EX-10 5 jan-ex10_95.htm EX-10.95 EX-10

EXECUTION VERSION

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER

 

 

among

 

 

JANONE INC.,

a Nevada. corporation,

 

STI MERGER SUB INC.,

a Delaware corporation,

 

SOIN THERAPEUTICS, LLC,

a Delaware limited liability company, and

A.MOL Soin, M.D.

 

 

 

 

Dated December 28, 2022

 

 

 

 

 

 

 


TABLE OF CONTENTS

ARTICLE I THE NIERGER 2

1.1
The Merger 2
1.2
Closing Deliveries 3
1.3
Effect on Company Securities 4
1.4
Payment Procedures 5
1.5
No Further Ownership Rights in the Company Membership Interests 6
1.6
Transfer Truces 6
1.7
Withholding Rights 6
1.8
Taking of Necessary Action; Further Action 7

ARTICLE II REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY 7

2.1
Organization, Standing, Power, and Subsidiaries 7
2.2
Capital Structure 7
2.3
Authority; Non-contravention 8
2.4
Financial Statements; No Undisclosed Liabilities 8
2.5
Absence of Changes 9
2.6
Litigation 9
2.7
Restrictions on Business Activities 9
2.8
Compliance with Laws; Governmental Permits 9
2.9
Title to, Condition and Sufficiency of, Assets; Real P10perty 10
2.10
Intellectual Property 10
2.11
Taxes 14
2.12
Employee Benefit Plans and Employee Matters 17
2.13
Interested-Party Transactions 17
2.14
Insurance 17
2.15
Books and Records. T 17
2.16
Material Contracts 17
2.17
Transaction Fees 18
2.18
FDA Matters 18
2.19
No Other Representations or Warranties 20

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE ACQUIRER AND THE MERGER SUB 20

3.1
Organization and Standing 20
3.2
Authority; Non-contravention 20
3.3
Issuance of Shares 21
3.4
No Prior Merger Sub Operations 21
3.5
Capitalization 21
3.6
Acquirer SEC Reports; Financial Statements 21
3.7
Tax Treatment 22
3.8
Transaction Fees 22
3.9
No Other Representations or Warranties 22

ARTICLE IV ADDITIONAL AGREEMENTS 23

4.1
Conduct of the Business 23
4.2
Confidentiality; Public Disclosure 25
4.3
Expenses 26
4.4
Tax Matters 26
4.5
Indemnification 28
4.6
Further Action 28
4.7
Access 29
4.8
Third-Party Consents; Notices 29
4.9
Form 8832 Election 29

 


4.10
No Solicitation 29
4.11
29
4.12
Certificate of Designation 31
4.13
Notification 31
4.14
Securities Filings 31
4.15
Post-Closing Activities of the Sole Owner 31

ARTICLE V CONDITIONS PRECEDENT 31

5.1
Conditions Precedent to Obligations of the Acquirer and the Merger Sub to the Closing 31
5.2
Conditions Precedent to Obligations of the Company to the Closing 32

ARTICLE VI INDE:M:NIFICATION 33

6.1
Indemnification 33
6.2
Indemnifiable Damage Threshold; Other Limitations 34
6.3
Period for Claims; Survival Period. 34
6.4
Claims..................., 35
6.5
Resolution of Objections to Indemnification Claims 36
6.6
Third-Party Claims 36
6.7
Payment of Indemnifiable Damages 37
6.8
Treatment of Indemnification Payments 37
6.9
Effect of Investigation ..............................:..., 37

ARTICLE VII TERMINATION 37

7.1
Termination 37
7.2
Effect of Termination 38

ARTICLE VIII GENERAL PROVISIONS 38

8.1
Notices 38
8.2
Interpretation 39
8.3
Amendment 40
8.4
Waiver 40
8.5
Counterparts................................................................................................., 40
8.6
Entire Agreement; Parties in Interest. 40
8.7
Assignment 41
8.8
Severability 41
8.9
Remedies Cumulative; Specific Performance 41
8.10
Governing Law; Submission to Jurisdiction; Consent to Service of Process 41
8.11
WAIVER OF JURYTRIAL 42

 


Exhibit A




Definitions




Exhibits

 


Exhibit B Exhibit C Exhibit D Exhibit E




Form of Certificate of Merger

Company Closing Financial Certificate Template Required Actions

Form of Series S Convertible Preferred Stock Certificate of Designation

 

Schedules

 


 

Company Disclosure Letter

 

 

 

 

iii

 


AGREEMENT AND PLAN. OF MERGER

 

THISAGREEMENT AND PLAN OF MERGER (this “Agreement') is made and entered into as of December 28, 2022 (the "Agreement Date'), among JanOne Inc., a Nevada corporation ("Acquirer'), STI Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Acquirer ("Merger Sub"), Soin Therapeutics, UC, a Delaware limited liability company (the "Company'), and Amal Soin M.D. a resident of the State of Ohio (the “Sole Owner'). Certain other terms used herein are defined in Exhibit A.

 

RECITALS

 

A.
This Agreement contemplates a reverse triangular merger of Merger Sub with and into the Company in a transaction intended to qualify as a tax-free reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.

 

B.
The Acquirer, the Merger Sub, and the Company intend to effect a merger of the Merger Sub with and into the Company, pursuant to which the Company would survive and become a wholly owned subsidiary of the Acquirer (the "Merger') in accordance with this Agreement, the DGCL, and the DLLC.

 

C.
The Sole Owner is the only member of the Company and has carefully considered the terms of this Agreement and has (1) declared this Agreement and the transactions contemplated by this Agreement and the documents referenced herein, including the Merger (collectively, the "Transaction'),upon the terms and subject to the conditions set forth herein, advisable, fair to and in the best interests of the Company and him and (2) approved this Agreement and the Merger in accordance with Applicable Law.

 

D.
The respective Boards of Directors of Acquirer (the “Acquirer Board') and the Merger Sub (the "Merger Sub Board') have each unanimously: (1) determined that it is in the best interests of the Acquirer or the Merger Sub, as applicable, and their respective stockholders, and declared it advisable, to enter into this Agreement; and (2) approved the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger; in each case, in accordance with the DGCL.

 

E.
For United States federal income tax purposes, the parties intend that the Transactions shall qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code'), and the parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Treasury Regulations Sections l.368-2(g) and 1.368- 3(a).

 

F.
The parties desire to make certain representations, warranties, covenants, and agreements in connection with the Merger and the other transactions contemplated by this Agreement and also to, prescribe certain terms and conditions to the Merger.

 

Now, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants, and agreements contained in this Agreement, and for such other good and valuable consideration, the receipt and adequacy of which ate hereby confirmed, the parties, intending to be legally bound, agree as follows:

 


ARTICLE!

THE MERGER

 

1.1
The Merger.

 

(a)
Merger. Upon the terms and subject to the conditions set forth herein, at the Effective Time, the Merger Sub shall be merged with and into the Company, and the separate existence of the Merger Sub shall cease and the Company shall become a wholly owned subsidiary of the Acquirer (sometimes referred to herein as the “Surviving Company').
(b)
Effects of the Merger. The Merger shall have the effects set forth herein and in the applicable provisions of the DGCL and the DILC.
(c)
Closing. Upon the terms and subject to the conditions set forth herein, the closing of the Transactions (the "Closing') shall take place remotely by electronic exchange of documents and signatures, unless otherwise agreed by the Acquirer and the Company, on the first Business Day following the satisfaction or waiver of the conditions set forth in Article V (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions). The date on which the Closing occurs is sometimes referred to herein as the "Closing Date."
(d)
Effective Time. A certificate of merger satisfying the applicable requirements of the DGCL and the DLLC, in substantially the form attached hereto as Exhibit B (the “Certificate of Merger"), shall be duly executed by the Company and the Merger Sub and, concurrently with or as soon as practicable following the Closing, delivered to the Secretary of State of the State of Delaware for filing. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or at such later time as the Acquirer and the Company agree and specify in the Certificate of Merger (the “Effective Time!').

 

(e)
Certificate of Formation and Operating Agreement; Officers. Unless otherwise determined by the Acquirer and the Company prior to the Effective Time:

 

(i)
the Certificate of Formation of the Company as in effect immediately prior to the Effective Time shall, by virtue of the Merger and without any further action, be the Certificate of Formation of the Surviving Company, until thereafter amended as provided by the FDC;

 

(ii)
the Company shall take all actions necessary to cause the Operating Agreement of the Company to be amended so that the Acquirer shall be the sole member of the Surviving Company immediately after the Effective Time; and
(iii)
the Company shall take all actions necessary to cause the officers of the Merger Sub immediately prior to the Effective Time to be the only officers or managers of the Surviving Company immediately after the Effective Time until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation, or removal in accordance with the Certificate of Formation and Operating Agreement of the Surviving Company.

 

(f)
Tax Consequences. For United States federal income tax purposes, the Merger is intended to constitute a reorganization within the meaning of Section 368(a)(1)(A) of the Code. The

 

 

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parties to this Agreement adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1368-3(a) of the Treasury Regulations.

1.2
Closing Deliveries.
(a)
The Company's Deliveries. The Company shall deliver to the Acquirer, at or prior to the Closing:

 

(i)
a certificate, dated as of the Closing Date and executed on behalf of the Company by the Sole Owner, certifying (A) the Certificate of Formation of the Company (the “Certificate of Formation") in effect as of the Closing, (B) the Operating Agreement of the Company (the “Operating agreement') in effect as of the Closing, (C) the resolutions of the Sole Owner (l) declaring this Agreement and the Transactions, upon the terms and subject to the conditions set forth herein, advisable, fair to, and in the best interests of the Company and its Sole Owner, (II) approving this Agreement in accordance with the DGCL and DLLC, and (III) approving the Merger;
(ii)
a certificate from the Secretary of State of the States of Delaware and Ohio, dated within ten Business Days prior to the Closing Date, certifying that the Company is in good standing;

(fu") the Certificate of Merger, executed by the Company;

(iv)
evidence reasonably satisfactory to the Acquirer of the Company's completion of the actions set forth in Exhibit D, including, but not limited to, the Company making an election on IRS Form 8832 to be classified for income tax purposes as an association taxable as a corporation (the “Required Actions"); and

 

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

 

Receipt by the Acquirer of any of the agreements, instruments, certificates, or documents delivered pursuant to this Section 1.2(a) shall not be deemed to be an agreement by the Acquirer or the Merger Sub that the information or statements contained therein are true, correct, or complete, and shall not diminish the Acquirer's or the Merger Sub's remedies hereunder if any of the foregoing agreements, instruments, certificates, or documents .are not true, correct, or complete.

 

(b)
The Acquirer and the Merger Sub's Deliverables. The Acquirer and the Merger Sub shall deliver to the Company and the Sole Owner at or prior to the Closing:

 

(i)
a certificate, dated as of the Closing Date and executed on behalf of the Acquirer by an officer, certifying the resolutions of the Board of Directors of the Acquirer approving this Agreement and the Transactions;

 

(ii)
a certificate, dated as of the Closing Date and executed on behalf of the Merger Sub by an officer, certifying (A) the Certificate of Incorporation of the Merger Sub in effect as of the Closing, (B) the Bylaws of the Merger Sub in effect as of the Closing, (C) the resolutions of the Board of Directors of the Merger Sub (l) declaring this Agreement and the Transactions, upon the terms and subject to the conditions set forth herein, advisable, fair to, and in the best interests of the Merger Sub and its sole stockholder, (II) approving this

 

 

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Agreement in accordance with the DGCL, and (III) directing that the adoption of this Agreement be submitted to its sole stockholder for consideration and recommending that its sole stockholder adopt this Agreement and approve the Merger, and (D) the resolutions of the Acquirer as the sole stockholder of the Merger Sub adopting this Agreement and approving the Merger;

 

(iii)
a certificate from the Secretary of State of Nevada, dated within ten Business Days prior to the Closing Date, certifying that the Acquirer is in good standing;
(iv)
a certificate from the Secretary of State of the State of Delaware, dated within ten Business Days prior to the Closing Date, certifying that the Merger Sub is in good standing; and

 

(v)
such other documents or instruments as the Company and the Sole Owner reasonably request and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

1.3
Effect on Company Securities.

 

(a)
Treatment of Company Membership Interests . Upon the terms and subject to the conditions set forth herein, at the Effective Time, by virtue of the Merger and without any action on the part of any party hereto or any other Person, all of the Sole Owner's membe1-ship interests in the Company shall be c celled and automatically converted into the right to receive, subject to and in accordance with Section 1.3(c), the shares of Series S Convertible Preferred Stock described in Section 1.4(a)(iii) below (the “Merger Consideration Shares').

 

(b)
Treatment of Merger Sub Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Acquirer, the Merger Sub or any other Person, each share of capital stock of the Merger Sub that is issued and outstanding immediately prior to the Effective Time shall be converted into and become 100% of the membership interests of the Surviving Company (and the membership interests of the Surviving Company into which the shares of the Merger Sub capital stock are so converted shall be the only membership interests of the Surviving Company that are issued and outstanding immediately after the Effective Time).

 

(c)
Change in Acquirer Common Stock. If between the date of this Agreement and the date of any payment by Acquirer of Merger Consideration that includes shares of Acquirer Series S Convertible Preferred Stock the outstanding shares of Acquirer Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the Merger Consideration shall be correspondingly adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares. If any consolidation or merger of Acquirer with another person in which Acquirer is not the survivor, or sale, transfer or other disposition of all or substantially all of Acquirer's assets to another person shall be effected, then, as a condition of such consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Sole Owner shall thereafter have the right to receive, in lieu of the Acquirer Series S Convertible Preferred Stock issuable pursuant to the Merger Consideration, such shares of stock, securities or assets as would have been payable with respect to or in exchange for the Acquirer Series S Convertible Preferred Stock payable to the Sole Owner, had such consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Sole Owner to the

 

4


 

 

5


end that the provisions hereof shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable pursuant to the Merger Consideration. The provisions of this Section 1.3(c) shall similarly apply to successive consolidations, mergers, sales, transfers or other dispositions.

 

1.4
Payment Procedures.

 

(a)
Delivery of Closing Consideration.

 

(i)
At or prior to the Closing, the Sole Owner shall deliver a properly completed and duly executed IRS Form W-9 to the Acquirer.

 

(ii)
Upon receipt of written confirmation of the effectiveness of the Merger from the Secretary of State of the State of Delaware and following receipt of an executed Form W-9 from the Sole Owner, the Acquirer will issue to the Sole Owner the Merger Consideration Shares issuable pursuant to Section Error! Reference source not found•. The deliveries and issuances required under this Section 1.4(a) are to be made within one Business Day following written confirmation of the effectiveness of the Merger and the receipt of the foregoing Tax form.

 

(iii) The Merger Consideration Shares initially shall consist of 100,000 shares of Series S Conve1tible Preferred Stock. In the event that, based upon the conversion rights in favor of the Sole Owner as set forth in the Series S CoD, additional shares of Series S Convertible Preferred Stock are required to be issued to the Sole Owner to fulfill the obligations of the Acquirer thereunder, then the Acquirer shall promptly issue to the Sole Owner that number of additional shares thereof sufficient to fulfill such obligations. In the event that, based upon the conversion rights in favor of the Sole Owner as set forth in the Series S CoD, the number of authorized, but unissued, shares of Series S Convertible Preferred Stock shall be insufficient for the Acquirer to fulfill its obligations to the Sole Owner hereunder, then the Acquirer and, if required, the Sole Owner shall promptly take such action as is reasonably required to increase the number of authorized, but unissued, shares of Series S Convertible Preferred Stock to an amount sufficient to permit the Acquirer to fulfill its obligations hereunder. If, as of December 28, 2032, (i) any shares of Series S Convertible Preferred Stock from the $17 Million Tranche (as that term is defined in the Series S CoD) remain issued and outstanding, or (ii) any shares of Series S Convertible Preferred Stock from either the $3 Million Tranche or the $10 Million Tranche (as such terms are defined in the Series S CoD) remain issued and outstanding after the Sole Owner has converted shares of Series S Convertible Preferred Stock from the $3 Million Tranche and the $10 Million Tranche into Acquirer Common Stock having an aggregate value upon all such conversions of

$13,000,000, then the Sole Owner shall promptly thereafter return all such remaining shares to the Acquirer for cancellation without the receipt of any additional consideration therefor.

 

(b)
Legends. Any shares of Series S Convertible Preferred Stock to be issued pursuant to this Agreement shall bear the following legends (along with any other legends that may be required under Applicable Law):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT''), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE

 

 

6


SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THATTHEY MAY BE REQUIRED TO BEAR THE FINANCIAL RJSKS OF THIS INVESTMENT FOR AN INDEFINITE PERJOD OF TIME. THE ISSUER OF THESE SECURJTIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURJTIES ACT AND ANY APPLICABLE STATE SECURJTIES LAWS.

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN INDEMNIFICATION OBLIGATIONS OF THE HOLDER IN FAVOR OF THE COMPANY, ALL AS SET FORTH IN THAT CERTAIN AGREEMENT AND PLAN OF MERGER, DATED AS OF DECEMBER 28, 2022, AMONG THE COMPANY, THE HOLDER, AND THE OTHER PARTIES THERETO. COPIES OF THAT AGREEJ.\IBNT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST_MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE COMPANY.

THE SECURITIES REPRESENTED HEREBY 111AY BE SUBJECT TO CANCELLATION AS OF DECEMBER 28, 2032, PURSUANT TO THE PROVISIONS OF THAT CERTAIN AGREEMENT AND PLAN OF MERGER, DATED AS OF DECEMBER 28, 2022, AMONG THE COMPANY, THE HOLDER, AND THE OTHER PARTIES_THERETO. COPIES OF T!-IAT AGREEMENT MAY BE OBTAINED AT NO COST BY WRITI'EN REQUEST_MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE COMPANY.

 

1.5
No Further Ownership Rights in the Company Membership Interests. The Merger Consideration issued or issuable in accordance with this Agreement shall be issued or issuable, as applicable, in full satisfaction of all rights pertaining to the membership interests of the Company, and there shall be no further registration of transfers on the records of the Surviving Company of membership interests of the Company that were outstanding immediately prior to the Effective Time.

 

1.6
Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, and other similar Truces and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid 50% by the Acquirer and 50% by the Sole Owner when due, and the Acquirer shall, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration, and other similar Taxes and fees.

 

1.7
Withholding Rights. Each of the Acquirer, the Merger Sub, the Surviving Company, and their respective subsidiaries, and any other Person who is a withholding agent under applicable Tax law, shall be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement to any continuing employee, any holder of any membership interests of the Company, or any other Person, such amounts as are required to be deducted and withheld under the Code or any provision of state, local, provincial, or foreign Tax law. To the extent that amounts are so

 

 

7


withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to such Persons in respect of which such deduction and withholding was made.

1.8
Taking of Necessary Action; Further Action. If, at any ti.me after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Company 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, the officers, managers, and members of the Surviving Company are fully authorized, in the name and on behalf of the Company or otherwise, 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.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

 

Subject to the disclosures set forth in the disclosure letter of the Company delivered to the Acquirer concurrently with the execution of this Agreement (the "Company Disclosure Letter') (each of which disclosures, in order to be effective, shall clearly indicate the Section and, if applicable, the Subsection of this Ai-tide II to which it relates (unless and only to the extent that the relevance to other representations and warranties is reasonably apparent from the actual text of the disclosures without any reference to extrinsic documentation or any independent knowledge on the part of the reader regarding the matter disclosed), each of the Company and the Sole Owner, jointly and severally, represent and warrant to the Acquirer as follows:

 

2.1
Organization Standing, Power, and Subsidiaries.

 

(a)
The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company has the limited liability company power to own, operate, use, distribute, and lease its properties and to conduct the Business and is qualified to do business as a foreign entity in the State of Ohio. There are no outstanding and currently effective powers of attorneys executed by or on behalf of the Company.

 

(b)
The Company does not have any Subsidiaries and the Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity.

 

(c)
Neither the Company nor the Sole Owner has ever approved or commenced any proceeding or made any election contemplating the dissolution or liquidation of the Company or the winding up or cessation of the business or affairs of the Company. There are no entities that have been merged into or that otherwise are predecessors to the Company.

 

(d)
Schedule 2.l(d) of the Company Disclosure Letter sets forth an accurate and complete list of the names and titles of the officers of the Company.

 

2.2
Capital Structure.

 

(a)
The Sole Owner is the sole legal, beneficial, record, and equitable owner of 100% of the membership interests of the Company, free and clear of all Encumbrances whatsoever except as may be set forth in the Operating Agreement of the Company. There are no commitments or Contracts to issue any membership interests of the Company. The Sole Owner's membership interests: (i) were issued in compliance with applicable laws; (ii) were not issued in violation of the Governing Documents of the Company or any other agreement, arrangement, or commitment to

 

8


 

 

9


which the Sole Owner or the Company is a party and are not subject to or in violation of any preemptive or similar rights of any Person. The Company is not under any obligation to register under the Securities Act or any other Applicable Law any of the membership interests of the Company.

 

(b)
Other than the Governing Documents of the Company, there are no voting trusts, proxies, or other agreements or understandings in effect with respect to the voting or transfer of any part of the membership interests of the Company.

 

2.3
Authority; Non-contravention.

 

(a)
The Company has all requisite limited liability company power and authority to enter into this Agreement and the other Company Transaction Documents and to consummate the Transactions. The execution and delivery of this Agreement and the other Company Transaction Documents and the consummation of the Transactions have been duly authorized by all necessary company action and authority on the part of the Company. Each Company Transaction Document has been duly executed and delivered by the Company and, assuming the due execution and delivery of such Transaction Document by the other parties hereto, constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms subject only to the effect, if any, of (i) applicable bankruptcy and other similar Applicable Law affecting the rights of creditors generally and (it) rules of law governing specific performance, injunctive relief, and other equitable remedies. The Sole Owner has, by resolution, duly adopted (and not thereafter modified or rescinded) and (i) declared that this Agreement and the Transactions, upon the terms and subject to the conditions set forth herein, advisable, fair to and in the best interests of the Company and its Sole Owner, (.it) approved this Agreement in accordance with Applicable Law, and (iii) approved the Merger. The affirmative vote of the Sole Owner is the only vote of the members of the Company necessary to adopt this Agreement and approve the Transactions under the DLLC and the Company's Governing Documents, each as in effect at the time of such adoption and approval (collectively, the

« Company Member Approval').

 

(6) The execution and delivery of this Agreement and the other Company Transaction Documents by the Company does not, and the consummation of the Transactions will not, (i) result in the creation of any Encumbrance on any of the material assets of the Company or any of the membership interests of the Company or (ii) conflict with, or result in any violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation, or acceleration of any obligation or loss of any benefit under, or require any consent, approval, or waiver from any Person pursuant to, (A) any provision of the Company's Governing Documents, in each case as amended to date, (B) any Contract of the Company or any Contract applicable to any of the assets of the Company ox (C) any Applicable Law.

(c) No consent, approval, Order, or authorization of, or registration, declaration, or filing with, or notice to, any Governmental Entity or any other Person is required by or with respect to the Company in connection with the execution and delivery of this Agreement or any other Company Transaction Document or the consummation of the Transactions, except for (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and (ii) those that, if not obtained or made, would not reasonably be expected to materially adversely affect the ability of the Company to consummate the Transactions.

 

2.4
Financial Statements; No Undisclosed Liabilities.

 

 

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(a)
The Company has made available to the Acquirer its unaudited financial statements for the fiscal year ending December 31, 2021 and for the six-month period ending June 30, 2022 (collectively, the "Financial Statements"), which are included as Schedule 2.4(a) of the Company Disclosure Letter. The Financial Statements (w) are derived from and in accordance with the books and records of the Company, and (x) fairly and accurately present in all material respects the financial condition of the Company at the dates therein indicated and the results of operations and cash flows of the Company for the periods therein specified (subject, in the case of unaudited interim period Financial Statements, to normal recurring year-end audit adjustments, none of which individually or in the aggregate are or will be material in amount), and (y) are true, correct, and complete in all material respects.

 

(b)
The Company does not have any Liabilities of any nature other than (i) those set forth or adequately reserved for in the balance sheet included in the Financial Statements as of June 30, 2022 (such date, the "Company Balance Sheet Date" and such balance sheet, the "Company Balance Sheet'), (ii) those incurred in the conduct of the Company's business since the Company Balance Sheet Date in the ordinary course of business and consistent with past practice that are of the type that ordinarily recur and, individually or in the aggregate, are not material in nature or amount, and (iii) those incurred by the Company in connection with the execution of this Agreement

 

2.5
Absence of Changes. Since the Company Balance Sheet Date, (a) the Business has been conducted in the ordinary course of business consistent with past practice, (b) the Company has not experienced a Material Adverse Effect, and (c) the Company has not done, caused, or permitted

any action that if taken after the Agreement Date would have required the prior written consent of the Acquirer pursuant to Section 4.1(a) - (y).

2.6
Litigation. There is no pending Legal Proceeding to which the Company is a party, and, to the knowledge of the Company, there is no threatened Legal Proceeding against the Company or any of its assets or any of its managers, directors, officers, or employees (in their capacities as such or relating to their employment, services, or relationship with the Company). To the knowledge of the Company, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Legal Proceeding. There is no Order against the Company, or any of its assets or, to the knowledge of the Company, any of its managers, directors, officers, or employees (in their capacities as such or relating to their employment, services, or relationship with the Company). No event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of ti.me) a violation of any such Order.

 

2.7
Restrictions on Business Activities. There is no Contract or Order binding upon the Company that restricts or prohibits, purports to restrict or prohibit, or has or would reasonably be expected to have, whether before or after consummation of the Merger, the effect of prohibiting, restricting, or impairing any current business practice of the Company, any acquisition of property by the Company or the conduct or operation of the Business as presently conducted or limiting the freedom of the Company or the Acquirer to (i) engage or participate, or compete with any other Person, in any line of business, market, or geographic area with respect to the Company Products or the Company Intellectual Property, or to make use of any Company Intellectual Property, including any grants by the Company of exclusive rights or licenses, (li) sell, distribute, or manufacture any products or services, (iii) solicit the services or business of any Person, or (iv) set prices freely for any products or services, including the Company Products (including any most favored pricing provisions).

 

2.8
Compliance with Laws: Governmental Permits.

 

 

11


(a)
The Company has at all times complied in all material respects with, and has not received any written or, to the knowledge of the Company, verbal, notice of violation with respect to, any Applicable Law.

 

(b)
The Company holds, and has at all times held and maintained, each federal, state, county, local, or foreign governmental consent, license, permission, consent, permit, grant, or other authorization and approval of a Governmental Entity that is required to carry on the activities required for or in connection with the carrying on of the conduct of the Business as required by all Applicable Laws in the places and in the manner in which the Business of the Company is carried on or the holding of any such interest (all of the foregoing consents, licenses, permissions, consents, permits, grants, and other authorizations and approvals, collectively, the "Company Authorizations'), except where the failure to hold or maintain any such Company Authorization does not have a Material Adverse Effect, and all of the Company Authorizations are in full force and effect, are not limited in duration or subject to any conditions, and have been complied with in all material respects. Schedule 2.8(b) of the Company Disclosure Letter identifies each Company Authorization,

 

(c)
The Company has not received any written or, to the knowledge of the Company, verbal, notice or other communication from any Governmental Entity regarding (i) any actual or alleged violation of any Company Authorization or (ii) any actual or alleged revocation, non­ renewal, withdrawal, suspension, cancellation, termination, or modification of any Company Authorization or any Company Authorization made subject to any restrictions, requirements, or conditions, or that may confer a right of revocation, and, to the knowledge of the Company, no such notice or other communication is forthcoming. The Company has complied in all material respects with all of the terms of the Company Authorizations and none of the Company Authorizations will be terminated, revoked, or impaired, or will become terminable, in whole or in part, as a result of the consummation of the Transactions.

 

2.9
Title to, Condition and Sufficiency of, Assets; Real Property.

 

(a)
The Company has good and marketable title to, or valid leasehold interest in all of the properties, and interests in properties and assets, real and personal, reflected on the Company Balance Sheet or acquired after the Company Balance Sheet Date (except properties and assets, or interests in properties and assets, sold or otherwise disposed of since the Company Balance Sheet Date in the ordinary course of business and consistent with past practice), or, with respect to leased properties and assets, valid leasehold interests in such properties and assets that afford the Company valid leasehold possession of the properties and assets that are the subject of such leases, in each case, free and clear of all Encumbrances, except Permitted Encumbrances.

 

(b)
To the Company's Knowledge, the assets and properties owned by the Company constitute all of the assets and properties that are necessary for the Company to operate the Business as cU1-rently operated without (i) the need for the Acquirer to acquire or license, any other asset, property, or Intellectual Property or (ii) the breach or violation of any Contract.

 

(c)
The Company does not own or lease any real property.

 

2.10
Intellectual Property.

 

(a)
As used herein, the following terms have the meanings indicated below:

 

 


(i)
"Company Intellectual Property' means all Intellectual Property owned by Company that relates to the use of low-dose naltrexone for treating Complex Regional Pain Syndrome ("CRPS') and that is used by the Company in the conduct of the Company's business as currently conducted.

 

(ii)
"Company Products' means all products or services (including any websites and mobile applications) currently or previously developed, produced, manufactured, marketed, licensed, sublicensed, sold, distributed, or performed by or on behalf of the Company and all products or services currently under development by the Company.

 

(iii)
"Intellectual Property' means (A) Intellectual Property Rights and

(B) Proprietary Information and Technology.

 

(iv)
"Intellectual Property Rights' means any and all of the following and all rights in, arising out of, or associated therewith, throughout the world: patents, utility models, and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, Provisionals, continuations, and continuations-in-part thereof and equivalent or similar rights in inventions and discoveries anywhere in the world, including invention disclosures, common law and statutory rights associated with trade secrets, confidential and proprietary information and know-how, industrial designs and any registrations and applications therefor, tradenames, logos, trade dress, trademarks and service marks, trademark and service mark registrations, trademark and service mark applications, and any and all goodwill associated with and symbolized by the foregoing items, Internet domain name applications and registrations, social media accounts, Internet and World Wide Web URLs or addresses, copyrights, copyright registrations and applications therefor, moral and economic rights of authors and inventors, however denominated, and any similar or equivalent rights to any of the foregoing, and all benefits, privileges, causes of action, and remedies relating to any of the foregoing.

 

(v)
"Open Source Materials' means software or other material that is distributed as "free software," "open source software," or under similar licensing or distribution terms (including the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry Standards License (SISL), and the Apache License).

 

(vi)
"Proprietary Information and Technology' means any and all of the following: works of authorship, computer programs, source code, and executable code, whether embodied in software, firmware, or otherwise, assemblers, applets, compilers, user interfaces, application programming interfaces, protocols, architectures, documentation, annotations, comments, designs, files, records, schematics, test methodologies, test vectors, emulation and simulation tools and reports, hardware development tools, models, tooling, prototypes, breadboards and other devices, data, data structures, databases, data compilations and collections, inventions (whether or not patentable), invention disclosures, discoveries, improvements, technology, proprietary and confidential ideas and information, tools, concepts, techniques, methods, processes, formulae, patterns, algorithms and specifications, customer lists and supplier lists, and any and all instantiations or embodiments of the foregoing or any Intellectual Property Rights in any form and embodied in any media.

 

 

11


(vii)
"Sensitive Data' means (a) individually identifiable Protected Health Information, as defined under the Health Insurance Portability and Accountability Act, as amended by the Health Infom1ation Technology for Economic and Clinical Health Act;
(b)
information required by any Applicable Law, Government Entity, or Governmental Order to be encrypted, masked, or otherwise protected from disclosure; (c) government identifiers that are not publicly available, such as Social Security or other individual tax identification numbers, driver's license numbers, and other government-issued identification numbers;

(d) bank accounts, credit or debit card numbers, with or without any required security code, access code, personal identification numbers or passwords, that in each case would permit access to an individual's financial account, and account information, including balances and transaction data; and (e) passwords or log-in credentials for accessing accounts.

(b)
Company Intellectual Property. The execution and delivery of this Agreement by the Company and the consummation by the Company of the Merger will not result in the breach of, or create on behalf of any third party the right to terminate or modify, any of the Company's rights in any Company Intellectual Property. Section 2.10(6) of the Company Disclosure Letter sets forth a true, correct, and complete list of all patents, patent applications, copyright applications and registrations, domain name registrations, trademark applications, and registrations, and all other registered Intellectual Property included in the Company Intellectual Property (the “Registrations'), enumerating specifically the applicable filing or registration number, title, jurisdiction in which filing was made or from which the patent or other registration issued, date of filing, date of issuance, and names of all current applicant(s) and registered owner(s) (including any co-owners), as applicable. All assignments of Registrations to the Company have been properly executed and recorded (including, as applicable, any assignments from any author or inventor of any such Intellectual Property) to the extent necessary in all jurisdictions applicable to such Registrations. All issuance, renewal, maintenance, annuity, and other payments that have become, are, or will become due, and all filings and other actions (including responses to any office actions) required to maintain and enforce the Registrations (or, in the case of applications, required to prevent abandonment), within ninety (90) days after the Agreement Date and the Closing Date, as applicable, have been, as applicable, paid, made, and/or undertaken by or on behalf of the Company. All of the Registrations are subsisting and in full force and effect and are, to the Company's knowledge, valid and enforceable or, in the case of applications, are pending).
(c)
Patents. The patents and non-provisional patent applications required to be identified in Section 2.10(6) of the Company Disclosure Letter (the "Scheduled Patent Rights') have not expired or been abandoned (or, in the case of patent applications, are pending). Except as has been previously disclosed to the Acquirer in writing, to the Company's knowledge, there are no grounds for invalidating any Scheduled Patent Right.

 

(d)
Prosecution Matters. There are no inventorship challenges or opposition, reexamination, nullity, or interference proceedings or other written challenges to ownership, use, registrability, patentability, enforceability, or validity declared, commenced, or provoked or, to the Company's knowledge, threatened, with a Governmental Entity, with respect to any Company Intellectual Property. The Company has complied in all material respects with all of its obligations and duties to the respective patent, trademark, and copyright offices, including the duty of candor and disclosure to the U.S. Patent and Trademark Office, with respect to all patent, trademark, and copyright applications filed by or on behalf of the Company.

 

(e)
Ownership. The Company has good, valid, and sufficient title to, free and clear of any Encumbrance (other than Permitted Encumbrances, and ownership of all Company

 

12


 

 

13


Intellectual Property used in the conduct of its business as now conducted. The Company does not have any obligation to disclose or otherwise share information related to its manufacturing processes with any third-party entity.

(f)
In To the Company's knowledge, (i) since its inception and as currently conducted, the conduct of the business of the Company has not interfered with, infringed, violated, or constituted a misappropriation of any Intellectual Property of any third party and (ii) the conduct of the business of the Company as proposed to be conducted following regulatory approval to market and sell the Company's Products will not interfere with, infringe, violate, or constitute a misappropriation of any Intellectual Property of any third party. The Company has not received any written (or to the Company's knowledge, oral) notices or claims alleging that the Company has interfered with, infringed upon, violated, or misappropriated any of the Intellectual Property rights of any other Person (including any written (or to the Company's knowledge, oral) claim that the Company must license or refrain from using any Intellectual Property). As of the Agreement Date, no Company Intellectual Property is subject to any outstanding consent, settlement, decree, order, injunction, judgment, or ruling of a Governmental Entity, or any Contract that restricts or otherwise materially limits the Company's exploitation thereof in the conduct of its business as presently conducted. To the Company's knowledge, no other Person has misappropriated, infringed, or otherwise violated any Company Intellectual Property.

 

(g)
Protection Measures. The Company has taken commercially reasonable measures to maintain and protect each item of Company Intellectual Property and to maintain in confidence all know-how, trade secrets, and other confidential information comprising a part thereof.

 

(h)
Options or Licenses. The Company is not a party to any options, licenses, agreements, or covenants of any kind relating to the Company's right to use or exploit the Company Intellectual Property. Except as provided in the agreements identified in Section 2.16 of the Company Disclosure Letter, the Company is not obligated to indemnify any third party against a charge of infringement of Intellectual Property.

 

(i)
Information Security. The Company complies in all material respects with all Applicable Laws, applicable Contract, and publicly published or posted Company policies, notices, and disclosures, in each case, governing the collection, sharing, processing, use, safeguarding, transmission, and destruction of Sensitive Data, and, as of the Agreement Date, has not received any written notice or claim alleging a breach or violation of the same. To the Company's knowledge, there have been no security breaches relating to, or any unauthorized access, loss, misappropriation, misuse, or acquisition of, any Sensitive Data maintained by the Company or by any third-party service provider on behalf of the Company, nor, to the Company's knowledge, has there been any security breach or unauthorized access or acquisition of any system operated by the Company or of any such third-party service provider on which such Sensitive Data resides or through which such Sensitive Data is processed. The Company has not provided, or been required by Applicable Law or Contract to provide, any notice of any security breach or unauthorized acquisition, access, or loss of Sensitive Data of the Company to any Person.

 

G) Activities with Governmental Entities or Universities. Except as provided in Section 2.100) of the Company Disclosure Letter, no academic institution, research center, or Governmental Entity (or any Person working for or on behalf of any such entity) has, or will be entitled to have, any right, title, or interest (including any "march-in" or co-ownership rights) in or to any Company Intellectual Property. Except as set forth in Section 2.1OG) of the Company Disclosure Letter, no funding, Intellectual Property, facilities, personnel, or other resources of any academic

 

 

14


institution, research center, Governmental Entity has been used in connection with the conception, reduction to practice, development, or other creation of any Company Intellectual Property, in each case in a manner that would cause such institution, center, or Governmental Entity to have or be entitled to have any right, title, or interest in or to any Company Intellectual Property.

2.11
Taxes.

 

(a)
The Company has properly completed and timely filed all Tax Returns required to be filed by it prior to the Closing Date and has timely paid all Taxes required to be paid by it (whether or not shown on any Tax Return). All Tax Returns were complete and accurate in all material respects and have been prepared in compliance with Applicable Law. There is no claim for Taxes that has resulted in an Encumbrance (other than an Encumbrance for Taxes not yet due and payable) against any of the assets of the Company.

 

(b)
The Company has delivered to the Acquirer true, correct, and complete copies of all of its Tax Returns, examination reports, and statements of deficiencies, adjustments, and proposed deficiencies and adjustments.

 

(c)
The Company Balance Sheet reflects all Liabilities for unpaid Taxes of the Company for periods (or portions of periods) through the Company Balance Sheet Date. The Company does not have any Liability for unpaid Taxes accruing after the Company Balance Sheet Date except for Taxes arising in the ordinary course of business and consistent with past practice. The Company does not have any Liability for Taxes (whether outstanding, accrued for, contingent, or otherwise).

 

(d)
There is (i) no past, pending, or, to the knowledge of the Company, threatened audit of, or Tax controversy associated with, any Tax Return of the Company that has been or is being conducted by a Tax Authority, (u) no other procedure, proceeding, or contest relating to any refund or deficiency in respect of Taxes pending or on appeal with any Governmental Entity, (iii) no extension of any statute of limitations on the assessment of any Taxes granted by the Company currently in effect, and (iv) no agreement to any extension of time for filing any Tax Return that has not been filed. No written claim has ever been made by any Governmental Entity in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction.

 

(e)
The Company has collected and remitted all sales, use, value-added, ad valore111, personal property, and similar Taxes ("Sales Taxes") with respect to sales made or services provided and, for all sales or provisions of services that are exempt from Sales Taxes and that were made without charging or remitting Sales Taxes, the Company has received and retained any required Tax exemption certificates or other documentation qualifying such sales or provisions of services as exempt.

 

(f)
The Company is not a party to or bound by any Tax sharing, Tax indemnity, Tax allocation agreement, or advance pricing agreement (other than a commercial agreement not primarily related to Taxes), and the Company does not have any Liability or potential Liability to another party or to a Governmental Entity under any such agreement.

 

(g) The Company has not participated in, and is not currently participating in, a "Reportable Transaction" within the meaning of Section 6707A(c)(2) of the Code or Treasury Regulation Section 1.6011-4(6).

 

 

15


(h)
The Company does not and has never been a member of a consolidated, combined, unitary, or aggregate group for Tax purposes (including, as the case may be, a tax consolidated group or fiscal unity for purposes of any corporate income tax or value-added tax) of which the Company was not the ultimate parent corporation.

 

(i)
The Company does not have any Liability for the Taxes of any other Person under Treasury Regulations Section 1.1502-6 (or '<Illy similar provision of state, local, or foreign law), as a transferee or successor (including any successor Tax liability derived from an acquisition of an ongoing concern), by operation of Applicable Law, by Contract, or otherwise.

G) The Company will not be required to include any item of income in, or exclude any item of deduction from, Taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting or use of an improper method of accounting for a Taxable period ending on or prior to the Closing Date, (it) "closing agreement" described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law) executed on or prior to the Closing Date, (iii) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law), (iv) installment sale or open transaction disposition made on or prior to the Closing Date, or (v) prepaid amount received or deferred revenue accrued on or prior to the Closing Date.

 

(k)
The Company has not received any private letter ruling from the IRS (or any comparable Tax ruling, binding or not on the Company, from any other Governmental Entity).

 

(1)
The Company is not subject to Tax in any country other than its country of incorporation, organization, or formation by virtue of having employees or a permanent establishment or any other place of business in such other country

 

(m)
The Company is not and has never been a ''United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code.

 

(n)
The Company has not constituted either a "distributing corporation" or a "controlled corporation" in a distribution of Equity Interests intended to qualify for Tax-free treatment under Section 355 of the Code (i) prior to the Agreement Date or (ii) in a distribution that could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.. The Company has not distributed Equity Interests of another Person, or had its Equity Interests distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 361 of the Code.

 

(o)
The Company has (i) complied with all Applicable Law relating to the payment, reporting and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 1471, 1472and 3406 of the Code or similar provisions under any foreign law), (ii) withheld (within the time and in the manner prescribed by Applicable Law) from employee wages or consulting compensation and paid over to the proper Governmental Entities (or is properly holding for such timely payment) all amounts required to be so withheld and paid over under all Applicable Law, including federal and state income Tax laws, the Federal Insurance Contribution Act, Medicare, Federal Unemployment Tax Act1 relevant state income and employment Tax withholding laws, and

foreign Tax laws (as applicable), and (iii) timely filed all withholding Tax Returns, for all periods

through and including the Closing Date. The Company is eligible for any payroll tax credit or deferral

 

 

16


that it has claimed pursuant to the CARES Act. Schedule 2.11(o) of the Company Disclosure Letter sets forth any such tax credit or deferral that the Company has claimed.

 

(p)
The Company does not own any interest in any "controlled foreign corporation" (as that item is defined in Section 957 of the Code), "passive foreign investment company" (as that term is defined in Section 1297 of the Code) or other entity the income of which is required to be included in the income of the Company.

 

(g)
The Company is not a party to a "gain recognition agreement" within the meaning of the U.S. Treasury Regulations promulgated under Section 367 of the Code.

 

(r)
The Company has made available to the Acquirer true, correct, and complete copies of all election statements under Section 83(6) of the Code, together with evidence of timely filing of such election statements with the appropriate Internal Revenue Service Center, with respect to any property issued by the Company or any BRISA Affiliate to any of their respective employees, non-employee directors, consultants, and other service providers.

 

(s)
Schedule 2.11(s) of the Company Disclosure Letter lists all "nonqualified deferred compensation plans" (within the meaning of Section 409A of the Code) to which the Company is a party and which are not exempt from Section 409A of the Code. Each such nonqualified deferred compensation plan complies with the requirements of paragraphs (2), (3), and (4) of Section 409A(a) by its terms and has been operated in accordance with such requirements. No event has occurred that would be treated by Section 409A(b) as a transfer of property for purposes of Section 83 of the Code. The Company is under no obligation to gross up any Taxes or reimburse any Tax­ related payments to any Person under Section 409A of the Code or otherwise.

 

(t)
The Company is in compliance with all applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practices and methodology of the Company. The prices for any property or services (or for the use of any property) provided by or to the Company are arm's length prices for purposes of all applicable transfer pricing laws, including the Treasury Regulations promulgated under Section 482 of the Code.

 

(u)
Except as set forth on Schedule 2.11(u) of the Company Disclosure Letter, there is no agreement, plan, arrangement or other Contract covering any current or former employee or other service provider of the Company or any BRISA Affiliate to which the Company is a party or by which the Company or its assets are bound that, considered individually or considered collectively with any other agreement, plan, arrangement, or other Contract will, or would reasonably be expect to, as a result of the Transactions (whether alone or upon the occurrence of any additional or subsequent events) give rise directly or indirectly to the payment of any amount that would reasonably be characterized as a "parachute payment" within the meaning of Section 280G of the Code (or any corresponding or similar provision of state, local, or foreign Tax law). The Company does not have (nor have ever had) any obligation to report, withhold, gross up, indemnify, or otherwise provide any payment for any excise Taxes, including those incurred pursuant to Section 409A or Section 4999 of the Code or due to the failure of any payment to be deductible under of Section 280G of the Code.

 

(v)
Schedule 2.11(v) of the Company Disclosure Letter lists each Person (whether or not a United States resident) who as of Closing will be, with respect to the Company, a "disqualified individual" (within the meaning of Section 280G of the Code and the regulations promulgated thereunder), as determined as of the Agreement Date.

 

17


 

 

18


(w)
The Company is properly treated for federal and applicable state and local Tax purposes as an association taxable as a corporation.

 

(x)
The Company operates at least one significant historic business line, or owns at least a significant portion of its historic business assets, in each case within the meaning of Treasury Regulations Section 1.368-1(d). Neither the Company nor any of its Affiliates has taken oi agreed to take any action, or is aware of any fact or circumstance, that would prevent the Merger from constituting a tax-free reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.

 

2.12
Employee Benefit Plans and Employee Matters. The Company has never had any employees, nor has the Company ever sponsored or maintained any employee benefit plans, whether insured or self-funded.

 

2.13
Interested-Party Transactions. Except as set forth in Schedule 2.13 of the Company Disclosure Letter, none of the officers of the Company or, to the knowledge of the Company, any of the other employees of the Company or any holder of Company Membership Interests, or any of the immediate family members of any of the foregoing, (i) has any direct or indirect ownership, participation, royalty, or other interest in, or is a manager, officer, director, or employee of or a consultant or contractor for any firm, partnership, entity, or corporation that competes with, or does business with, or has any contractual arrangement with, the Company (except with respect to any interest in less than 5% of the stock of any corporation whose stock is publicly traded), (Ji) is a party to, or to the knowledge of the Company, otherwise directly or indirectly interested in, any Contract to which the Company is a party or by which the Company or any of its assets are bound, except for normal compensation for services as a manager, officer, director, or employee thereof, or (iii) has any interest in any property, real or personal, tangible or intangible (including any Intellectual Property) that is used in, or that relates to, the Business.

 

2.14
Insurance. The Company maintains the policies of insurance set forth in Schedule 2.14 of the Company Disclosure Letter, including all legally required workers' compensation insurance and errors and omissions, casualty, fire, cybersecurity, and general liability insurance. Schedule 2.14 of the Company Disclosure Letter sets forth the name of the insurer under each such policy and bond, the type of policy or bond, the coverage amount, and any applicable deductible and any other material provisions, as well as all material claims made under such policies that are currently outstanding. The Company has made available to the Acquirer true, correct, and complete copies of all such policies of insurance issued at the request or for the benefit of the Company. There is no claim pending under any of such policies as to which coverage has been questioned, denied, or disputed by the underwriters of such policies. All premiums due and payable under all such policies and bonds have been timely paid and the Company is otherwise in compliance with the terms of such policies. All such policies remain in full force and effect, and the Company has no knowledge of any threatened termination of, or material premium increase with respect to, any of such policies.

 

2.15
Books and Records. The Company has made available to the Acquirer true, correct, and complete copies of (i) all documents identified on the Company Disclosure Letter, (ii) the Governing Documents of the Company, each as currently in effect.

 

2.16
Material Contracts.

 

(a)
Schedule 2.16 of the Company Disclosure Letter set forth a list of each of all Contracts to which the Company is a party, that are material to the Company or the Business, and that are in effect and active on the Agreement Date (collectively, the "Material Contracts').

 

 

19


(b)
All Material Contracts are in written form. The Company has performed all of its obligations required to be performed by it, except where any such failure does not have a Material Adverse Effect, and the Company is entitled to all benefits under, and, to its knowledge, is not alleged to be in default in respect of, any Material Contract. Each of the Material Contracts is in full force and effect, subject only to the effect, if any, of applicable bankruptcy and other similar Applicable Law affecting the rights of creditors generally and rules of law governing specific performance, injunctive relief, and other equitable remedies. Neither the Company nor, to the knowledge of the Company, any other party to any Material Contract is in default or breach in any material respect under the terms of any Material Contract, and no event, occurrence, condition, or act has occurred, that, with the giving of notice, the lapse of time or the happening of any other event or condition, would reasonably be expected to (i) constitute an event of default under any Material Contract or (ii) give any third party

(A) the right to declare a default or exercise any remedy under any Material Contract, (B) the right to a rebate, chargeback, refund, credit, penalty, or change in delivery schedule under any Material Contract, (C) the right to accelerate the maturity or performance of any obligation of the Company under any Mate1ial Contract, or (D) the right to cancel, terminate, or modify any Material Contract. The Company has not received any written or, to the Company's knowledge, verbal, notice or other communication regarding any actual or possible violation or breach of, default under, or intention to cancel or modify any Material Contract (including under a force111ajeure or similar provision, including as a result of the COVID-19 Pandemic). The Company does not have any Liability for renegotiation of any Government Contract. True and complete copies of all Material Contracts have been made available to the Acquirer.

 

2.17
Transaction Fees. No broker, finder, financial advisor, investment banker, or similar Person is entitled to any brokerage, finder's, or other fee or commission in connection with the origin, negotiation, or execution of this Agreement or in connection with the Transactions.

 

2.18
FDA Matters.

 

(a)
All Company Products that are subject to the jurisdiction of the United States Food and Drug Administration (the "FD ') are being developed, manufactured, used, processed, labeled, stored, tested, and imported or exported in compliance in all material respects with all Applicable Laws, including all applicable requirements under the federal Food and Drug and Cosmetic Act ("FDC '), the Public Health Service Act and their applicable implementing regulations. All Company Products that are subject to the jurisdiction of any other Governmental Entity are being developed, manufactured, used, processed, labeled, stored, tested, imported, and exported in compliance in all material respects with all comparable Applicable Laws of such Governmental Entity.

 

(b)
Neither the Company nor any representative of the Company nor, to the knowledge of the Company, any licensees or assignees of any Company Intellectual Property has received any written notice that the FDA or any other Governmental Entity has initiated, or threatened to initiate, any action to (i) suspend any clinical trial, (ii) withdraw approval of, or suspend or terminate, any Investigational New Drug Application, or any comparable foreign regulatory application, in each case sponsored by the Company with respect to any Company Product, or otherwise prevent or prohibit the preclinical research on or clinical study of any Company Products by or on behalf of the Company, or (ill) recall, or order to suspend the manufacture of, any Company Product.

 

(c)
Neither the Company nor, to the knowledge of the Company, any of its officers, employees, or agents or clinical investigators acting for the Company, has committed any act, made any statement, or failed to make any statement that would reasonably be expected to provide a basis for the FDA to invoke its policy with respect to "Fraud, Untrue Statements of Material Facts,

 

 

20


Bribery, and Illegal Gratuities" set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto. Additionally, neither the Company nor, to the knowledge of the Company, any officer, employee, or agent of the Company has been convicted of any crime or engaged in any conduct that would reasonably be expected to result in (i) debarment under 21 U.S.C. Section 335a or any similar applicable state or foreign Applicable Law or (ii) exclusion under 42 U.S.C. Section 1320a- 7 or any similar applicable state or foreign Applicable Law.

 

(d)
Except as is not material to the Company in any case or in the aggregate, all animal studies or other preclinical tests performed by the Company, or by third-party vendors on the Company's behalf, in connection with or as the basis for any regulatory approval required for the Company Products either have been conducted in accordance, in all material respects, with applicable Law, including applicable Good Laboratory Practice regulations as described in 21 CPR Part 58 or comparable foreign Applicable Laws.

 

(e)
The Company has delivered to the Acquirer copies of any and all written notices of inspectional observations, establishment inspection reports, and any other documents received by the Company from any Governmental Entity, including the FDA or any comparable foreign Governmental Entities, that identify lack of compliance by the Company \with Applicable Laws, including Applicable Laws of the FDA or comparable foreign Governmental Entities.

 

(f)
True, complete, and correct copies of any and all of the Company's submissions to, or material correspondence with, the FDA or its comparable foreign Governmental Entity have been provided to the Acquirer by the Company.

 

(g)
There is no Legal Proceeding pending or, to the knowledge of the Company, threatened, with respect to a violation by the Company of any Applicable Law, including the FDCA, FDA regulations adopted thereunder, or the Controlled Substance Act.

 

(h)
The Company has not received from any Governmental Entity any

(i) inspection reports, (ii) notices of adverse :findings, warning or untitled letters, or minutes of meetings, or (iii) other correspondence concerning the Company Products, in each case in which any Governmental Entity asserted in writing that the operations of the Company may not be in compliance with Applicable Laws.

 

(i)
The Company has not received written notice from any of its suppliers of any material interruption of supply or manufacturing capacity, shortage of raw materials, components, or other manufacturing problems that would have a material adverse effect on the subsequent development of the Company Products, nor, to the knowledge of the Company, do any conditions exist that reasonably would be expected to lead to such manufacturing problems.

G) All applications, notifications, submissions, information, claims, reports, and statistics and other data that have been utilized by the Company, or prepared with the intention to be utilized by the Company, as the basis for or submitted in connection with any regulatory notifications, submissions, applications, filings, or Company Authorizations to the FDA or any other Governmental Entity relating to the Company Products were true, complete, and correct in all material respects as of the date of preparation and submission, as applicable, and/or any necessary or required updates, changes, corrections, or modification to such applications, notifications, submissions, information, and data have been submitted to the FDA or other Governmental Entity.

 

(k) Neither the Company nor any of its employees or agents acting on the Company's behalf has (i) made any offer to, or used any funds for, unlawful contributions, loans,

 

 

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donations, gifts, entertainment, bribe, rebate, payoff, influence payment, kickback, or other unlawful expenses, payments, or gifts of money or anything of value, in each case as prohibited under any Applicable Law; (.ii") made or agreed to make any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; (iii) taken any action that would constitute a violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C.§§78dd-1, et seq, or the Anti-Kickback Statute, 42 U.S.C.§1320a-7b, the Physician Self-Referral Law, 42 U.S.C. §1395nn, or their equivalent in any jurisdiction where the Company conducts business; or (iv) made or agreed to make any other unlawful payment.

 

Q.) Except as set forth in Section 2.18(1) of the Company Disclosure Letter, the Company has not conducted or sponsored, and is not currently conducting or sponsoring, any clinical trials, nor have any clinical trials been conducted or sponsored on the Company's behalf. Each of the clinical trials set forth in Section 2.18(1) of the Company Disclosure Letter, was conducted or is being conducted in compliance with all Applicable Laws. Except as set forth in Section 2.180) of the

Company Disclosure Letter, the Company has not filed any investigational new drug application, nor has any investigational new drug application been filed on the Company's behalf. No investigational new drug application filed by or on behalf of the Company with the FDA or any comparable foreign Governmental Entity has been te1minated or suspended by the FDA or such Governmental Entity, and neither the FDA nor such Governmental Entity has commenced, or threatened to initiate, any action to place a clinical hold order on, or otherwise terminate, delay, or suspend, any proposed or ongoing clinical investigation conducted or proposed to be conducted by the Company.

 

2.19
No Other Representations or Warranties. Except for the representations and warranties of the Company and the Sole Owner set forth in this Agreement, the other Transaction Documents and any schedule, certificate, or other document delivered pursuant hereto or thereto or in connection with the Transactions, neither the Company nor the Sole Owner nor any of their Representatives makes any other representation or warranty, express or implied, either written or oral, regarding the Company or the Sole Owner or otherwise in connection with this Agreement and the Transactions.

 

 

ARTICLE III

representations and Warranties OF the acquirer and the merger SUB

 

Except as and to the extent disclosed in the Acquirer SEC Reports filed or furnished with the SEC on or after August 15, 2022 (the “Applicable Date') and publicly available as of the Agreement Date, the Acquirer and the Merger Sub, jointly and severally, represent and warrant to the Company and the Sole Owner as follows:

 

3.1
Organization and Standing. Each of the Acquirer and the Merger Sub is a corporation duly organi2:ed, validly existing and in good standing under the laws of its jurisdiction of organization. Neither the Acquirer nor the Merger Sub is in violation of any of the provisions of its Articles of Incorporation or Certificate of Incorporation, as applicable, or Bylaws, or Governing Documents.

 

3.2
Authority; Non-contravention,

 

(a)
Each of the Acquirer and the Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the Transactions. The execution and delivery of this Agreement and the consummation of the Transactions have been duly authorized by all necessary corporate action on the part of the Acquirer and the Merger Sub. This Agreement has been duly executed

 

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and delivered by each of the Acquirer and the Merger Sub and, assuming the due