Form 8-K
8-K — Liminatus Pharma, Inc.
Accession: 0001104659-26-064585
Filed: 2026-05-20
Period: 2026-05-17
CIK: 0001971387
SIC: 2836 (BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES))
Item: Entry into a Material Definitive Agreement
Item: Financial Statements and Exhibits
Documents
8-K — tm2615228d1_8k.htm (Primary)
EX-2.1 — EXHIBIT 2.1 (tm2615228d1_ex2-1.htm)
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8-K (Primary)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
May 17, 2026
Date of Report (Date of earliest event reported)
LIMINATUS PHARMA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
001-42626
93-2710748
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
2251 Stern Goodman Street, Suite E, Fullerton, CA
92833
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including
area code: (213) 273-5453
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
LIMN
The Nasdaq Stock Market LLC
Warrants
LIMNW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth
company x
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into Material Definitive Agreement.
On May 17, 2026, Liminatus Pharma, Inc. (the
“Company”) entered into a Merger Agreement (as it may be amended, supplemented or otherwise modified from time to time, the
“Merger Agreement”) with InnocsAI LLC, Delaware limited liability company (“InnocsAI”), and NamChul Jung, an individual,
as the representative of the members of InnocsAI. Capitalized terms used in this Current Report on Form 8-K but not otherwise defined
herein have the meanings given to them in the Merger Agreement.
Acquisition and Merger Consideration
Upon the closing of the transactions contemplated
in the Merger Agreement, and subject to the terms and conditions set forth therein, and in accordance with the applicable provisions of
the Delaware Corporation Law and the Delaware Limited Liability Company Act, InnocsAI will merge with an into a new wholly-owned Delaware
subsidiary of the Company (“Merger Sub”), the separate corporate existence of the Company will cease and Merger Sub will continue
as the surviving corporation (the “Merger”).
Pursuant to the terms of the Merger Agreement,
the aggregate consideration to be paid to existing members of InnocsAI is 1,600,000,000 shares of the Company’s common stock, at
an issue price of $0.20 per share (the “Closing Payment Shares”), and contingent value rights to be agreed upon by the parties
representing in the aggregate the right to receive 20% of net proceeds from any future strategic sale, out-license, transfer, or exit
of the assets acquired from InnocsAI. Upon the effectiveness of the Merger, all issued and outstanding membership interests of InnocsAI
will be canceled and automatically converted into the Closing Payment. Valetudo Therapeutics LLC is a member of InnocsAI, and Chris Kim, the CEO and a director of the Company, is the
CEO and controlling member of Valetudo Therapeutics LLC.
Overview of Acquired Pipeline Assets
The assets to be acquired in the Merger include
a portfolio of oncology-focused biologic and cellular therapy programs. The portfolio is centered on CAR-T and antibody-related technologies
designed to address certain limitations observed in current approaches to hematologic malignancies and solid tumors, including antigen
escape, tumor heterogeneity, limited T-cell persistence, tumor microenvironment-mediated suppression, and lineage-restricted target coverage.
The Company believes that these assets may provide development opportunities across hematologic oncology, solid tumor indications, and
future multi-target platform applications.
IBC101. IBC101 is an autologous
CD19xCD22 bivalent CAR-T cell therapy candidate designed for relapsed or refractory B-cell malignancies. The product is intended to function
as an OR-gate CAR-T therapy, enabling recognition of malignant B cells expressing either CD19 or CD22. According to company materials,
IBC101 has received authorization from the Ministry of Food and Drug Safety of the Republic of Korea for a Phase 1/2a clinical study in
relapsed or refractory diffuse large B-cell lymphoma, with Seoul St. Mary’s Hospital identified as the lead clinical site.
IBC101 is designed to address antigen
escape and tumor heterogeneity, which are recognized mechanisms of relapse following single-antigen CD19-directed CAR-T therapy. By combining
CD19 and CD22 targeting, IBC101 is intended to broaden antigen coverage in B-cell malignancies. Company materials also describe an ex
vivo expansion process using IL-7 and IL-15, with the goal of supporting T-cell fitness and persistence. If successfully developed, IBC101
could represent a next-generation hematologic CAR-T candidate with potential applicability in relapsed or refractory DLBCL and other B-cell
malignancies.
INC101. INC101 is a preclinical
autologous bicistronic CAR-T cell therapy candidate for solid tumors based on a dual-antigen MSLNxCD276 design. The construct is designed
as an AND-gate system in which mesothelin provides the primary tumor-associated activation signal and CD276, also known as B7-H3, provides
a secondary costimulatory signal. This design is intended to improve tumor selectivity by requiring convergence of two tumor-associated
signals.
The INC101 program is designed to
address challenges that have limited CAR-T development in solid tumors, including on-target/off-tumor risk, antigen heterogeneity, tonic
signaling, T-cell exhaustion, and tumor microenvironment-mediated suppression. Company materials describe a bicistronic architecture that
separates activation and costimulation into two modules and incorporates engineering features intended to reduce signal leakage. A related
follow-on construct, INC102, incorporates a dominant-negative TGF-β receptor armoring strategy intended to support T-cell function
in TGF-β-rich tumor microenvironments. The proposed development focus includes biomarker-selected solid tumors with mesothelin and
CD276 expression, including malignant pleural mesothelioma, ovarian cancer, pancreatic cancer, and other selected solid tumors.
CS1 Antibody Platform. The
CS1 antibody platform consists of proprietary anti-CS1 monoclonal antibodies intended to serve as an enabling module for the Company’s
hematologic CAR-T platform. Rather than being positioned primarily as a standalone CS1-directed CAR-T program, the CS1 binders are intended
to be combined with the CD19xCD22 bivalent CAR-T backbone to support development of a potential CD19xCD22xCS1 trivalent CAR-T candidate.
This strategy is intended to extend
the platform from B-cell malignancies into plasma-cell malignancies, including multiple myeloma. CD19 and CD22 are intended to provide
coverage of B-cell leukemias and lymphomas, while CS1 is intended to add plasma-cell targeting capability. By integrating these targets
into one trivalent CAR-T framework, the Company may be able to bridge B-cell malignancy and plasma-cell malignancy targeting strategies
and support broader hematologic oncology platform-development opportunities.
Representations and Warranties
The Merger Agreement contains customary representations
and warranties of the parties, except as provided in the Merger Agreement. Certain representations and warranties are qualified by materiality
or Material Adverse Effect. “Material Adverse Effect” as used in the Merger Agreement means a material adverse change or a
material adverse effect upon on the assets, liabilities, condition (financial or otherwise), prospects, net worth, management, earnings,
cash flows, business, operations or properties of the Company Group and the Business, taken as a whole, whether or not arising from transactions
in the ordinary course of business, subject to certain customary exceptions. Certain representations are subject to specified exceptions
and qualifications contained in the Merger Agreement or in information provided pursuant to certain disclosure schedules to the Merger
Agreement.
Conduct Prior to Closing; Covenants
Each of InnocsAI and the Company has agreed to,
and cause its subsidiaries to, operate its respective business in the ordinary course, consistent with past practices, and to refrain
from taking certain specified actions without the prior written consent of certain other parties, in each case, subject to certain exceptions
and qualifications.
The Merger Agreement also contains, among other
things, covenants providing for:
· each party not soliciting, initiating, encouraging or continuing discussions with any third party with
respect to any merger, consolidation, business combination, or similar transaction, or any sale or transfer of a substantial portion of
assets or equity interests, other than the transactions contemplated or permitted by the Merger Agreement;
· each party not amending, modifying or supplementing its certificate of incorporation and bylaws or other
organizational or governing documents;
· each party not paying, declaring or promising to pay any dividends or other distributions with respect
to its capital stock or other equity securities;
· each party not obtaining or incurring any loan or other Indebtedness;
· each party not merging or consolidating with or acquiring any other person or be acquired by any other
person;
· each party not issuing, redeeming or repurchasing any capital stock, membership interests or other securities;
· each party providing access to their books and records and providing information relating to their respective
businesses to the other party, its legal counsel and representatives;
· InnocsAI delivering annual and interim financial statements; and
· key personnel of InnocsAI entering into non-competition, non-solicitation
and confidentiality agreements.
The Company will prepare and file with the SEC
a registration statement relating to the transactions contemplated by the Merger Agreement, registering the Closing Payment Shares to
be issued under the Merger Agreement, which will also contain a proxy statement of the Company for the purpose of soliciting proxies from
the Company’s stockholders for approval of certain matters related to the transactions contemplated by the Merger Agreement. InnocsAI
will provide the Company with all reasonable information concerning the business of the Company Group and the management, operations and
financial condition of the Company Group as is required by the SEC for inclusion in the registration statement, including, all financial
statements required by relevant securities laws and regulations.
General Conditions to Closing
Consummation of the Merger is subject to customary
closing conditions for similar transactions, including, among other things, (i) the Company and InnocsAI receiving approval from their
respective stockholders and members to the transactions and (ii) the absence of injunctions or other legal restraints preventing or prohibiting
the consummation of the Merger.
The Company’s Conditions to Closing
The obligations of the Company to consummate the
transactions contemplated by the Merger Agreement, in addition to the conditions described above, will be conditioned upon each of the
following, among other things:
· InnocsAI complying with all of its obligations under the Merger Agreement;
· the representations and warranties of InnocsAI being true on and as of the closing date of the transactions,
other than as would not in the aggregate reasonably be expected to have a Material Adverse Effect;
· there having been no occurrence of a Material Adverse Effect with respect to InnocsAI;
· the key personnel of InnocsAI having entered into the non-compete agreements, and the Company having entered
into labor agreements with its employees to the extent required by law; and
· the Company’s stockholders having approved the transactions contemplated by the Merger Agreement.
InnocsAI’s Conditions to Closing
The obligations of InnocsAI to consummate the
transactions contemplated by the Merger Agreement, in addition to the conditions described above, will be conditioned upon each of the
following, among other things:
· the Company complying with all of their obligations under the Merger Agreement in all material respects;
and
· the representations and warranties of the Company being true on and as of the closing date of the transactions,
other than as would not in the aggregate reasonably be expected to have a material adverse effect with respect to the Company.
Termination
The Merger Agreement may be terminated and/or
abandoned at any time prior to the Closing as follows:
· by mutual written consent of the Company and InnocsAI;
· by either InnocsAI or the Company, in the event the Closing has not occurred by December 31, 2026, provided
the party seeking to terminate the agreement is not in material breach of the Merger Agreement;
· by either InnocsAI or the Company, in the event that any applicable
authority has issued a final and non-appealable injunction or order making the Merger illegal or prohibiting their consummation;
· by the Company, if InnocsAI has materially breached any representation, warranty, covenant or agreement
set forth in the Merger Agreement and such breach has not been cured within 30 days following the date that InnocsAI is notified in writing
of such breach; or
· by InnocsAI, if the Company has materially breached any representation, warranty, covenant or agreement
set forth in the Merger Agreement and such breach has not been cured within 30 days following the date that the Company is notified in
writing of such breach.
The Merger Agreement is filed with this Current
Report on Form 8-K as Exhibit 2.1, and is incorporated by reference, and the foregoing summary of the terms of the Merger Agreement is
subject to, and qualified in its entirety by, such document.
Item 9.01 Financial Statements and Exhibits.
Exhibit No.
Description
2.1*
Merger Agreement, dated May 17, 2026, by and among Liminatus Pharma, Inc., InnocsAI LLC and NamChul Jung, as the Members’ Representative
104
Cover Page Interactive Data File (formatted as Inline XBRL)
*
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission.
Forward-Looking Statements
Certain statements made in this Current Report
are forward-looking statements. When used in this Current Report, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,”
“may,” “will,” “should,” “future,” “propose” and variations of these words
or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown
risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s and InnocsAI’s control,
that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors,
among others, that may affect actual results or outcomes include: performance of the Company’s and InnocsAI’s business; the
risk that the approval of the stockholders of the Company for the proposed transactions is not obtained; failure to realize the anticipated
benefits of the proposed transactions, including as a result of a delay in consummating the proposed transactions; risks relating to the
combined company’s sources of cash and cash resources; risks relating to the combined company’s ability to manage future growth;
the effects of competition on the combined company’s future business; the Company’s ability to maintain compliance with the
continued listing requirements of the Nasdaq listing rules in order to prevent its common stock from being delisted from Nasdaq; the outcome
of any potential litigation, government and regulatory proceedings, any investigations and inquiries involving the parties to the transactions;
the impact of pandemics, global conflicts, the global economic status or tariffs on the Company’s or the combined company’s
business; and those factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which
was filed with the SEC on March 31, 2026, and other documents of the Company filed, or to be filed, with the SEC. The Company and InnocsAI
do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by law.
Additional Information and Where to Find It
The proposed transactions will be submitted to
stockholders of the Company for their consideration and approval. The Company intends to file a registration statement (the “Registration
Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) which will include a preliminary proxy statement
in connection with the Companys solicitation for proxies for the vote by the Company’s stockholders in connection with the proposed
transactions and other matters as described in the Registration Statement, as well as a prospectus relating to the offer of the securities
to be issued in connection with the proposed transactions. After the Registration Statement is filed and declared effective, the Company
will mail a definitive proxy statement and other relevant documents to its stockholders as of the record date established for voting on
the proposed transactions. The Company’s stockholders and other interested persons are advised to read, once available, the preliminary
proxy statement/prospectus and any amendments thereto and, once available, the definitive proxy statement/prospectus, in connection with
the Company’s solicitation of proxies for its special meeting of stockholders to be held to approve, among other things, the proposed
transactions, because these documents will contain important information about the Company, InnocsAI and the proposed transactions. Stockholders
may also obtain a copy of the preliminary or definitive proxy statement, once available, as well as other documents filed with the SEC
regarding the proposed transactions and other documents filed with the SEC by the Company, without charge, at the SEC’s website
located at www.sec.gov or by directing a request to the Company.
Participants in the Solicitation
The Company, InnocsAI and their respective directors, executive officers,
and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitations of proxies from
the Company’s stockholders in connection with the proposed transactions. Information regarding the persons who may, under SEC rules,
be deemed participants in the solicitation of the Company’s stockholders in connection with the proposed transactions will be set
forth in the proxy statement/prospectus to be filed with the SEC in connection with the transactions. You can find more information about
the Company’s directors and executive officers and their ownership of shares of common stock of the Company in the Company’s
filings with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was
filed with the SEC on March 31, 2026. Additional information regarding the participants in the proxy solicitation and a description of
their direct and indirect interests will be included in the proxy statement/prospectus when it becomes available. Shareholders, potential
investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before making any
voting or investment decisions. You may obtain free copies of these documents from the sources indicated above.
No Offer or Solicitation
This report shall not constitute a solicitation of a proxy, consent,
or authorization with respect to any securities or in respect of any proposed transaction. This report shall not constitute an offer to
sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in
which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, or an exemption therefrom.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 20, 2026
LIMINATUS PHARMA, INC.
By:
/s/ Chris Kim
Name:
Chris Kim
Title:
Chief Executive Officer
EX-2.1 — EXHIBIT 2.1
EX-2.1
Filename: tm2615228d1_ex2-1.htm · Sequence: 2
Exhibit 2.1
MERGER AGREEMENT
dated
May 17, 2026
by and among
InnocsAI LLC, Delaware limited liability company
(the “Company”),
NamChul Jung, as
the Members’ Representative (the “NamChul Jung”), and
Liminatus Pharma, Inc., a Delaware corporation
(the “Purchaser”),
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1
ARTICLE II MERGER
6
2.1
Merger
6
2.2
Merger Effective Date
6
2.3
Effect of the Merger
7
2.4
Closing; Effective Time
7
2.5
Taking of Necessary Action; Further Action
7
2.6
No Further Ownership Rights in Company Capital Stock
7
ARTICLE III CONSIDERATION
7
3.1
Conversion of Company Capital Stock
7
3.2
Closing Payment
8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
8
4.1
Corporate Existence and Power
8
4.2
Authorization
9
4.3
Governmental Authorization
9
4.4
Non-Contravention
9
4.5
Capitalization
9
4.6
Charter Documents
10
4.7
Corporate Records
10
4.8
Assumed Names
10
4.9
Subsidiaries
10
4.10
Consents
11
4.11
Financial Statements
11
4.12
Books and Records
12
4.13
Absence of Certain Changes
12
4.14
Properties; Title to the Company’s Assets
14
4.15
Litigation
14
4.16
Contracts
15
4.17
Licenses and Permits
17
4.18
Compliance with Laws
17
4.19
Intellectual Property
18
4.20
[intentionally omitted]
19
4.21
Accounts Receivable and Payable; Loans
19
4.22
Pre-payments
19
4.23
Employees
19
4.24
Employment Matters
20
4.25
Withholding
20
4.26
Employee Benefits and Compensation
21
4.27
Real Property
21
4.28
Accounts
21
i
4.29
Tax Matters
22
4.30
Environmental Laws
23
4.31
Finders’ Fees
23
4.32
Powers of Attorney and Suretyships
23
4.33
Directors and Officers
23
4.34
Certain Business Practices
23
4.35
Money Laundering Laws
24
4.36
Insurance
24
4.37
Related Party Transactions
24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER
24
5.1
Corporate Existence and Power
24
5.2
Corporate Authorization
25
5.3
Governmental Authorization
25
5.4
Non-Contravention
25
5.5
Finders’ Fees
25
5.6
Issuance of Shares
25
5.7
[intentionally omitted]
25
5.8
Information Supplied
25
5.9
Board Approval
26
5.10
Purchaser SEC Documents and Financial Statements
26
5.11
Certain Business Practices
27
5.12
Money Laundering Laws
27
ARTICLE VI COVENANTS OF THE PARTIES PENDING CLOSING
27
6.1
Conduct of the Business
27
6.2
Access to Information
30
6.3
Notices of Certain Events
30
6.4
Annual and Interim Financial Statements
30
6.5
SEC Filings
31
6.6
Employees of the Company and the Manager
31
ARTICLE VII COVENANTS OF THE COMPANY
32
7.1
Reporting and Compliance with Laws
32
7.2
Best Efforts to Obtain Consents
32
7.3
Regulatory Licenses
32
7.4
Best Efforts to Obtain Consents
32
ARTICLE VIII COVENANTS OF ALL PARTIES HERETO
32
8.1
Best Efforts; Further Assurances
32
8.2
Cooperation with Registration Statement
32
8.3
Confidentiality
33
ARTICLE IX CONDITIONS TO CLOSING
34
9.1
Condition to the Obligations of the Parties
34
9.2
Conditions to Obligations of Purchaser
34
9.3
Conditions to Obligations of the Company
35
ii
ARTICLE X DISPUTE RESOLUTION
35
10.1
Arbitration
35
10.2
Waiver of Jury Trial; Exemplary Damages
37
ARTICLE XI TERMINATION
37
11.1
Termination Without Default
37
11.2
Termination Upon Default
38
11.3
Effect of Termination
38
ARTICLE XII MISCELLANEOUS
39
12.1
Notices
39
12.2
Amendments; No Waivers; Remedies
39
12.3
Arm’s length bargaining; no presumption against drafter
40
12.4
Publicity
40
12.5
Expenses
40
12.6
No Assignment or Delegation
40
12.7
Governing Law
40
12.8
Counterparts; electronic signatures
40
12.9
Entire Agreement
41
12.10
Severability
41
12.11
Construction of certain terms and references; captions
41
12.12
Further Assurances
42
12.13
Third Party Beneficiaries
42
12.14
Members’ Representative
42
12.15
Non-Recourse
42
iii
MERGER AGREEMENT
This MERGER AGREEMENT (the “Agreement”),
dated as of May 17, 2026 (the “Signing Date”), by and among InnocsAI LLC, Delaware limited liability company (the
“Company”), NamChul Jung, an individual (the “Members’ Representative”), as the representative
of the members of the Company (each, a “Member” and collectively the “Members”), and Liminatus Pharma, Inc.,
a Delaware corporation (the “Purchaser”).
W I T N E S E T H :
A. The Company and/or its Subsidiaries (collectively, the “Company
Group”) are in the business of CAR-T therapy technologies and related intellectual property rights (which, together with
all other businesses and activities conducted by the Company Group, is hereinafter referred to as the “Business”);
B. The Purchaser will form a new wholly-owned subsidiary of the Purchaser in the State of Delaware (“Merger
Sub”);
C. The Members of the Company are listed on Schedule 1.8 hereto and own 100% of the issued and outstanding
shares of the Company; and
D. The Company will merge with and into Merger Sub (the “Merger”), after which Merger
Sub will be the surviving company (the “Surviving Corporation”) and a wholly-owned subsidiary of the Purchaser.
The parties accordingly
agree as follows:
ARTICLE I
DEFINITIONS
The following terms, as used
herein, have the following meanings:
1.1 “Action”
means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise,
by or before any Authority.
1.2 “Additional
Agreements” mean the Registration Rights Agreement and the Non-Compete Agreements.
1.3 “Affiliate”
means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such
Person.
1.4 “Authority”
means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any
public, private or industry regulatory authority, whether international, national, Federal, state, or local.
1.5 “Books
and Records” means all books and records, ledgers, employee records, customer lists, files, correspondence, and other records
of every kind (whether written, electronic, or otherwise embodied) owned or used by a Person or in which a Person’s assets, the
business or its transactions are otherwise reflected, other than stock books and minute books.
1
1.6 “Business
Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New
York are authorized to close for business.
1.7 “Closing”
has the meaning set forth in Section 2.4.
1.8 “Closing
Payment” means:
a. 1,600,000,000
shares of Purchaser Common Stock, at an issue price of $0.20 per share (the “Closing Payment Shares”), issuable
to the Members and in such amounts set forth opposite each Member’s name on Schedule 1.8.
b. Contingent
Value Rights to be agreed upon by the parties representing in the aggregate the right to receive 20% of net proceeds from any future strategic
sale, out-license, transfer, or exit of the assets acquired from the Company.
1.9 “COBRA”
means collectively, the requirements of Sections 601 through 606 of ERISA and Section 4980B of the Code.
1.10 “Code”
means the Internal Revenue Code of 1986, as amended.
1.11 “Company
Capital Stock” has the meaning set forth in Section 4.4.
1.12 “Company
Stock Rights” means all options, warrants or other rights to purchase, convert or exchange into Company Capital Stock.
1.13 “Contracts”
means the Leases and all other contracts, agreements, leases (including equipment leases, car leases and capital leases), licenses, Permits,
commitments, client contracts, statements of work (SOWs), sales and purchase orders and similar instruments, oral or written, to which
any member of the Company Group is a party or by which any of its respective assets are bound, including any entered into by any member
of the Company Group in compliance with Section 7.1 after the Signing Date and prior to the Closing, and all rights and benefits
thereunder, including all rights and benefits thereunder with respect to all cash and other property of third parties under the Company
Group’s dominion or control.
1.14 “Control”
of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling”
and “under common Control with” have correlative meanings. Without limiting the foregoing, a Person (the “Controlled
Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially,
as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more of the votes for election of
directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the
profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited
partner), manager, or member (other than a member having no management authority that is not a 10% Owner) of the Controlled Person; or
(c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law
of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate
of the Controlled Person is a trustee.
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1.15 “Environmental
Laws” shall mean all Laws that prohibit, regulate or control any Hazardous Material or any Hazardous Material Activity, including,
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource Recovery and Conservation Act of 1976,
the Federal Water Pollution Control Act, the Clean Air Act, the Hazardous Materials Transportation Act and the Clean Water Act.
1.16 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.
1.17 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
1.18 “Hazardous
Material” shall mean any material, emission, chemical, substance or waste that has been designated by any Authority to be radioactive,
toxic, hazardous, a pollutant or a contaminant.
1.19 “Hazardous
Material Activity” shall mean the transportation, transfer, recycling, storage, use, treatment, manufacture, removal, remediation,
release, exposure of others to, sale, labeling, or distribution of any Hazardous Material or any product or waste containing a Hazardous
Material, or product manufactured with ozone depleting substances, including, any required labeling, payment of waste fees or charges
(including so-called e-waste fees) and compliance with any recycling, product take-back or product content requirements.
1.20 “Indebtedness”
means with respect to any Person, (a) all obligations of such Person for borrowed money, or with respect to deposits or advances
of any kind (including amounts by reason of overdrafts and amounts owed by reason of letter of credit reimbursement agreements), including
with respect thereto, all interests, fees and costs, (b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property
purchased by such Person, (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services
(other than accounts payable to creditors for goods and services incurred in the ordinary course of business), (e) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
lien or security interest on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed,
(f) all obligations of such Person under leases required to be accounted for as capital leases under U.S. GAAP, (g) all guarantees
by such Person, (h) all liability of such Person with respect to any hedging obligations, including interest rate or currency exchange
swaps, collars, caps or similar hedging obligations, and (i) any agreement to incur any of the same.
1.21 “Intellectual
Property Right” means any trademark, service mark, registration thereof or application for registration therefor, trade name,
license, invention, patent, patent application, trade secret, trade dress, know-how, copyright, copyrightable materials, copyright registration,
application for copyright registration, software programs, data bases, u.r.l.s., and any other type of proprietary intellectual property
right, and all embodiments and fixations thereof and related documentation, registrations and franchises and all additions, improvements
and accessions thereto, and with respect to each of the forgoing items in this definition, which is owned or licensed or filed by any
member of the Company Group, or used or held for use in the Business, whether registered or unregistered or domestic or foreign.
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1.22 “Inventory”
is defined in the UCC.
1.23 “Law”
means any domestic or foreign, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation.
1.24 “Leases”
means the leases set forth on Schedule 1.24 attached hereto, together with all fixtures and improvements erected on the premises
leased thereby.
1.25 “Lien”
means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect
of such property or asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing.
1.26 “Material
Adverse Effect” or “Material Adverse Change” means a material adverse change or a material adverse effect
upon on the assets, liabilities, condition (financial or otherwise), prospects, net worth, management, earnings, cash flows, business,
operations or properties of the Company Group and the Business, taken as a whole, whether or not arising from transactions in the ordinary
course of business, provided, however, that “Material Adverse Effect” or “Material Adverse Change” shall not include
any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic
or political conditions; (ii) conditions generally affecting the industries in which the Company operates; (iii) any changes
in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security
or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or
terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or
omitted to be taken) with the written consent of or at the written request of Purchaser; (vi) any changes in applicable Laws or accounting
rules (including U.S. GAAP) or the enforcement, implementation or interpretation thereof; (vii) the announcement, pendency or
completion of the transactions contemplated by this Agreement; (viii) any natural or man-made disaster or acts of God; or (ix) any
failure by the Company to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the
underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded); except, in the case of
subclauses (i), (ii), (iv), (vi) and (viii), to the extent such change, event, circumstance or effect has a disproportionate adverse
effect on such entity as compared to other Persons engaged in the same industry.
1.27 “Order”
means any decree, order, judgment, writ, award, injunction, rule or consent of or by an Authority.
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1.28 “Permitted
Liens” means (i) all defects, exceptions, restrictions, easements, rights of way and encumbrances disclosed in policies
of title insurance which have been made available to Purchaser; (ii) mechanics’, carriers’, workers’, repairers’
and similar statutory Liens arising or incurred in the ordinary course of business for amounts (A) that are not delinquent, (B) that
are not material to the business, operations and financial condition of the Company so encumbered, either individually or in the aggregate,
and (C) not resulting from a breach, default or violation by the Company Group of any Contract or Law; (iii) liens for Taxes
not yet due and payable or which are being contested in good faith by appropriate proceedings (and for which adequate accruals or reserves
have been established on the Financial Statements), and (iv) the Liens set forth on Schedule 1.40.
1.29 “Person”
means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political
subdivision thereof, or an agency or instrumentality thereof.
1.30 “Pre-Closing
Period” means any period that ends on or before the Closing Date or with respect to a period that includes but does not end
on the Closing Date, the portion of such period through and including the day of the Closing.
1.31 “Purchaser
Common Stock” means the common stock of Purchaser.
1.32 “Real
Property” means, collectively, all real properties and interests therein (including the right to use), together with all buildings,
fixtures, trade fixtures, plant and other improvements located thereon or attached thereto; all rights arising out of use thereof (including
air, water, oil and mineral rights); and all subleases, franchises, licenses, permits, easements and rights-of-way which are appurtenant
thereto.
1.33 “Registration
Rights Agreement” means the agreement, in a form to be agreed by the parties hereto, governing the resale of the Closing Payment
Shares.
1.34 “Sarbanes-Oxley
Act” means the Sarbanes-Oxley Act of 2002, as amended.
1.35 “SEC”
means the Securities and Exchange Commission.
1.36 “Securities
Act” means the Securities Act of 1933, as amended.
1.37 “Subsidiary”
means each entity of which at least fifty percent (50%) of the capital stock or other equity or voting securities are Controlled or owned,
directly or indirectly, by the Company, which for the avoidance of doubt shall include any variable interest entity through which all
or a portion of the Business is conducted.
1.38 “Tangible
Personal Property” means all tangible personal property and interests therein, including machinery, computers and accessories,
furniture, office equipment, communications equipment, automobiles, trucks, forklifts and other vehicles owned or leased by the Company
Group and other tangible property, including the items listed on Schedule 4.14(a).
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1.39 “Tax(es)”
means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature
imposed by any Taxing Authority (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and
services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment,
payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum,
environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Code or similar
provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable
Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or
additional amount imposed with respect thereto.
1.40 “Taxing
Authority” means the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition
of any Tax or the administration of any Law relating to any Tax.
1.41 “Tax
Return” means any return, information return, declaration, claim for refund or credit, report or any similar statement, and
any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated, combined, unitary
or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection
or payment of a Tax or the administration of any Law relating to any Tax.
1.42 “UCC”
means the Uniform Commercial Code of the State of New York, or any corresponding or succeeding provisions of Laws of the State of New
York, or any corresponding or succeeding provisions of Laws, in each case as the same may have been and hereafter may be adopted, supplemented,
modified, amended, restated or replaced from time to time.
1.43 “U.S.
GAAP” means U.S. generally accepted accounting principles, consistently applied.
ARTICLE II
MERGER
2.1 Merger.
At the Effective Time (as defined in Section 2.2), and subject to and upon the terms and conditions of this Agreement, and in accordance
with the applicable provisions of the Delaware Corporation Law (the “DGCL”) and the Delaware Limited Liability Company
Act (the “DLLCA”), the Company shall be merged with and into Merger Sub, the separate corporate existence of Company
shall cease and the Merger Sub shall continue as the Surviving Corporation.
2.2 Merger
Effective Date. The parties hereto shall cause the Merger to be consummated by filing a certificate of merger (the “Certificate
of Merger”) with the relevant authorities in Delaware in accordance with the relevant provisions of the DGCL and the DLLCA,
as applicable (the date of the registration of such filing, or such later date as specified in the Certificate of Merger, being the “Effective
Time”).
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2.3 Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger
and the applicable provisions of the DGCL and the DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, liabilities, duties and obligations of
the Company and Merger Sub shall become the property, rights, privileges, agreements, powers and franchises, debts, liabilities, duties
and obligations of the Surviving Corporation, which shall include the assumption by the Surviving Corporation of any and all agreements,
covenants, duties and obligations of the Company and the Merger Sub set forth in this Agreement to be performed after the Closing. For
the avoidance of doubt, the Purchaser Warrants shall survive the Merger and remain in effect without any change to their existing terms.
2.4 Closing;
Effective Time. Unless this Agreement is earlier terminated in accordance with Article XIII, the closing of the Merger (the
“Closing”) shall take place at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, New York, at 10:00
a.m. local time, on the second (2nd) Business Day after the satisfaction or waiver (to the extent permitted by applicable
law) of the conditions set forth in Article X or at such other time, date and location as the Purchaser and Company agree in writing.
The parties may participate in the Closing via electronic means. The date on which the Closing actually occurs is hereinafter referred
to as the “Closing Date”.
2.5 Taking
of Necessary Action; Further Action. If, at any time after the Closing, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full right, title and interest in, to and under, and/or possession
of, all assets, property, rights, privileges, powers and franchises of the Company and the Merger Sub, the officers and directors of
the Surviving Corporation are fully authorized in the name and on behalf of the Company and the Merger Sub, to take all lawful action
necessary or desirable to accomplish such purpose or acts, so long as such action is not inconsistent with this Agreement.
2.6 No
Further Ownership Rights in Company Capital Stock. At the Effective Time, the register of members of the Company shall be closed
and thereafter there shall be no further registration of transfers of shares of Company Capital Stock on the records of the Company.
From and after the Effective Time, the holders of certificates evidencing ownership of shares of Company Capital Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such shares of Company Capital Stock, except as otherwise
provided for herein or by Law. On or prior to the Effective Time, the Company shall terminate the Equity Incentive Plan.
ARTICLE III
CONSIDERATION
3.1 Conversion
of Company Capital Stock.
(a) Conversion
of Company Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, Merger
Sub, the Company or the Members, the Company Capital Stock issued and outstanding immediately prior to the Effective Time shall be canceled
and automatically converted into the right to receive, without interest, the applicable portion of the Closing Payment as determined
pursuant to Schedule 1.8 hereto and the Certificate of Merger.
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(b) Conversion
of Shares of Merger Sub. Each share of Merger Sub that is issued and outstanding immediately prior to the Effective Time will, by
virtue of the Merger and without further action on the part of the sole shareholder of Merger Sub, be converted into and become one share
of the Surviving Corporation (and the shares of Surviving Corporation into which the shares of Merger Sub are so converted shall be the
only shares of the Surviving Corporation that are issued and outstanding immediately after the Effective Time). Each certificate evidencing
ownership of shares of Merger Sub will, as of the Effective Time, be deemed to evidence ownership of such shares of the Surviving Corporation.
(c) Treatment
of Company Capital Stock Owned by the Company. At the Effective Time, all shares of Company Capital Stock that are owned by the Company
as treasury shares immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.
(d) No
Liability. Notwithstanding anything to the contrary in this Section 3.1, no party hereto shall be liable to any person for any
amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
(e) Surrender
of Certificates. The Closing Payment issued upon the surrender of Company Capital Stock in accordance with the terms hereof, shall
be deemed to have been issued in full satisfaction of all rights pertaining to such securities, other than any additional rights pursuant
to this Agreement.
(f) Lost
or Destroyed Certificates. In the event any certificates shall have been lost, stolen or destroyed, the Surviving Corporation shall
issue in exchange for such lost, stolen or destroyed certificates or securities, as the case may be, upon the making of an affidavit
of that fact by the holder thereof, such securities, as may be required pursuant to this Section 3.1.
3.2 Closing
Payment.
(a) No
certificates or scrip representing fractional shares of Purchaser Common Stock will be issued pursuant to the Merger, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a stockholder of the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the
disclosure schedules delivered by the Company to the Purchaser prior to the execution of this Agreement, the Company hereby represents
and warrants to Purchaser that each of the following representations and warranties are true, correct and complete as of the date of
this Agreement and as of the Closing Date.
4.1 Corporate
Existence and Power. The Company is a limited liability company duly formed and validly existing under the Laws of the Delaware.
The Company has all power and authority, corporate and otherwise, and all governmental licenses, franchises, Permits, authorizations,
consents and approvals required to own and operate its properties and assets and to carry on the Business as presently conducted and
as proposed to be conducted. The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in
which the properties owned or leased by it or the operation of its Business as currently conducted makes such licensing or qualification
necessary, except where the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect. The Company
has offices located only at the addresses set forth on Schedule 4.1.
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4.2 Authorization.
The execution, delivery and performance by the Company of this Agreement and the Additional Agreements and the consummation by the Company
of the transactions contemplated hereby and thereby are within the corporate powers of the Company and, except for the approval of the
holders of a majority of the membership interests of the Company (the “Company Member Approval”), have been duly authorized
by all necessary action on the part of the Company. This Agreement constitutes, and, upon their execution and delivery, each of the Additional
Agreements will constitute, a valid and legally binding agreement of the Company enforceable against the Company in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement
of creditors’ rights generally and by general principles of equity.
4.3 Governmental
Authorization. Except for the approvals listed on Schedule 4.3, neither the execution, delivery nor performance by the Company
of this Agreement or any Additional Agreements requires any consent, approval, license, order or other action by or in respect of, or
registration, declaration or filing with, any Authority as a result of the execution, delivery and performance of this Agreement or any
of the Additional Agreements or the consummation of the transactions contemplated hereby or thereby (each of the foregoing, a “Governmental
Approval”).
4.4 Non-Contravention.
None of the execution, delivery or performance by the Company of this Agreement or any Additional Agreements does or will (a) contravene
or conflict with the organizational or constitutive documents of any member of the Company Group, (b) contravene or conflict with
or constitute a violation of any provision of any Law or Order binding upon or applicable to the Company Group, (c) except for the
Contracts listed on Schedule 4.16(a) requiring Company Consents (but only as to the need to obtain such Company Consents),
constitute a default under or breach of (with or without the giving of notice or the passage of time or both) or violate or give rise
to any right of termination, cancellation, amendment or acceleration of any right or obligation of the Company Group or require any payment
or reimbursement or to a loss of any material benefit relating to the Business to which the Company Group are entitled under any provision
of any Permit, Contract or other instrument or obligations binding upon the Company Group or by which any of the Company Capital Stock
or any of the Company Group’s assets is or may be bound or any Permit, (d) result in the creation or imposition of any Lien
on any of the Company Capital Stock, (e) cause a loss of any material benefit relating to the Business to which the Company Group
are entitled under any provision of any Permit or Contract binding upon the Company Group, or (f) result in the creation or imposition
of any Lien (except for Permitted Liens) on any of the Company Group’s assets.
4.5 Capitalization.
The Company has a single class of membership interests (the “Company Capital Stock”), the owners of 100% of which
are reflected on Schedule 1.8. No Company Capital Stock is held in its treasury. All of the issued and outstanding Company Capital
Stock has been duly authorized and validly issued, is fully paid and non-assessable and has not been issued in violation of any preemptive
or similar rights of any Person. All of the issued and outstanding Company Capital Stock is owned of record and beneficially by the Members
as set forth on Schedule 1.8, free and clear of all Liens. No outstanding Company Capital Stock is subject to any right of first
refusal, right of first offer, preemptive right or similar restriction. No other class of securities of the Company is authorized or
outstanding. There are no: (a) outstanding subscriptions, options, warrants, rights (including “phantom share rights”),
calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase,
issuance or sale of any shares of the Company, or (b) agreements with respect to any of the Company Capital Stock, including any
voting trust, other voting agreement or proxy with respect thereto.
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4.6 Charter
Documents. Copies of the Certificate of formation and operating agreement (the “Charter Documents”) have heretofore
been made available to Purchaser, and such copies are each true and complete copies of such instruments as amended and in effect on the
date hereof. The Company has not taken any action in violation or derogation of its Charter Documents.
4.7 Corporate
Records. All proceedings occurring since January 1, 2021 of the board of directors of the Company, including committees thereof,
and all consents to actions taken thereby, are accurately reflected in the minutes and records contained in the corporate minute books
of the Company. The register of members of the Company is complete and accurate.
4.8 Assumed
Names. Schedule 4.8 is a complete and correct list of all assumed or “doing business as” names currently or, within
five (5) years of the date of this Agreement used by the Company Group, including names on any websites. Since January 1, 2021
none of the members of the Company Group has used any name other than the names listed on Schedule 4.8 to conduct the Business.
The Company Group has filed appropriate “doing business as” certificates in all applicable jurisdictions with respect to
itself.
4.9 Subsidiaries.
(a) Schedule
4.9 sets forth each Subsidiary and the amount of issued and outstanding capital stock and securities of each Subsidiary that is owned
by the Company Group, which are owned free and clear of all Liens. Except for the unpaid capital stock as listed on Schedule 4.9,
all the capital stock of each Subsidiary are fully paid-up. Except for the Subsidiaries so listed, the Company does not own or Control,
directly or indirectly, any ownership, equity, profits or voting interest in any Person or has any agreement or commitment to purchase
any such interest, and has not agreed and is not obligated to make, nor is bound by any Contract under which it may become obligated to
make, any future investment (in the form of a loan, capital contribution or otherwise) in any other Person.
(b) Each
Subsidiary is a corporation duly organized, validly existing and in good standing under and by virtue of the Laws of the jurisdiction
of its formation set forth by its name on Schedule 4.9. Each Subsidiary has all power and authority, corporate and otherwise, and
all governmental licenses, Permits, authorizations, consents and approvals required to own and operate its properties and assets and to
carry on the Business as presently conducted and as proposed to be conducted. No Subsidiary is qualified to do business as a foreign entity
in any jurisdiction, except as set forth by its name on Schedule 4.9, and there is no other jurisdiction in which the character
of the property owned or leased by any Subsidiary or the nature of its activities make qualification of such Subsidiary in any such jurisdiction
necessary. Each Subsidiary has offices located only at the addresses set forth by its name on Schedule 4.9.
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(c) No
outstanding capital stock or other securities of any Subsidiary is subject to any right of first refusal, right of first offer, preemptive
right or similar restriction. Except as set forth on Schedule 4.9(c), there are no: (i) outstanding subscriptions, options,
warrants, rights (including “phantom stock rights”), calls, commitments, understandings, conversion rights, rights of exchange,
plans or other agreements of any kind providing for the purchase, issuance or sale of any shares of the capital stock or other securities
of a Subsidiary, or (ii) agreements with respect to any of the capital stock or other securities of a Subsidiary, including any
voting trust, other voting agreement or proxy with respect thereto.
4.10 Consents.
The Contracts listed on Schedule 4.10 are the only Contracts binding upon the Company Group or by which any of the Company Capital
Stock or any of the Company Group’s assets are bound, requiring a consent, approval, authorization, order or other action of or
filing with any Person as a result of the execution, delivery and performance of this Agreement or any of the Additional Agreements or
the consummation of the transactions contemplated hereby or thereby (each of the foregoing, a “Company Consent”).
4.11 Financial
Statements.
(a) Schedule
4.11 includes the audited consolidated financial statements of the Company as of and for the fiscal years ended December 31,
2025 and 2024 consisting of the audited consolidated balance sheet as of such date, the audited consolidated income statement for the
twelve (12) month period ended on such date, and the audited consolidated cash flow statement for the twelve (12) month period ended on
such date, (collectively, the “Financial Statements”) and the audited consolidated balance sheet as of December 31,
2025 (the “Balance Sheet Date”) included therein, the “Balance Sheet”).
(b) The
Financial Statements are complete and accurate and fairly present, in conformity with U.S. GAAP applied on a consistent basis, the financial
position of the Company Group as of the dates thereof and the results of operations of the Company Group for the periods reflected therein.
The Financial Statements (i) were prepared from the Books and Records of the Company Group; (ii) were prepared on an accrual
basis in accordance with U.S. GAAP consistently applied; (iii) contain and reflect all necessary adjustments and accruals for a fair
presentation of the Company’s Group financial condition as of their dates including for all warranty, maintenance, service and indemnification
obligations; and (iv) contain and reflect adequate provisions for all liabilities for all material Taxes applicable to the Company
Group with respect to the periods then ended.
(c) Except
as specifically disclosed, reflected or fully reserved against on the Balance Sheet, and for liabilities and obligations of a similar
nature and in similar amounts incurred in the ordinary course of business since the date of the Balance Sheet, there are no liabilities,
debts or obligations of any nature (whether accrued, fixed or contingent, liquidated or unliquidated, asserted or unasserted or otherwise)
relating to the Company Group. All debts and liabilities, fixed or contingent, which should be included under U.S. GAAP on the Balance
Sheet are included therein.
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(d) The
Balance Sheet included in the Financial Statements accurately reflects the outstanding Indebtedness of the Company Group as of the date
thereof. Except as set forth on Schedule 4.11, the Company Group does not have any Indebtedness.
(e) All
financial projections delivered by or on behalf of the Company to Purchaser with respect to the Business were prepared in good faith using
assumptions that the Company believes to be reasonable and the Company is not aware of the existence of any fact or occurrence of any
circumstances that is reasonably likely to have an Material Adverse Effect.
4.12 Books
and Records. All Contracts, documents, and other papers or copies thereof delivered to Purchaser by or on behalf of the Company Group
are accurate, complete, and authentic.
(a) The
Books and Records accurately and fairly, in reasonable detail, reflect the transactions and dispositions of assets of and the providing
of services by the Company Group. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance
that:
(i) transactions
are executed only in accordance with the respective management’s authorization;
(ii) all
income and expense items are promptly and properly recorded for the relevant periods in accordance with the revenue recognition and expense
policies maintained by the Company, as permitted by U.S. GAAP;
(iii) access
to assets is permitted only in accordance with the respective management’s authorization; and
(iv) recorded
assets are compared with existing assets at reasonable intervals, and appropriate action is taken with respect to any differences.
(b) All
accounts, books and ledgers of the Company Group have been properly and accurately kept and completed in all material respects, and there
are no material inaccuracies or discrepancies of any kind contained or reflected therein. Except as disclosed on Schedule 4.12(b),
the Company Group does not have any records, systems controls, data or information recorded, stored, maintained, operated or otherwise
wholly or partly dependent on or held by any means (including any mechanical, electronic or photographic process, whether computerized
or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership (excluding licensed software
programs) and direct control of the Company Group and which is not located at the relevant office.
4.13 Absence
of Certain Changes. Since the Balance Sheet Date, the Company Group has conducted the Business in the ordinary course consistent
with past practices. Without limiting the generality of the foregoing, except as set forth on Schedule 4.13, since the Balance
Sheet Date, there has not been:
(a) any
Material Adverse Effect or any material diminishment in the value to Purchaser of the transactions contemplated hereby;
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(b) any
transaction, Contract or other instrument entered into, or commitment made, by the Company Group, or any of the Company Group’s
assets (including the acquisition or disposition of any assets) or any relinquishment by the Company Group of any Contract or other right,
in either case other than transactions and commitments in the ordinary course of business consistent in all respects, including kind and
amount, with past practices and those contemplated by this Agreement;
(c) (i) any
redemption of, declaration, setting aside or payment of any dividend or other distribution with respect to any capital stock or other
equity interests in the Company Group; (ii) any issuance by the Company Group of shares of capital stock or other equity interests
in the Company Group, or (iii) any repurchase, redemption or other acquisition, or any amendment of any term, by the Company Group
of any outstanding shares of capital stock or other equity interests;
(d) (i) any
creation or other incurrence of any Lien (other than Permitted Liens) on the Company Capital Stock or any other capital stock or securities
of the Company Group or on any of the Company Group’s assets, and (ii) any making of any loan, advance or capital contributions
to or investment in any Person by the Company Group;
(e) any
material personal property damage, destruction or casualty loss or personal injury loss (whether or not covered by insurance) affecting
the business or assets of the Company Group;
(f) any
material labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof
to organize any employees of the Company Group, which employees were not subject to a collective bargaining agreement at the Balance Sheet
Date, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to any employees of the Company Group;
(g) any
sale, transfer, lease to others or otherwise disposition of any of its assets by the Company Group except for inventory sold in the ordinary
course of business consistent with past practices or immaterial amounts of other Tangible Personal Property not required by its business;
(h) any
capital expenditure by the Company Group in excess in any fiscal month of an aggregate of $100,000 or entering into any lease of capital
equipment or property under which the annual lease charges exceed $100,000 in the aggregate by the Company Group;
(i) any
institution of litigation, settlement or agreement to settle any litigation, action, proceeding or investigation before any court or governmental
body relating to the Company Group or its property or suffering of any actual or threatened litigation, action, proceeding or investigation
before any court or governmental body relating to the Company Group or its property;
(j) the
incurrence of any Indebtedness, or any loan of any monies to any Person or guarantee of any obligations of any Person by the Company Group;
13
(k) except
as required by U.S. GAAP, any change in the accounting methods or practices (including, any change in depreciation or amortization policies
or rates) of the Company Group or any revaluation of any of the assets of the Company Group;
(l) any
amendment to the Company Group’s organizational documents, or any engagement by the Company Group in any merger, consolidation,
reorganization, reclassification, liquidation, dissolution or similar transaction;
(m) any
acquisition of assets (other than acquisitions of inventory in the ordinary course of business consistent with past practice) or business
of any Person;
(n) any
material Tax election made by the Company Group outside of the ordinary course of business consistent with past practice, or any material
Tax election changed or revoked by the Company Group; any material claim, notice, audit report or assessment in respect of Taxes settled
or compromised by the Company Group; any annual Tax accounting period changed by the Company Group; any Tax allocation agreement, Tax
sharing agreement, Tax indemnity agreement or closing agreement relating to any Tax entered into by the Company Group; or any right to
claim a material Tax refund surrendered by the Company Group; or
(o) any
commitment or agreement to do any of the foregoing.
4.14 Properties;
Title to the Company’s Assets.
(a) Except
as set forth on Schedule 4.14(a), the items of Tangible Personal Property have no defects, are in good operating condition and
repair and function in accordance with their intended uses (ordinary wear and tear excepted) and have been properly maintained, and are
suitable for their present uses and meet all specifications and warranty requirements with respect thereto.
(b) All
of the Tangible Personal Property is located at the office of the Company.
(c) The
Company has good, valid and marketable title in and to, or in the case of the Leases and the assets which are leased or licensed pursuant
to Contracts, a valid leasehold interest or license in or a right to use, all of their assets reflected on the Balance Sheet. Except
as set forth on Schedule 4.14(c), no such asset is subject to any Liens other than Permitted Liens. The Company Group’s
assets constitute all of the assets of any kind or description whatsoever, including goodwill, for the Company Group to operate the Business
immediately after the Closing in the same manner as the Business is currently being conducted.
4.15 Litigation.
Except as set forth on Schedule 4.15, there is no Action (or any basis therefore) pending against, or to the best knowledge of
the Company threatened against or affecting, the Company Group, any of its officers or directors, the Business, or any Company Capital
Stock or any of the Company’s Group assets or any Contract before any court, Authority or official or which in any manner challenges
or seeks to prevent, enjoin, alter or delay the transactions contemplated hereby or by the Additional Agreements. There are no outstanding
judgments against the Company Group. The Company Group is not, and has not been in the past five (5) years, subject to any proceeding
with any Authority.
14
4.16 Contracts.
(a) Schedule
4.16(a) lists all Contracts, oral or written (collectively, “Material Contracts”) to which the Company Group
is a party and which are currently in effect and constitute the following:
(i) all
Contracts that require annual payments or expenses by, or annual payments or income to, the Company Group of $100,000 or more (other than
standard purchase and sale orders entered into in the ordinary course of business consistent with past practice);
(ii) all
sales, advertising, agency, lobbying, broker, sales promotion, market research, marketing or similar contracts and agreements, in each
case requiring the payment of any commissions by the Company Group in excess of $100,000 annually;
(iii) all
employment Contracts, employee leasing Contracts, and consultant and sales representatives Contracts with any current or former officer,
director, employee or consultant of the Company Group or other Person, under which the Company Group (A) has continuing obligations
for payment of annual compensation of at least $100,000 (other than oral arrangements for at-will employment), (B) has severance
or post termination obligations to such Person (other than COBRA obligations), or (C) has an obligation to make a payment upon consummation
of the transactions contemplated hereby or as a result of a change of control of the Company;
(iv) all
Contracts creating a joint venture, strategic alliance, limited liability company and partnership agreements to which the Company Group
is a party;
(v) all
Contracts relating to any acquisitions or dispositions of assets by the Company Group;
(vi) all
Contracts for material licensing agreements, including Contracts licensing Intellectual Property Rights, other than “shrink wrap”
licenses;
(vii) all
Contracts relating to secrecy, confidentiality and nondisclosure agreements restricting the conduct of the Company Group or limiting the
freedom of the Company Group to compete in any line of business or with any Person or in any geographic area;
(viii) all
Contracts relating to patents, trademarks, service marks, trade names, brands, copyrights, trade secrets and other Intellectual Property
Rights of the Company Group;
(ix) all
Contracts providing for guarantees, indemnification arrangements and other hold harmless arrangements made or provided by the Company
Group, including all ongoing agreements for repair, warranty, maintenance, service, indemnification or similar obligations;
15
(x) all
Contracts with or pertaining to the Company Group to which any Affiliate of the Company Group is a party;
(xi) all
Contracts relating to property or assets (whether real or personal, tangible or intangible) in which the Company Group holds a leasehold
interest (including the Leases) and which involve payments to the lessor thereunder in excess of $100,000 per year;
(xii) all
Contracts relating to outstanding Indebtedness, including financial instruments of indenture or security instruments (typically interest-bearing)
such as notes, mortgages, loans and lines of credit;
(xiii) any
Contract relating to the voting or control of the equity interests of the Company Group or the election of directors of the Company Group
(other than the organizational documents of the Company Group);
(xiv) any
Contract not cancellable by the Company Group with no more than 60 days’ notice if the effect of such cancellation would result
in monetary penalty to the Company Group in excess of $100,000 per the terms of such contract;
(xv) any
Contract that can be terminated, or the provisions of which are altered, as a result of the consummation of the transactions contemplated
by this Agreement or any of the Additional Agreements to which the Company Group is a party; and
(xvi) any
Contract for which any of the benefits, compensation or payments (or the vesting thereof) will be increased or accelerated by the consummation
of the transactions contemplated hereby or the amount or value thereof will be calculated on the basis of any of the transactions contemplated
by this Agreement.
(b) Except
as set for the on Schedule 4.16(b), each Contract is a valid and binding agreement, and is in full force and effect, and neither
the Company Group nor, to the Company’s best knowledge, any other party thereto, is in breach or default (whether with or without
the passage of time or the giving of notice or both) under the terms of any such Material Contract. Except as set for the on Schedule
4.16(b), the Company Group has not assigned, delegated, or otherwise transferred any of its rights or obligations with respect to
any Material Contracts, or granted any power of attorney with respect thereto or to any of the Company Group’s assets. Except as
set forth on Schedule 4.16(b), no Contract (i) requires the Company Group to post a bond or deliver any other form of security
or payment to secure its obligations thereunder or (ii) imposes any non-competition covenants that may be binding on, or restrict
the Business or require any payments by or with respect to Purchaser or any of its Affiliates.
(c) Except
as set forth on Schedule 4.16(c), none of the execution, delivery or performance by the Company of this Agreement or Additional
Agreements to which the Company is a party or the consummation by the Company of the transactions contemplated hereby or thereby constitutes
a default under or gives rise to any right of termination, cancellation or acceleration of any obligation of the Company Group or to a
loss of any material benefit to which the Company Group is entitled under any provision of any Material Contract.
16
(d) Except
as set for the on Schedule 4.16(d), the Company Group is in compliance with all covenants, including all financial covenants,
in all notes, indentures, bonds and other instruments or agreements evidencing any Indebtedness.
4.17 Licenses
and Permits. Schedule 4.17 correctly lists each license, franchise, permit, order or approval or other similar authorization
required under applicable law to carry out or otherwise affecting, or relating in any way to, the Business, together with the name of
the Authority issuing the same (the “Permits”). Except as indicated on Schedule 4.17, such Permits are valid
and in full force and effect, and none of the Permits will, assuming the related Company Consent has been obtained or waived prior to
the Closing Date, be terminated or impaired or become terminable as a result of the transactions contemplated hereby. The Company Group
has all Permits necessary to operate the Business.
4.18 Compliance
with Laws. Except as set forth on Schedule 4.18, the Company Group is not in violation of, has not violated, and to the Company’s
best knowledge, is neither under investigation with respect to nor has been threatened to be charged with or given notice of any violation
or alleged violation of, any Law, or judgment, order or decree entered by any court, arbitrator or Authority, domestic or foreign, nor
is there any basis for any such charge and within the last 24 months the Company Group has not received any subpoenas by any Authority.
(a) Without
limiting the foregoing paragraph, the Company Group is not in violation of, has not violated, and to the Company’s best knowledge
is not under investigation with respect to nor has been threatened or charged with or given notice of any violation of any provisions
of:
(i) any
Law applicable due to the specific nature of the Business, including Laws applicable to data privacy, data security and/or personal information
(“Data Protection Laws”) and Laws applicable to lending activities;
(ii) the
Foreign Corrupt Practices Act of 1977 (§§ 78dd-1 et seq.), as amended (the “Foreign Corrupt Practices Act”);
(iii) any
comparable or similar Law of any jurisdiction; or
(iv) any
Law regulating or covering conduct in, or the nature of, the workplace, including regarding sexual harassment or, on any impermissible
basis, a hostile work environment.
(b) Without
limiting the foregoing paragraph, neither the Company Group nor, to the knowledge of the Company, any director, officer, agent, employee,
Affiliate or Person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”). The Company Group has not engaged in transactions with, or exported
any of its products or associated technical data (i) into (or to a national or resident of) Cuba, Iran, Iraq, Libya, North
Korea, Syria or any other country to which the United States has embargoed goods to or has proscribed economic transactions with or (ii) to
the knowledge of the Company, to any Person included on the United States Treasury Department’s list of Specially Designated Nationals
or the U.S. Commerce Department’s Denied Persons List.
17
(c) Except
as set forth on Schedule 4.18, no permit, license or registration is required by the Company Group in the conduct of the Business
under any of the Laws described in this Section 4.18.
4.19 Intellectual
Property.
(a) Schedule
4.19 sets forth a true, correct and complete list of all Intellectual Property Rights, specifying as to each, as applicable: (i) the
nature of such Intellectual Property Right; (ii) the owner of such Intellectual Property Right; (iii) the jurisdictions by
or in which such Intellectual Property Right has been issued or registered or in which an application for such issuance or registration
has been filed; and (iv) all licenses, sublicenses and other agreements pursuant to which any Person is authorized to use such Intellectual
Property Right.
(b) Within
the past five (5) years (or prior thereto if the same is still pending or subject to appeal or reinstatement) the Company Group has
not been sued or charged in writing with or been a defendant in any Action that involves a claim of infringement of any Intellectual Property
Rights, and the Company has no knowledge of any other claim of infringement by the Company Group, and no knowledge of any continuing infringement
by any other Person of any Intellectual Property Rights of the Company Group.
(c) The
current use by the Company Group of the Intellectual Property Rights does not infringe, and the use by the Company Group of the Intellectual
Property Rights after the closing will not infringe, the rights of any other Person. Any Intellectual Property Rights used by the Company
Group in the performance of any services under any Contract is, and upon the performance of such Contract remains, owned by the Company
Group and no client, customer or other third-party has any claim of ownership on the Intellectual Property Rights.
(d) Except
as disclosed on Schedule 4.19(d), all employees, agents, consultants or contractors who have contributed to or participated in
the creation or development of any copyrightable, patentable or trade secret material on behalf of the Company Group or any predecessor
in interest thereto either: (i) is a party to a “work-for-hire” agreement under which the Company Group is deemed to
be the original owner/author of all property rights therein; or (ii) has executed an assignment or an agreement to assign in favor
of the Company Group (or such predecessor in interest, as applicable) all right, title and interest in such material.
(e) None
of the execution, delivery or performance by the Company of this Agreement or any of the Additional Agreements to which the Company is
a party or the consummation by the Company of the transactions contemplated hereby or thereby will cause any material item of Intellectual
Property Rights owned, licensed, used or held for use by the Company Group immediately prior to the Closing to not be owned, licensed
or available for use by the Company Group on substantially the same terms and conditions immediately following the Closing.
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(f) The
Company has taken reasonable measures to safeguard and maintain the confidentiality and value of all trade secrets and other items of
Intellectual Property Rights that are confidential and all other confidential information, data and materials licensed by the Company
Group or otherwise used in the operation of the Business. The transactions contemplated by this Agreement will not result in the violation
of any Data Protection Laws or the privacy policies of the Company Group.
4.20 [intentionally
omitted].
4.21 Accounts
Receivable and Payable; Loans.
(a) All
accounts receivable and notes of the Company Group reflected on the Financial Statements, and all accounts receivable and notes arising
subsequent to the date thereof, represent valid obligations arising from services actually performed or goods actually sold by the Company
Group in the ordinary course of business consistent with past practice. The accounts payable of the Company reflected on the Financial
Statements, and all accounts payable arising subsequent to the date thereof, arose from bona fide transactions in the ordinary course
consistent with past practice.
(b) To
the best of the Company’s knowledge, there is no contest, claim, or right of setoff in any agreement with any maker of an account
receivable or note relating to the amount or validity of such account, receivables or note involving an amount in excess of $100,000.
Except as set forth on Schedule 4.21(b), to the best knowledge of the Company, all accounts, receivables or notes are good and
collectible in the ordinary course of business.
(c) The
information set forth on Schedule 4.21(c) separately identifies any and all accounts, receivables or notes of the Company
Group which are owed by any Affiliate of the Company Group. Except as set forth on Schedule 4.21(c), the Company Group is not
indebted to any of its Affiliates and no Affiliates are indebted to the Company Group.
4.22 Pre-payments.
Except as set forth on Schedule 4.22, the Company Group has not received any payments with respect to any services to be rendered
or goods to be provided after the Closing except in the ordinary course of business.
4.23 Employees.
(a) Schedule
4.23(a) sets forth a true, correct and complete list of each of the 20 highest compensated employees of the Company Group as
of December 31, 2025, setting forth the name, title, current salary or compensation rate for each such person and total compensation
(including bonuses and commissions) paid to each such person for the fiscal year ended December 31, 2025.
(b) Except
as set forth on Schedule 4.23(b), the Company Group is not a party to or subject to any collective bargaining agreement,
or any similar agreement, and there has been no activity or proceeding by a labor union or representative thereof to organize any employees
of the Company Group.
19
(c) There
are no pending or, to the knowledge of the Company, threatened claims or proceedings against the Company Group under any worker’s
compensation policy or long-term disability policy.
4.24 Employment
Matters.
(a) Schedule
4.24(a) sets forth a true and complete list of every employment agreement, commission agreement, employee group or executive
medical, life, or disability insurance plan, and each incentive, bonus, profit sharing, retirement, deferred compensation, equity, phantom
stock, stock option, stock purchase, stock appreciation right or severance plan of the Company Group now in effect or under which the
Company Group has or might have any obligation, or any understanding between the Company Group and any employee concerning the terms of
such employee’s employment that does not apply to the Company Group’s employees generally (collectively, “Labor Agreements”).
The Company Group has previously delivered to Purchaser true and complete copies of each such Labor Agreement, any employee handbook or
policy statement of the Company Group, and complete and correct information concerning the Company Group’s employees.
(b) Except
as disclosed on Schedule 4.24(b):
(i) to
the best knowledge of the Company Group, no employee of the Company Group, in the ordinary course of his or her duties, has breached or
will breach any obligation to a former employer in respect of any covenant against competition or soliciting clients or employees or servicing
clients or confidentiality or any proprietary right of such former employer; and
(ii) the
Company Group is not a party to any collective bargaining agreement, does not have any material labor relations problems, and there is
no pending representation question or union organizing activity respecting employees of the Company Group.
4.25 Withholding.
Except as disclosed on Schedule 4.25, all obligations of the Company Group applicable to its employees, whether arising by operation
of Law, by contract, by past custom or otherwise, or attributable to payments by the Company Group to trusts or other funds or to any
governmental agency, with respect to unemployment compensation benefits, social security benefits or any other benefits for its employees
with respect to the employment of said employees through the date hereof have been paid or adequate accruals therefor have been made
on the Financial Statements. Except as disclosed on Schedule 4.25, all reasonably anticipated obligations of the Company Group
with respect to such employees (except for those related to wages during the pay period immediately prior to the Closing Date and arising
in the ordinary course of business), whether arising by operation of Law, by contract, by past custom, or otherwise, for salaries and
holiday pay, bonuses and other forms of compensation payable to such employees in respect of the services rendered by any of them prior
to the date hereof have been or will be paid by the Company Group prior to the Closing Date.
20
4.26 Employee
Benefits and Compensation. Schedule 4.26 sets forth each “employee benefit plan” (as defined in Section 3(3) of
ERISA), bonus, deferred compensation, equity-based or non-equity-based incentive, severance or other plan or written agreement relating
to employee or director benefits or employee or director compensation or fringe benefits, maintained or contributed to by the Company
Group at any time during the 5-calendar year period immediately preceding the date hereof and/or with respect to which the Company Group
could incur or could have incurred any direct or indirect, fixed or contingent liability (each a “Plan” and collectively,
the “Plans”). Each Plan is in compliance with applicable law in all material respects.
4.27 Real
Property.
(a) Except
as set forth on Schedule 4.27, the Company Group does not own, or otherwise have an interest in, any Real Property, including
under any Real Property lease, sublease, space sharing, license or other occupancy agreement. The Company Group has good, valid and subsisting
title to its respective leasehold estates in the offices described on Schedule 4.27, free and clear of all Liens. The Company
Group has not breached or violated any local zoning ordinance, and no notice from any Person has been received by the Company Group or
served upon the Company Group claiming any violation of any local zoning ordinance.
(b) With
respect to the Lease: (i) it is valid, binding and in full force and effect; (ii) all rents and additional rents and other
sums, expenses and charges due thereunder have been paid; (iii) the lessee has been in peaceable possession since the commencement
of the original term thereof; (iv) no waiver, indulgence or postponement of the lessee’s obligations thereunder has been granted
by the lessor; (v) there exist no default or event of default thereunder by the Company Group or, to the Company’s knowledge,
by any other party thereto; (vi) there exists no occurrence, condition or act which, with the giving of notice, the lapse of time
or the happening of any further event or condition, would become a default or event of default by the Company Group thereunder; and (vii) there
are no outstanding claims of breach or indemnification or notice of default or termination thereunder. The Company Group holds the leasehold
estate on the Lease free and clear of all Liens, except for Liens of mortgagees of the Real Property in which such leasehold estate is
located. The Real Property leased by the Company Group is in a state of maintenance and repair in all material respects adequate and
suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required
in connection with any of the leased Real Properties. The Company Group is in physical possession and actual and exclusive occupation
of the whole of the leased property, none of which is subleased or assigned to another Person. The Lease leases all useable square footage
of the premise located at the leased Real Property. The Company Group does not owe any brokerage commission with respect to any Real
Property.
4.28 Accounts.
Schedule 4.28 sets forth a true, complete and correct list of the checking accounts, deposit accounts, safe deposit boxes, and
brokerage, commodity and similar accounts of the Company Group, including the account number and name, the name of each depositary or
financial institution and the address where such account is located and the authorized signatories thereto.
21
4.29 Tax
Matters. Except as set forth on Schedule 4.29:
(a) (i) The
Company Group has duly and timely filed all material Tax Returns which are required to be filed by or with respect to it, and has paid
all Taxes which have become due; (ii) all such Tax Returns are true, correct and complete and accurate in all material respects;
(iii) all such Tax Returns have been examined by the relevant Taxing Authority or the period for assessment for Taxes in respect
of such Tax Returns has expired; (iv) there is no Action, pending or proposed in writing, with respect to Taxes of the Company Group;
(v) no statute of limitations in respect of the assessment or collection of any Taxes of the Company Group for which a Lien may be
imposed on any of the Company Group’s assets has been waived or extended, which waiver or extension is in effect; (vi) the
Company Group has complied in all material respects with all applicable Laws relating to the reporting, payment, collection and withholding
of Taxes and has duly and timely withheld or collected, paid over to the applicable Taxing Authority and reported all Taxes (including
income, social, security and other payroll Taxes) required to be withheld or collected by the Company Group; (vii) no stock transfer
Tax, sales Tax, use Tax, real estate transfer Tax or other similar Tax will be imposed on the transfer of the Company Capital Stock by
the Members to the Purchaser pursuant to this Agreement; (viii) there is no Lien (other than Permitted Liens) for Taxes upon any
of the assets of the Company Group; (ix) there is no outstanding request for a ruling from any Taxing Authority, request for a consent
by a Taxing Authority for a change in a method of accounting, subpoena or request for information by any Taxing Authority, or agreement
with any Taxing Authority, with respect to the Company Group; (x) no claim has ever been made by a Taxing Authority in a jurisdiction
where the Company Group has not paid any Tax or filed Tax Returns, asserting that the Company Group is or may be subject to Tax in such
jurisdiction; (xi) the Company Group has provided to Purchaser true, complete and correct copies of all Tax Returns relating to,
and all audit reports and correspondence relating to each proposed adjustment, if any, made by any Taxing Authority with respect to, any
taxable period ending after December 31, 2020; (xii) there is no outstanding power of attorney from the Company Group authorizing
anyone to act on behalf of the Company Group in connection with any Tax, Tax Return or Action relating to any Tax or Tax Return of the
Company Group; (xiii) the Company Group is not, and has ever been, a party to any Tax sharing or Tax allocation Contract; (xiv) the
Company Group is and has never been included in any consolidated, combined or unitary Tax Return; (xv) to the knowledge of the Company,
no issue has been raised by a Taxing Authority in any prior Action relating to the Company Group with respect to any Tax for any period
which, by application of the same or similar principles, could reasonably be expected to result in a proposed Tax deficiency of the Company
Group for any other period; and (xvi) the Company Group has not requested any extension of time within which to file any Tax Return,
which Tax Return has since not been filed.
(b) The
Company Group will not be required to include any item of income or exclude any item of deduction for any taxable period ending after
the Closing Date as a result of the use of a method of accounting with respect to any transaction that occurred on or before the Closing
Date.
(c) The
unpaid Taxes of the Company Group (i) did not, as of the most recent fiscal month end, exceed the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Unaudited
Financial Statements and (ii) will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of the Company in filing its Tax Return.
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4.30 Environmental
Laws.
(a) Except
as set forth in Schedule 4.30, the Company Group has not (i) received any written notice of any alleged claim, violation
of or Liability under any Environmental Law which has not heretofore been cured or for which there is any remaining liability; (ii) disposed
of, emitted, discharged, handled, stored, transported, used or released any Hazardous Materials, arranged for the disposal, discharge,
storage or release of any Hazardous Materials, or exposed any employee or other individual to any Hazardous Materials so as to give rise
to any Liability or corrective or remedial obligation under any Environmental Laws; or (iii) entered into any agreement that may
require it to guarantee, reimburse, pledge, defend, hold harmless or indemnify any other Person with respect to liabilities arising out
of Environmental Laws or the Hazardous Materials Activities of the Company Group.
(b) The
Company Group has delivered to Purchaser all material records in its possession concerning the Hazardous Materials Activities of the Company
Group and all environmental audits and environmental assessments in the possession or control of the Company Group of any facility currently
owned, leased or used by the Company Group which identifies the potential for any violations of Environmental Law or the presence of Hazardous
Materials on any property currently owned, leased or used by the Company Group.
(c) Except
as set forth on Schedule 4.30(c), there are no Hazardous Materials in, on, or under any properties owned, leased or used at any
time by the Company Group such as could give rise to any material liability or corrective or remedial obligation of the Company Group
under any Environmental Laws.
4.31 Finders’
Fees. Except as set forth on Schedule 4.31, there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of the Company Group or any of Affiliates who might be entitled to any fee or commission
from the Company, Merger Sub, Purchaser or any of their Affiliates upon consummation of the transactions contemplated by this Agreement.
4.32 Powers
of Attorney and Suretyships. Except as set forth on Schedule 4.32, the Company Group does not have any general or special
powers of attorney outstanding (whether as grantor or grantee thereof) or any obligation or liability (whether actual, accrued, accruing,
contingent, or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of
any Person.
4.33 Directors
and Officers. Schedule 4.33 sets forth a true, correct and complete list of all directors and officers of the Company Group.
4.34 Certain
Business Practices. Neither the Company Group, nor any director, officer, agent or employee of the Company Group (in their capacities
as such) has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977 or (iii) made any other unlawful payment.
Neither the Company Group, nor any director, officer, agent or employee of the Company Group (nor any Person acting on behalf of any
of the foregoing, but solely in his or her capacity as a director, officer, employee or agent of the Company Group) has, since January 1,
2021, directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental
employee or other Person who is or may be in a position to help or hinder the Company Group or assist the Company Group in connection
with any actual or proposed transaction, which, if not given or continued in the future, would reasonably be expected to adversely affect
the business or prospects of the Company Group and would reasonably be expected to subject the Company Group to suit or penalty in any
private or governmental litigation or proceeding.
23
4.35 Money
Laundering Laws. The operations of the Company Group are and have been conducted at all times in compliance with anti-money laundering
statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental authority (collectively, the “Money Laundering Laws”),
and no Action involving the Company Group with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
4.36 Insurance.
All forms of insurance owned or held by and insuring the Company Group are set forth on Schedule 4.36, and such policies are in
full force and effect. All premiums with respect to such policies covering all periods up to and including the Closing Date have been
paid, and no notice of cancellation or termination has been received with respect to any such policy which was not replaced on substantially
similar terms prior to the date of such cancellation or termination. There is no existing default or event which, with or without the
passage of time or the giving of notice or both, would constitute a default under any such policy or entitle any insurer to terminate
or cancel any such policy. Such policies will not in any way be affected by or terminate or lapse by reason of the transactions contemplated
by this Agreement or the Additional Agreements. The insurance policies to which the Company Group is a party are sufficient for compliance
with all requirements of all Contracts to which the Company Group is a party or by which the Company Group is bound. In the three (3) years
preceding the date of this Agreement, the Company Group has not been refused any insurance with respect to its assets or operations or
had its coverage limited by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance.
The Company Group does not have any self-insurance arrangements.
4.37 Related
Party Transactions. Except as contemplated by this Agreement and the Financial Statements, no Affiliate of the Company Group (a) is
a party to any Contract, or has otherwise entered into any transaction, understanding or arrangement, with the Company Group or (b) owns
any property or right, tangible or intangible, which is used by the Company Group.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as disclosed in the
Purchaser SEC Documents filed with or furnished to the SEC prior to the date of this Agreement (other than any risk factor disclosures
or other similar cautionary or predictive statements therein), Purchaser hereby represent and warrant to the Company that each of the
following representations and warranties are true, correct and complete as of the date of this Agreement and as of the Closing Date:
5.1 Corporate
Existence and Power. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the Stater
of Delaware.
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5.2 Corporate
Authorization. The execution, delivery and performance by the Purchaser of this Agreement and the Additional Agreements and the consummation
by the Purchaser of the transactions contemplated hereby and thereby are within the corporate powers of the Purchaser and have been duly
authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the
Purchaser and it constitutes, and upon its execution and delivery, the Additional Agreements will constitute, a valid and legally binding
agreement of the Purchaser, enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
5.3 Governmental
Authorization. Assuming the accuracy of the representations and warranties set forth in Section 4.3, neither the execution,
delivery nor performance of this Agreement requires any consent, approval, license or other action by or in respect of, or registration,
declaration or filing with any Authority.
5.4 Non-Contravention.
The execution, delivery and performance by the Purchaser of this Agreement does not and will not (i) contravene or conflict with
the organizational or constitutive documents of the Purchaser, or (ii) contravene or conflict with or constitute a violation of
any provision of any Law, judgment, injunction, order, writ, or decree binding upon the Purchaser.
5.5 Finders’
Fees. Except for any liabilities for fees or commissions described on Schedule 4.31 (which are the responsibility of the Company),
there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the
Purchaser or their Affiliates who might be entitled to any fee or commission from the Company or any of its Affiliates upon consummation
of the transactions contemplated by this Agreement or any of the Additional Agreements.
5.6 Issuance
of Shares. The Closing Payment Shares, when issued in accordance with this Agreement, will be duly authorized and validly issued,
and will be fully paid and nonassessable.
5.7 [intentionally
omitted].
5.8 Information
Supplied. None of the information supplied or to be supplied by the Purchaser expressly for inclusion or incorporation by reference
in the filings with the SEC and mailings to Purchaser’s stockholders with respect to the solicitation of proxies to approve the
transactions contemplated by this Agreement and the Additional Agreements, if applicable, or in any other Additional Purchaser SEC Documents,
will, at the date of filing and/ or mailing, as the case may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Purchaser or
that is included in the Purchaser SEC Documents).
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5.9 Board
Approval. The Purchaser’s board of directors (including any required committee or subgroup of such board) has, as of the date
of this Agreement, unanimously (i) declared the advisability of the transactions contemplated by this Agreement, (ii) determined
that the transactions contemplated hereby are in the best interests of the stockholders of Purchaser and (iii) determined that the
transactions contemplated hereby constitutes a “Business Combination” as such term is defined in Purchaser’s amended
and restated certificate of incorporation and bylaws.
5.10 Purchaser
SEC Documents and Financial Statements. Purchaser has filed all forms, reports, schedules, statements and other documents, including
any exhibits thereto, required to be filed or furnished by Purchaser with the SEC since Purchaser’s formation under the Exchange
Act or the Securities Act, together with any amendments, restatements or supplements thereto, and will use commercially reasonable efforts
to file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement
(the “Additional Purchaser SEC Documents”). Purchaser has made available to the Company copies in the form filed with
the SEC of all of the following, except to the extent available in full without redaction on the SEC’s website through EDGAR for
at least two (2) days prior to the date of this Agreement: (i) Purchaser’s Annual Reports on Form 10-K for each
fiscal year of Purchaser beginning with the first year Purchaser was required to file such a form, (ii) all proxy statements relating
to Purchaser’s meetings of stockholders (whether annual or special) held, and all information statements relating to stockholder
consents, since the beginning of the first fiscal year referred to in clause (i) above, (iii) its Form 8-Ks filed since
the beginning of the first fiscal year referred to in clause (i) above, and (iv) all other forms, reports, registration statements
and other documents (other than preliminary materials if the corresponding definitive materials have been provided to the Company pursuant
to this Section 6.12) filed by Purchaser with the SEC since Purchaser’s formation (the forms, reports, registration statements
and other documents referred to in clauses (i), (ii), (iii), and (iv) above, whether or not available through EDGAR, are, collectively,
the (“Purchaser SEC Documents”). The Purchaser SEC Documents were, and the Additional Purchaser SEC Documents will
be, prepared in all material respects in accordance with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley
Act, as the case may be, and the rules and regulations thereunder. The Purchaser SEC Documents did not, and the Additional Purchaser
SEC Documents will not, at the time they were or are filed, as the case may be, with the SEC (except to the extent that information contained
in any Purchaser SEC Document or Additional Purchaser SEC Document has been or is revised or superseded by a later filed Purchaser SEC
Document or Additional Purchaser SEC Document, then on the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that the foregoing does not apply to statements
in or omissions in any information supplied or to be supplied by the Company Group expressly for inclusion or incorporation by reference
in any Registration Statement or Other Filing. As used in this Section 5.10, the term “file” shall be broadly construed
to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.
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5.11 Certain
Business Practices. Neither the Purchaser, nor any director, officer, agent or employee of the Purchaser (in their capacities as
such) has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977 or (iii) made any other unlawful payment. Neither
the Purchaser, nor any director, officer, agent or employee of the Purchaser (nor any Person acting on behalf of any of the foregoing,
but solely in his or her capacity as a director, officer, employee or agent of the Purchaser) has, since January 31, 2024, directly
or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental employee
or other Person who is or may be in a position to help or hinder the Purchaser or assist the Purchaser in connection with any actual
or proposed transaction, which, if not given or continued in the future, would reasonably be expected to adversely affect the business
or prospects of the Purchaser and would reasonably be expected to subject the Purchaser to suit or penalty in any private or governmental
litigation or proceeding.
5.12 Money
Laundering Laws. The operations of the Purchaser are and have been conducted at all times in compliance with the Money Laundering
Laws, and no Action involving the Purchaser with respect to the Money Laundering Laws is pending or, to the knowledge of the Purchaser,
threatened.
ARTICLE VI
COVENANTS OF THE PARTIES PENDING CLOSING
6.1 Conduct
of the Business. Each of the Company and the Purchaser covenants and agrees that:
(a) from the date hereof
through the Closing Date, each party shall conduct business only in the ordinary course, (including the payment of accounts payable and
the collection of accounts receivable), consistent with past practices, and shall not enter into any material transactions without the
prior written consent of the other party, and shall use its best efforts to preserve intact its business relationships with employees,
clients, suppliers and other third parties. Without limiting the generality of the foregoing, from the date hereof until and including
the Closing Date, without the other party’s prior written consent (which shall not be unreasonably withheld), neither party shall,
and the Company shall cause its Subsidiaries not to:
(i) amend,
modify or supplement its certificate of incorporation and bylaws or other organizational or governing documents;
(ii) amend,
waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise in any way, any Contract or any other
right or asset of the Company or Purchaser;
(iii) modify,
amend or enter into any contract, agreement, lease, license or commitment, which (A) is with respect to Real Property, (B) extends
for a term of one year or more or (C) obligates the payment of more than $100,000 (individually or in the aggregate);
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(iv) make
any capital expenditures in excess of $100,000 (individually or in the aggregate);
(v) sell,
lease, license or otherwise dispose of any of the Company Group’s or Purchaser’s assets or assets covered by any Contract
except pursuant to existing contracts or commitments disclosed herein;
(vi) accept
returns of products sold from Inventory except in the ordinary course, consistent with past practice;
(vii) pay,
declare or promise to pay any dividends or other distributions with respect to its capital stock or other equity securities, or pay, declare
or promise to pay any other payments to any stockholder or other equityholder (other than payment of salary, benefits, leases, commissions
and other regular and necessary similar payments in the ordinary course);
(viii) obtain
or incur any loan or other Indebtedness, including drawings under the Company Group’s or the Purchaser’s existing lines of
credit, or repay or satisfy any Indebtedness other than repayment of Indebtedness in accordance with the terms thereof;
(ix) suffer
or incur any Lien, except for Permitted Liens, on the Company Group’s assets;
(x) suffer
any damage, destruction or loss of property related to any of the Company Group’s or the Purchaser’s assets, whether or not
covered by insurance;
(xi) delay,
accelerate or cancel any receivables or Indebtedness owed to the Company Group or the Purchaser or write off or make further reserves
against the same;
(xii) merge
or consolidate with or acquire any other Person or be acquired by any other Person;
(xiii) permit
any insurance policy protecting any of the Company Group’s or the Purchaser’s assets to lapse, unless simultaneously with
such lapse, a replacement policy underwritten by an insurance company of nationally recognized standing having comparable deductions and
providing coverage equal to or greater than the coverage under the lapsed policy for substantially similar premiums or less is in full
force and effect;
(xiv) adopt
any severance, retention or other employee plans, amend any of its employee plans or fail to continue to make timely contributions thereto
in accordance with the terms thereof;
(xv) institute,
settle or agree to settle any litigation, action, proceeding or investigation before any court or governmental body in each case in excess
of $100,000 (exclusive of any amounts covered by insurance) or that imposes injunctive or other non-monetary relief on such party;
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(xvi) make
any change in its accounting principles or methods or write down the value of any Inventory or assets;
(xvii) change
the place of business or jurisdiction of organization;
(xviii) issue,
redeem or repurchase any capital stock, membership interests or other securities, or issue any securities exchangeable for or convertible
into any shares of its capital stock or other securities;
(xix) make
or change any material Tax election or change any annual Tax accounting periods;
(xx) enter
into any transaction with or distribute or advance any assets or property to any of its Affiliates other than the payment of salary and
benefits in the ordinary course; or
(xxi) agree
to do any of the foregoing.
(b) Neither
party shall knowingly and intentionally (i) take or agree to take any action that might make any representation or warranty of such
party inaccurate or misleading in any respect at, or as of any time prior to, the Closing Date or (ii) omit to take, or agree to
omit to take, any action necessary to prevent any such representation or warranty from being inaccurate or misleading in any respect at
any such time.
(c) From
the date hereof through the Closing Date, neither the Company Group, on the one hand, nor the Purchaser, on the other hand, shall, and
such Persons shall use reasonable best efforts to cause each of their respective officers, directors, Affiliates, managers, consultant,
employees, representatives and agents not to, directly or indirectly, (i) encourage, solicit, initiate, engage or participate in
negotiations with any Person concerning any Alternative Transaction, (ii) take any other action intended or designed to facilitate
the efforts of any Person relating to a possible Alternative Transaction or (iii) approve, recommend or enter into any Alternative
Transaction or any Contract related to any Alternative Transaction. For purposes of this Agreement, the term “Alternative Transaction”
shall mean any of the following transactions involving the Company Group or the Purchaser (other than the transactions contemplated by
this Agreement): (i) any merger, consolidation, share exchange, business combination or other similar transaction, or (ii) any
sale, lease, exchange, transfer or other disposition of a material portion of the assets of such Person (other than sales of inventory
in the ordinary course of business) or any class or series of the capital stock or other equity interests of the Company Group or the
Purchaser in a single transaction or series of transactions. In the event that there is an unsolicited proposal for, or an indication
of a serious interest in entering into, an Alternative Transaction, communicated in writing to the Company Group or the Purchaser or any
of their respective representatives or agents (each, an “Alternative Proposal”), such party shall as promptly as practicable
(and in any event within one (1) Business Day after receipt) advise the other parties to this Agreement orally and in writing of
any Alternative Proposal and the material terms and conditions of any such Alternative Proposal (including any changes thereto) and the
identity of the person making any such Alternative Proposal. The Company and the Purchaser shall keep the other parties informed on a
reasonably current basis of material developments with respect to any such Alternative Proposal.
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6.2 Access
to Information. From the date hereof until and including the Closing Date, the Company and the Purchaser shall each, to the best
of its ability, (a) continue to give the other party, its legal counsel and other representatives full access to the offices, properties
and, Books and Records, (b) furnish to the other party, its legal counsel and other representatives such information relating to
the business of the Company Group and the Purchaser as such Persons may request and (c) cause the employees, legal counsel, accountants
and representatives to cooperate with the other party in its investigation of the Business; provided that no investigation pursuant to
this Section (or any investigation prior to the date hereof) shall affect any representation or warranty given by the Company or
the Purchaser and, provided further, that any investigation pursuant to this Section shall be conducted in such manner as not to
interfere unreasonably with the conduct of the Business of the Company. Notwithstanding anything to the contrary in this Agreement, neither
party shall be required to provide the access described above or disclose any information if doing so is reasonably likely to (i) result
in a waiver of attorney-client privilege, work product doctrine or similar privilege or (ii) violate any contract to which it is
a party or to which it is subject or applicable Law.
6.3 Notices
of Certain Events. Each party shall promptly notify the other party of:
(a) any
notice or other communication from any Person alleging or raising the possibility that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement or that the transactions contemplated by this Agreement might give
rise to any Action or other rights by or on behalf of such Person or result in the loss of any rights or privileges of the Company (or
the Purchaser, post-Closing) to any such Person or create any Lien on any Company Capital Stock or capital stock of the Purchaser or
any of the Company Group’s or the Purchaser’s assets;
(b) any
notice or other communication from any Authority in connection with the transactions contemplated by this Agreement or the Additional
Agreements;
(c) any
Actions commenced or threatened against, relating to or involving or otherwise affecting either party or any of their stockholders or
their equity, assets or business or that relate to the consummation of the transactions contemplated by this Agreement or the Additional
Agreements;
(d) the
occurrence of any fact or circumstance which constitutes or results, or might reasonably be expected to constitute or result, in a Material
Adverse Change; and
(e) any
inaccuracy of any representation or warranty of such party contained in this Agreement at any time during the term hereof, or any failure
of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, that would
reasonably be expected to cause any of the conditions set forth in Article X not to be satisfied.
6.4 Annual
and Interim Financial Statements. From the date hereof through the Closing Date, within forty-five (45) calendar days following the
end of each three-month quarterly period, the Company shall deliver to Purchaser an unaudited consolidated summary of the Company Group’s
earnings and an unaudited consolidated balance sheet for the period from the Balance Sheet Date through the end of such quarterly period
and the applicable comparative period in the preceding fiscal year. The Company shall also promptly deliver to Purchaser copies of any
audited consolidated financial statements of the Company Group that the Company’s certified public accountants may issue.
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6.5 SEC
Filings.
(a) The
Company acknowledges that:
(i) the
Purchaser’s stockholders must approve the transactions contemplated by this Agreement (the “Purchaser Stockholder Approval”)
prior to the transactions contemplated hereby being consummated and that, in connection with such approval, the Purchaser must call a
special meeting of its stockholders requiring Purchaser to prepare and file with the SEC a proxy statement and proxy card (the “Proxy
Statement”), which will be included in the Registration Statement;
(ii) the
Purchaser will be required to file Quarterly and Annual reports that may be required to contain information about the transactions contemplated
by this Agreement; and
(iii) the
Purchaser will be required to file Current Reports on Form 8-K to announce the transactions contemplated hereby and other significant
events that may occur in connection with such transactions.
(b) The
Company acknowledges that a substantial portion of the Proxy Statement shall include disclosure regarding the Company and its management,
operations and financial condition. Accordingly, the Company agrees to as promptly as reasonably practical provide Purchaser with such
information as shall be reasonably requested by Purchaser for inclusion in or attachment to the Proxy Statement, and that such information
is accurate in all material respects and complies as to form in all material respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder. The Company understands that such information shall be included in the Proxy Statement
and/or responses to comments from the SEC or its staff in connection therewith and mailings. The Company shall make, and cause each Subsidiary
to make, their managers, directors, officers and employees available to Purchaser and its counsel in connection with the drafting of
such filings and mailings and responding in a timely manner to comments from the SEC.
6.6 Employees
of the Company and the Manager. Schedule 6.6 lists those employees designated by the Company as key personnel of the Company
(the “Key Personnel”). The Key Personnel shall, as a condition to their continued employment with the Company, execute
and deliver to the Company non-competition, non-solicitation and confidentiality agreements in form and substance satisfactory to Purchaser
(the “Non-Compete Agreements”). The Company shall use its best efforts to enter into Labor Agreements with each of
its employees to the extent required by law prior to the Closing Date, and to satisfy all accrued obligations of the Company Group applicable
to its employees, whether arising by operation of Law, by Contract, by past custom or otherwise, for payments by the Company to any trust
or other fund or to any Authority, with respect to, social insurance benefits, housing fund benefits, unemployment or disability compensation
benefits or otherwise.
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ARTICLE VII
COVENANTS OF THE COMPANY
The Company agrees that:
7.1 Reporting
and Compliance with Laws. From the date hereof through the Closing Date, the Company shall on behalf of the Company Group duly and
timely file all Tax Returns required to be filed with the applicable Taxing Authorities, pay any and all Taxes required by any Taxing
Authority and duly observe and conform in all material respects, to all applicable Laws and Orders.
7.2 Best
Efforts to Obtain Consents. The Company shall use its best efforts to obtain each Company Consent and Governmental Approval as promptly
as practicable hereafter.
7.3 Regulatory
Licenses. The Company shall use its best efforts to obtain all the requisite regulatory licenses and permits for purposes of carrying
out the Business legitimately.
7.4 Best
Efforts to Obtain Consents. After the effectiveness of the Registration Statement, the Company shall use its best efforts to obtain
the Company Member Approval as promptly as practicable thereafter.
ARTICLE VIII
COVENANTS OF ALL PARTIES HERETO
The parties hereto covenant
and agree that:
8.1 Best
Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, each party shall use its best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Laws, and in the
case of the Company, as reasonably requested by Purchaser, to consummate and implement expeditiously each of the transactions contemplated
by this Agreement. The parties hereto shall execute and deliver such other documents, certificates, agreements and other writings and
take such other actions as may be necessary or desirable in order to consummate or implement expeditiously each of the transactions contemplated
by this Agreement.
8.2 Cooperation
with Registration Statement.
(a) Notwithstanding
anything in this Agreement to the contrary, it is understood and agreed that the Purchaser intends to promptly prepare and file with the
SEC a registration statement (the “Registration Statement”) relating to the transactions contemplated hereby.
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(b) The
Company shall provide Purchaser with all reasonable information concerning the business of the Company Group and the management, operations
and financial condition of the Company Group as is required by the SEC for inclusion in the Registration Statement (“Company
Information”), including, all financial statements required by relevant securities laws and regulations (the “Required
Financial Statements”), which shall be prepared under such accounting principles and for such periods as required by the forms,
rules and regulations of the SEC or as requested by the SEC in connection with its review of the Registration Statement or any Other
Filing. Subject to the Company’s review and approval of any Registration Statement including Company Information and the consent
of the Company’s auditor to the inclusion of the Required Financial Statements in any Registration Statement (in each case, such
approval or consent not to be unreasonably withheld, conditioned or delayed), the Company acknowledges and agrees that Company Information
(including the Required Financial Statements), or summaries thereof or extracts therefrom, may be included in the Registration Statement
and any other filings required under the Exchange Act, Securities Act or any other United States federal, foreign or blue sky laws (“Other
Filings”). In connection therewith, the Company shall instruct the employees, counsel, financial advisors, auditors and other
authorized representatives of the Company Group to reasonably cooperate with Purchaser as relevant if required to achieve the foregoing.
The Purchaser agrees to provide the Company with a reasonable opportunity to review any Registration Statement and to not file any Registration
Statement without the Company’s approval (such approval not to be unreasonably withheld, conditioned or delayed).
(c) As
of the date of the filing of any Registration Statement with the SEC or Other Filing, none of the Company Information, Required Financial
Statements or other financial information supplied by the Company in connection with the Registration Statement or Other Filing shall
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order
to make the statements therein in light of the circumstances under which they were made, not misleading. If at any time prior to Closing,
a change in such Company Information, Required Financial Statements or other financial information, which would make the preceding sentence
incorrect, should be discovered by the Company, it shall promptly notify Purchaser of such change. The Company shall reasonably cooperate
with Purchaser on a best efforts basis in its filing of the Registration Statement and Other Filings, and shall instruct the employees,
counsel, financial advisors, auditors and other authorized representatives of the Company Group to reasonably cooperate with Purchaser
in connection therewith.
8.3 Confidentiality.
Except as necessary to complete the Proxy Statement or any other Registration Statement or Other Filings, the Company, on the one hand,
and Purchaser, on the other hand, shall hold and shall cause their respective representatives to hold in strict confidence, unless compelled
to disclose by judicial or administrative process or by other requirements of Law, all documents and information concerning the other
party furnished to it by such other party or its representatives in connection with the transactions contemplated by this Agreement (except
to the extent that such information can be shown to have been (a) previously known by the party to which it was furnished, (b) in
the public domain through no fault of such party or (c) later lawfully acquired from other sources, which source is not the agent
of the other party, by the party to which it was furnished), and each party shall not release or disclose such information to any other
person, except its representatives in connection with this Agreement. In the event that any party believes that it is required to disclose
any such confidential information pursuant to applicable Laws, to the extent legally permissible, such party shall give timely written
notice to the other party so that such party may have an opportunity to obtain a protective order or other appropriate relief. Each party
shall be deemed to have satisfied its obligations to hold confidential information concerning or supplied by the other party if it exercises
the same care as it takes to preserve confidentiality for its own similar information. The parties acknowledge that some previously confidential
information will be required to be disclosed in the Proxy Statement and any other Registration Statement and Other Filings.
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ARTICLE IX
CONDITIONS TO CLOSING
9.1 Condition
to the Obligations of the Parties. The obligations of all of the parties to consummate the Closing are subject to the satisfaction
of all the following conditions:
(a) No
provisions of any applicable Law, and no Order shall restrain or prohibit or impose any condition on the consummation of the Closing;
(b) There
shall not be any Action brought by any governmental Authority to enjoin or otherwise restrict the consummation of the Closing;
(c) The
Registration Rights Agreement, shall have been entered into and the same shall be in full force and effect.
9.2 Conditions
to Obligations of Purchaser. The obligation of Purchaser to consummate the Closing is subject to the satisfaction, or the waiver
at Purchaser’s sole and absolute discretion, of all the following further conditions:
(a) The
Company shall have duly performed all of its obligations hereunder required to be performed by it at or prior to the Closing Date.
(b) All
of the representations and warranties of the Company contained in this Agreement and in any certificate delivered by the Company pursuant
hereto, disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, regardless
of whether it involved a known risk, shall: (i) be true, correct and complete at and as of the date of this Agreement, or, (ii) if
otherwise specified, when made or when deemed to have been made, and (iii) be true, correct and complete as of the Closing Date,
except in the case of (i), (ii) and (iii) for any inaccuracies in such representations and warranties which would not in the
aggregate reasonably be expected to have a Material Adverse Effect.
(c) There
shall have been no event, change or occurrence which individually or together with any other event, change or occurrence, would reasonably
be expected to have a Material Adverse Effect, regardless of whether it involved a known risk.
(d) Purchaser
shall have received a certificate signed by the Chief Executive Officer and Chief Financial Officer of the Company to the effect set forth
in clauses (a) through (c) of this Section 9.2.
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(e) Purchaser
shall have received all documents it may reasonably request relating to the existence of the Company and the authority of the Company
to enter into and perform under this Agreement, all in form and substance reasonably satisfactory to Purchaser and its legal counsel,
including (i) a copy of the Charter Documents certified as of a recent date by the Secretary of State or similar official of its
jurisdictions of organization, (ii) copies of resolutions duly adopted by the board of directors of the Company and by vote or consent
of the Members authorizing this Agreement, the Additional Agreements and the transactions contemplated hereby and thereby, (iii) a
certificate of the Secretary of the Company certifying as to signatures of the officer(s) executing this Agreement and any certificate
or document to be delivered pursuant hereto, together with evidence of the incumbency of such Secretary, and (iv) a recent good standing
certificate regarding the Company from each jurisdiction in which the Company organized or is qualified to do business.
(f) The
Key Personnel shall have executed the Non-Compete Agreements and the same shall be in full force and effect, and the Company shall have
entered into Labor Agreements with each of its employees to the extent required by law, and satisfied all accrued obligations of the Company
applicable to its employees.
(g) The
Purchaser Stockholder Approval shall have been obtained.
9.3 Conditions
to Obligations of the Company. The obligations of the Company to consummate the Closing is subject to the satisfaction, or the waiver
at the Company’s discretion, of all of the following further conditions:
(a) (i) The
Purchaser shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to
the Closing Date, (ii) the representations and warranties of Purchaser contained in this Agreement, and in any certificate or other
writing delivered by the Purchaser pursuant hereto, disregarding all qualifications and expectations contained therein relating to materiality
shall be true and correct in all respects at and as of the Closing Date, as if made at and as of such date, except for any inaccuracies
in such representations and warranties which would not in the aggregate reasonably be expected to have a material adverse effect on the
Purchaser, and (iii) the Company shall have received a certificate signed by an authorized officer of the Purchaser to the foregoing
effect.
(b) Purchaser
shall have executed and delivered to the Company a copy of each Additional Agreement to which it is a party.
ARTICLE X
DISPUTE RESOLUTION
10.1 Arbitration.
(a) The
parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement (including with respect
to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement) or any alleged breach thereof
(including any action in tort, contract, equity, or otherwise), to binding arbitration before one arbitrator (the “Arbitrator”).
Binding arbitration shall be the sole means of resolving any dispute, claim, or controversy arising out of or relating to this Agreement
(including with respect to the meaning, effect, validity, termination, interpretation, performance or enforcement of this Agreement)
or any alleged breach thereof (including any claim in tort, contract, equity, or otherwise).
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(b) If
the parties cannot agree upon the Arbitrator, the Arbitrator shall be selected by the New York, New York chapter head of the American
Arbitration Association upon the written request of either side. The Arbitrator shall be selected within thirty (30) days of the written
request of any party.
(c) The
laws of the State of New York shall apply to any arbitration hereunder. In any arbitration hereunder, this Agreement shall be governed
by the laws of the State of New York applicable to a contract negotiated, signed, and wholly to be performed in the State of New York,
which laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall issue a written decision, setting forth findings
of fact and conclusions of law, within sixty (60) days after he shall have been selected. The Arbitrator shall have no authority to award
punitive or other exemplary damages.
(d) The
arbitration shall be held in New York, New York in accordance with and under the then-current provisions of the rules of the American
Arbitration Association, except as otherwise provided herein.
(e) On
application to the Arbitrator, any party shall have rights to discovery to the same extent as would be provided under the Federal Rules of
Civil Procedure, and the Federal Rules of Evidence shall apply to any arbitration under this Agreement; provided, however, that the
Arbitrator shall limit any discovery or evidence such that his decision shall be rendered within the period referred to in Section 10.1(c).
(f) The
Arbitrator may, at his discretion and at the expense of the party who will bear the cost of the arbitration, employ experts to assist
him in his determinations.
(g) The
costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief as provided in Section 10.1(h),
as applicable (including actual attorneys’ fees and costs), shall be borne by the unsuccessful party and shall be awarded as part
of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs in such decision. The determination of the
Arbitrator shall be final and binding upon the parties and not subject to appeal.
(h) Any
judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction. The parties
expressly consent to the non-exclusive jurisdiction of the courts (Federal and state) in New York, New York to enforce any award of the
Arbitrator or to render any provisional, temporary, or injunctive relief in connection with or in aid of the Arbitration. The parties
expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted to
arbitration hereunder. None of the parties hereto shall challenge any arbitration hereunder on the grounds that any party necessary to
such arbitration (including the parties hereto) shall have been absent from such arbitration for any reason, including that such party
shall have been the subject of any bankruptcy, reorganization, or insolvency proceeding.
36
(i) The
parties shall indemnify the Arbitrator and any experts employed by the Arbitrator and hold them harmless from and against any claim or
demand arising out of any arbitration under this Agreement or any agreement contemplated hereby, unless resulting from the gross negligence
or willful misconduct of the person indemnified.
(j) Notwithstanding
anything herein to the contrary, the parties agree that irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement. The parties expressly consent to the non-exclusive jurisdiction
of the courts (Federal and state) in New York, New York to render such relief and to enforce specifically the terms and provisions of
this Agreement.
10.2 Waiver
of Jury Trial; Exemplary Damages.
(a) THE
PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVE ANY RIGHT EACH SUCH PARTY MAY HAVE TO TRIAL BY JURY
IN ANY ACTION OF ANY KIND OR NATURE, IN ANY COURT IN WHICH AN ACTION MAY BE COMMENCED, ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT. NO PARTY SHALL BE AWARDED PUNITIVE OR OTHER EXEMPLARY DAMAGES RESPECTING ANY DISPUTE ARISING UNDER THIS AGREEMENT.
(b) Each
of the parties to this Agreement acknowledge that each has been represented in connection with the signing of this waiver by independent
legal counsel selected by the respective party and that such party has discussed the legal consequences and import of this waiver with
legal counsel. Each of the parties to this Agreement further acknowledge that each has read and understands the meaning of this waiver
and grants this waiver knowingly, voluntarily, without duress and only after consideration of the consequences of this waiver with legal
counsel.
ARTICLE XI
TERMINATION
11.1 Termination
Without Default.
(a) This
Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing by mutual written
consent of the Purchaser and the Company.
(b) In
the event that the Closing of the transactions contemplated hereunder has not occurred by December 31, 2026 (the “Outside
Closing Date”), and no material breach of this Agreement by the party (i.e., the Purchaser or the Merger Sub, on one hand,
or the Company, on the other hand) seeking to terminate this Agreement shall have occurred or have been made (as provided in Section 11.2
hereof), Purchaser or the Company shall have the right, at its sole option, to terminate this Agreement without liability to the other
party. Such right may be exercised by Purchaser or the Company, as the case may be, giving written notice to the other at any time after
the Outside Closing Date.
37
(c) In
the event an Authority shall have issued an Order, having the effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which Order is final and non-appealable, Purchaser or the Company shall have the right, at its sole option, to terminate this
Agreement without liability to the other party.
11.2 Termination
Upon Default.
(a) The
Purchaser may terminate this Agreement by giving notice to the Company on or prior to the Closing Date, without prejudice to any rights
or obligations Purchaser may have, if the Company shall have materially breached any representation, warranty, agreement or covenant
contained herein to be performed on or prior to the Closing Date and such breach shall not be cured by the earlier of the Outside Closing
Date and thirty (30) days following receipt by the Company of a notice describing in reasonable detail the nature of such breach.
(b) The
Company may terminate this Agreement by giving notice to Purchaser, without prejudice to any rights or obligations the Company may have,
if Purchaser shall have materially breached any of its covenants, agreements, representations, and warranties contained herein to be
performed on or prior to the Closing Date and such breach shall not be cured by the earlier of the Outside Closing Date and thirty (30)
days following receipt by Purchaser of a notice describing in reasonable detail the nature of such breach.
11.3 Effect
of Termination. If this Agreement is terminated pursuant to this Article XIII, this Agreement shall become void and of no effect
without liability of any party (or any stockholder, director, officer, employee, Affiliate, agent, consultant or representative of such
party) to the other party hereto; provided that, if such termination shall result from the material breach by a party of its covenants
and agreements hereunder or fraud, such party shall be fully liable for any and all liabilities and damages incurred or suffered by the
other party as a result of such failure. The provisions of Section 8.4, Article X, this Section 11.3 and Article XII
shall survive any termination hereof pursuant to this Article XI.
38
ARTICLE XII
MISCELLANEOUS
12.1 Notices.
Any notice hereunder shall be sent in writing, addressed as specified below, and shall be deemed given: (a) if by hand or recognized
courier service, by 4:00 PM on a business day, addressee’s day and time, on the date of delivery, and otherwise on the first business
day after such delivery; (b) if by fax or email, on the date that transmission is confirmed electronically, if by 4:00 PM on a business
day, addressee’s day and time, and otherwise on the first business day after the date of such confirmation; or (c) five days
after mailing by certified or registered mail, return receipt requested. Notices shall be addressed to the respective parties as follows
(excluding telephone numbers, which are for convenience only), or to such other address as a party shall specify to the others in accordance
with these notice provisions:
if to the Company (or, following
the Closing, the Surviving Corporation), to:
InnocsAI LLC
3524 Silverside Road, Suite 35B
Wilmington, Delaware 19810
Attn: NamChul Jung
e-mail: ncjung017@gmail.com
if to the Members’
Representative:
NamChul Jung
3524 Silverside Road, Suite 35B
Wilmington, Delaware 19810
e-mail: ncjung017@gmail.com
if to the Purchaser:
Liminatus Pharma, Inc.
2251 Stern Goodman Street, Suite E
Fullerton, CA 92833
Attn: Chris Kim
e-mail: chris@liminatus.com
with a copy (which
shall not constitute notice) to:
Loeb & Loeb LLP
345 Park Ave
New York, NY 10154
Attention: Giovanni Caruso
e-mail: gcaruso@loeb.com
12.2 Amendments;
No Waivers; Remedies.
(a) This
Agreement cannot be amended, except by a writing signed by each party, and cannot be terminated orally or by course of conduct. No provision
hereof can be waived, except by a writing signed by the party against whom such waiver is to be enforced, and any such waiver shall apply
only in the particular instance in which such waiver shall have been given.
(b) Neither
any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of
dealing shall constitute a waiver of or prevent any party from enforcing any right or remedy or from requiring satisfaction of any condition.
No notice to or demand on a party waives or otherwise affects any obligation of that party or impairs any right of the party giving such
notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement.
No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as
appropriate to make the aggrieved party whole with respect to such breach, or subsequent exercise of any right or remedy with respect
to any other breach.
39
(c) Except
as otherwise expressly provided herein, no statement herein of any right or remedy shall impair any other right or remedy stated herein
or that otherwise may be available.
(d) Notwithstanding
anything else contained herein, neither shall any party seek, nor shall any party be liable for, punitive or exemplary damages, under
any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of this Agreement or any provision
hereof or any matter otherwise relating hereto or arising in connection herewith.
12.3 Arm’s
length bargaining; no presumption against drafter. This Agreement has been negotiated at arm’s-length by parties of equal bargaining
strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated
in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship between the parties, and no such
relationship otherwise exists. No presumption in favor of or against any party in the construction or interpretation of this Agreement
or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.
12.4 Publicity.
Except as required by law or applicable stock exchange rules and except with respect to the Additional Purchaser SEC Documents,
the parties agree that neither they nor their agents shall issue any press release or make any other public disclosure concerning the
transactions contemplated hereunder without the prior approval of the other party hereto. If a party is required to make such a disclosure
as required by law or applicable stock exchange rules, the party making such determination will, if practicable in the circumstances,
use reasonable commercial efforts to allow the other party reasonable time to comment on such disclosure in advance of its issuance.
12.5 Expenses.
The costs and expenses in connection with this Agreement and the transactions contemplated hereby shall be paid by the Purchaser after
the Closing. If the Closing does not take place, each party shall be responsible for its own expenses.
12.6 No
Assignment or Delegation. No party may assign any right or delegate any obligation hereunder, including by merger, consolidation,
operation of law, or otherwise, without the written consent of the other party. Any purported assignment or delegation without such consent
shall be void, in addition to constituting a material breach of this Agreement.
12.7 Governing
Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without giving effect
to the conflict of laws principles thereof, except that all matters relating to the fiduciary duties of the Purchaser’s board of
directors shall be subject to the laws of the Republic of the Delaware.
12.8 Counterparts;
electronic signatures. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which
shall constitute one agreement. This Agreement shall become effective upon delivery to each party of an executed counterpart or the earlier
delivery to each party of original, photocopied, or electronically transmitted signature pages that together (but need not individually)
bear the signatures of all other parties.
40
12.9 Entire
Agreement. This Agreement together with the Additional Agreements, sets forth the entire agreement of the parties with respect to
the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings and agreements related thereto (whether
written or oral), all of which are merged herein. No provision of this Agreement or any Additional Agreement may be explained or qualified
by any agreement, negotiations, understanding, discussion, conduct or course of conduct or by any trade usage. Except as otherwise expressly
stated herein or any Additional Agreement, there is no condition precedent to the effectiveness of any provision hereof or thereof. No
party has relied on any representation from, or warranty or agreement of, any person in entering into this Agreement, prior hereto or
contemporaneous herewith or any Additional Agreement, except those expressly stated herein or therein.
12.10 Severability.
A determination by a court or other legal authority that any provision that is not of the essence of this Agreement is legally invalid
shall not affect the validity or enforceability of any other provision hereof. The parties shall cooperate in good faith to substitute
(or cause such court or other legal authority to substitute) for any provision so held to be invalid a valid provision, as alike in substance
to such invalid provision as is lawful.
12.11 Construction
of certain terms and references; captions. In this Agreement:
(a) References
to particular sections and subsections, schedules, and exhibits not otherwise specified are cross-references to sections and subsections,
schedules, and exhibits of this Agreement.
(b) The
words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Agreement as a whole
and not to any particular provision of this Agreement, and, unless the context requires otherwise, “party” means a party signatory
hereto.
(c) Any
use of the singular or plural, or the masculine, feminine, or neuter gender, includes the others, unless the context otherwise requires;
“including” means “including without limitation;” “or” means “and/or;” “any”
means “any one, more than one, or all;” and, unless otherwise specified, any financial or accounting term has the meaning
of the term under United States generally accepted accounting principles as consistently applied heretofore by the Company.
(d) Unless
otherwise specified, any reference to any agreement (including this Agreement), instrument, or other document includes all schedules,
exhibits, or other attachments referred to therein, and any reference to a statute or other law includes any rule, regulation, ordinance,
or the like promulgated thereunder, in each case, as amended, restated, supplemented, or otherwise modified from time to time. Any reference
to a numbered schedule means the same-numbered section of the disclosure schedule. Any reference in a schedule contained in the disclosure
schedules delivered by a party hereunder shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) the applicable
representations and warranties (or applicable covenants) that are contained in the section of this Agreement that corresponds to such
schedule and any other representations and warranties of such party that are contained in this Agreement to which the relevance of such
item thereto is reasonably apparent on its face. The mere inclusion of an item in a schedule as an exception to (or, as applicable, a
disclosure for purposes of) a representation or warranty shall not be deemed an admission that such item represents a material exception
or material fact, event or circumstance or that such item would have a Material Adverse Effect or establish any standard of materiality
to define further the meaning of such terms for purposes of this Agreement.
41
(e) If
any action is required to be taken or notice is required to be given within a specified number of days following a specific date or event,
the day of such date or event is not counted in determining the last day for such action or notice. If any action is required to be taken
or notice is required to be given on or before a particular day which is not a Business Day, such action or notice shall be considered
timely if it is taken or given on or before the next Business Day.
(f) Captions
are not a part of this Agreement, but are included for convenience, only.
(g) For
the avoidance of any doubt, all references in this Agreement to “the knowledge or best knowledge of the Company” or similar
terms shall be deemed to include the actual or constructive (e.g., implied by Law) knowledge of the Key Personnel.
12.12 Further
Assurances. Each party shall execute and deliver such documents and take such action, as may reasonably be considered within the
scope of such party’s obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.
12.13 Third
Party Beneficiaries. Except as provided in Section 9.5 and Section 14.16, neither this Agreement nor any provision hereof
confers any benefit or right upon or may be enforced by any Person not a signatory hereto.
12.14 Members’
Representative. NamChul Jung has been appointed by the Members as agent and attorney-in-fact for each Member, (i) to give and
receive notices and communications to Purchaser for any purpose under this Agreement and the Additional Agreements, (ii) to act
on behalf of Members in accordance with the provisions of the Agreement, the securities described herein and any other document or instrument
executed in connection with the Agreement and the Merger and (iii) to take all actions necessary or appropriate in the judgment
of the Members’ Representative for the accomplishment of the foregoing. Such agency may be changed by the Members from time to
time upon no less than twenty (20) days prior written notice to the Purchaser, provided, however, that the Members’ Representative
may not be removed unless holders of at least 51% of all of the Company Common Stock on an as-if converted basis outstanding immediately
prior to the transaction contemplated by this Agreement agree to such removal. Any vacancy in the position of Members’ Representative
may be filled by approval of the holders of at least 51% of all of the Company Common Stock on an as-if converted basis outstanding immediately
prior to the transaction contemplated by this Agreement. Any removal or change of the Members’ Representative shall not be effective
until written notice is delivered to Purchaser. No bond shall be required of the Members’ Representative, and the Members’
Representative shall not receive any compensation for his services. Notices or communications to or from the Members’ Representative
shall constitute notice to or from the Members. The Members’ Representative shall not be liable for any act done or omitted hereunder
while acting in good faith and in the exercise of reasonable business judgment. A decision, act, consent or instruction of the Members’
Representative shall, for all purposes hereunder, constitute a decision, act, consent or instruction of all of the Members of the Company
and shall be final, binding and conclusive upon each of the Members. The Members shall severally indemnify the Members’ Representative
and hold him harmless against any loss, liability, or expense incurred without gross negligence or bad faith on the part of the Members’
Representative and arising out of or in connection with the acceptance or administration of his duties hereunder.
12.15 Non-Recourse.
This Agreement may be enforced only against, and any dispute, claim or controversy based upon, arising out of or related to this Agreement
or the transactions contemplated hereby may be brought only against, the entities that are expressly named as parties hereto and then
only with respect to the specific obligations set forth in this Agreement with respect to such party. No past, present or future director,
officer, employee, incorporator, member, partner, shareholder, agent, attorney, advisor, lender or representative or Affiliate of any
named party to this Agreement (which Persons are intended third party beneficiaries of this Section 12.15) shall have any liability
(whether in contract or tort, at law or in equity or otherwise, or based upon any theory that seeks to impose liability of an entity
party against its owners or Affiliates) for any one or more of the representations, warranties, covenants, agreements or other obligations
or liabilities of such named party or for any dispute, claim or controversy based on, arising out of, or related to this Agreement or
the transactions contemplated hereby.
[The remainder of this page intentionally
left blank; signature pages to follow]
42
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year first above written.
Purchaser:
LIMINATUS
PHARMA, INC.
By:
/s/ Chris Kim
Name:
Chris Kim
Title:
CEO
Company:
INNOCSAI
LLC
By:
/s/ NamChul Jung
Name:
NamChul Jung
Title:
CEO
Members’
Representative:
By:
/s/ NamChul Jung
Name:
NamChul Jung
43
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Name:
dei_SecurityExchangeName
Namespace Prefix:
dei_
Data Type:
dei:edgarExchangeCodeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
+ Details
Name:
dei_SolicitingMaterial
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
dei_TradingSymbol
Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Details
Name:
us-gaap_StatementClassOfStockAxis=us-gaap_CommonClassAMember
Namespace Prefix:
Data Type:
na
Balance Type:
Period Type:
X
- Details
Name:
us-gaap_StatementClassOfStockAxis=us-gaap_WarrantMember
Namespace Prefix:
Data Type:
na
Balance Type:
Period Type: