txmd-8k_20220527.htm
false 0000025743 0000025743 2022-05-27 2022-05-27

 

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

Date of Report (Date of earliest event reported): May 27, 2022

 

TherapeuticsMD, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada

 

001-00100

 

87-0233535

(State or Other

Jurisdiction of Incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

951 Yamato Road, Suite 220

Boca Raton, FL 33431

(Address of Principal Executive Office) (Zip Code)

 

Registrant’s telephone number, including area code:  (561) 961-1900

 

Not Applicable

(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 (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

TXMD

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 (§230-405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2). Emerging growth company

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 a Material Definitive Agreement.

Agreement and Plan of Merger

On May 27, 2022, TherapeuticsMD, Inc., a Nevada corporation (the “Company”), Athene Parent, Inc., a Nevada corporation (“Parent”), and Athene Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Parent is an affiliate of investment funds advised by EW Healthcare Partners (“EW”). Capitalized terms used herein and not otherwise defined have the meaning set forth in the Merger Agreement.

Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Merger Sub will commence a cash tender offer (the “Offer”) to acquire all of the issued and outstanding shares of the common stock, par value $0.001 per share, of the Company (“Common Stock”) at a price per share of $10.00, in cash, without interest (the “Offer Price”), subject to any withholding of taxes required by applicable law. The Offer will initially remain open for 20 business days from the date of commencement of the Offer, subject to extension under certain circumstances.

The Merger Agreement provides that, following the consummation of the Offer, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Merger will be governed by Section 92A.133 of the Nevada Revised Statutes (the “NRS”), with no stockholder vote required to consummate the Merger. In the Merger, each outstanding share of Common Stock (other than shares of Common Stock held in the treasury of the Company, owned by a wholly-owned subsidiary of the Company or by Parent, Merger Sub, or any other subsidiary of Parent) will be converted into the right to receive cash in an amount equal to the Offer Price, without interest.

The Board of Directors of the Company (the “Board”) unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, were fair to and in the best interests of the Company and its stockholders, (ii) adopted and approved and declared advisable the Merger Agreement and the transactions contemplated thereby, and (iii) recommended, by resolution, that the stockholders of the Company accept the Offer and tender their shares of Common Stock pursuant to the Offer.

Immediately prior to the effective time of the Merger (the “Effective Time”), except as provided in the Merger Agreement, each option to purchase Common Stock, whether vested or unvested, outstanding and unexercised immediately prior to the Effective Time will vest (if unvested) and be cancelled without any consideration in respect thereof. Immediately prior to the Effective Time, subject to the Merger Agreement, each unvested Company restricted stock unit award (other than a Company restricted performance-based stock unit award) that is outstanding will fully vest and will be cancelled and converted into the right to receive an amount (subject to any applicable withholding tax) in cash equal to the product of the Offer Price and the number of shares subject to such Company restricted stock unit award. Immediately prior to the Effective Time, subject to the Merger Agreement, each performance-based stock unit award of the Company that is outstanding will be cancelled and converted into the right to receive an amount (subject to any applicable withholding tax) in cash equal to the product of the Offer Price and the number of shares that vest at target vesting level for such performance-based stock unit award.

Pursuant to the terms of the Merger Agreement, following the date of the Merger Agreement, the Company will take all actions with respect to the Company’s 2020 Employee Stock Purchase Plan (the “ESPP”) to provide that (i) with respect to any offering periods in effect as of the date of the Merger Agreement (the “Current Purchase Period”), no employee who is not a participant in the ESPP as of the date of the Merger Agreement may become a participant in the ESPP and no employee participating in the Current Purchase Period may increase the percentage amount of his or her payroll deduction election in effect immediately prior to the date of the Merger Agreement, (ii) there will be no new offering periods following the Current Purchase Period, and (iii) in all events, the Company will terminate the ESPP immediately prior to, and subject to the occurrence of, the Effective Time. The Current Purchase Period will end on November 14, 2022; provided, that if the Effective Time is prior to November 14, 2022, the Company will end the Current Purchase Period immediately prior to the Effective Time, and all outstanding purchase rights under the ESPP will be automatically exercised, in accordance with the terms of the ESPP, at such time, and any shares of Common Stock purchased under the ESPP will be cancelled and converted into the right to receive the Offer Price.

The Merger Agreement contains representations and warranties and covenants of the parties customary for a transaction of this nature, including covenants regarding the operation of the Company’s business prior to the Effective Time.

The Company is also subject to customary restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals. The Merger Agreement also contains customary covenants requiring the Board, subject to certain exceptions, to recommend that the Company’s stockholders accept the Offer and tender their shares of Common Stock to Merger Sub pursuant to the Offer (the “Company Board Recommendation”). Prior to the acceptance time of the Offer, the Board may withhold, withdraw, qualify, or modify the Company Board Recommendation in response to a Company Intervening Event or in response to an

 


 

acquisition proposal that the Board determines in good faith constitutes a Superior Proposal, in each case, subject to complying with the notice obligations and other specified conditions set forth in the Merger Agreement.

Merger Sub has agreed to commence the Offer as promptly as practicable from the date of the Merger Agreement (but in no event later than June 6, 2022). The consummation of the Offer will be conditioned on (i) the number of shares of Common Stock validly tendered and not properly withdrawn in accordance with the terms of the Offer (excluding any shares tendered pursuant to guaranteed delivery procedures that have not yet been “received” as such term is used in NRS 92A.133(g)), when added to any shares of Common Stock owned by Merger Sub, representing, at the acceptance time of the Offer (the “Acceptance Time”), at least a majority of the voting power of the then issued and outstanding shares of Common Stock, (ii) the accuracy of the representations and warranties of the Company and compliance by the Company with the covenants contained in the Merger Agreement, subject to qualifications, (iii) there not having been a Company Material Adverse Effect with respect to the Company since the date of the Merger Agreement, (iv) the absence of any default or event of default under Financing Agreement (as defined below) and (v) other customary closing conditions.

The consummation of the Merger will be conditioned on (i) no order or other legal restraint that prohibits the consummation of the Merger being in effect, (ii) Merger Sub (or Parent on its behalf) has accepted for payment all shares of Common Stock validly tendered and not validly withdrawn pursuant to the Offer and (iii) the absence of any default or event of default under the Financing Agreement.

The Merger Agreement contains certain termination rights for both the Company and Parent, including that, subject to certain limitations, (i) the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by 11:59 p.m. Eastern Time on July 13, 2022 (the “Termination Date”), (ii) the Company and Parent may mutually agree to terminate the Merger Agreement, (iii) prior to the acceptance time of the Offer, the Company may terminate the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, subject to the Company paying Parent a termination fee of $3,250,000 and the other terms and conditions set forth in the Merger Agreement, (iv) Parent may terminate the Merger Agreement because the Board changes the Company Board Recommendation or in the event of a Willful Breach by the Company of its no-shop covenants, and (v) the Company may terminate the Merger Agreement if Merger Sub does not commence the Offer by June 6, 2022, or does not extend the Offer when required to do so, or does not accept for payment the shares of Common Stock after the Expiration of the Offer when the conditions to the Offer have been satisfied.

The Company will be required to pay the termination fee of $3,250,000 in the event that (i) the Company terminates the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, (ii) Parent terminates the Merger Agreement because the Board changes the Company Board Recommendation, or (iii) Parent terminates the Merger Agreement either due to a breach by the Company that causes a condition to the Offer not to be satisfied or if the Company willfully breaches the no-shop provisions of the Merger Agreement. In addition, the Company will be required to pay the termination fee under specified circumstances if, within 12 months after the termination of the Merger Agreement, the Company enters into or consummates a Competing Acquisition Transaction.

Pursuant to an equity commitment letter, dated as of May 27, 2022 (the “Equity Commitment Letter”), and subject to the terms thereof, EW Healthcare Partners Fund 2, L.P., a Delaware limited partnership (the “Investor”), committed to provide Parent, at the Effective Time, with an equity contribution of up to approximately $93,000,000, the proceeds of which will be used by Parent to pay the Offer Price, Merger consideration and certain fees and expenses required to be paid by Parent at the closing of the Merger pursuant to, and in accordance with, the Merger Agreement. Pursuant to Amendment No. 11 (as defined below) to the Company’s Financing Agreement, and subject to the terms and conditions therein, the Lenders (as defined below) have agreed to roll-over the existing indebtedness of the Company. Pursuant to the Merger Agreement and the Equity Commitment Letter, the Investor is required to pay to the Company any amounts for monetary damages awarded to the Company against Parent or Merger Sub for any willful breach of the Merger Agreement up to a cap of $5,110,000.

The Merger Agreement also provides that the Company, on one hand, or Parent and Merger Sub, on the other hand, may specifically enforce the obligations under the Merger Agreement, except that the Company may only cause Parent’s equity financing commitment to be funded and the Merger to be consummated in circumstances where the conditions to Parent’s and Merger Sub’s obligations to consummate the Merger are satisfied.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to this report and incorporated herein by reference.

The Merger Agreement and the foregoing description of the Merger Agreement have been included to provide investors and stockholders with information regarding the terms of the Merger Agreement. It is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Merger Agreement were made only as of specified dates for the purposes of such agreement, were solely for the benefit of the parties to such agreement and may be subject to qualifications and limitations agreed upon by such parties. In particular, in reviewing the representations, warranties and covenants contained in the Merger Agreement and discussed in the foregoing description, it is important to bear in mind that such representations, warranties and covenants were negotiated with the principal purpose of allocating risk between the parties, rather than establishing matters as facts.

 


 

Such representations, warranties and covenants may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the U.S. Securities and Exchange Commission (the “SEC”). Investors and stockholders generally are not third-party beneficiaries under the Merger Agreement. Accordingly, investors and stockholders should not rely on such representations, warranties and covenants as characterizations of the actual state of facts or circumstances described therein. Information concerning the subject matter of such representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures.

Sixth Street Financing Agreement Amendments

On May 27, 2022, the Company entered into Amendment No. 10 (“Amendment No. 10”) to that certain Financing Agreement, dated as of April 24, 2019, as amended, with Sixth Street Specialty Lending, Inc., as administrative agent, the various lenders from time to time party thereto (the “Lenders”), and certain of the Company’s subsidiaries party thereto from time to time as guarantors (the “Financing Agreement”). Pursuant to Amendment No. 10, among other amendments, (i) interest payments under the Financing Agreement were paused, such that interest on each term loan shall be payable in cash and in arrears (a) upon any prepayment of that term loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid and (b) on the maturity date, (ii) the minimum cash covenant was set at $10,000,000, (iii) the maturity date of the Financing Agreement was amended to July 13, 2022, (iv) the termination of the Merger Agreement was added as an event of default, and (v) the Company agreed to a paid in kind amendment fee of $1,780,000 (the “Amendment No. 10 PIK Fee”), which fee was added to the principal amount of the loans under the Financing Agreement.

On May 27, 2022, the Company entered into Amendment No. 11 (“Amendment No. 11”) to the Financing Agreement. Amendment No. 11 contains amendments to the Financing Agreement that would go into effect upon the satisfaction of certain conditions on or before July 13, 2022 (the “Amendment Effective Date”), including (i) the consummation of the Merger, (ii) the payment in cash of (a) all accrued and unpaid interest under the Financing Agreement through and including the Amendment Effective Date and (b) all fees, costs, expenses and taxes then payable pursuant to Section 2.7 or 10.2 of the Financing Agreement, and (iii) the delivery to the administrative agent of certain customary documents, including a Pledge Agreement, executed by Parent, with respect to the pledge of 100% of the capital stock of the Company

The foregoing descriptions of Amendment No. 10 and Amendment No. 11 are not complete and are qualified in their entirety by reference to the full text of Amendment No. 10 and Amendment No. 11, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.

Item 8.01

Other Events.

On May 31, 2022, the Company and EW issued a joint press release announcing the execution of the Merger Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Cautionary Notes Regarding Forward Looking Statements

Certain statements in this communication, including, without limitation, statements regarding the proposed transaction, plans and objectives, and management’s beliefs, expectations or opinions, may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address expected future actions and expected future business and financial performance. Forward-looking statements may be identified by the use of words such as “believe,” “will,” “should,” “estimate,” “anticipate,” “potential,” “expect,” “intend,” “plan,” “may,” “subject to,” “continue,” “if” and similar words and phrases. These forward-looking statements are not guarantees of future events and involve risks, uncertainties and assumptions that are difficult to predict.

Actual results, developments and business decisions may differ materially from those expressed or implied in any forward-looking statements as a result of numerous factors, risks and uncertainties over which the Company or EW Healthcare Partners, as applicable, have no control. These factors, risks and uncertainties include, but are not limited to, the following: (1) the conditions to the completion of the proposed transaction may not be satisfied, including uncertainties as to how many of the Company’s stockholders will tender their shares in the tender offer and the possibility that if the transaction does not close by July 13, 2022 , or the Company is unable to satisfy the minimum qualified cash covenant under the Company’s Financing Agreement, it will constitute an event of default under the Company’s Financing Agreement and the Company may not continue as a going concern; (2) the parties’ ability to complete  the proposed transaction contemplated by the Merger Agreement in the anticipated timeframe or at all; (3) the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction agreement between the parties to the proposed transaction (including that if the transaction agreement is terminated it is an event of default under the Company’s Financing Agreement and the Company may not continue as a going concern); (4) the effect of the announcement or pendency of the proposed transaction on business relationships, operating results, and business generally; (5) risks that the proposed transaction disrupts current plans and operations and potential difficulties in employee retention as a result of the proposed transaction; (6) risks related to diverting management’s attention from ongoing business operations; (7) the outcome of any legal proceedings that may be instituted related to

 


 

the proposed transaction or the transaction agreement between the parties to the proposed transaction; (8) the amount of the costs, fees, expenses and other charges related to the proposed transaction; (9) the risk that competing offers or acquisition proposals will be made; (10) general economic conditions, particularly those in the life science and medical device industries; (11) stock trading prices, including the impact of the proposed transaction on the Company’s stock price and the corresponding impact that failure to close the proposed transaction would be expected to have on the Company’s stock price, particularly in relation to the Company’s current and future capital needs and its ability to raise additional funds to finance its future operations in the event the proposed transaction does not close;  (12) the participation of third parties in the consummation of the proposed transaction; and (13) other factors discussed from time to time in the reports of the Company filed with the Securities and Exchange Commission (the “SEC”), including the risks and uncertainties contained in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s most recent Annual Report on Form 10-K, as filed with the SEC on March 23, 2022, and related sections in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are available free of charge at http://www.sec.gov or under the “Investors & Media” section on the Company’s website at www.therapeuticsmd.com.

Forward-looking statements reflect the views and assumptions of management as of the date of this communication with respect to future events. The Company does not undertake, and hereby disclaims, any obligation, unless required to do so by applicable laws, to update any forward-looking statements as a result of new information, future events or other factors. The inclusion of any statement in this communication does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Additional Information about the Transaction and Where to Find It

The tender offer has not yet commenced. This communication is neither an offer to buy nor a solicitation of an offer to sell any securities of the Company, nor is it a recommendation by the Company, its management or Board of Directors that any investors sell or otherwise tender any securities of the Company in connection with the transactions described elsewhere in this communication. The solicitation and the offer to buy shares of the Company’s common stock will only be made pursuant to a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and other related materials that an affiliate of EW Healthcare Partners intends to file with the SEC. In addition, the Company will file with the SEC a Recommendation Statement on Schedule 14D-9 with respect to the tender offer. Once filed, investors will be able to obtain the tender statement on Schedule TO, the offer to purchase, the Recommendation Statement of the Company on Schedule 14D-9 and related materials filed with the SEC with respect to the tender offer and the merger, free of charge at the website of the SEC at www.sec.gov or from the information agent named in the tender offer materials. Investors may also obtain, at no charge, the documents filed with or furnished to the SEC by the Company under the “Investors & Media” section of the Company’s website at www.therapeuticsmd.com. Investors are advised to read these documents when they become available, including the Recommendation Statement of the Company and any amendments thereto, as well as any other documents relating to the tender offer and the merger that are filed with the SEC, carefully and in their entirety prior to making any decisions with respect to whether to tender their shares in the tender offer because such documents contain important information, including the terms and conditions of the tender offer.

Item 9.01

Financial Statements and Exhibits.

(d)Exhibits

Exhibit Index

 

Exhibit No.

 

Description

 

 

 

 

 

 

2.1*

 

Agreement and Plan of Merger, dated as of May 27, 2022, among TherapeuticsMD, Inc., Athene Parent, Inc. and Athene Merger Sub, Inc.

 

 

 

10.1

 

Amendment No. 10 to Financing Agreement, dated May 27, 2022, by and among TherapeuticsMD, Inc., VitaMedMD, LLC, BocagreenMD, Inc., Sixth Street Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC.

 

 

 

10.2

 

Amendment No. 11 to Financing Agreement, dated May 27, 2022, by and among TherapeuticsMD, Inc., VitaMedMD, LLC, BocagreenMD, Inc., Sixth Street Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC.

 

 

 

99.1

 

Joint Press Release, dated May 31, 2022.

 

 

 

104

 

Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document).

 

 

 

*

Schedules to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

 


 

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.

Date:  May 31, 2022

 

THERAPEUTICSMD, INC.

 

 

 

 

 

 

/s/ Michael C. Donegan

 

 

Michael C. Donegan

 

 

Interim Chief Financial Officer, Chief Accounting

Officer and Vice President Finance

 

 

txmd-ex21_29.htm

Exhibit 2.1

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN EXCLUDED PURSUANT TO REGULATION S-K, ITEM 601(B)(10). SUCH EXCLUDED INFORMATION IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER

by and among:

ATHENE PARENT, INC.

ATHENE MERGER SUB, INC.

and

THERAPEUTICSMD, INC.


dated as of

MAY 27, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 


TABLE OF CONTENTS

 

 

 

 

 

Pages

 

 

 

ARTICLE I THE OFFER

 

2

Section 1.1

The Offer

 

2

Section 1.2

Company Actions

 

5

ARTICLE II THE MERGER

 

7

Section 2.1

The Merger

 

7

Section 2.2

Conversion of Shares of Capital Stock

 

8

Section 2.3

Surrender and Payment

 

8

Section 2.4

No Dissenter’s Rights

 

10

Section 2.5

Company Equity Awards

 

10

Section 2.6

Lost Certificates

 

11

Section 2.7

Warrants

 

11

Section 2.8

Adjustments to Merger Consideration

 

12

Section 2.9

Withholding

 

12

ARTICLE III THE SURVIVING CORPORATION

 

12

Section 3.1

Articles of Incorporation

 

12

Section 3.2

Bylaws

 

12

Section 3.3

Directors and Officers

 

12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

13

Section 4.1

Organization

 

13

Section 4.2

Capitalization

 

14

Section 4.3

Authorization; No Conflict

 

15

Section 4.4

Subsidiaries

 

16

Section 4.5

SEC Reports and Financial Statements

 

17

Section 4.6

Absence of Material Adverse Changes, etc

 

19

Section 4.7

Litigation

 

19

Section 4.8

Broker’s or Finder’s Fees

 

19

Section 4.9

Employee Plans

 

20

Section 4.10

Opinions of Company Financial Advisors

 

22

Section 4.11

Taxes

 

22

Section 4.12

Compliance with Laws; Permits; Governmental Authorizations

 

23

Section 4.13

Regulatory Matters

 

24

 

i

 


TABLE OF CONTENTS
(continued)

 

 

Pages

 

 

 

Section 4.14

Intellectual Property; IT Assets; Data Privacy

 

26

Section 4.15

Employment Matters

 

30

Section 4.16

Insurance

 

30

Section 4.17

Material Contracts

 

31

Section 4.18

Real Property

 

33

Section 4.19

Environmental Matters

 

33

Section 4.20

Title to Assets

 

34

Section 4.21

Inapplicability of Anti-takeover Statutes

 

34

Section 4.22

No Other Parent Representations or Warranties

 

34

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

 

35

Section 5.1

Organization

 

35

Section 5.2

Authorization; No Conflict

 

35

Section 5.3

No Legal Proceedings Challenging the Merger

 

36

Section 5.4

Ownership of Company Common Stock

 

36

Section 5.5

Broker’s or Finder’s Fees

 

36

Section 5.6

Activities of Merger Sub

 

36

Section 5.7

Disclosure Documents

 

36

Section 5.8

Financing Arrangements

 

37

Section 5.9

Certain Arrangements

 

38

Section 5.10

No Other Company Representations or Warranties

 

38

ARTICLE VI COVENANTS

 

38

Section 6.1

Access and Investigation

 

38

Section 6.2

Operation of the Company’s Business

 

39

Section 6.3

Acquisition Proposals

 

43

Section 6.4

Filings; Other Actions; Notification

 

47

Section 6.5

Stock Exchange De-listing

 

50

Section 6.6

Public Announcements

 

50

Section 6.7

Financing Arrangements

 

51

Section 6.8

Directors and Officers Exculpation, Indemnification and Insurance

 

52

Section 6.9

Transaction Litigation

 

54

ii

 


TABLE OF CONTENTS
(continued)

 

 

Pages

 

 

 

Section 6.10

Rule 16b-3

 

54

Section 6.11

Employee Matters

 

54

Section 6.12

FIRPTA Certificate

 

56

Section 6.13

Confidentiality

 

56

Section 6.14

Obligations of Merger Sub

 

56

Section 6.15

Parent Vote

 

56

Section 6.16

Takeover Statutes

 

56

Section 6.17

Notification of Certain Matters

 

57

Section 6.18

Merger Without a Stockholders’ Meeting

 

57

ARTICLE VII CONDITIONS TO MERGER

 

57

Section 7.1

Conditions to Each Party’s Obligation to Effect the Merger

 

57

ARTICLE VIII TERMINATION

 

58

Section 8.1

Termination

 

58

Section 8.2

Notice of Termination

 

59

Section 8.3

Effect of Termination

 

59

Section 8.4

Company Termination Fees

 

60

ARTICLE IX MISCELLANEOUS PROVISIONS

 

61

Section 9.1

Amendment or Supplement

 

61

Section 9.2

Extension of Time, Waiver, etc

 

62

Section 9.3

No Survival

 

62

Section 9.4

Entire Agreement; No Third Party Beneficiary

 

62

Section 9.5

Applicable Law; Jurisdiction

 

63

Section 9.6

Specific Performance

 

64

Section 9.7

[Reserved]

 

65

Section 9.8

Assignment

 

65

Section 9.9

Notices

 

65

Section 9.10

Severability

 

66

Section 9.11

Fees and Expenses

 

67

Section 9.12

Construction

 

67

Section 9.13

Counterparts; Signatures

 

68

 

 

iii

 


TABLE OF CONTENTS
(continued)

 

 

 

Exhibit ADefinitions

Exhibit BAmended and Restated Articles of Incorporation of the Surviving Corporation

Annex A Conditions to the Offer

 

 

 

 

 

 

 

iv

 


 

 

Agreement and Plan of Merger

This Agreement and Plan of Merger (“Agreement”) is made and entered into as of May 27, 2022 (the “Agreement Date”) by and among Athene Parent, Inc., a Nevada corporation (“Parent”), Athene Merger Sub, Inc., a Nevada corporation and wholly owned direct subsidiary of Parent (“Merger Sub”), and TherapeuticsMD, Inc., a Nevada corporation (the “Company”).  Each of Parent, Merger Sub and the Company are referred to herein as a “Party” and collectively as the “Parties”. Certain capitalized terms used in this Agreement are defined in Exhibit A.

Recitals

WHEREAS, the parties hereto intend that, on the terms and subject to the conditions set forth herein, Merger Sub shall merge with and into the Company, with the Company being the surviving corporation (the “Merger”);

WHEREAS, pursuant to this Agreement, Merger Sub has agreed to commence a tender offer (as may be amended, supplemented or modified, the “Offer”) to purchase all of the outstanding shares of Company Common Stock (such shares of Company Common Stock being hereinafter referred to as the “Shares”), for a price per Share of $10.00 (such amount or any greater amount per Share that may be paid pursuant to the Offer, and as may be adjusted in accordance with this Agreement, the “Offer Price”);

WHEREAS, as soon as practicable following the Offer Closing, Merger Sub shall merge with and into the Company, on the terms and subject to the conditions set forth in this Agreement, with the Company being the surviving corporation, with the Merger to be effected pursuant to Section 92A.133 and the other applicable provisions of the Nevada Revised Statutes (the “NRS”), whereby each Share issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled in accordance with Section 2.2(a)) will be converted into the right to receive the Offer Price, payable to the holder in cash, without interest, subject to any withholding of Taxes as contemplated by this Agreement;

WHEREAS, the board of directors of the Company (the “Company Board”) has unanimously (i) determined that this Agreement and the Transactions, including the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) adopted, approved and declared advisable this Agreement and the Transactions, and (iii) recommended, by resolution, that holders of Company Common Stock (as defined herein) accept the Offer and tender their Shares to Merger Sub pursuant to the Offer;

WHEREAS, each of the boards of directors of Parent and Merger Sub has adopted and approved this Agreement and declared it advisable for Parent and Merger Sub, respectively, to enter into this Agreement and the Transactions, including the Offer and the Merger, upon the terms and subject to the conditions set forth herein;

WHEREAS, Parent shall, or shall cause the direct holder of the stock of Merger Sub to, immediately following execution and delivery of this Agreement, approve this Agreement in its capacity as sole stockholder of Merger Sub;

 


 

WHEREAS, as a condition and inducement to the Company’s willingness to enter into this Agreement, Parent and Merger Sub have delivered to the Company previously or concurrently with the execution of the Agreement, a commitment letter between Parent and the Investor, pursuant to which the Investor has committed, subject to the terms and conditions thereof, to invest in Parent, directly or indirectly, the cash amounts set forth therein (the “Equity Commitment Letter”); and

WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and to set forth certain conditions to the Offer and the Merger.

Agreement

NOW, THEREFORE, in consideration of the mutual covenants and premises contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

Article I
The Offer

Section 1.1The Offer.

(a)Provided that this Agreement shall not have been terminated in accordance with Section 8.1, and subject to the Company having provided the information required to be provided pursuant to Section 1.2(b), as promptly as practicable after the Agreement Date, and in any event on or before June 6, 2022 (the date of such commencement, the “Offer Commencement Date”), Merger Sub shall (and Parent shall cause Merger Sub to) commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer to purchase all of the Shares at a price per share equal to the Offer Price. The Parties hereby acknowledge and agree that the Offer shall constitute an “offer” as defined in NRS 92A.133(4)(e).

(b)The obligation of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment and pay for any Shares validly tendered and not validly withdrawn pursuant to the Offer shall be subject only to the satisfaction, or waiver by Merger Sub or Parent, of (x) the condition (the “Minimum Condition”) that at least that number of shares of Company Common Stock validly tendered and not validly withdrawn prior to the Expiration Date of the Offer (other than shares of Company Common Stock tendered by guaranteed delivery that have not yet been “received,” as such term is used in NRS 92A.133(g), by the depositary for the Offer), when added to any shares of Company Common Stock already owned by Merger Sub, if any, equals a majority of the voting power of the then issued and outstanding shares of Company Common Stock, and (y) the other conditions set forth in Annex A (the conditions described in clauses (x) and (y) are collectively referred to as the “Offer Conditions”). Subject to the satisfaction, or waiver by Merger Sub or Parent, of the Offer Conditions, Merger Sub shall (and Parent shall cause Merger Sub to) consummate the Offer in accordance with its terms and accept for payment (the time of such acceptance for payment, the “Acceptance Time”) and pay for all Shares validly tendered and not validly withdrawn pursuant to the Offer as promptly as practicable (and in any event within three Business Days) after the Expiration Date and in any event in compliance with Rule 14e-1(c) under

 

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the Exchange Act. The Offer Price payable in respect of each Share validly tendered and not validly withdrawn pursuant to the Offer shall be paid to the seller of such Share in cash, without interest, subject to the deduction or withholding of any Taxes as contemplated by this Agreement, on the terms and subject to the conditions set forth in this Agreement. The time scheduled for payment for shares of Company Common Stock accepted for payment pursuant to and subject to the conditions of the Offer is referred to in this Agreement as the “Offer Closing”, and the date on which the Offer Closing occurs is referred to in this Agreement as the “Offer Closing Date.”

(c)The Offer shall be made by means of an offer to purchase that describes the terms and conditions of the Offer as set forth in this Agreement. Merger Sub and Parent expressly reserve the right to waive (in whole or in part) any Offer Condition at any time and from time to time, to increase the Offer Price or to make any other changes in the terms and conditions of the Offer; provided, however, that without the prior written consent of the Company, Merger Sub shall not (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer, (iii) reduce the number of Shares to be purchased in the Offer, (iv) amend or modify any of the Offer Conditions in a manner that is adverse to the holders of Shares or impose conditions to the Offer in addition to the Offer Conditions, (v) amend, modify or waive the Minimum Condition or (vi) extend or otherwise change the Expiration Date in a manner other than pursuant to and in accordance with this Agreement.

(d)Unless extended as provided in this Agreement, the Offer shall initially be scheduled to expire at midnight, New York City time, at the end of the day on the date that is twenty Business Days (calculated as set forth in Rule 14d-1(g)(3) and Rule 14e-1(a) under the Exchange Act) after the Offer Commencement Date (the “Initial Expiration Date”). Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, and subject to the last proviso of this Section 1.1(d), unless this Agreement shall have been terminated in accordance with Section 8.1, (i) if, at midnight, New York City time, at the end of the day on the Initial Expiration Date or any subsequent date and time as of which the Offer is scheduled to expire, any Offer Condition is not satisfied or, to the extent waivable in accordance with the terms hereof and applicable Law, has not been waived by Merger Sub or Parent, Merger Sub shall (subject to the rights or remedies of the parties hereto hereunder, including under Article VIII), extend (and re-extend) the Offer and its expiration date beyond the Initial Expiration Date (the Initial Expiration Date as it may be extended herein is referred to as the “Expiration Date”) for one or more periods, in consecutive increments of up to ten Business Days each (each such increment to end at 11:59 p.m., New York City time, on the last Business Day of such increment), the length of each such period to be determined by Parent in its reasonable discretion (or such longer period as Parent and the Company may mutually agree) to permit such Offer Condition to be satisfied (it being understood, for the avoidance of doubt, that the Offer shall not be extended pursuant to this sentence if all Offer Conditions have been satisfied or waived); provided, that if at any then-scheduled expiration of the Offer, all of the Offer Conditions (other than the Minimum Condition and any Offer Conditions that are by their nature to be satisfied at the Offer Acceptance Time) have been satisfied or waived (to the extent waivable in accordance with the terms hereof and applicable Law) and the Minimum Condition has not been satisfied, Merger Sub shall not be required to (and Parent shall not be required to cause Merger Sub to) extend the Offer for more than two additional consecutive increments of five (5) Business Days each (or such shorter periods as may be agreed to by the Company and Merger Sub); provided, however, that in no event shall Merger Sub (x) be required to extend the Expiration Date to any date beyond the Termination Date

 

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or (y) without the prior written consent of the Company be permitted to extend the Expiration Date to any date beyond the Termination Date. In addition, Merger Sub shall, with or without the written consent of the Company, extend the Offer for any minimum period required by any rule or regulation of the SEC or its staff, any rule or regulation of Nasdaq or any other applicable Law, in each case, applicable to the Offer.

(e)Merger Sub shall not terminate the Offer prior to any scheduled Expiration Date without the prior written consent of the Company, except in connection with a termination of this Agreement permitted in accordance with the terms of Section 8.1. In the event that this Agreement is terminated pursuant to Section 8.1, whether or not the Expiration Date has occurred, Merger Sub shall (and Parent shall cause Merger Sub to) promptly (and in any event within twenty-four hours of such termination), irrevocably and unconditionally terminate the Offer, not acquire any Shares pursuant thereto, and cause any depositary acting on its behalf to promptly return in accordance with applicable Law all tendered Shares to the registered holders thereof.

(f)On the Offer Commencement Date, Merger Sub and Parent shall (i) file or cause to be filed with the SEC, in accordance with Rule 14d-3 under the Exchange Act, a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments, supplements and exhibits thereto, the “Schedule TO”) that will contain or incorporate by reference the related offer to purchase the Shares pursuant to the Offer, the form of the related letter of transmittal, the summary advertisement and other ancillary Offer documents pursuant to which the Offer will be made and instruments pursuant to which the Offer will be made (collectively, and together with all exhibits, amendments and supplements thereto, the “Offer Documents”); and (ii) cause the Schedule TO and related Offer Documents to be disseminated to holders of Shares in accordance with applicable federal securities Laws. The Company shall promptly furnish to Merger Sub and Parent in writing all information concerning the Company and its stockholders that may be required by applicable Law to be set forth in the Offer Documents or reasonably requested in connection with any action contemplated by this Section 1.1(f). Except with respect to any amendments filed in connection with a Change of Recommendation (or, prior to a Change of Recommendation, the applicable event that may give rise to a Change of Recommendation), the Company and its counsel shall be given reasonable opportunity to review and comment on the Offer Documents (including any amendment or supplement thereto) prior to the filing thereof with the SEC, and Merger Sub and Parent shall give reasonable and good faith consideration to any comments made by the Company and its counsel. Each of Merger Sub, Parent and the Company agrees to promptly correct any information provided by it for use in the Offer Documents if and to the extent that such party becomes aware that such information shall have become false or misleading in any material respect or as otherwise required by applicable Law. Merger Sub and Parent further agree to take all steps necessary to cause the Offer Documents as so corrected (if applicable) to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by applicable Laws. Upon receipt of any written or oral comments by Merger Sub, Parent or their counsel from any Governmental Authority or its staff with respect to the Offer Documents, or any request from any Governmental Authority or its staff for amendments or supplements to the Offer Documents, Merger Sub and Parent agree to (i) promptly provide the Company and its counsel with a copy of any such written comments or requests (or a description of any such oral comments or requests); (ii) provide the Company and its counsel a reasonable opportunity to comment on any proposed response thereto, and to give reasonable and good faith consideration to any such comments made by the Company and its counsel; (iii) provide the

 

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Company and its counsel an opportunity to participate with Merger Sub, Parent or their counsel in any materials discussions or meetings with any Governmental Authority or its staff regarding the Offer Documents; and (iv) provide the Company with copies of any written comments or responses submitted by Merger Sub and Parent in response thereto.

(g)The Offer Price shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization, reclassification, combination, merger, issuer tender offer, exchange of shares or other like change with respect to Company Common Stock occurring on or after the Agreement Date and prior to Merger Sub’s acceptance for payment of, and payment for, Company Common Stock tendered in the Offer, and such adjustment to the Offer Price shall provide to the holders of Company Common Stock the same economic effect as contemplated by this Agreement prior to such action and shall as so adjusted from and after the date of such event, be the Offer Price; provided, however, that nothing in this Section 1.1(g) shall be construed to permit the Company to take any action with respect to the Company Common Stock that is prohibited by the terms of this Agreement.

(h)Parent shall be responsible for 100% of the fees, costs and expenses (except for the fees, costs and expenses of the Company’s advisors), including any filings fees, associated with the preparation, filing and mailing of the Offer Documents and the Schedule 14D-9.

Section 1.2Company Actions.

(a)As promptly as commercially practicable after the Offer Documents are filed with the SEC (and in any event within four (4) Business Days after the filing of the Schedule TO), the Company shall file or cause to be filed with the SEC a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (together with all exhibits, amendments and supplements thereto, the “Schedule 14D-9”) that, subject to Section 6.3(d) and Section 6.3(e) shall contain and reflect the Company Board Recommendation. The Company shall also include in the Schedule 14D-9 the opinion of the Company Financial Advisor. The Company hereby consents to the inclusion of the Company Board Recommendation in the Offer Documents and to the inclusion of a copy of the Schedule 14D-9 with the Offer Documents mailed or furnished to holders of Shares. Each of Merger Sub and Parent shall promptly furnish to the Company in writing all information concerning Merger Sub and Parent that may be required by applicable Law to be set forth in the Schedule 14D-9 or reasonably requested in connection with any actions contemplated by this Section 1.2(a). The Company shall cause the Schedule 14D-9 to be filed with the SEC pursuant to this Section 1.2(a) to be disseminated to the Company’s stockholders as and to the extent required by the Exchange Act concurrently with the dissemination of the Schedule TO to the holders of Company Common Stock by Merger Sub. Except with respect to any amendments filed in connection with a Change of Recommendation (or, prior to a Change of Recommendation, the applicable event that may give rise to a Change of Recommendation), the Company agrees to provide Merger Sub, Parent and their counsel reasonable opportunity to review and comment on the Schedule 14D-9 prior to the filing thereof with the SEC, and the Company shall give reasonable and good faith consideration to any comments made by Merger Sub, Parent and their counsel. Each of the Company, Merger Sub and Parent agrees to promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent such party has become aware that such information shall have become

 

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false or misleading in any material respect. The Company further agrees to take all steps necessary to cause the Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to the Company’s stockholders, in each case as and to the extent required by applicable Law. Upon receipt of any written or oral comments or requests for amendments or supplements by the Company or its counsel from any Governmental Authority or its staff with respect to the Schedule 14D-9, the Company agrees to (i) promptly provide Merger Sub, Parent and their counsel with a copy of any such written comments or requests for amendments or supplements (or a description of any such oral comments); (ii) provide Merger Sub, Parent and their counsel a reasonable opportunity to comment on any proposed response thereto, and to give reasonable and good faith consideration to any such comments made by Merger Sub, Parent and their counsel prior to responding to any such comments or requests; (iii) provide the Company and its counsel an opportunity to participate with Merger Sub, Parent or their counsel in any materials discussions or meetings with any Governmental Authority or its staff regarding the Schedule 14D-9; and (iv) provide Merger Sub or Parent with copies of any written comments or responses submitted by the Company in response thereto.

(b)In connection with the Offer, no later than two (2) Business Days prior to the Offer Commencement Date, the Company shall cause its transfer agent to promptly furnish Merger Sub and Parent with (i) mailing labels containing the names and addresses of all record holders of Shares; and (ii) security position listings of Shares held in stock depositories, each as of a recent date, and of those persons who become record or beneficial owners subsequent to such date, together with other readily available listings and computer files containing names, addresses and security position listings of record holders and beneficial owners of Shares. The Company shall furnish Merger Sub and Parent with such additional information, including updated listings and computer files of record holders and beneficial holders of Shares, mailing labels, addresses, and security position listings, and such other assistance as Merger Sub, Parent or their agents may reasonably request in communicating the Offer to the record and beneficial holders of Shares. Parent and Merger Sub shall use such information only in connection with the Offer and the Merger and shall take such actions as may be reasonably required to protect the unauthorized disclosure or use of information received by it pursuant to this Section 1.2(b) and shall use reasonable best efforts to have such information returned or destroyed in accordance with the terms of the Confidentiality Agreement governing such information.

 

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Article II
The Merger

Section 2.1The Merger.

(a)Upon the terms and subject to the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VII (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted by applicable Law) of such conditions at the Closing), at the Effective Time, Merger Sub shall be merged with and into the Company in accordance with the NRS whereupon the separate existence of Merger Sub shall cease, and the Company shall be the surviving corporation (the “Surviving Corporation”) as a wholly owned Subsidiary of Parent. The Merger shall be effected pursuant to NRS 92A.133 and shall be effected as soon as practicable following consummation of the Offer; provided, however, that, if, notwithstanding the foregoing, the Merger is not permitted to be effected pursuant to NRS 92A.133 for any reason, then the Parties shall take all actions necessary to cause the authorization of this Agreement and the Merger, and the consummation of the Merger as promptly as practicable after the consummation of the Offer pursuant to the applicable provisions of the NRS.

(b)The consummation of the Merger shall take place at a closing (the “Closing”) to be held remotely via electronic transmission of related documentation or similar means, on a date and at a time to be agreed upon by Parent and the Company, which date shall be as soon as practicable following the Offer Closing and in any event, no later than the third (3rd) Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VII (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted by applicable Law) of such conditions at the Closing), or at such other location, date and time as Parent and the Company shall mutually agree upon in writing.  The date upon which the Closing shall actually occur pursuant hereto is referred to herein as the “Closing Date.”

(c)At the Closing, the Company shall file articles of merger in requisite and customary form and substance, and as agreed upon with Parent, with the Office of the Nevada Secretary of State and make all other filings or recordings required by the NRS in connection with the Merger.  The Merger shall become effective at such time as the articles of merger is duly filed with the office of the Nevada Secretary of State (or at such later effective time permitted under the NRS as may be mutually agreed to by the parties and as specified in the articles of merger) (the time as of which the Merger becomes effective, the “Effective Time”).

(d)From and after the Effective Time, the Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Sub, all as provided under the NRS.

 

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Section 2.2Conversion of Shares of Capital Stock.  At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any holder of any shares of Company Common Stock or any shares of capital stock of Merger Sub or Parent:

(a)except as otherwise provided in Section 2.2(b), Section 2.2(c) or Section 2.4, each share of Company Common Stock outstanding immediately prior to the Effective Time shall be cancelled and cease to exist and shall be converted into the right to receive the Offer Price in cash, without interest (such amount, as may be adjusted in accordance with Section 2.8, the “Common Stock Merger Consideration”), and each holder of any such share of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Common Stock Merger Consideration in accordance with Section 2.3;

(b)each share of Company Common Stock held by the Company as a treasury share, and share of Company Common Stock owned by a wholly-owned Company Subsidiary or by Parent or its Subsidiaries immediately prior to the Effective Time shall be canceled, and no payment shall be made with respect thereto; and

(c)each share of common stock of Merger Sub outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

Section 2.3Surrender and Payment.

(a)Prior to the Acceptance Time, Parent shall appoint an agent reasonably acceptable to the Company (the “Exchange Agent”) for the purpose of paying the Merger Consideration as provided in Section 2.2(a).  Parent shall provide (or shall cause to be provided) to the Exchange Agent, at or prior to the Effective Time, cash sufficient to pay the Merger Consideration in respect of (i) certificated shares of Company Common Stock (the certificates representing such certificated shares, the “Certificates”) and (ii) the uncertificated shares of Company Common Stock (the “Uncertificated Shares”) (but not, for the avoidance of doubt, the Company PSU Consideration and the Company RSU Consideration) (such cash, the “Exchange Fund”).  If, for any reason (including losses) the Exchange Fund is inadequate to pay the Merger Consideration in respect of the Certificates and the Uncertificated Shares (excluding, for the avoidance of doubt, the Company PSU Consideration and the Company RSU Consideration), Parent shall take all steps necessary to enable or cause the Surviving Corporation promptly to deposit in trust additional cash with the Exchange Agent sufficient to pay all such amounts, and Parent and the Surviving Corporation shall in any event be liable for the payment thereof.  All cash deposited with the Exchange Agent shall only be used for the purposes provided in this Agreement, or as otherwise agreed by the Company and Parent before the Effective Time.  Promptly after the Effective Time (but in no event later than five (5) Business Days after the Effective Time), Parent shall cause the Exchange Agent to send to each holder of shares of Company Common Stock as of immediately prior to the Effective Time (other than Parent or any Subsidiary of Parent) a letter of transmittal, in form and substance reasonably acceptable to the Surviving Corporation, and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall

 

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pass, only upon proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent) for use in such exchange.

(b)Each former holder of shares of Company Common Stock that have been converted into the right to receive the Merger Consideration shall be entitled to receive, upon (i) surrender to the Exchange Agent of a Certificate, together with a properly completed letter of transmittal, or (ii) receipt of an “agent’s message” by the Exchange Agent (or such other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the Merger Consideration in respect of the Company Common Stock represented by a Certificate or Uncertificated Share.  Until so surrendered or transferred, as the case may be, each such Certificate or Uncertificated Share shall represent after the Effective Time for all purposes only the right to receive such Merger Consideration.  No interest or dividends will be paid or accrue on any Merger Consideration payable to former holders of Certificates or Uncertificated Shares.

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

(d)After the Effective Time, the transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of shares of Company Common Stock.  If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation or the Exchange Agent, they shall be canceled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this Article II.

(e)Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by former holders of shares of Company Common Stock one year after the Effective Time shall be returned to Parent, upon demand, and any such former holder who has not exchanged shares of Company Common Stock for the Merger Consideration in accordance with this Section 2.3 prior to that time shall thereafter look only to Parent for payment of the Merger Consideration in respect of such cancelled shares without any interest thereon.  Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the Exchange Agent shall be liable to any former holder of shares of Company Common Stock for any amounts paid to a public official or any Governmental Authority pursuant to applicable abandoned property, escheat or similar Laws.  Any amounts remaining unclaimed by former holders of shares of Company Common Stock immediately prior to such time when such amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by applicable Law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.

 

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(f)The agreement with the Exchange Agent shall provide that the Exchange Agent shall invest any cash included in the Exchange Fund as directed by Parent or, after the Effective Time, the Surviving Corporation; provided, that (i) no such investment (including any losses thereon) shall relieve Parent or the Exchange Agent from making the payments required by this Article II, (ii) no such investment shall have maturities that could prevent or delay payments to be made pursuant to this Agreement and (iii) all such investments shall be in (w) short-term direct obligations of the United States of America, (x) short-term obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (y) short-term commercial paper rated the highest quality by either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services or (z) certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $10 billion. Any interest or income produced by such investments will be payable to the Surviving Corporation or Parent, as directed by Parent.

Section 2.4No Dissenter’s Rights.  Pursuant to NRS 92A.390, no holder of any shares of Company Common Stock will have or be entitled to assert dissenter’s rights or any other rights of appraisal as a result of or in connection with this Agreement or the Transactions.

Section 2.5Company Equity Awards.

(a)As of the Effective Time, and conditioned upon the occurrence of the Effective Time, and without any action on the part of any holder of Company Options, (i) all Unvested Company Options (whether time and/or performance-based) that are outstanding as of immediately prior to the Effective Time shall fully vest and become exercisable, and become Vested Company Options and (ii) to the extent not exercised prior to the Effective Time, each Company Option (including any Vested Company Option and any formerly Unvested Company Option) shall be canceled at the Effective Time, without any consideration in respect thereof.

(b)Effective as of the Effective Time and without any action on the part of any holder of Company RSUs, each Company RSU, other than a Company PSU, that is then outstanding and unvested shall automatically be canceled and converted into the right to receive from the Surviving Corporation, through the Surviving Corporation’s payroll, an amount of cash equal to the product of (A) the number of shares of Company Common Stock then underlying such Company RSU multiplied by (B) the Common Stock Merger Consideration, without any interest thereon (the “Company RSU Merger Consideration”).  

(c)Effective as of the Effective Time and without any action on the part of any holder of Company PSUs, each Company PSU that is then outstanding and unvested shall automatically be canceled and converted into the right to receive from the Surviving Corporation, through the Surviving Corporation’s payroll, an amount of cash equal to the product of (A) the number of shares of Company Common Stock that vest at the target vesting level pursuant to the applicable Company PSU grant terms multiplied by (B) the Common Stock Merger Consideration, without any interest thereon (the “Company PSU Merger Consideration”).  

(d)Parent shall pay, or shall cause the Surviving Corporation to pay through the Surviving Corporation’s payroll, the aggregate Company RSU Merger Consideration and Company PSU Merger Consideration, without interest thereon and subject to deduction for any

 

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required withholding, at the Effective Time or at the Company’s next ordinary course payroll date (but in no event later than twenty (20) Business Days after the Effective Time).

(e)The Company Board (or, if appropriate, any committee thereof administering the Stock Plans) and the Company, as applicable, shall take such actions as are necessary (i) to approve and effectuate the foregoing provisions of this Section 2.5, including making any determinations and/or resolutions of the Company Board or a committee thereof or any administrator of a Stock Plan as may be necessary in accordance with the terms of the applicable Stock Plan and (ii) to terminate each of the Stock Plans, effective as of and subject to the occurrence of the Effective Time.

(f)Promptly following the Agreement Date, the Company Board (or, if applicable, any committee thereof administering the Company ESPP) shall adopt such resolutions or take such other necessary actions to provide that, (i) with respect to any outstanding Offering Period(s) (as such term is defined in the Company ESPP) under the Company ESPP as of the Agreement Date, no participant in the Company ESPP may increase the percentage amount of his or her payroll deduction election in effect on the Agreement Date for such Offering Period and no new participants may participate in such Offering Period; (ii) no new Offering Period shall be commenced under the Company ESPP on or after the Agreement Date; (iii) any Offering Period under the Company ESPP that does not end prior to the Effective Time shall terminate and a Subscription Date (as such term is defined in the Company ESPP) shall occur under the Company ESPP immediately prior to the Effective Time with respect to such Offering Period, in which case any shares of Company Common Stock purchased pursuant to such Offering Period shall be treated the same as all other shares of Company Common Stock in accordance with Section 2.2(a); and (iv) immediately prior to, and subject to the occurrence of the Effective Time, the Company ESPP shall terminate.

Section 2.6Lost Certificates.  If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the delivery by such Person of a written indemnity agreement in form and substance reasonably acceptable to Parent, the Exchange Agent will pay, in exchange for such lost, stolen or destroyed Certificate, the applicable Merger Consideration to be paid in respect of the shares of Company Common Stock formerly represented by such Certificate, as contemplated by this Article II.

Section 2.7Warrants.  Prior to the Effective Time, the Company shall deliver to the holders of any Warrants notice required under the terms of the Warrant Documentation (if any). The Warrants outstanding immediately prior to the Effective Time (other than the Warrants that automatically become null and void as of the Effective Time if not exercised prior thereto, which shall expire in accordance with their terms if unexercised) shall remain outstanding immediately following the Effective Time and shall not be affected by the Merger (except for the effects specifically set forth in the Warrant Documentation).  The Surviving Corporation, and to the extent required under the applicable Warrant Documentation, Parent, shall comply with any obligations under the applicable Warrant Documentation.

Section 2.8Adjustments to Merger Consideration.  The Merger Consideration shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend  

 

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(including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization, reclassification, combination, merger, issuer tender offer, exchange of shares or other like change with respect to Company Common Stock occurring on or after the Agreement Date and prior to the Effective Time, and such adjustment to the Merger Consideration shall provide to the holders of Company Common Stock and Company Equity Awards the same economic effect as contemplated by this Agreement prior to such action and shall, as so adjusted from and after the date of such event, be the Merger Consideration; provided, however, that nothing in this Section 2.8 shall be construed to permit the Company to take any action with respect to the Company Common Stock that is prohibited by the terms of this Agreement, including Section 6.2.

Section 2.9Withholding.  Notwithstanding anything to the contrary here in, each of Parent, Merger Sub, the Surviving Corporation, its Subsidiaries and any other withholding agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement, including consideration payable to any holder or former holder of Company Equity Awards, such amounts as it is required to deduct and withhold with respect to the making of such payment pursuant to the Code or under any provision of federal, state, local or foreign Tax Law. To the extent that amounts are so deducted or withheld and timely and properly paid over to the appropriate Governmental Authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

Article III
The Surviving Corporation

Section 3.1Articles of Incorporation.  At the Effective Time, the articles of incorporation of the Surviving Corporation shall be amended and restated to be in the form set forth on Exhibit B, until thereafter amended in accordance with the NRS and such articles of incorporation.

Section 3.2Bylaws.  At the Effective Time, the bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be amended and restated to be in the form of the bylaws of the Surviving Corporation (except that all references to the name of Merger Sub therein shall be modified to refer to the name of the Company), until thereafter amended in accordance with the NRS and such bylaws.

Section 3.3Directors and Officers.  

(a)The directors of the Surviving Corporation shall from and after the Effective Time until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation be the individuals who are the directors of Merger Sub immediately prior to the Effective Time.

(b)The officers of the Surviving Corporation shall from and after the Effective Time until their respective successors have been duly appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the

 

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Surviving Corporation be the individuals who are the officers of Merger Sub immediately prior to the Effective Time.

Article IV
Representations and Warranties of the Company

Except as (i) disclosed in the Company SEC Reports that are publicly available on the internet website of the SEC prior to the Agreement Date (excluding in each case any disclosures contained therein (other than those disclosures which relate to specific historical events or circumstances affecting the Company) under the captions “Risk Factors,” “Safe Harbor Cautionary Statement,” “Quantitative or Qualitative Disclosures About Market Risk” and any other disclosures contained therein to the extent they are predictive, cautionary or forward-looking in nature) (provided, that the exception in this clause (i) shall not apply to Section 4.2 or Section 4.6(c) or (ii) set forth in the disclosure letter (each section of which qualifies the correspondingly numbered representation and warranty or covenant to the extent specified therein, provided that any disclosure set forth with respect to any particular Section shall be deemed to be disclosed in reference to any other applicable Section if the disclosure in respect of the particular Section is sufficient on its face to inform Parent of the applicability of such disclosure to such other Section, provided, further that with respect to Section 4.6(c), only the items (if any) specifically disclosed against Section 4.6(c) of the Company Disclosure Letter shall be deemed disclosure with respect to Section 4.6(c)) delivered by the Company to Parent prior to the execution of this Agreement (the “Company Disclosure Letter”), the Company hereby represents and warrants to Merger Sub and Parent as follows:

Section 4.1Organization.  The Company is a corporation duly organized, validly existing and in good standing under the Laws of Nevada. Each of the Subsidiaries of the Company (the “Company Subsidiaries”) (i) is a corporation, limited liability company, limited partnership or other legal entity duly organized, validly existing and (ii) where applicable, in good standing under the Laws of the jurisdiction of its organization (to the extent the “good standing” concept is applicable in the case of any jurisdiction outside the United States), except where the failure to be in good standing (to the extent applicable) would not reasonably be expected to have a Company Material Adverse Effect.  Each of the Company and the Company Subsidiaries has all requisite corporate or similar power and authority to enable it to own, operate and lease its properties, own and use its assets and to carry on its business as now conducted, except for such power and authority, the lack of which, individually or in the aggregate, has not had or would not reasonably be expected to have a Company Material Adverse Effect.  The copies of the articles of incorporation and bylaws of the Company which are incorporated by reference as exhibits to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2020 (the “Company Charter Documents”) are complete and correct copies of such documents and contain all amendments thereto as in effect on the Agreement Date. There are no provisions of the Company Charter Documents, and the Company has not taken or permitted to occur any action that would have the effect of limiting or precluding, in each case, as contemplated by this Agreement, the (i) ability of the Company to consummate the Merger under NRS 92A.133 (and not a vote of the Company’s stockholders pursuant to NRS 92A.120) by virtue of satisfaction of the ownership threshold requirements of NRS 92A.133 pursuant to the Offer, or (ii) exemption, pursuant to NRS 92A.390, of the Merger from dissenter’s rights under NRS 92A.300 to 92A.500, inclusive.

 

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Section 4.2Capitalization.

(a)The authorized capital stock of the Company consists of (i) 12,000,000 shares of Company Common Stock and (ii) 10,000,000 shares of preferred stock, par value $0.001 per share, of the Company (the “Company Preferred Stock”). As of the close of business on May 18, 2022 (the “Capitalization Date”):  (A) 8,810,224 shares of Company Common Stock were issued and outstanding; (B) no shares of Company Common Stock were held by the Company in its treasury; (C) there were outstanding Company Options to purchase 261,605 shares of Company Common Stock; (D) 167,487 shares of Company Common Stock were issuable in respect of outstanding Company PSUs (assuming target achievement, respectively, of any applicable performance goals); (E) 318,511 shares of Company Common Stock were issuable in respect of outstanding Company RSUs; (F) 177,604 shares of Company Common Stock were reserved for the future grant of Company Equity Awards under the Stock Plans (excluding shares reserved for issuance upon exercise of the Company Options); (G) 101,239 shares of Company Common Stock were reserved for future issuance under the Company ESPP; (H) 101,044 shares of Company Common Stock were issuable upon the exercise of Warrants and (I) no shares of Company Preferred Stock. Such issued and outstanding shares of Company Common Stock have been, and all shares that may be issued pursuant to any Stock Plan, the Company ESPP, the Warrants, or as contemplated or permitted by this Agreement will be when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid, nonassessable and not subject to (or issued in violation of) any preemptive or similar rights.  There are no outstanding contractual obligations of the Company of any kind to redeem, purchase or otherwise acquire any Equity Interests of the Company.  Other than the Company Common Stock, there are no outstanding bonds, debentures, notes or other Indebtedness or securities of the Company having the right to vote (or, other than the outstanding Company RSUs and Warrants, convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. Neither the Company nor any Company Subsidiary is a party to any voting agreement with respect to any Equity Interests of the Company or any Company Subsidiary.  Section 4.2(a) of the Company Disclosure Letter sets forth, as of the Capitalization Date, a list of the holders of Company Equity Awards, including (to the extent applicable) the date on which each such Company Equity Award was granted, the number of shares of Company Common Stock subject to such Company Equity Award, the expiration date of such Company Equity Award, the price at which such Company Equity Award may be exercised (if any) under an applicable Stock Plan, the vested or unvested status of such Company Equity Award, and the applicable Stock Plan pursuant to which such Company Equity Awards were granted. Section 4.2(a) of the Company Disclosure Letter sets forth a true and correct list of the weighted average exercise price of the Warrants.

(b)Except as set forth in Section 4.2(b) and in Section 4.2(b) of the Company Disclosure Letter, and other than pursuant to the terms of the Warrants, as of the Capitalization Date, no (i) shares of capital stock or other voting securities of, (ii) other equity or voting interests in, (iii) securities convertible into or exchangeable for, or options, warrants or other rights to acquire or receive any, capital stock, voting securities or other equity interests in or (iv) stock appreciation rights, “phantom” stock rights or other rights that give the holder thereof any economic or voting interest of a nature accruing to the holders of capital stock in (clauses (i), (ii), (iii) and (iv), collectively, “Equity Interests”) the Company were issued, reserved for issuance or outstanding.  Except as set forth in Section 4.2(a) of the Company Disclosure Letter or pursuant

 

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to the terms of the Warrants, as of the Capitalization Date, there are no outstanding commitments, agreements, arrangements or undertakings of any kind to which the Company or any of the Company Subsidiaries is a party or by which any of them is bound (A) obligating the Company or any of the Company Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any Equity Interests in the Company or any of the Company Subsidiaries or (B) obligating the Company or any of the Company Subsidiaries to issue, grant, extend or enter into any such commitment, agreement, arrangement or undertaking.

Section 4.3Authorization; No Conflict.

(a)The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Offer, the Merger and the other Transactions are within the Company’s corporate powers and, assuming that the Transactions are consummated in accordance with NRS 92A. 133 and have been duly authorized by all necessary corporate action on the part of the Company.  The Company has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by Parent and Merger Sub, this Agreement constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms (except as enforceability is subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

(b)The Company Board, by resolutions adopted at a meeting duly called and held, has unanimously (i) determined that this Agreement and the Transactions, including the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) adopted, approved and declared advisable this Agreement and the Transactions, and (iii) duly adopted resolutions recommending, subject to Section 6.3, that the holders of Company Common Stock accept the Offer and tender their Shares to Merger Sub pursuant to the Offer (such recommendation, the “Company Board Recommendation”), which resolutions, subject to Section 6.3, have not been rescinded, modified or withdrawn in any way.

(c)The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions require no action by or in respect of or filing with any Governmental Authority, other than (i) the filing of the articles of merger with respect to the Merger with the Office of the Nevada Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any applicable requirements of the Securities Act and the Exchange Act, (iv) compliance with any applicable rules of Nasdaq, and (v) any additional actions or filings, except those that the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(d)The execution, delivery and performance by the Company of this Agreement and the consummation of the Transactions do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the Company Charter Documents, (ii) assuming compliance with the matters referred to in Section 4.3(c), contravene, conflict with or result in a violation or breach of any provision of any applicable Law or Order, (iii) assuming compliance with the matters referred to in Section 4.3(c), require any consent or other action by any Person under, result in any breach of, constitute a default, or an event that, with or without

 

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notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or the loss of any benefit to which the Company or any of the Company Subsidiaries is entitled under, any Contract, or result in the creation or imposition of any Lien on any asset of the Company or any of the Company Subsidiaries, with only such exceptions, in the case of each of clauses (iii) through (iv), as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Section 4.4Subsidiaries.

(a)Section 4.4 of the Company Disclosure Letter sets forth, as of the Agreement Date, a complete and accurate list and the Equity Interest of each Person that is owned, directly or indirectly, by the Company and their respective jurisdictions of organization.  The Company owns, directly or indirectly, 100% of the Equity Interests of the Company Subsidiaries.  Other than equity securities held in the ordinary course of business for cash management purposes, the Company does not own or hold the right to acquire any equity securities, ownership interests or voting interests (including voting debt) of, or securities exchangeable or exercisable therefor, or investments in, any other Person.

(b)All of the outstanding Equity Interests in each Company Subsidiary are, where applicable, duly authorized, validly issued, fully paid, nonassessable and not subject to (or issued in violation of) any preemptive or similar rights, and such Equity Interests are owned by the Company or by a Company Subsidiary free and clear of any Liens (other than Permitted Liens) or limitations on voting rights.  There are no subscriptions, options, warrants, calls, rights, convertible securities or other agreements or commitments of any character relating to the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange under any outstanding security or other instrument) for any of the Equity Interests of any Company Subsidiary.  

(c)The Company has not agreed and is not obligated to make, and is not bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity.

(d)The Company has delivered or made available to Parent accurate and complete copies of the articles or certificate of incorporation and bylaws (or equivalent organizational documents, as applicable) of the Company Subsidiaries, in each case as in effect on the date hereof. None of the Company Subsidiaries are in material violation of any of the provisions of their articles or certificate of incorporation and bylaws (or equivalent organizational documents, as applicable).  

Section 4.5SEC Reports and Financial Statements.

(a)Since January 1, 2019, the Company has timely filed or furnished with the United States Securities and Exchange Commission (the “SEC”) all reports, schedules, forms, registration statements, definitive proxy statements and other documents (including exhibits and all information incorporated by reference) required to be filed or furnished by the Company with the SEC (such documents, together with any documents filed or furnished, as applicable, by the Company with the SEC during such period on a voluntary basis, the Company SEC Reports”).  

 

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As of their respective filing dates, and giving effect to any amendments or supplements thereto filed prior to the Agreement Date, the Company SEC Reports (i) complied in all material respects as to form with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act and (ii) did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  None of the Company Subsidiaries is required to file any forms, reports or other documents with the SEC pursuant to Section 13 or 15 of the Exchange Act.

(b)The consolidated balance sheets and the related consolidated statements of comprehensive income, changes in stockholders’ equity and cash flows (including, in each case, any related notes and schedules thereto) of the Company contained in the Company SEC Reports, as of their respective dates of filing with the SEC (or, if such Company SEC Reports were amended prior to the Agreement Date, the date of the filing of such amendment, with respect to the consolidated financial statements that are amended or restated therein), comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in conformity with GAAP (except, in the case of unaudited statements, subject to normal and recurring year-end adjustments) applied on a consistent basis during the periods involved (except as otherwise noted therein or to the extent required by GAAP) and present fairly in all material respects the consolidated financial position and the consolidated results of operations, cash flows and stockholders’ equity of the Company and the Company Subsidiaries as of the dates or for the periods presented therein (subject, in the case of unaudited statements, to normal year-end adjustments), except to the extent that information contained in such Company SEC Report has been reviewed, amended, modified or supplemented (prior to the date of the Agreement) by a subsequent Company SEC Report.

(c)Neither the Company nor any of the Company Subsidiaries has any liabilities required by GAAP to be set forth on a consolidated balance sheet of the Company, except: (i) liabilities reflected or reserved against in the consolidated balance sheet (or the notes thereto) of the Company as of December 31, 2021 included in the Company SEC Reports (the “Balance Sheet”), (ii) liabilities incurred after December 31, 2021 in the ordinary course of business (none of which relate to breach of Contract, breach of warranty, tort, infringement or violation of applicable Law), (iii) liabilities incurred in connection with the Transactions or the vitaCare Transaction, (iv) executory obligations under any Contract (none of which is a liability for a breach thereof); provided that, with respect to Company Material Contracts in effect on the Agreement Date, such Contract was made available to Parent prior to the Agreement Date and, with respect to Contracts entered into subsequent to the Agreement Date, such Contract was entered into in accordance with Section 6.2, or (v) liabilities that would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.

(d)The Company maintains a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) which  is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and include those policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company and provide reasonable assurance: (i) that transactions are recorded as necessary to permit preparation of financial

 

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statements in conformity with GAAP, (ii) that receipts and expenditures are executed only in accordance with the authorization of management and directors of the Company and (iii) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s assets that would materially affect the Company’s financial statements.  As of the Agreement Date, neither the Company nor the Company’s independent registered public accounting firm has identified or been made aware of any “significant deficiencies” or “material weaknesses” (as defined by the Public Company Accounting Oversight Board) in the design or operation of the Company’s internal controls over financial reporting, in each case that has not been subsequently remediated.

(e)The Company maintains “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that (i) all information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported to the individuals responsible for preparing such reports within the time periods specified in the rules and forms of the SEC, and (ii) all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of the Company required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.

(f)The Schedule 14D-9 will, when filed with the SEC, and any amendments or supplements thereto, when filed with the SEC, at any time such document is amended or supplemented or at the time such document is first published, sent or given to the Company’s stockholders, as applicable, comply in all material respects with the applicable requirements of the Exchange Act. None of the information supplied or to be supplied by or on behalf of the Company expressly for inclusion or incorporation by reference in the Schedule TO and the other Offer Documents, or the Schedule 14D-9, at the time such document is filed with the SEC, at any time such document is amended or supplemented or at the time such document is first published, sent or given to the Company’s stockholders, 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.  The representations and warranties contained in this Section 4.5(f) shall not apply to statements or omissions included or incorporated by reference in the Schedule TO, the Schedule 14D-9 or other Offer Documents, as applicable, based upon information supplied by the Parent, Merger Sub, or any Subsidiary of Parent or any of their respective Representatives specifically for use or incorporation by reference therein.

(g)Neither the Company nor any of the Company Subsidiaries is a party to or has any obligation or other commitment to become a party to any securitization transaction, off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among the Company or any of the Company Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose Entity, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K under the Exchange Act)) where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or

 

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material liabilities of, the Company or any of the Company’s Subsidiaries in the Company’s published financial statements or other Company SEC Reports.

(h)As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Company SEC Reports.  To the Knowledge of the Company, none of the Company SEC Reports is the subject of ongoing SEC review and there are no inquiries or investigations by the SEC or any internal investigations pending or threatened, in each case regarding any accounting practices of the Company.

(i)The Company is in compliance in all material respects with the applicable listing rules and policies of Nasdaq.

Section 4.6Absence of Material Adverse Changes, etc.  Between December 31, 2021 and the Agreement Date, (a) except for actions expressly contemplated by this Agreement, the vitaCare Transaction Documents or the vitaCare Transaction, the Company and the Company Subsidiaries have conducted their business in all material respects in the ordinary course of business, (b) the Company and the Company Subsidiaries have not taken any actions that, if taken after the Agreement Date, would require Parent’s consent pursuant to Section 5.2(b), and (c) there has not been or occurred any event, condition, change, occurrence or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.  

Section 4.7Litigation.  There are, and since January 1, 2019, there have been, no Legal Proceedings pending or, to the Knowledge of the Company, threatened, to which the Company or any of the Company Subsidiaries is a party, or, to the Knowledge of the Company, by, against or affecting any present officer, director or employee of the Company or any Company Subsidiary in such individual’s capacity as such that, individually or in the aggregate has had or would reasonably be expected to have a Company Material Adverse Effect.  There are no Orders outstanding against the Company or any of the Company Subsidiaries that, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect. To the Knowledge of the Company no investigation or review by any Governmental Authority with respect to the Company or any Company Subsidiary is pending or is being threatened, other than any investigations or reviews that would not reasonably be expected to have a Company Material Adverse Effect.

Section 4.8Broker’s or Finder’s Fees.  Except for Greenhill & Co., LLC or any of its respective Affiliates (each a “Company Financial Advisor” and collectively, the “Company Financial Advisors”), no agent, broker, Person or firm acting on behalf of the Company or any Company Subsidiary or under the Company’s or any Company Subsidiary’s authority is or will be entitled to any advisory or broker’s or finder’s or other similar fee or commission from any of the parties hereto in connection with any of the Transactions.  The Company has made available to Parent accurate and complete copies of any agreements with the Company Financial Advisors.  

Section 4.9Employee Plans.

(a)Section 4.9(a) of the Company Disclosure Letter sets forth a complete and accurate list of each material Company Plan (other than any offer letter or other employment

 

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Contract that (i) is terminable “at-will” or following a notice period imposed by applicable Law, (ii) does not provide for severance, equity or equity-based compensation or retention, change of control, transaction or similar bonuses other than severance payments required to be made by the Company or any Company Subsidiaries under applicable foreign Law, and (iii) does not materially deviate from the Company’s standard form made available to Parent prior to the Agreement Date).

(b)With respect to each material Company Plan (excluding for this purpose offer letters that do not materially deviate from the Company’s standard form made available to Parent prior to the Agreement Date), the Company has made available to Parent a true and correct copy of, as applicable:  (i) each written Company Plan and all amendments thereto, if any, or, with respect to any unwritten Company Plan, a summary of the material terms thereof; (ii) the current summary plan description of each Company Plan and any material modifications thereto, if any, or any written summary provided to participants with respect to any plan for which no summary plan description exists; (iii) the most recent determination letter (or if applicable, advisory or opinion letter) from the Internal Revenue Service or other Governmental Authority; (iv) the most recent annual report on Form 5500 or such similar report, statement or information return required to be filed with or delivered to any Governmental Authority, if any; (v) all material non-routine communications with any Governmental Authority regarding any Company Plan; (vi) the most recent nondiscrimination tests required to be performed under the Code; and (vii) the most recent financial statements and actuarial or other valuation reports prepared with respect thereto.

(c)Neither the Company nor any other Person that would be or, at any relevant time, would have been considered a single employer with the Company under the Code or ERISA has during the past six (6) years maintained, contributed to, or been required to contribute to and neither the Company nor any Company Subsidiary has any current or contingent liability or obligation under or with respect to (i) a plan subject to Title IV of ERISA or Code Section 412, including any “single employer” defined benefit plan or any “multiemployer plan” each as defined in Section 4001 of ERISA, (ii) a “multiple employer plan” as defined in Section 413(c) of the Code, or (iii) a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA.

(d)Each Company Plan that is intended to be “qualified” within the meaning of Section 401(a) of the Code or receive any other favorable tax treatment, is so qualified and is the subject of a favorable determination letter (or, if applicable, advisory or opinion letter) from the Internal Revenue Service that has not been revoked or meets the requirements for such treatment and, to the Knowledge of the Company, no event has occurred and no facts or conditions exist that would reasonably be expected to adversely affect the qualified status of any such Company Plan or result in the imposition of any liability, penalty or Tax under ERISA, the Code or other applicable Law.  Except as would not reasonably be expected to result in material liability to the Company or any Company Subsidiary, no “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, or breach of fiduciary duty has occurred with respect to any Company Plan.   Neither the Company nor any Company Subsidiary has any liability (whether or not assessed) under Sections 4980D, 4980H, 6721 or 6722 of the Code.

(e)Except to the extent required under Section 601 et seq. of ERISA or 4980B of the Code (or any other similar state or local Law) for which the covered Person bears the full

 

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cost of coverage, neither the Company or any Company Subsidiary nor any Company Plan has any present or future obligation to provide post-employment or post-termination welfare benefits to or make any payment to, or with respect to, any Person including any former employee, officer or director or contractor of the Company or any  Company Subsidiary pursuant to any retiree medical benefit plan or other retiree welfare plan or Company Plan.

(f)Except as has not had and would not reasonably be expected to have a Company Material Adverse Effect, (i) each Company Plan has been established, maintained, funded, operated and administered in accordance with its provisions and in material compliance with all applicable provisions of ERISA, the Code and other applicable Law; (ii) all payments and contributions required to be made under the terms of any Company Plan have been made or the amount of such payment or contribution obligation has been reflected in the Company SEC Reports which are publicly available prior to the Agreement Date; and (iii) no disputed claims for benefits or Legal Proceeding is pending or, to the Knowledge of the Company, threatened in connection with any Company Plan, other than routine claims for benefits that have been or are being handled through an administrative claims procedure.

(g)Neither the Company nor any Company Subsidiary maintains any obligations to indemnify, “gross-up” or reimburse any individual in respect of any Taxes or related interest or penalties incurred by such individual, including under Sections 409A or 4999 of the Code or otherwise.

(h)Each Company Plan subject to Section 409A of the Code (if any) has been operated and maintained in compliance in all material respects therewith, such that no Taxes or interest will be due and owing in respect of such Company Plan failing to be in compliance therewith.

(i)Except as set forth in Section 4.9(i) of the Company Disclosure Letter, neither the execution of this Agreement nor the consummation of the Transactions (alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) will (i) entitle any current or former director, officer, employee or individual independent contractor of the Company or any of the Company Subsidiaries to any compensation or benefit, (ii) accelerate the time of payment or vesting, or trigger any payment or funding, of any compensation or benefits or trigger any other material obligation under any Company Plan or otherwise, (iii) result in any breach or violation of, default under or limit the Company’s right to amend, modify or terminate any Company Plan or (iv) give rise to payments or benefits that, separately or in the aggregate, could be nondeductible to the payor under Section 280G of the Code or would result in an excise Tax on any recipient under Section 4999 of the Code.

Section 4.10Opinions of Company Financial Advisors.  The Company Board has received from the Company Financial Advisor an opinion to the effect that, based on various assumptions and limitations set forth therein, as of the date of such opinion, the Merger Consideration to be received by the holders of Company Common Stock (other than Parent and its Affiliates) pursuant to this Agreement is fair, from a financial point of view, to such holders.

 

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Section 4.11Taxes.

(a)The Company and each of the Company Subsidiaries has (i) timely filed all income and other material Tax Returns required to be filed by it in the manner prescribed by applicable Law and all such Tax Returns are true, correct and complete in all material respects; (ii) paid all Taxes required to be paid by the Company or any Company Subsidiary (whether or not shown as due and owing on such Tax Return); and (iii) withheld and timely paid over to the appropriate Governmental Authority all material Taxes required to have been withheld and paid by such Person.

(b)There is no claim, audit, action, suit or proceeding currently pending or, to the Knowledge of the Company, threatened against or with respect to the Company or any Company Subsidiary in respect of any Taxes or Tax Return. No deficiency for any Taxes has been asserted in writing or assessed by any Governmental Authority against any the Company or any Company Subsidiary, except for deficiencies that have been satisfied by payment, settled, withdrawn or otherwise resolved. No claim has been made by any Governmental Authority in a jurisdiction in which the Company or any Company Subsidiary, as applicable, does not file Tax Returns that it is or may be subject to Tax by, or required to file Tax Returns in, that jurisdiction. Neither the Company nor any Company Subsidiary has granted any request, agreement or consent to waive or extend any statute of limitations relating to the payment or collection of Taxes of the Company or the Company Subsidiaries that has not expired and no request for any such waiver or extension is currently pending.

(c)Neither the Company nor any Company Subsidiary has been a party to a “listed transaction” or “transaction of interest” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) and (6) (or similar provisions of state, local, or foreign Law).

(d)Neither the Company nor any Company Subsidiary is a party to (i) any Tax sharing agreement, Tax indemnity obligation or similar agreement, or (ii) any other arrangement or practice with respect to Taxes. Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated, consolidated, combined, unitary or similar group filing income Tax Returns (other than a group the common parent of which was the Company) or (ii) has any liability for the Taxes of another Person (other than the Company or any Company Subsidiary) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by Contract (other than Contracts entered into in the ordinary course of business the principal purpose of which is unrelated to Taxes) or otherwise.

(e)There are no Liens for Taxes on any of the assets of the Company or any Company Subsidiary other than Permitted Liens.

(f)Neither the Company nor any of the Company Subsidiaries will be required to include any item of material income in, or exclude any item of material deduction from, taxable income for any period (or portion thereof) ending after the Closing Date as a result of: (i) change in, or use of an improper, method of accounting for a taxable period ending on or prior to the Closing Date, including by reason of the application of Section 481 of the Code (or any analogous or similar provision of state, local or foreign Law); (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Law)

 

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executed on or prior to the Closing Date; (iii) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 (or any corresponding or similar provision of state, local, or foreign income Law); (iv) an installment sale or open transaction disposition made on or prior to the Closing Date; or (v) a prepaid amount or deferred revenue received on or prior to the Closing Date. Neither the Company nor any of the Company Subsidiaries will be required to make any payment after the Closing Date as a result of an election under Section 965 of the Code.

(g)Within the past two (2) years, neither the Company nor any of the Company Subsidiaries has been either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.

(h)The Company has not been, and will not be, a United States real property holding company within the meaning of Section 897(c) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(i)Neither the Company nor any of the Company Subsidiaries has deferred any Taxes under Section 2302 of the CARES Act, claimed any Tax credit under Section 2301 of the CARES Act or otherwise taken any action to elect or avail itself of any provision of the CARES Act relating to Taxes.

Section 4.12Compliance with Laws; Permits; Governmental Authorizations.

(a)Neither the Company nor any of the Company Subsidiaries is, or since January 1, 2019 has been, in violation of any Law (including Health Law) or Order applicable to the Company or the Company Subsidiaries or by which any of their respective properties or businesses are bound or any regulation issued under any of the foregoing or has been notified by any Governmental Authority of any violation by the Company or any Company Subsidiary of, or any investigation with respect to, any such Law (including Health Law) or Order, except for any such violation that would not, or would not reasonably be expected to individually or in the aggregate, have a Company Material Adverse Effect.

(b)Since January 1, 2019, neither the Company, any Company Subsidiary, nor any director, officer or employee of the Company or any Company Subsidiary nor, to the Knowledge of the Company, any representative, agent, consultant, or any other person (in each case, acting for or on behalf of the Company or Company Subsidiary) has violated any provision of any Anti-Corruption Laws, Health Laws or Trade Control Laws by having:  (i) directly or indirectly paid, offered or promised to make or offer any contribution, gift, entertainment or other expense, (ii) made, offered or promised to make or offer any payment, loan or transfer of anything of value, including any reward, advantage or benefit of any kind to or for the benefit of foreign or domestic government officials or employees, or to foreign or domestic political parties, candidates thereof or campaigns, (iii) paid, offered or promised to make or offer any bribe, payoff, influence payment, kickback, rebate, or other similar payment of any nature, (iv) established or maintained any fund of corporate monies or other properties, (v) created or caused the creation of any false or inaccurate books and records of the Company or any Company Subsidiaries related to any of the foregoing, (vi) taken, caused to be taken or failed to have taken any other action in connection with the business of the Company that would cause the Company to violate any Anti-Corruption Laws

 

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or Trade Control Laws, (vii) been a Sanctioned Person or (viii) engaged in any dealings with, for the benefit of, or on behalf of any Sanctioned Person or Sanctioned Country; except, in each case, as would not reasonably be expected to have a Company Material Adverse Effect.  The Company has established and maintains policies and procedures designed to reasonably ensure compliance with Anti-Corruption Laws, Trade Control Laws and Health Laws.  

(c)Each of the Company and the Company Subsidiaries is, and has been since January 1, 2019, in possession of all governmental franchises, licenses, permits, Regulatory Permits, authorizations and approvals (“Permits”) necessary to enable it to own, operate and lease its properties and to carry on its business as now conducted, except for such Permits, the lack of which, individually or in the aggregate, has not had or would not reasonably be expected to have a Company Material Adverse Effect.   

(d)The Company and the Company Subsidiaries each hold all Governmental Authorizations and Permits necessary to enable the Company and each Company Subsidiary to conduct its business in the manner in which its businesses is currently being conducted, except where failure to hold such Governmental Authorizations would not reasonably be expected to have a Company Material Adverse Effect.  The Governmental Authorizations and Permits held by the Company and the Company Subsidiaries are valid and in full force and effect, except where the failure to be valid or in full force and effect would not reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate.  The Company and each of the Company Subsidiaries is in compliance with the terms and requirements of such Governmental Authorizations, except where failure to be in compliance would not reasonably be expected to be material to have a Company Material Adverse Effect.

Section 4.13Regulatory Matters.

(a)Except as would not reasonably be expected to have a Company Material Adverse Effect, since January 1, 2019, (i) the Company and the Company Subsidiaries have in effect all necessary and applicable Regulatory Permits (including, for the avoidance of doubt, all Investigational New Drug Applications (INDs), New Drug Applications (NDAs) and Biologics License Applications (BLAs) (or their foreign equivalents)) required by any Health Authority to permit the conduct of their respective businesses as currently conducted, (ii) all of such Regulatory Permits are in full force and effect and (iii) each of the Company and applicable Company Subsidiary is in compliance with, and is not in default under, each such Regulatory Permit.

(b)Except as would not reasonably be expected to have a Company Material Adverse Effect, since January 1, 2019, the Company, the Company Products, and the facilities in which the Company Products are developed, tested, made, processed, labeled, packaged, handled or stored are in compliance with all applicable requirements under applicable Health Laws, including cGMP, the Food Drug and Cosmetic Act, the Public Health Service Act, applicable state and local requirements, any comparable foreign Laws, and all terms and conditions of all applicable Regulatory Permits.

(c)Set forth on Section 4.13(c) of the Company Disclosure Letter is a list and description of all Regulatory Permits.  Other than the Regulatory Permits in Section 4.13(c) of the Company Disclosure Letter and except as set forth in Section 4.13(c) of the Company Disclosure

 

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Letter, there are no additional Regulatory Permits required by any Health Authority to permit the conduct of their respective businesses as currently conducted, except where the failure to have such Regulatory Permits would not reasonably be expected to have a Company Material Adverse Effect, individually or in the aggregate.

(d)Except as would not reasonably be expected to have a Company Material Adverse Effect, since January 1, 2019, none of the Company, any of the Company Subsidiaries or, to the Knowledge of the Company, any of their respective directors, officers, employees or agents has (i) made an untrue statement of a material fact or fraudulent statement to the FDA or any other Health Authority or (ii) failed to disclose a material fact required to be disclosed to the FDA or any other Health Authority. None of the Company, any of the Company Subsidiaries or any of their respective directors, officers, employees or agents is the subject of any pending or, to the Company’s Knowledge, threatened investigation by the FDA, or the subject of any investigation by any other Health Authority or Governmental Authority, that, assuming such investigations were determined or resolved adversely, would be expected to have a Company Material Adverse Effect.

(e)Except as would not reasonably be expected to have a Company Material Adverse Effect, the Company and each of the Company Subsidiaries, is and has been since January 1, 2018, in compliance in all material respects with all Health Laws.  Neither the Company, nor any of the Company Subsidiaries (i) has received any material written notice from any Health Authority or Governmental Authority (including a warning, untitled or notice of violation letter or Form FDA-483) alleging any violation of, or non-compliance with, any Health Law, (ii) are subject to any material enforcement, regulatory or administrative proceedings against or affecting the Company or any Company Subsidiary relating to or arising under any Health Law and, to the Knowledge of the Company, no such enforcement, regulatory or administrative proceeding has been threatened, or (iii) are a party to any corporate integrity agreement, monitoring agreement, deferred prosecution agreement, consent decree, settlement order, or other similar agreement, in each case, entered into with or imposed by any Governmental Authority, and no such action is pending as of the date hereof.

(f)Since January 1, 2019, neither any the Company, Company Subsidiaries, nor any of their officers, directors, managers, employees, or agents are or have been: (i) excluded, suspended or debarred from participation, or are otherwise determined to be or identified as ineligible to participate, in any Governmental Health Care Program, (ii) subject to a civil monetary penalty assessed under Section 1128A of the Social Security Act, sanctioned, indicted or convicted of a crime, or pled nolo contendere or to sufficient facts, in connection with any allegation of violation of any Governmental Health Program requirement or Law, (iii) to the Knowledge of the Company, the target or subject of any investigation relating to any offense of any Governmental Health Care Program, (iv) party to any individual integrity agreement, corporate integrity agreement or other formal or informal agreement (e.g., deferred prosecution agreement) with any Governmental Authority concerning any Health Law, (v) listed on the Office of Inspector General’s List of Excluded Individuals and Entities, (vi) listed on the General Services Administrative published list of parties excluded from federal procurement programs and non-procurement programs, or (vii) subjected to any other debarment, exclusion or sanction list or database.

 

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(g)All manufacturing operations conducted by or for the benefit of the Company and the Company Subsidiaries have been conducted in compliance in all material respects with all applicable Health Laws, including good manufacturing practices regulations.  No Company Product has been recalled, withdrawn or suspended (whether voluntarily or otherwise) or has been adulterated or misbranded by the Company or a Company Subsidiary in a manner that would reasonably be expected to result in action by a Governmental Authority. No proceedings seeking the recall, withdrawal, suspension or seizure of any such Company Product or pre-market approvals or marketing authorizations are pending or, to the Knowledge of the Company, threatened against the Company, nor have any such proceedings been pending at any time. The Company has made available to Parent all information about adverse drug experiences obtained or otherwise received by the Company from any source, in the United States or outside of the United States, including information derived from clinical investigations, surveillance studies or registries, reports in the scientific literature and unpublished scientific papers relating to any Company Product in the possession of the Company (or to which it has reasonable access).

(h)Neither the Company nor the Company Subsidiaries are covered entities pursuant to HIPAA.

Section 4.14Intellectual Property; IT Assets; Data Privacy.

(a)Section 4.14(a) of the Company Disclosure Letter sets forth, as of the date of this Agreement, a complete and accurate list of (i) all Company Intellectual Property that is Registered Intellectual Property that has not otherwise lapsed, been abandoned, expired or been cancelled (“Company Registered Intellectual Property”), and (ii) a high level, non-confidential description of any invention disclosures and draft patent applications included in the Company Intellectual Property, indicating for each such item in clause (i), as applicable, the owner, the application, publication or registration number, and date and jurisdiction of filing or issuance, as applicable.  All necessary registration, maintenance, renewal, and other relevant filing fees due through the date of this Agreement have been timely paid and all necessary documents and certificates in connection therewith have been timely filed with the relevant Governmental Authority or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining the Company Registered Intellectual Property in full force and effect.

(b)The Company is the sole and exclusive owner (including owner of record) of all right, title and interest in and to each item of Company Intellectual Property, except the Company Intellectual Property exclusively licensed to the Company.

(c)Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, each item of Company Registered Intellectual Property (other than applications for Company Registered Intellectual Property) is subsisting and, with respect to Company Registered Intellectual Property issued by an applicable Governmental Authority, to the Company’s Knowledge, valid and enforceable (assuming registration where required for enforcement).  To the Company’s Knowledge and except as noted in Section 4.14(a)(i) and Section 4.14(a)(ii) of the Company Disclosure Letter, the Company, and Company Subsidiaries exclusively own the Company Intellectual Property, free and clear of all Liens other than Permitted Liens.

 

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(d)Except as noted in Section 4.14(a) of the Company Disclosure Letter, neither the Company nor any Company Subsidiary has granted to any Person a joint ownership interest of, or has granted, or permitted any Person to retain, any exclusive rights that remain in effect in, any Company Intellectual Property material to the conduct of the businesses of the Company and the Company Subsidiaries.  To the Company’s Knowledge, the Company Intellectual Property and Licensed Intellectual Property include all Intellectual Property Rights that are necessary and sufficient to enable the operation and conduct of the businesses of the Company and the Company Subsidiaries as currently being conducted or as contemplated to be conducted.

(e)To the Company’s Knowledge and except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, since January 1, 2019, the conduct of the businesses of the Company and the Company Subsidiaries and the Company Products have not infringed, violated, or misappropriated the Intellectual Property Rights of any third party and do not infringe, violate or misappropriate the Intellectual Property Rights of any third party.  No Legal Proceeding has been filed or threatened in writing against the Company or any Company Subsidiary by any third party since January 1, 2019 (i) alleging that the conduct of the businesses of the Company or the Company Subsidiaries infringes, violates or misappropriates the Intellectual Property Rights of any third party or (ii) challenging or contesting the ownership, validity, scope, registrability, enforceability or use of any Company Intellectual Property other than office actions in the ordinary course of prosecution.

(f)To the Company’s Knowledge, except as would not have a Company Material Adverse Effect, no Person has been or is misappropriating, infringing, diluting or violating any Company Intellectual Property.  No such claims have been made in writing (including cease and desist letters or offers to take a license) against any Person by the Company or any Company Subsidiary.

(g)To the Knowledge of the Company, no current or former director, officer, employee, contractor or consultant of the Company or the Company Subsidiaries jointly owns or retains any license or similar right under any material Company Intellectual Property.  To the Company’s Knowledge, all Persons who contributed to the creation or development of any material Company Intellectual Property owned or purported to be owned by the Company or any Company Subsidiary have signed written documents obligating them to assign and have validly assigned, in writing, to the Company or the Company Subsidiaries their rights and interests therein, except where such Intellectual Property automatically vested in the Company by operation of Law. No current or former directors, officers, employees, contractors or consultants of the Company or any of the Company Subsidiaries has made a written claim, or to the Company’s Knowledge, threatened to make any claim, of ownership or right, in whole or in part, to any material Company Intellectual Property or to any remuneration in connection therewith.

(h)The Company and each of the Company Subsidiaries have exercised commercially reasonable efforts to protect their rights in the Trade Secrets material to the business of the Company or any of the Company Subsidiaries that are Company Intellectual Property, including through the development of policies for the protection of such Trade Secrets, and, to the Knowledge of the Company, there has been no unauthorized use, disclosure or misappropriation by any Person of any such Trade Secrets, except where failure to do so would not be material to

 

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the Company and the Company Subsidiaries, taken as a whole.  To the Company’s Knowledge, each current and former employee, consultant or independent contractor of the Company or any Company Subsidiary who has had access to any Trade Secrets that are Company Intellectual Property has entered into a written agreement with the Company or Company Subsidiary to protect the secrecy and confidentiality of such Trade Secrets, except where failure to do so would not be material.  In connection with the Company’s and the Company Subsidiaries’ license grants to third parties of any licenses to use any Source Code to any Software for any Company Product for which the Company and the Company Subsidiaries have determined to maintain as a Trade Secret, such arrangements contain customary contractual protections designed to appropriately limit the rights of such third party licensees and preserve the Company’s rights to the Trade Secrets embodied by such Source Code, except where such failure to do so would not be material to the Company and the Company Subsidiaries, taken as a whole.

(i)No government funding and no facilities of a university, college, other educational institution or research center were used in the development of any Company Intellectual Property where, as a result of such funding or the use of such facilities, such entity has any right, title or interest in such Company Intellectual Property, and (ii) no former or current employee, consultant or independent contractor of the Company or any Company Subsidiary who contributed to the creation or development of any Company Intellectual Property has performed services for the government or a university, college, other educational institution or research center during a period of time during which such employee, consultant or independent contractor was also performing services for the Company or any Company Subsidiary.

(j)To the Knowledge of the Company, since January 1, 2019, except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, the Processing of any Personal Data by or on behalf of the Company and the Company Subsidiaries has not violated, and does not violate, any applicable Privacy and Data Security Requirements.  Except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, there is no Legal Proceeding pending, asserted in writing or threatened in writing against the Company or any of the Company Subsidiaries alleging a violation of any Privacy and Data Security Requirement or any Person’s right of privacy or publicity, and, to the Knowledge of the Company, no valid basis exists for any such Legal Proceeding.  Except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, neither the Company nor its Subsidiaries has (i) received any written communications from or (ii) to the Knowledge of the Company, been the subject of any claim, charge, investigation or regulatory inquiry by a data protection authority or any other Governmental Authority, in each of (i) and (ii), regarding the Processing of Personal Data.  Except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, the execution and performance of this Agreement will not breach or otherwise cause any violation on the part of the Company or any of the Company Subsidiaries of any applicable Privacy and Data Security Requirements.

(k)To the Knowledge of the Company, the IT Assets operate and perform in all material respects sufficient to permit the operation of the Company’s and Company Subsidiaries’ business as currently conducted.  To the Knowledge of the Company, since January 1, 2019, except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, (i) there has been no successful security breach or unauthorized

 

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access to or use of any of the IT Assets, and (ii) the Company has used security measures designed to protect the IT Assets from any viruses, worms, trojan horses, bugs or faults, breakdowns, contaminants or continued substandard performance that would be expected to cause any disruption or interruption in or to the use of any such IT Assets or to the business of the Company and Company Subsidiaries.  

(l)Since January 1, 2019, the Company and Company Subsidiaries have (i) implemented and maintained reasonable technical, administrative and organizational safeguards to protect Personal Data and other confidential data in its possession or under its control against loss, theft, misuse or unauthorized access, use, modification, alteration, destruction, disclosure or other Proceeding, and (ii) taken reasonable steps to ensure that any third party with access to Personal Data collected by or on behalf of the Company and Company Subsidiaries has implemented and maintained the same. To the Knowledge of the Company, except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, no Person has gained unauthorized access to, engaged in unauthorized or unlawful Processing, disclosure or use, or accidentally or unlawfully destroyed, lost or altered (i) any Personal Data related to the business of or used by the Company or the Company Subsidiaries or (ii) any IT Assets that Process Personal Data related to the business of or used by the Company or the Company Subsidiaries, its respective Personal Data processors, customers, subcontractors or vendors, or any other Persons on its or their behalf.  Neither the Company nor the Company Subsidiaries has notified or plans to notify, either voluntarily or as required by any Privacy and Data Security Requirements, any affected individual, any third party, any Governmental Authority or the media of any breach or non-permitted use or Processing or disclosure of Personal Data related to the business of or used by the Company or the Company Subsidiaries.

 

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Section 4.15Employment Matters.  

(a)Neither the Company nor any Company Subsidiary is a party to or otherwise bound by any collective bargaining agreement, Contract or other agreement or understanding with a labor union, works council, labor organization or similar organized employee representative (collectively, “CBAs”), nor is any such Contract, agreement or understanding presently being negotiated, nor are any Company Employees represented by any labor union, works council, or other labor organization. To the Knowledge of the Company, there is no representation or organizing campaign respecting any employees of the Company or any of the Company Subsidiaries pending or threatened, nor have there been any such campaigns since January 1, 2019.  Since January 1, 2019, no labor union, works council, other labor organization, or group of Company Employees has made a demand for recognition or certification, and there are no representation or certification proceedings presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority.  There is, and since January 1, 2019, there has been, no pending or, to the Knowledge of the Company, threatened, labor strike, dispute, walkout, work stoppage, slow-down, lockout or other material labor dispute involving the Company or any of the Company Subsidiaries which, individually or in the aggregate, has resulted in, or would reasonably be expected to have a Company Material Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since January 1, 2019, (a) neither the Company nor any Company Subsidiary has engaged in any unfair labor practice and there are no unfair labor practice charges or complaints against the Company or any Company Subsidiary pending, or, to the Knowledge of the Company, threatened, before a Governmental Authority, (b) the Company and each Company Subsidiary has been in compliance with all applicable Laws with respect to labor and employment, including all Laws relating to labor relations, employment and employment practices, occupational safety and health standards, terms and conditions of employment, wages and hours, classification of employees and independent contractors, immigration and workers’ compensation, and (c) no Legal Proceeding with respect to the Company or any of the Company Subsidiaries in relation to the employment or alleged employment of any individual is ongoing, pending or, to the Knowledge of the Company, threatened.  Since January 1, 2019, the Company and the Company Subsidiaries have not received or been involved in any complaints, claims or Legal Proceedings against any Company Employee relating to sexual harassment or discrimination.

Section 4.16Insurance.  All material insurance policies, material self-insurance programs and arrangements relating to the business, assets and operations of the Company and the Company Subsidiaries are set forth on Section 4.16 of the Company Disclosure Letter (“Insurance Policies”).  To the Knowledge of the Company, all such Insurance Policies or their replacements are in full force and effect with no notices of cancellation or modification pending, all premiums due have been paid to date.

 

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Section 4.17Material Contracts.

(a)Except for this Agreement, Section 4.17 of the Company Disclosure Letter sets forth a list as of the Agreement Date of each Contract to which the Company or any of the Company Subsidiaries is a party to or bound by (other than a Contract solely between or among the Company and its wholly owned Company Subsidiaries) (each of the following Contracts being a “Company Material Contract”):

(i)that would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K promulgated by the SEC;

(ii)is with a related person (as defined in Item 404 of Regulation S-K of the Securities Act) that would be required to be disclosed in the Company SEC Reports;

(iii)that relates to the formation, creation, governance, economics or control of any joint venture, partnership or other similar arrangement;

(iv)that is for the acquisition or disposition of any material business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise), or that contains a material right of first negotiation, right of first refusal or similar right, in each case entered into since January 1, 2019;

(v)that is relating to the borrowing or lending of Indebtedness in a principal amount in excess of $500,000 (whether incurred, assumed, guaranteed or secured by any asset);

(vi)(A) any Contract (excluding purchase orders entered into in the ordinary course of business the forms of which have been made available to Parent) that is one of the top 10 Contracts for the purchase of materials, supplies, goods, services, equipment or other assets, measured by aggregate payments made by the Company or the Company Subsidiaries during the fiscal year ended December 31, 2021 or (B) any Contract (excluding purchase orders entered into in the ordinary course of business the forms of which have been made available to Parent) with any customer of the Company or any Company Subsidiaries who in the fiscal year ended December 31, 2021, was one of the 10 largest sources of revenues for the Company and its Subsidiaries, based on amounts paid or payable;

(vii)any Contract containing any grant of any license or covenant not to assert relating to or under Intellectual Property Rights (A) by the Company or any Company Subsidiary to a third party or (B) by a third party to the Company or any Company Subsidiary, excluding licenses of non-customized off-the-shelf Software commercially available on standard terms for an annual fee of no more than $500,000;

(viii)that contains (A) any covenant that purports to materially limit or otherwise restrict the ability of the Company or the Company Subsidiaries to compete in any business or geographic area or to use or exploit any material Company Owned Intellectual Property, a (B) “most favored nation” clause or other term providing

 

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preferential pricing or treatment to a third party, (C) material minimum purchase obligations on the Company or any of the Company Subsidiaries or (D) any right of first negotiation, right of first refusal or similar right;

(ix)that is with any Affiliate, director, executive officer (as such term is defined in the Exchange Act), holder of 5% or more of Equity Interests of the Company or, to the Knowledge of the Company, any of their Affiliates (other than the Company) or immediate family members (other than offer letters that can be terminated at will without severance obligations and Contracts pursuant to Company Options);

(x) that is a settlement agreement that (A) requires payment by the Company or any of the Company Subsidiaries after the date hereof in excess of $500,000 or (y) imposes non-monetary obligations or restrictions on the Company or any of its Subsidiaries after the date of this Agreement which obligations or restrictions which would apply to Parent or its Affiliates following the Closing;

(xi)that is a Contract with a Governmental Authority;

(xii)any Velocity Transaction Document;

(xiii)that is a CBA; and

(xiv)the Financing Agreement.

(b)The Company has made available to Parent true and correct copies of each Company Material Contract in effect as of the Agreement Date. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each of the Company Material Contracts is in full force and effect, and represents a valid and binding obligation of the Company or a Company Subsidiary, enforceable in accordance with its terms against the Company or the Company Subsidiary (as the case may be), to the Knowledge of the Company, each other party thereto, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding in Law or equity), (ii) neither the Company nor any Company Subsidiary nor, to the Company’s Knowledge, any other party to such Company Material Contract, is in breach of or default (or, to the Knowledge of the Company, has received notice of an alleged breach or default) under any Company Material Contract and, neither the Company nor any Company Subsidiary nor, to the Company’s Knowledge, any other party to such Company Material Contract, has taken or failed to take any action that with or without notice, lapse of time or both would constitute a breach of or default under any Company Material Contract, (iii) since January 1, 2021 through the Agreement Date, neither the Company nor any Company Subsidiaries have received any written notice regarding any violation or breach or default under any Company Material Contract that has not since been cured and (iv) neither the Company nor any Company Subsidiaries have waived in writing any rights under any Company Material Contract.

 

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Section 4.18Real Property.

(a)Neither the Company nor any Company Subsidiary owns any real property.

(b)Section 4.18(b) of the Company Disclosure Letter sets forth a true and correct list of all properties leased, subleased, licensed or occupied by the Company or a Company Subsidiary as of the Agreement Date (collectively, the “Leased Real Property”) and the Real Property Leases in connection therewith.  Except as would not reasonably be expected to have a Company Material Adverse Effect, (i) the Company or a Company Subsidiary has a valid leasehold interest in all of the Leased Real Property, free and clear of all Liens (except for Permitted Liens), (ii) each Real Property Lease is valid and binding on the Company or a Company Subsidiary and, to the Company’s Knowledge, each counterparty thereto, and is full force and effect, (iii) neither the Company nor any Company Subsidiary is in breach of or default under any Real Property Lease, nor, to the Company’s Knowledge, is any other party to such Real Property Lease, and (iv) neither the Company nor any Company Subsidiary has received any written notice from the counterparty under any Real Property Lease that such counterparty intends to terminate such Real Property Lease.  The Company has delivered or made available to Parent complete and accurate copies of all Real Property Leases.

(c)Except as set forth in Section 4.18 of the Company Disclosure Letter, neither the Company nor any Company Subsidiary has leased, subleased, licensed, transferred or mortgaged any portion of any Leased Real Property to any Person.

(d)Neither the Company nor any Company Subsidiary has received any written notice of existing, pending or threatened (i) condemnation proceedings affecting the Leased Real Property, or (ii) zoning, building code or other moratorium proceedings, or similar matters which would reasonably be expected to materially and adversely affect the ability to use and operate the Leased Real Property as currently used and operated.

Section 4.19Environmental Matters.  Except for those matters that would not reasonably be expected to have a Company Material Adverse Effect, (a) each of the Company and the Company Subsidiaries is, and since January 1, 2019 has been, in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining or complying with all Governmental Authorizations required under Environmental Laws for the operation of its business; (b) as of the date hereof, there is no investigation, suit, claim, action or Legal Proceeding relating to or arising under any Environmental Law that is pending or, to the Knowledge of the Company, threatened in writing against the Company or any Company Subsidiaries or, to the Knowledge of the Company, the Leased Real Property; (c) as of the date hereof, neither the Company nor any of the Company Subsidiaries has received any written notice, report or other information of or entered into any legally binding agreement, order, settlement, judgment, injunction or decree involving uncompleted, outstanding or unresolved violations, liabilities or requirements on the part of the Company or any Company Subsidiaries relating to or arising under Environmental Laws; (d) to the Knowledge of the Company:  (i) no Person has been exposed to any Hazardous Materials at a property or facility of the Company or any Company Subsidiaries at levels in excess of applicable permissible exposure levels; and (ii) there are and have been no Hazardous Materials present or Released on, at, under or from any property or facility, including the Leased Real Property, in a manner and concentration that would reasonably be expected to

 

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result in any claim against or liability of the Company or any Company Subsidiaries under any Environmental Law; and (e) neither the Company nor any Company Subsidiaries has assumed, undertaken, or otherwise become subject to any liability of another Person relating to Environmental Laws other than any indemnities in Company Material Contracts or Real Property Leases.

Section 4.20Title to Assets.  Each of the Company and the Company Subsidiaries has good and valid title to all material assets (excluding intellectual property, which is covered under Section 4.14) owned by it as of the date of this Agreement, including all material assets reflected on the Balance Sheet, except (a) for assets sold or otherwise disposed of in the ordinary course of business since the date of the Balance Sheet, (b) to the extent such assets are assets owned, leased or used or held for use by Velocity or the Velocity Buyer, and (c) except where such failure would not reasonably be expected to have a Company Material Adverse Effect.

Section 4.21Inapplicability of Anti-takeover Statutes.  Assuming the accuracy of the representations and warranties of Merger Sub and Parent in Section 5.4, the Company Board has taken all appropriate and necessary actions to render any and all limitations on mergers, business combinations and ownership of shares of the Company Common Stock as set forth in the Company’s Organizational Documents or in any state takeover or anti-takeover statute or similar Law (including NRS 78.378 to 78.3793, inclusive, and NRS 78.411 to 78.444, inclusive) (collectively, the “Takeover Provisions”) to be inapplicable to this Agreement and the Transactions, including the Offer and the Merger. The Company is not, and at no time from and including the Agreement Date through and including the Offer Closing Date will the Company be, an “issuing corporation” (as defined in NRS 78.3789).

Section 4.22No Other Parent Representations or Warranties.  Except as and only to the extent expressly set forth in the representations and warranties made by the Parent and Merger Sub and contained in Article V, the Company hereby acknowledges and agrees that neither Parent nor Merger Sub, or any of their respective Affiliates or Representatives or any other Person, has made or is making any other express or implied representation or warranty with respect to Parent, Merger Sub or their respective business or operations, including with respect to any information provided or made available to the Company or any of its Affiliates or Representatives or any other Person.

 

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Article V
Representations and Warranties of Parent and Merger Sub

Each of Merger Sub and Parent represents and warrants to the Company as follows:

Section 5.1Organization.  Each of Parent and Merger Sub is a corporation, limited liability company, limited partnership or other legal entity duly organized, validly existing and, where applicable in good standing under the Laws of the jurisdiction of its organization (to the extent the “good standing” concept is applicable in the case of any jurisdiction outside the United States), except where the failure to be so organized, existing, or in good standing would not reasonably be expected to have a material adverse effect on the ability of Merger Sub or Parent to consummate the Transactions.  Each of Parent and Merger Sub has all requisite corporate or similar power and authority to enable it to own, operate and lease its properties and to carry on its business as now conducted.  Parent has delivered or made available to the Company complete and correct copies of the articles of incorporation, bylaws or other constituent documents, as amended to the Agreement Date, of Merger Sub.

Section 5.2Authorization; No Conflict.

(a)The execution, delivery and performance by each of Parent and Merger Sub of this Agreement, and the consummation by each of Parent and Merger Sub of the Transactions are within the corporate or similar powers of Parent and Merger Sub, as applicable, and, subject to the completion of the actions contemplated by Section 6.15, have been duly authorized by all necessary corporate or similar action on the part of each of Parent and Merger Sub.  Each of Parent and Merger Sub has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by the Company, this Agreement constitutes a legal, valid and binding agreement of each of Parent and Merger Sub enforceable against each of Parent and Merger Sub, as applicable, in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

(b)The execution, delivery and performance by Merger Sub and Parent of this Agreement and the consummation by Merger Sub and Parent of the Transactions require no action by or in respect of or filing with any Governmental Authority, other than (i) the filing of articles of merger with respect to the Merger with the Office of the Nevada Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any applicable requirements of the Securities Act and the Exchange Act, and (iii) any additional actions or filings, except those that the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Parent’s or Merger Sub’s ability to consummate the Offer, the Merger and the Transactions.

(c)The execution, delivery and performance by Merger Sub and Parent of this Agreement and the consummation of the Transactions do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the articles of incorporation or certificate of incorporation, as applicable, or bylaws or other constituent documents of Merger Sub and Parent, (ii) assuming compliance with the matters referred to in Section 5.2(b), contravene,

 

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conflict with or result in a violation or breach of any provision of any applicable Law or Order, (iii) assuming compliance with the matters referred to in Section 5.2(b), require any consent or other action by any Person under, result in any breach of, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or the loss of any benefit to which Parent or Merger Sub is entitled under, any Contract, or  (iv) result in the creation or imposition of any Lien on any asset of Parent or Merger Sub, with only such exceptions, in the case of each of clauses (ii) through (iv), as would not reasonably be expected, individually or in the aggregate, to have a material adverse effect on Parent’s or Merger Sub’s ability to consummate the Offer, the Merger and the Transactions.

Section 5.3No Legal Proceedings Challenging the Merger.  There are no Legal Proceedings pending or, to the knowledge of Parent, threatened, to which Parent or any Subsidiary of Parent is a party that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on Parent’s ability to consummate the Merger and the Transactions.  As of the Agreement Date, (a) there is no Legal Proceeding pending against Merger Sub or Parent challenging the Offer or the Merger; and (b) to the Knowledge of Parent, no Legal Proceeding has been threatened against Merger Sub or Parent challenging the Offer or the Merger.

Section 5.4Ownership of Company Common Stock.  Other than as a result of this Agreement, none of Parent, Merger Sub or any of their respective Subsidiaries beneficially own (as such term is used in Rule 13d-3 promulgated under the Exchange Act) or owns (as such term is defined in the NRS) any shares of Company Common Stock or any options, warrants or other rights to acquire Company Common Stock or other securities of, or any other economic interest (through derivatives, securities or otherwise) in the Company.  None of Merger Sub or Parent or any of their “affiliates” or “associates” are, or at any time during the two (2) years has been, an “interested stockholder” of the Company as defined in the NRS.  Prior to the Agreement Date, neither Parent nor Merger Sub has taken, or authorized or permitted any Representatives of Parent or Merger Sub to take, any action that would reasonably be expected to cause, Parent, Merger Sub or any of their “affiliates” or “associates” to be deemed an “interested stockholder” as defined in the NRS.

Section 5.5Broker’s or Finder’s Fees.  No agent, broker, Person or firm acting on behalf of Parent or any of its Subsidiaries or under Parent’s or any of its Subsidiaries’ authority is or will be entitled to any advisory or broker’s or finder’s or other similar fee or commission from any of the parties hereto in connection with any of the Transactions.

Section 5.6Activities of Merger Sub.  Merger Sub was formed solely for the purpose of engaging in the Transactions.  Merger Sub has not and will not prior to the Effective Time engage in any activities other than those contemplated by this Agreement and has, and will have as of immediately prior to the Effective Time, no liabilities other than those incident to its formation and pursuant to the Transactions.

Section 5.7Disclosure Documents.  The Schedule TO and the other Offer Documents will, when filed with the SEC, and any amendments or supplements thereto, when filed with the SEC, at any time such document is amended or supplemented or at the time such document is first published, sent or given to the Company’s stockholders, as applicable, comply in all material

 

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respects with the applicable requirements of the Exchange Act. None of the information supplied or to be supplied by or on behalf of Merger Sub or Parent or any of its Subsidiaries expressly for inclusion or incorporation by reference in the Schedule TO and the other Offer Documents, and the Schedule 14D-9, at the time such document is filed with the SEC, at any time such document is amended or supplemented or at the time such document is first published, sent or given to the Company’s stockholders, 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.  The representations and warranties contained in this Section 5.7 shall not apply to statements or omissions included or incorporated by reference in the Schedule TO or other Offer Documents, as applicable, based upon information supplied by the Company or any of its Representatives specifically for use or incorporation by reference therein.  

Section 5.8Financing Arrangements.  

(a)Parent has delivered to the Company a true, correct and complete copy of the fully executed equity commitment letter as of the date hereof (together with all exhibits, annexes, schedules and term sheets attached thereto and as amended, modified, supplemented, replaced or extended from time to time after the Agreement Date, the “Equity Commitment Letter”) from the Investor pursuant to which the Investor has agreed to make an equity investment in Parent, subject to the terms and conditions therein, in cash in the aggregate amount set forth therein (the “Equity Financing”).

(b)As of the date hereof, the Equity Commitment Letter is in full force and effect and constitutes the valid, binding and enforceable obligation of Parent, Merger Sub and the Sponsor, as applicable, and, to the knowledge of Parent, the other party thereto, enforceable in accordance with their terms (subject to the Enforceability Limitations). As of the date hereof, (i) the Equity Commitment Letter has not been amended or modified in any manner, and (ii) the commitments contained therein have not been terminated, reduced, withdrawn or rescinded in any respect by Parent, Merger Sub or the Investor or, to the knowledge of Parent, any other party thereto, and no such termination, reduction, withdrawal or rescission is contemplated by Parent, Merger Sub or the Investor or, to the knowledge of Parent, any other party thereto.

(c)The net proceeds of the Equity Financing, when funded in accordance with the Equity Commitment Letter will be, in the aggregate, sufficient to make the payment of all amounts payable pursuant to Article I and Article II in connection with or as a result of the Offer and the Merger.

(d) The 11th Amendment Effective Date is subject solely to the conditions set forth in the 11th Amendment. Assuming the satisfaction of the conditions set forth in Section 7.1 and the performance by the Company of its obligations under this Agreement, Parent is not aware of any fact or occurrence that would reasonably be expected to cause the conditions to the 11th Amendment Effective Date to not be satisfied.

 

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Section 5.9Certain Arrangements.  There are no Contracts or commitments to enter into Contracts between Parent, Merger Sub or any of their controlled Affiliates, on the one hand, and any director, officer or employee of the Company or any of the Company Subsidiaries, on the other hand.

Section 5.10No Other Company Representations or Warranties.  Except as and only to the extent expressly set forth in the representations and warranties made by the Company and contained in Article IV or the certificate to be provided pursuant to clause (c)(vii) of Annex A, Merger Sub and Parent hereby acknowledge and agree that:  (a) neither the Company nor any Company Subsidiaries, or any of their respective Affiliates or Representatives or any other Person, has made or is making any other express or implied representation or warranty with respect to the Company or Company Subsidiaries or their respective business or operations, including with respect to any information provided or made available to the Merger Sub, Parent or any of their respective Affiliates or Representatives or any other Person; and (b) except in the case of Fraud, neither the Company nor any Company Subsidiaries, or any of their respective Affiliates or Representatives or any other Person will have or be subject to any liability or indemnification obligation or other obligation of any kind or nature to Merger Sub, Parent or any of their respective Affiliates or Representatives or any other Person, resulting from the delivery, dissemination or any other distribution to Merger Sub, Parent or any of their respective Affiliates or Representatives or any other Person, or the use by Merger Sub, Parent or any of their respective Affiliates or Representatives or any other Person, of any such information provided or made available to any of them by the Company or any Company Subsidiaries, or any of their respective Affiliates or Representatives or any other Person, including any information, documents, estimates, projections, forecasts or other forward-looking information, business plans or other material provided or made available to Merger Sub, Parent or any of their respective Affiliates or Representatives or any other Person, in “data rooms,” confidential information memoranda or management presentations in anticipation or contemplation of the Merger or any of the Transactions.

Article VI
Covenants

Section 6.1Access and Investigation.  Subject to the Confidentiality Agreement, during the period commencing on the Agreement Date and ending on the earlier of (a) the Effective Time and (b) the termination of this Agreement pursuant to Section 8.1 (such period being referred to herein as the “Interim Period”), the Company shall, and shall cause the Company Subsidiaries and its and their respective Representatives to, upon reasonable advance notice to the Company from Parent: (i) provide Parent and Parent’s Representatives with reasonable access during normal business hours to the Company’s and the Company Subsidiaries’ books, records, Tax Returns, material operating and financial reports, work papers, assets, officers, personnel, offices and other facilities, Contracts and other documents and information relating to the Company and the Company Subsidiaries and (ii) provide Parent and Parent’s Representatives with such copies of the books, records, Tax Returns, work papers, Contracts and other documents and information relating to the Company and the Company Subsidiaries, and with such additional financial, operating and other data and information regarding the Company and the Company Subsidiaries, as Parent may reasonably request; provided, however, that any such access shall be conducted at Parent’s expense, under the supervision of appropriate personnel of the Company and in such a manner not to unreasonably interfere with the normal operation of the business of the Company or

 

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create material risk of damage or destruction to any material assets or property of the Company. Any such access shall be subject to the Company’s reasonable security measures and insurance requirements and shall not include invasive testing.  Information obtained by Merger Sub or Parent pursuant to this Section 6.1 will constitute “Evaluation Material” under the Confidentiality Agreement and will be subject to the provisions of the Confidentiality Agreement.  Nothing in this Section 6.1 will require the Company to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company would: (A) violate any of its or its Affiliates’ respective obligations with respect to confidentiality; (B) result in a violation of applicable Law; (C) result in the loss of a legal protection afforded by the attorney-client privilege or the attorney work product doctrine or similar privilege; or (D) is commercially sensitive (as determined by the Company in its sole discretion), in each case, so long as the Company has reasonably cooperated with Parent to either permit such inspection of or to disclose such information on a basis that does not waive such privilege with respect thereto, disclose such information subject to execution of a joint defense agreement in customary form, and/or limit disclosure to external counsel of Parent.  Notwithstanding anything to the contrary in this Section 6.1, the Company may satisfy its obligations set forth above by electronic means if physical access would not be permitted or reasonably practical in light of any COVID-19 Measures.

Section 6.2Operation of the Company’s Business.

(a)Except (i) as expressly contemplated, required or permitted by this Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 6.2(a) or Section 6.2(b) of the Company Disclosure Letter, (iv) as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or (v) for any actions taken reasonably and in good faith in response to any COVID-19 Measure or COVID-19 (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), during the Interim Period, the Company shall and shall cause the Company Subsidiaries to: (A) ensure that it conducts its and their respective businesses in the ordinary course in all material respects and in compliance in all material respects with all applicable Laws; (B) use commercially reasonable efforts to preserve intact its and their respective current business organizations, keep available the services of its and their respective current officers and employees and maintain its and their respective relations and goodwill with material customers, suppliers, landlords, Governmental Authorities and other Persons having material business relationships with the Company or the Company Subsidiaries; and (C) keep in full force and effect all appropriate insurance policies covering all material assets of the Company.

 

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(b)Except (v) as expressly contemplated, required or permitted by this Agreement, (w) as required by applicable Law, (x) as set forth in Section 6.2 of the Company Disclosure Letter or (y) as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed, other than with respect to clauses (i), (ii), (iii), (iv) (solely as it relates to the Company Charter Documents), (xviii), (xix) and (xx) (to the extent related to the foregoing), with respect to which Parent may withhold, condition or delay the consent in its sole discretion), during the Interim Period, the Company shall not and shall cause the Company Subsidiaries not to:

(i)establish a record date for, declare, accrue, set aside or pay any dividend, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) in respect of any shares of capital stock or any other Company or Company Subsidiaries securities (other than dividends or distributions paid in cash from a direct or indirect wholly owned Company Subsidiary to the Company or another direct or indirect wholly owned Company Subsidiary); adjust, split, combine or reclassify any capital stock or otherwise amend the terms of any Company or Company Subsidiary securities; or acquire, redeem or otherwise reacquire or offer to acquire, redeem or otherwise reacquire any shares of capital stock or other securities, other than (1) the withholding or retirement of shares of Company Common Stock to satisfy Tax obligations with respect to Company Equity Awards outstanding on the Agreement Date in accordance with the terms of such Company Equity Awards and (2) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options outstanding on the Agreement Date to pay the exercise price thereof in accordance with the terms of such Company Options.

(ii)sell, issue, grant or authorize the sale, issuance, or grant of any Equity Interests (including Company Equity Awards), except that (x) the Company may issue shares of Company Common Stock pursuant to the exercise or settlement of Company Equity Awards under the Stock Plans outstanding on the Agreement Date in accordance with the terms of such Company Equity Awards; and (y) the Company may issue shares of Company Common Stock in connection with the exercise of Warrants pursuant to the Warrant Documentation;

(iii)except as otherwise expressly required by Section 2.5, amend or otherwise modify any of the terms of any Company Equity Awards;

(iv)amend or permit the adoption of any amendment to the Company Charter Documents or the articles or certificate of incorporation and bylaws (or other similar organizational documents) of any of the Company Subsidiaries;

(v) acquire, by means of a merger, consolidation, recapitalization or otherwise, (1) any Equity Interest of any other Person or (2) any assets (other than (x) purchases pursuant to commitments under Contracts of the Company or any Company Subsidiary as in effect on the date of this Agreement and made available to Parent or (y) acquisitions of raw materials or supplies in the ordinary course of business) or  otherwise effect, propose, become a party to or adopt a plan with respect to any merger, liquidation or partial liquidation, dissolution, restructuring, consolidation, share exchange,

 

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business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares, reorganization of the Company or similar transaction;

(vi)form any Company Subsidiary or enter into any joint venture, partnership, limited liability corporation or similar arrangement;

(vii)make or authorize any capital expenditure other than any capital expenditure that (A) is provided for in the Company’s capital expense budget delivered to Parent prior to the date of this Agreement, which expenditures shall be in accordance with the categories set forth in such budget, or (B) in an amount, in the aggregate, of less than $250,000;

(viii)(A) amend or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim, liability or obligation under any Real Property Lease or (B) enter into any Contract which if entered into prior to the date hereof would have been a Real Property Lease;

(ix)sell, assign, transfer or otherwise dispose of, lease or license or grant any right to, assets or property material to the Company and the Company Subsidiaries, taken as a whole, to any other Person, except for dispositions of inventory in the ordinary course of business;

(x)sell, lease, sublease, license, sublicense, assign or otherwise grant rights under any material Company Intellectual Property (except for non-exclusive licenses granted to third parties in the ordinary course of business) or transfer, cancel, abandon or fail to renew, maintain or diligently pursue applications for or otherwise dispose of any Company Intellectual Property (other than non-exclusive licenses granted to third parties in the ordinary course of business);

(xi) (A) lend money to, or make any advances to, capital contributions to or investments in, any Person (other than (x) advances to Company Employees for travel and other business related expenses in the ordinary course of business or (y) loans, advances, capital contributions or investments to or in a direct or indirect wholly owned Company Subsidiary), (B) guarantee any Indebtedness, (C) incur any Indebtedness or (D) amend, terminate or modify the Financing Agreement or waive any provision thereto;

(xii)except as required pursuant to the terms of any Company Plan in effect as of the Agreement Date or applicable Law, (A) establish, adopt, enter into or amend in any respect any Company Plan or any CBA, other than entry into offer letters with new hires permitted by subsection (D) hereof in the ordinary course of business (provided that such offer letter does not provide for the grant of any equity or equity-based awards, change in control benefits, severance or transaction or retention bonus); (B) amend or waive any of its rights under, or accelerate the vesting under, any provision of any Company Plan; (C) except for annual merit increases in annual base salaries and cash bonuses made in the ordinary course of business to employees of the Company and the Company Subsidiaries with an annual base salary that does not exceed $70,000, grant any increase in

 

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compensation, bonuses or other benefits to any current directors, officers, or employees of the Company and the Company Subsidiaries; or (D) hire, terminate the employment or services of (other than for cause”, as determined by the Company in good faith), or layoff (or give notice of any such actions to) any employee or individual independent contractor with an annual base compensation in excess of $70,000 (other than any hiring of any such employee to replace any departed employees in the ordinary course of business and consistent with the Company budget for 2022 and previously provided to Parent);

(xiii)enter into or amend any severance, termination, employment or consulting agreement with any current or former Company Employee, director or independent contractor of the Company or any Company Subsidiary with an annual base compensation in excess of $70,000;

(xiv)other than as required by changes in GAAP or SEC rules and regulations, change any of its methods of financial accounting, cash management or financial accounting practices in any material respect;

(xv)(A) make, change or rescind any material Tax election; (B) settle or compromise any material Tax claim or assessment or enter into any material closing agreement with respect to Taxes; (C) change (or request to change) any material method of accounting for Tax purposes or annual Tax accounting period; (D) file any material amended Tax Return, (E) surrender any right to claim a material Tax refund, or (F) or consent to any consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment;

(xvi)commence any Legal Proceeding, except with respect to:  (A) routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers in good faith the views and comments of Parent with respect to any such Legal Proceeding prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;

(xvii)settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than (A) any Transaction Litigation (subject to Section 6.9) or (B) any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby and (1) that results solely in a monetary obligation involving only the payment of monies by the Company of not more than $250,000 in the aggregate; (2) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, the Company and the payment of monies by the Company that together with any settlement made under clause (1) are not more than $250,000 in the aggregate (not funded by an indemnity obligation or through insurance policies); or (3) that results solely in a monetary obligation involving payment by the Company of an amount not greater than the amount specifically reserved in accordance with GAAP with respect to such Legal Proceedings or claim on the Balance Sheet;

 

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(xviii)adopt or implement any stockholder rights plan or similar arrangement;

(xix)(A) enter into any Contract reasonably expected to cause the Company to abandon, terminate, delay, fail to consummate, materially impede or interfere with the Transactions; or (B) other than in the ordinary course of business, or as required by the terms thereof, enter into, renew or extend, materially amend or terminate any Company Material Contract; provided, that no Contract that would be a Company Material Contract of the type described in Section 4.17(a)(viii) may be entered into without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed);

(xx)(A) negotiate, modify, extend or enter into any CBA or recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or the Post-Closing Company Subsidiaries; or (B) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could implicate the WARN Act; or

(xxi)authorize any of, or commit, resolve, propose or agree in writing or otherwise to take any of, the foregoing actions.

(c)Notwithstanding anything to the contrary in Section 6.2(a), Section 6.2(b) or Section 6.3, the Company and its Representatives shall be permitted to take the actions set forth in Section 6.2(c) of the Company Disclosure Letter and such activities shall not constitute the receipt of an Acquisition Proposal.

Section 6.3Acquisition Proposals.

(a)No Solicitation.  From the Agreement Date until the earlier of the Offer Acceptance Time and the termination of this Agreement in accordance with Article VIII, and except as expressly permitted by this Section 6.3, the Company shall not, and shall cause its Subsidiaries and its and their respective directors and officers not to, and shall direct other Representatives not to, directly or indirectly:

(i)initiate, solicit, propose or knowingly encourage or knowingly facilitate any inquiries or the making of any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, any Acquisition Proposal (other than discussions solely to inform such Person of the provisions contained in this Section 6.3(a));

(ii)engage in, continue or otherwise participate in any discussions (other than, in response to an unsolicited inquiry from any Person relating to an Acquisition Proposal, solely informing such Person of the provisions contained in this Section 6.3(a)) or negotiations regarding, or provide any non-public information or data to any Person (other than Parent, Merger Sub or their respective Representatives) relating to, any Acquisition Proposal or any proposal or offer that would reasonably be expected to lead to an Acquisition Proposal;

 

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(iii)otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal;

(iv)except as expressly permitted by Section 6.3(e), approve, endorse, recommend, or execute or enter into any letter of intent, agreement in principle, term sheet, memorandum of understanding, merger agreement, acquisition agreement, joint venture agreement or other similar Contract relating to an Acquisition Proposal (other than an Acceptable Confidentiality Agreement) (an “Alternative Acquisition Agreement”). As soon as reasonably practicable after the date of this Agreement, the Company shall deliver a written notice to each Person that entered into a confidentiality agreement in anticipation of potentially making an Acquisition Proposal within the one hundred eighty (180) days prior to the Agreement Date requesting the prompt return or destruction of all confidential information previously furnished to any Person within the one hundred eighty (180) prior to the Agreement Date for the purposes of evaluating a possible Acquisition Proposal; or

(v)furnish to any Person (other than Parent, Merger Sub or their respective Representatives) any non-public information relating to the Company or any of its Subsidiaries or afford to any such Person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company and its Subsidiaries, in any such case with the intent to induce, or that would reasonably be expected to result in, the making, submission or announcement of an Acquisition Proposal.

(b)Exceptions.  Notwithstanding anything to the contrary in this Agreement, the Company and its Representatives may prior to the Acceptance Time (i) provide information in response to a request therefor by a Person who makes an unsolicited bona fide written Acquisition Proposal if the Company did not violate Section 6.3(a) in respect of such Person and following the Agreement Date if (x) such Acquisition Proposal did not result from a violation of Section 6.3(a); (y) prior to providing such information, the Company receives from such Person an executed confidentiality agreement on terms that, taken as a whole, are no less favorable in the aggregate to the other party than those contained in the Confidentiality Agreement (it being understood that such confidentiality agreement need not contain a standstill provision or otherwise prohibit the making, or amendment, of an Acquisition Proposal and that does not prohibit the Company from providing any information to Parent or otherwise prohibit the Company from complying with its obligations under this Section 6.2(c) (any confidentiality agreement satisfying the criteria of this clause (y) being an “Acceptable Confidentiality Agreement”)) and (z) the Company promptly (and in any event within twenty-four (24) hours thereafter) makes available to Parent any material non-public information concerning the Company or the Company Subsidiaries that the Company provides to any such Person that was not previously made available to Parent; and (ii) engage or participate in any discussions or negotiations with any Person who has made such an Acquisition Proposal, if and only if, (A) prior to taking any action described in clause (i) or (ii) above, the Company Board determines in good faith, after consultation with financial advisors and outside legal counsel, that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable Law and (B) prior to taking any action described in clause (i) or (ii) above, the Company Board has determined in good faith based on information then available that such Acquisition Proposal either constitutes a Superior Proposal or is reasonably likely to result in a Superior Proposal.

 

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(c)Notice of Acquisition Proposals.  The Company agrees that it will promptly (and, in any event, within twenty-four (24) hours) notify Parent in writing (i) if any inquiries, proposals or offers with respect to an Acquisition Proposal are received by the Company, its Subsidiaries or any of their respective Representatives and the identities of the Person(s) making such inquiry, proposal or offer, (ii) if any non-public information is requested from the Company in connection with an Acquisition Proposal and (iii) if any discussions or negotiations regarding an Acquisition Proposal are sought to be initiated or continued with the Company, or any of its Representatives, and in each case will provide, in connection with such notice, a summary of the material terms and conditions of any proposals, offers or requests (including, if applicable, any modifications to such proposals, offers or requests and unredacted copies of any material and relevant documents and agreements relating thereto, written requests, proposals or offers, including proposed agreements).  Thereafter, the Company shall keep Parent reasonably informed, on a prompt basis (and, in any event, within twenty-four (24) hours), of the status and material terms of any such proposals, offers, or amendments in connection therewith) and the status of any such discussions or negotiations.

(d)No Change of Recommendation or Alternative Acquisition Agreement.  Subject to Section 6.3(e), the Company Board and each committee of the Company Board shall not:

(i) (A) fail to make, withhold, withdraw, qualify or modify (or publicly propose to withhold, withdraw, qualify or modify), in a manner adverse to Parent or Merger Sub, the Company Board Recommendation, (B) approve, authorize, endorse, adopt or recommend (publicly or otherwise) (or publicly propose to approve, authorize, endorse, adopt or recommend) an Acquisition Proposal, (C) fail to recommend, in the solicitation/recommendation statement on Schedule 14D-9, against any Acquisition Proposal that is a tender offer or exchange offer subject to Regulation 14D promulgated under the Exchange Act (other than any tender offer or exchange offer by Parent or Merger Sub) within ten (10) Business Days after the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of such tender offer or exchange offer (including by taking no position with respect to the acceptance of such tender offer or exchange offer by the Company’s stockholders) within five (5) Business Days after the commencement of such tender offer or exchange offer or (D) if an Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such Acquisition Proposal and publicly reaffirm the Company Board Recommendation upon Parent’s written request, in each case, within five (5) Business Days after public disclosure of the Acquisition Proposal; provided that Parent may make such request only once with respect to such Acquisition Proposal unless such Acquisition Proposal is subsequently materially modified, in which case Parent may make such request once each time such material modification is made (any action described in clauses (A) through (D), a “Change of Recommendation”); or

(ii)cause or permit the Company or any of its Subsidiaries to enter into an Alternative Acquisition Agreement (other than any Acceptable Confidentiality Agreement entered into in accordance with Section 6.3(b)) relating to any Acquisition Proposal.

 

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(e)Change of Recommendation / Superior Proposal Termination.  Notwithstanding anything to the contrary in this Agreement, (x) the Company Board may make a Change of Recommendation at any time prior to the Offer Acceptance Time (1) if the Company receives a bona fide unsolicited written Acquisition Proposal following the Agreement Date that did not result from a violation or breach of Section 6.2 and has not been withdrawn and the Company Board determines in good faith (after consultation with the Company’s outside legal and financial advisors) based on the information then available that such Acquisition Proposal constitutes a Superior Proposal or (2) in response to a Company Intervening Event, in either case of (1) or (2), only if the Company Board determines in good faith that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable Law and (y) if the Company Board is permitted to make a Change of Recommendation pursuant to clause (x)(1), the Company may also terminate this Agreement pursuant to Section 8.1(f) to enter into an Alternative Acquisition Agreement with respect to the applicable Superior Proposal; provided, however, that neither the Company Board or the Company shall take any of the foregoing actions unless:

(i)the Company shall have complied with its obligations under this Section 6.3(e);

(ii)the Company shall have provided prior written notice (a “Determination Notice”) to Parent at least five (5) Business Days in advance (the “Notice Period”) to the effect that the Company Board intends to take such action and specifying in writing, in reasonable detail the circumstances giving rise to such proposed action, including, in the case such action is proposed to be taken in connection with an Acquisition Proposal, the information specified by Section 6.3(c) with respect to such Acquisition Proposal (it being understood and agreed that the delivery of a Determination Notice shall not, in and of itself, be deemed a Change of Recommendation);

(iii)the Company shall have, during the Notice Period, negotiated with, Parent and its Representatives in good faith (to the extent Parent desires to negotiate) to make such adjustments in the terms and conditions of this Agreement such that (A) the failure to take such action would no longer be inconsistent with the directors’ fiduciary duties under applicable Law and (B) with respect to any such action to be taken in connection with an Acquisition Proposal, such Acquisition Proposal ceases to constitute a Superior Proposal; provided, however, that in the event of any material revision to the terms of such Superior Proposal or any material changes to the event that the Company Board has determined to be a Company Intervening Event, as the case may be, the Company shall be required to deliver a new Determination Notice to Parent and to comply with the requirements of Section 6.3(e)(ii) and this Section 6.3(e)(iii) with respect to such new Determination Notice and the revised Superior Proposal or Company Intervening Event, as the case may be contemplated thereby (provided, that the notice period for any such successive written notices shall be three (3) Business Days instead of five (5) Business Days);

(iv)at or following the end of such Notice Period, the Company Board shall have determined in good faith based on the information then available that  (A) failure to take such action would continue to be inconsistent with the directors’ fiduciary duties under applicable Law and (B) with respect to any such action to be taken in connection

 

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with an Acquisition Proposal, such Acquisition Proposal continues to constitute a Superior Proposal, in each case taking into account any revisions to this Agreement made or proposed in writing by Parent prior to the time of such determination pursuant to clause (iii) above; and

(v)in the event of a termination of this Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, the Company shall have validly terminated this Agreement in accordance with Section 8.1 and paid the Company Termination Fee in accordance with Section 8.4.

(f)Certain Permitted Disclosure.  Nothing contained in this Section 6.3 shall be deemed to prohibit the Company or the Company Board from (i) taking and disclosing to the Company’s stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act (or any similar communication to the Company’s stockholders); provided, that any such disclosure shall be deemed to be a Change of Recommendation unless the Company Board expressly publicly reaffirms the Company Board Recommendation within five (5) Business Days following any written request by Parent, or (ii) making any “stop-look-and-listen” communication to the Company’s stockholders pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communications to the Company’s stockholders); provided, however, that the Company Board shall not make or resolve to make a Change of Recommendation except in accordance with Section 6.3(e) and any statement or disclosure by the Company or the Company Board pursuant to this Section 6.3(f) must be subject to the terms and conditions of this Agreement and will not limit or otherwise affect the obligations of the Company or the Company Board and the rights of Parent under this Section 6.3.

(g)Existing Discussions.  Upon execution and delivery of this Agreement, the Company agrees that it will, and will cause its Subsidiaries and direct its and their respective Representatives, to (i) cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal, (ii) immediately cease providing any information to any such Person or its Representatives, and (iii) promptly terminate all access granted to any such Person and its Representatives to any physical or electronic data room.

(h)Breach By Representatives.  The Company agrees that any breach of this Section 6.3 by any of its Subsidiaries or their respective Representatives shall be deemed to be a breach of this Agreement by the Company.

Section 6.4Filings; Other Actions; Notification.

(a)Cooperation.  Subject to the terms and conditions set forth in this Agreement, the Company and Parent shall cooperate with each other and use (and shall cause their respective Subsidiaries to use) their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under this Agreement and applicable Laws, including the Antitrust Laws, to consummate and make effective the Offer and the Merger when required in accordance with this Agreement, and execute and deliver any additional instruments necessary to consummate the Offer, the Merger and the other Transactions and to fully carry out the purposes of this Agreement.  Parent shall be

 

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responsible for all filing fees payable to a Governmental Authority in connection with all filings pursuant to Antitrust Laws hereunder. The Company and Parent, and their respective Subsidiaries and Representatives, shall, unless prohibited by applicable Law or the applicable Governmental Authority, (i) keep one another promptly apprised of any substantive communications with a Governmental Authority concerning the Offer, the Merger or any of the other Transactions; (ii) respond as promptly as practicable to all requests for additional information from a Governmental Authority under any Antitrust Law concerning the Offer, the Merger or any of the other Transactions; (iii) provide each other in advance, with a reasonable opportunity for review and comment, drafts of contemplated substantive communications with any Governmental Authority concerning the Offer, Merger or any of the other Transactions; and (iv) provide each other advance notice of all pre-arranged and non-ministerial meetings and conferences, or substantive discussions, with a Governmental Authority concerning the Merger or any of the other Transactions, and, unless prohibited by the Governmental Authority, permit one another to attend and participate therein either directly or through counsel.  Subject to applicable Laws relating to the exchange of information, and subject to reasonable confidentiality considerations, limiting disclosure to outside counsel and consultants retained by such counsel, and subject to redaction or withholding of documents  as necessary (A) to comply with contractual arrangements, (B) to remove references to valuation of the Company, and (C) to protect confidential and competitively sensitive information, Parent and the Company shall have the right to review reasonably in advance and, to the extent practicable, each will consult with the other on and consider in good faith the views of the other in connection with, any filing made with, or written materials submitted to, any third party and/or any Governmental Authority in connection with the Offer, Merger and the other Transactions.  In exercising the foregoing rights, each of the Company and Parent shall act reasonably and as promptly as reasonably practicable and advisable.  Nothing in this Agreement shall require the Parties to take or agree to take any action with respect to its business or operations unless the effectiveness of such agreement or action is conditioned upon Closing.  

(b)Information.  Subject to applicable Laws, the Company and Parent each shall, upon request by the other, furnish the other with all information concerning itself, its respective Subsidiaries, directors, officers and stockholders and such other matters, in each case, as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of Parent, Merger Sub, the Company or any of their respective Subsidiaries to any third party and/or any Governmental Authority in connection with the Offer and the Merger, and shall provide the other party with final copies of any filings made with a Governmental Authority.

(c)Status.  Subject to applicable Laws and the instructions of any Governmental Authority, the Company and Parent each shall keep the other apprised of the status of matters relating to completion of the Offer and the Merger, including promptly furnishing the other with copies of filings, submissions, notices or other communications sent or received by Parent, Merger Sub, the Company or any of its Subsidiaries, as the case may be, to or from any third party and/or any Governmental Authority with respect to the Transactions.  Neither the Company nor Parent shall permit any of its officers or any other Representatives to participate in any non-ministerial meeting or substantive discussion with any Governmental Authority in respect of any filings, investigation or other inquiry with respect to the Transactions unless, to the extent legally permissible and reasonably practicable, (i) it consults with the other party in advance and

 

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(ii) unless prohibited by such Governmental Authority, gives the other party the opportunity to attend and participate in such meeting or substantive discussion.

(d)Regulatory Matters.  Subject to the terms and conditions set forth in this Agreement, without limiting the generality of the other undertakings pursuant to this Section 5.6, each of the Company and Parent agree to take or cause to be taken the following actions:

(i)the provision to each and every federal, state, local or foreign court or Governmental Authority of non-privileged information and documents requested by any Governmental Authority that is necessary for the consummation of the Transactions, as promptly as reasonably practicable and advisable;

(ii)the use of its reasonable best efforts to avoid the entry of any permanent, preliminary or temporary injunction or other order, decree, decision, determination or judgment that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the Transactions, including the (A) the defense through litigation on the merits of any claim asserted in any court, agency or other proceeding by any Governmental Authority, seeking to delay, restrain, prevent, enjoin  or otherwise prohibit consummation of such transactions, and (B) the proffer and agreement by Parent and its Subsidiaries of their respective willingness to sell, lease, license or otherwise dispose of, or hold separate pending such disposition, and promptly to effect the sale, lease, license, disposal and holding separate of, and to accept such conditions, limitations, obligations, or other restraints upon the conduct or operation of, such assets, rights, product lines, licenses, categories of assets or businesses or other operations, or interests therein, of Parent, the Company or any of their respective Subsidiaries (and the entry into agreements with, and submission to orders of, the relevant Governmental Authority with jurisdiction over enforcement of any applicable Antitrust Laws (“Government Antitrust Entity”) giving effect thereto) if such action should be necessary or advisable to avoid, prevent, eliminate or remove the actual, anticipated or threatened (x) commencement of any proceeding in any forum or (y) issuance of any order, decree, decision, determination, judgment or Law, in each case that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the Transactions by any Government Antitrust Entity (it being understood that no such action will be binding on the Company, Parent or any of their respective Subsidiaries or Affiliates unless it is contingent upon the occurrence of the Closing); provided, further, however, that nothing in this Agreement shall require Parent or Merger Sub to agree to provide prior notice to or seek affirmative approval from any Governmental Authority for any future acquisitions or to take or agree to any action of the types referred to in clauses (B) in this Section 6.4(d)(ii) if such action relates to any Affiliate of Parent (other than Company and the Company Subsidiaries); and

(iii)the prompt use of its reasonable best efforts to take, in the event that any permanent, preliminary or temporary injunction, decision, order, judgment, determination, decree or Law is entered, issued or enacted, or becomes reasonably foreseeable to be entered, issued or enacted, in any proceeding, review or inquiry of any kind that would make consummation of the Transactions in accordance with the terms of this Agreement unlawful or that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the Transactions, any and all steps (including, the appeal thereof, the

 

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posting of a bond or the taking of the steps contemplated by clause (ii) of this paragraph (d)) necessary to resist, vacate, modify, reverse, suspend, prevent, eliminate, avoid or remove such actual, anticipated or threatened injunction, decision, order, judgment, determination, decree or enactment so as to permit such consummation on a schedule as close as possible to that contemplated by this Agreement.

(e)Notwithstanding anything to the contrary set forth in this Agreement, neither the Company, any of the Company Subsidiaries, Parent nor any of its Affiliates will be required to agree to the payment of a consent fee, “profit sharing” payment or other consideration (including increased or accelerated payments) or the provision of additional security (including a guaranty), in connection with the Merger, including in connection with obtaining any consent pursuant to any Company Material Contract, in each case unless such payment, consideration or security is contingent upon the occurrence of the Closing.

(f)Without limiting in any respect Parent’s obligations under this Section 6.4, Parent shall have the right to (i) direct, devise and implement the strategy for obtaining any necessary approval of, for responding to any request from, inquiry or investigation by (including directing the timing, nature and substance of all such responses), and shall have the right to lead all meetings and communications (including any negotiations) with, any Governmental Authority that has authority to enforce any Antitrust Law and (ii) without limiting the generality of clause (i) of this Section 6.4(f) or the obligations of the Company under this this Section 6.4, control the defense and settlement of any Legal Proceeding brought by or before any Governmental Authority that has authority to enforce any Antitrust Law. Parent shall consult with the Company in a reasonable manner and consider in good faith the views and comments of the Company in connection with the foregoing.

Section 6.5 Stock Exchange De-listing.  Prior to the Closing Date, the Company shall cooperate with Parent and use reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of Nasdaq to enable the delisting by the Surviving Corporation of the Company Common Stock from Nasdaq and the deregistration of the Company Common Stock under the Exchange Act as promptly as practicable after the Effective Time. The Company shall cause the Company Common Stock to remain registered under the Exchange Act and listed for trading on the Nasdaq at all times prior to the Effective Time, including, for the avoidance of doubt, entering into one or more reverse stock split(s) in order to remain listed.

Section 6.6Public Announcements.  The initial press release regarding this Agreement shall be a joint press release in mutually agreed form.  Thereafter, the Company and Parent each shall consult with the other prior to issuing any press releases or otherwise making public announcements with respect to the Merger and the Transactions, and to the extent practicable shall give each other a reasonable opportunity to review and comment on any such press release or announcement, except in all cases (a) as may be required by Law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or interdealer quotation service or by the request of any Governmental Authority, in which case the party required to issue such press release or announcement shall use reasonable best efforts to provide the other party with a reasonable opportunity to review and comment on any such press release or announcement, or (b) with respect to any communications by the Company in connection with a Change of

 

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Recommendation effected pursuant to and in accordance with Section 6.3(e) (or, prior to a Change of Recommendation, the applicable event that may give rise to a Change of Recommendation), or by Parent in response thereto. Except as may be required by Law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or interdealer quotation service or by the request of any Governmental Authority, neither Parent nor Merger Sub shall issue any press release or other written public statement about the vitaCare Transaction without the Company’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed); provided, that Parent, Merger Sub and their respective Affiliates may (i) make disclosures (which are made subject to existing confidentiality obligations) to their respective investors or in connection with its fundraising activities and (ii) provide general information about the subject matter of this Agreement in connection with fundraising, marketing, informational or reporting activities of the kind customarily provided with respect to investments of this nature.

Section 6.7Financing Arrangements.

(a)From the date of this Agreement until the Closing Date, the Company agrees to use reasonable best efforts to provide, and shall cause the Company Subsidiaries and its and their respective officers, directors and employees to use reasonable best efforts to provide, in each case at Parent’s sole expense, such cooperation as may be reasonably requested by Parent in connection with the 11th Amendment and any other arrangement of any debt financing arranged by Parent in connection with the Transactions (the “Debt Financing”).  Notwithstanding the foregoing, (A) such requested cooperation shall not (i) unreasonably disrupt or interfere with the operations of the Company or the Company Subsidiaries or (ii) cause competitive harm to the Company or the Company Subsidiaries if the transactions contemplated by this Agreement are not consummated, (B) nothing in this Section 6.7(a) shall require cooperation to the extent that it would (x) cause any condition to the Closing set forth in Article VII to not be satisfied or (y) cause any breach of this Agreement, (C) neither the Company nor any of the Company Subsidiaries shall be required to (1) pay any commitment or other similar fee prior to the Closing Date, (2) incur or assume any liability in connection with the Debt Financing or the Financing prior to the Closing Date that is not already in existence on the Agreement Date or (3) provide access to or disclose information where the Company determines that such access or disclosure would reasonably be likely to jeopardize the attorney-client privilege or contravene any applicable Law and (D) none of the Company, the Company Subsidiaries or their respective directors, officers or employees shall be required to execute, deliver or enter into, or perform any agreement, document or instrument with respect to any Debt Financing that is not already contemplated by the Financing Agreement as in effect on the Amendment Date that is not contingent upon the Closing.

(b)Prior to the Closing, the Company shall remain in compliance with its obligations under the Financing Agreement and shall not and shall cause the Company Subsidiaries to not take any actions or fail to take any actions that would reasonably be expected to result in a “Default” or an “Event of Default” (as such terms are defined in the Financing Agreement) under the Financing Agreement.

Section 6.8Directors and Officers Exculpation, Indemnification and Insurance.

(a)Existing Agreements and Protections.  The Surviving Corporation, its Subsidiaries and Parent shall honor and fulfill in all respects the indemnification, exculpation, and

 

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advancement obligations of the Company and the Company Subsidiaries and any of their respective current or former directors and officers and any person who becomes a director or officer of the Company or any of the Company Subsidiaries prior to the Effective Time (the “Indemnified Persons”) for acts or omissions occurring at or prior to the Effective Time, in each case as provided in the Company Charter Documents, the articles or certificate of incorporation and bylaws (or other similar organizational documents) of the Company Subsidiaries and any indemnification agreement between any Indemnified Person and the Company or any Company Subsidiary (in each case, as in effect on the Agreement Date and, in the case of any indemnification agreement, as set forth in Section 6.8(a) of the Company Disclosure Letter).  In addition, commencing at the Effective Time and ending on the sixth (6th) anniversary of the Effective Time, the Surviving Corporation and its Subsidiaries shall (and Parent shall cause the Surviving Corporation and its Subsidiaries to) cause the articles or certificate of incorporation and bylaws (and other similar organizational documents) of the Surviving Corporation and its Company Subsidiaries to contain provisions with respect to indemnification, exculpation and the advancement of expenses with respect to acts or omissions prior to the Effective Time that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the Company Charter Documents and the articles or certificate of incorporation and bylaws (or other similar organizational documents) of the Company Subsidiaries as of the Agreement Date, as applicable, and such provisions shall not be repealed, amended or otherwise modified (whether by operation of Law or otherwise) in any manner except as required by applicable Law.

(b)Indemnification.  Without limiting the generality of the provisions of Section 6.8(a), during the period commencing at the Effective Time and ending on the sixth (6th) anniversary of the Effective Time, the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) indemnify and hold harmless each Indemnified Person from and against any costs, fees and expenses (including, to the extent applicable, a duty to advance reasonable attorneys’ fees and investigation expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, proceeding, investigation or inquiry, whether civil, criminal, administrative or investigative, to the extent such claim, proceeding, investigation or inquiry arises directly or indirectly out of or pertains directly or indirectly to (i) any action or omission or alleged action or omission in such Indemnified Person’s capacity as a director, officer, employee or agent of the Company or any of the Company Subsidiaries or other Affiliates that occurred prior to or at the Effective Time or (ii) any of the Transactions; provided, however, that if, at any time prior to the sixth (6th) anniversary of the Effective Time, any Indemnified Person delivers to Parent a written notice asserting a claim for indemnification or advancement under this Section 6.8(b), then the claim asserted in such notice shall survive the sixth (6th) anniversary of the Effective Time until such time as such claim is fully and finally resolved.  In the event of any such claim, the Surviving Corporation shall pay all and/or advance reasonable fees and expenses of any counsel retained by an Indemnified Person promptly after statements therefor are received. No Indemnified Person shall be liable for any settlement effected without his or her prior express written consent.

(c)Insurance.  The Company currently maintains a directors’ and officers’ liability insurance policy (“D&O Insurance”), an accurate and complete summary of which has been made available by the Company to Parent or Parent’s Representatives prior to the Agreement Date.  Prior to the Effective Time, notwithstanding anything to the contrary set forth in this Agreement, the Company shall purchase a six-year “tail” prepaid policy on the D&O Insurance

 

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for the benefit of the Indemnified Persons who are currently covered by such D&O Insurance with respect to their acts and omissions occurring prior to the Effective Time in their capacities as directors and officers of the Company (as applicable), on terms with respect to coverage, deductibles and amounts no less favorable than the D&O Insurance; provided, that in no event shall the Company or the Surviving Corporation be required to expend in any one year an amount in excess of 300% of the annual premium currently payable by the Company with respect to the D&O Insurance, it being understood that if the annual premiums payable for such insurance coverage exceeds such amount, Parent shall be obligated to cause the Surviving Corporation to obtain a policy with the greatest coverage available for a cost equal to such amount.  The Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) maintain such “tail” policy in full force and effect and continue to honor their respective obligations thereunder.

(d)Successors and Assigns.  If the Surviving Corporation (or Parent) or any of its successors or assigns shall (i) consolidate with or merge into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of the Surviving Corporation shall assume all of the obligations of the Surviving Corporation (or Parent) set forth in this Section 6.8.

(e)No Impairment; Third Party Beneficiaries.  The obligations set forth in this Section 6.8 shall not be terminated, amended or otherwise modified in any manner that adversely affects any Indemnified Person (or any other person who is a beneficiary under the D&O Insurance or the “tail” policy referred to in Section 6.8(c) (and their heirs and representatives)) without the prior written consent of such affected Indemnified Person or other person who is a beneficiary under the D&O Insurance or the “tail” policy referred to in Section 6.8(c) (and their heirs and representatives).  Each of the Indemnified Persons or other persons who are beneficiaries under the D&O Insurance or the “tail” policy referred to in Section 6.8(c) (and their heirs and representatives) are intended to be third party beneficiaries of this Section 6.8, with full rights of enforcement as if a party thereto.  The rights of the Indemnified Persons (and other persons who are beneficiaries under the D&O Insurance or the “tail” policy referred to in Section 6.8(c) (and their heirs and representatives)) under this Section 6.8 shall be in addition to, and not in substitution for, any other rights that such persons may have under the articles or certificate of incorporation, bylaws or other equivalent organizational documents, any and all indemnification agreements of or entered into by the Company or any of the Company Subsidiaries, or applicable Law (whether at law or in equity).

(f)Joint and Several Obligations.  The obligations and liability of the Surviving Corporation, Parent and their respective Subsidiaries under this Section 6.8 shall be joint and several.

(g)Preservation of Other Rights.  Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of the Company Subsidiaries for any of their respective directors, officers or other employees,

 

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it being understood and agreed that the indemnification provided for in this Section 6.8 is not prior to or in substitution for any such claims under such policies.

Section 6.9Transaction Litigation.  Prior to the earlier of the Effective Time or the date of termination of this Agreement pursuant to Section 8.1, the Company shall promptly notify Parent of all Legal Proceedings commenced or, to the Knowledge of the Company, threatened against the Company or any of the Company Subsidiaries or any of their respective directors or officers, in each case in connection with, arising from or otherwise relating to the Offer, the Merger or any of the other Transactions (“Transaction Litigation”) (including by providing copies of all pleadings and other material documents with respect thereto) and thereafter keep Parent reasonably informed with respect to the status thereof.  The Company shall (a) give Parent reasonable opportunity (at Parent’s sole expense and subject to a customary joint defense agreement) to participate in the defense, settlement or prosecution of any Transaction Litigation; and (b) consult with Parent with respect to the defense, settlement and prosecution of any Transaction Litigation.  Further, the Company may not compromise, settle or come to an arrangement regarding, or propose or agree to compromise, settle or come to an arrangement regarding, any Transaction Litigation unless Parent has consented thereto in writing (which consent will not be unreasonably withheld, conditioned or delayed).  For purposes of this Section 6.9, “participate” means that Parent will be kept reasonably apprised of proposed strategy and other significant decisions with respect to the avoidance of doubt, Parent’s right to “participate” in the defense and prosecution of any Transaction Litigation by the Company (to the extent that the attorney client privilege between the Company and its counsel is not undermined or otherwise affected), and Parent may offer comments or suggestions with respect to such Transaction Litigation, but will not be afforded any decision-making power or other authority over such Transaction Litigation except for the settlement or compromise consent set forth above.

Section 6.10Rule 16b-3.  The Company shall take all such steps as may be required to cause the Transactions, and any other dispositions of equity securities (including derivative securities) of the Company resulting from the Transactions by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Section 6.11Employee Matters.

(a)For purposes of this Section 6.11, (i) the term “Covered Employees” means employees who are employed by the Company or any Company Subsidiary as of immediately prior to the Effective Time; and (ii) the term “Continuation Period” means the period beginning at the Effective Time and ending on the first anniversary of the Effective Time (or, if earlier, the termination date of the relevant Covered Employee).

 

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(b)During the Continuation Period, Parent shall, or shall cause the Surviving Corporation or any Company Subsidiary to, provide to each Covered Employee for so long as such Covered Employee remains employed by Parent, the Surviving Corporation or any Company Subsidiary during the Continuation Period, (i) a base salary (or base wages, as the case may be), annual short-term cash bonus opportunities and commissions) that are, in the aggregate, no less favorable to the base salary (or base wages), annual cash bonus opportunities and commissions (excluding any equity or equity-based compensation) provided to such Covered Employee immediately prior to the Effective Time and (ii) employee benefits that are, in the aggregate, substantially comparable to the employee benefits provided to such Continuing Employees pursuant to the Company Plans set forth on Section 4.9(a) of the Company Disclosure Letter (excluding, any defined benefit pension plan, retiree medical benefits, equity or equity-based compensation, retention bonuses or change of control bonuses or benefits) provided to such Covered Employee immediately prior to the Effective Time).

(c)In the event any Covered Employee first becomes eligible to participate under any employee benefit plan, program, policy, or arrangement of Parent or the Surviving Corporation or any of their respective Subsidiaries (“Parent Employee Benefit Plan”) following the Effective Time or during the calendar year including the Effective Time, Parent shall, or shall cause the Surviving Corporation to, use commercially reasonable efforts to: (i) for the plan year in which the Effective Time occurs waive any preexisting condition exclusions and waiting periods with respect to participation and coverage requirements applicable to any Covered Employee under any Parent Employee Benefit Plan providing medical, dental, or vision benefits to the same extent such limitation was waived or satisfied under the analogous Company Plan the Covered Employee participated in immediately prior to coverage under the Parent Employee Benefit Plan and (ii)  for the plan year in which the Effective Time occurs provide each Covered Employee with credit for any copayments and deductibles paid prior to the Covered Employee’s coverage under any Parent Employee Benefit Plan during the calendar year in which such amount was paid, to the same extent such credit was given under the analogous Company Plan in which the Covered Employee participated immediately prior to coverage under the Parent Employee Benefit Plan, in satisfying any applicable deductible or out-of-pocket requirements under the Parent Employee Benefit Plan.  

(d)As of the Effective Time, Parent shall cause the Surviving Corporation and their respective Subsidiaries to recognize, each Covered Employee’s service earned prior to the Effective Time with the Company (or any predecessor entities of the Company or any of the Company Subsidiaries) for purposes of vesting in any defined contribution retirement plan and eligibility to participate purposes (but not for benefit accrual purposes under any defined benefit pension plan, retiree medical benefits or any equity or equity-based compensation plan, as applicable) to the same extent and for the same purposes as such Covered Employee was entitled, before the Effective Time, to credit for such service under any similar Company Plan in which such Covered Employee participated immediately prior to the Effective Time.  In no event shall anything contained in this Section 6.11(d) result in any duplication of benefits for the same period of service.

 

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(e)Without limiting the generality of Section 9.4, nothing in this Section 6.11 shall (i) be construed to limit the right of Parent, the Company, or any of the Company Subsidiaries (including, following the Effective Time, the Surviving Corporation) to amend or terminate any Company Plan or other benefit or compensation plan, program, policy, agreement, Contract or arrangement, (ii) be construed as the adoption, establishment, amendment, modification or termination of any Company Plan, Parent Employee Benefit Plan or other benefit or compensation plan, program, policy, Contract, agreement or arrangement, (iii) be construed to require Parent, the Company, or any of the Company Subsidiaries (including, following the Effective Time, the Surviving Corporation) to retain the employment of any particular Person for any fixed period of time following the Effective Time or (iv) create any third-party beneficiary or other right in any other Person, including any current or former director, officer, employee or other service provider or any participant in any Company Plan, Parent Employee Benefit Plan or other benefit or compensation plan, program, policy, arrangement, Contract or agreement, including any Covered Employee or dependent or beneficiary thereof.

Section 6.12FIRPTA Certificate. At the Closing, the Company shall deliver to Parent a certification that the Company is not and has not been a United States real property holding corporation, dated as of the Closing Date and in form and substance required under  Treasury Regulation Section 1.897-2(h); provided that if Parent does not receive such certification Parent’s sole remedy shall be to withhold in accordance with Section 2.9.

Section 6.13Confidentiality.  The parties hereto acknowledge that Essex Woodlands Services Co., Inc., an Affiliate of Parent and the Company have previously executed a nondisclosure agreement, dated as of January 21, 2022 (the “Confidentiality Agreement”), which Confidentiality Agreement shall continue in full force and effect in accordance with its terms.

Section 6.14Obligations of Merger Sub.  Parent shall take all action necessary to cause Merger Sub and, after the Closing, the Surviving Corporation to perform their respective obligations under this Agreement and to consummate the Offer, the Merger and the Transactions upon the terms and subject to the conditions set forth in this Agreement.  Parent and Merger Sub will be jointly and severally liable for the failure by either of them to perform and discharge any of their respective covenants, agreements and obligations pursuant to and in accordance with this Agreement.

Section 6.15Parent Vote.  Immediately following the execution and delivery of this Agreement, Parent will or will cause the sole stockholder of Merger Sub, to execute and deliver to Merger Sub and the Company a written consent approving the Merger in accordance with applicable Law.

Section 6.16Takeover Statutes.  If any Takeover Provision or other “takeover” law is or may become applicable to the Offer, the Merger or the other Transactions, the Company and the Company Board shall grant such approvals and take such actions (including amending the Company’s bylaws) as are necessary so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise act to eliminate or minimize the effects of such Takeover Provision or such statute or regulation on such transactions.

 

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Section 6.17Notification of Certain Matters.  Unless prohibited by applicable Law, Parent and the Company shall each promptly notify the other party upon receiving notice of any event, effect, occurrence, fact, circumstance, condition or change that would reasonably be expected to give rise to a failure of a condition precedent in Article VII; provided, however, that the failure to make any such notification (in and of itself) shall not be taken into account in determining whether the conditions set forth in Article VII have been satisfied or give rise to any right of termination to any party hereto under Article VIII.

Section 6.18Merger Without a Stockholders’ Meeting.  As promptly as practicable following the consummation of the Offer, the Parties shall take all necessary and appropriate actions to cause the Merger to become effective without a meeting of the stockholders of the Company, in accordance with NRS 92A.133 and the other applicable provisions of the NRS.

Article VII
Conditions to Merger

Section 7.1Conditions to Each Party’s Obligation to Effect the Merger.  The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction (or waiver by Parent and the Company, to the extent permitted by applicable Law) of each of the following conditions at or prior to the Closing:

(a)No Legal Prohibition.  No Governmental Authority of competent jurisdiction shall have announced, enacted, issued, promulgated, entered, enforced or deemed applicable to the Merger any applicable Law, or issued or granted any Order (whether temporary, preliminary or permanent) (any such Law or Order, a “Legal Restraint”), that is in effect and that has the effect of making the consummation of the Merger illegal or which has the effect of prohibiting, enjoining, preventing or restraining the consummation of the Merger.

(b)The Offer.  Merger Sub (or Parent on Merger Sub’s behalf) shall have accepted for payment for all of the Shares validly tendered and not validly withdrawn pursuant to the Offer; provided, however, that neither Merger Sub nor Parent shall be entitled to assert the failure of this condition if, in breach of this Agreement, Merger Sub fails to purchase any Shares validly tendered and not validly withdrawn pursuant to the Offer.

(c)No Default.  As of immediately prior to the Closing, there shall be no “Default” or “Event of Default” (as such terms are defined in the Financing Agreement) that has occurred and is continuing to occur under the Financing Agreement.

 

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Article VIII
Termination

Section 8.1Termination.  This Agreement may be terminated and the Merger may be abandoned at any time prior to the Offer Closing (except as provided herein), only as follows:

(a)by mutual written agreement of Parent and the Company; or

(b)by either Parent or the Company if the Offer Closing shall not have occurred on or before 11:59 p.m. Eastern Time on July 13, 2022 (the “Termination Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b) shall not be available to any party hereto whose failure to perform or comply with any obligation under this Agreement has been the principal cause of, or resulted in, the failure of the Offer Closing to have occurred on or before the Termination Date; or

(c)by the Company, if (i) Merger Sub fails to commence (within the meaning of Rule 14d-2 under the Exchange Act) or extend the Offer in violation of Section 1.01 (other than due to a violation or breach by the Company of any provision of this Agreement that has been the principal cause of, or resulted in, such failure to commence the Offer or extend the Offer) or (ii) if the Expiration Time shall have occurred and Merger Sub shall not have accepted for payment, within three (3) Business Days following the Expiration Date, the shares of Company Common Stock validly tendered (and not validly withdrawn) pursuant to the Offer in accordance with the terms of this Agreement; provided, that the right to terminate this Agreement shall not be available to the Company if its breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the principal cause of, or resulted in, Merger Sub having failed to accept for payment the shares of Company Common Stock validly tendered (and not validly withdrawn) pursuant to the Offer in accordance with the terms of this Agreement; or

(d)by either Parent or the Company if any Legal Restraint permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto whose breach any representation, warranty, covenant or agreement set forth in this Agreement has been the principal cause of, or resulted in, such Legal Restraint; or

(e)by the Company in the event (i) of a breach of any covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement or (ii) that any of the representations and warranties of Parent and Merger Sub set forth in this Agreement (without regard to any qualifications or exceptions contained therein as to materiality) shall have been inaccurate when made or shall have become inaccurate, in either case such that such breach or inaccuracy (x) (i) would reasonably be expected to prevent or materially delay the Offer or the Merger and (y) (i) is not reasonably capable of being cured by Parent or Merger Sub by the Termination Date or (y)(ii) if reasonably capable of being cured by Parent or Merger Sub by the Termination Date, the Company has delivered to Parent written notice of such breach or inaccuracy and such breach or inaccuracy is not cured by Parent or Merger Sub, as applicable, by the earlier of (A) the Termination Date and (B) the date that is thirty (30) days after delivery of such notice; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(e) shall not be

 

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available to the Company if it is in breach of any representation, warranty, covenant or agreement set forth in this Agreement such that Parent would be entitled to terminate this Agreement pursuant to Section 8.1(g); or

(f)by the Company, prior to the Offer Acceptance Time, if (i) the Company Board authorizes the Company, subject to complying in all material respects with the terms of Section 6.3(e), to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal; and (ii) the Company pays to Parent the Company Termination Fee in accordance with Section 8.4(a) prior to or substantially concurrently with such termination; or

(g)by Parent in the event (i) of a breach of any covenant or agreement on the part of the Company set forth in this Agreement or (ii) that any of the representations and warranties of the Company set forth in this Agreement shall have been inaccurate when made or shall have become inaccurate, in either case such that the conditions set forth in Sections (c)(i), (c)(ii) or (c)(iii) of Annex A, as applicable, would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become inaccurate, as applicable (x) (i) is not reasonably capable of being cured by the Company by the Termination Date or (x)(ii) if reasonably capable of being cured by the Company by the Termination Date, Parent has delivered to the Company written notice of such breach and such breach is not cured by the Company by the earlier of (A) the Termination Date and (B) the date that is thirty (30) days after delivery of such notice; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(g) shall not be available to Parent if it is in breach of any representation, warranty, covenant or agreement set forth in this Agreement such that the Company would be entitled to terminate this Agreement pursuant to Section 8.1(e); or

(h)by Parent in the event that, a Change of Recommendation shall have occurred; or

(i)by Parent in the event of a Willful Breach of any covenant or agreement on the part of the Company set forth in Section 6.3.

Section 8.2Notice of Termination.  A party terminating this Agreement pursuant to Section 8.1 (other than Section 8.1(a)) shall deliver a written notice to the other party setting forth specific basis for such termination and the specific provision of Section 8.1 pursuant to which this Agreement is being terminated.  A valid termination of this Agreement pursuant to Section 8.1 (other than Section 8.1(a)) shall be effective upon receipt by the non-terminating party of the foregoing written notice, validly given.

Section 8.3Effect of Termination.  In the event of a valid termination of this Agreement pursuant to Section 8.1, this Agreement shall be of no further force or effect without liability of any party or parties hereto, as applicable (or any former, current or future stockholder, equityholder, Affiliate, director, manager, officer, employee, agent, consultant or other Representative of such party or parties) to the other party or parties hereto, as applicable, except (a) for the terms of Section 6.4(c), Section 6.6, Section 6.12, this Section 8.3, Section 8.4 and Article IX, each of which shall survive the termination of this Agreement, (b) that nothing herein shall relieve any party or parties hereto, as applicable, from liability for any Fraud committed in connection with this Agreement or any of Transactions and (c) that nothing herein shall relieve

 

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any party or parties hereto, as applicable, from liability for Willful Breach in connection with this Agreement or any of the Transactions.  In addition to the foregoing, no termination of this Agreement shall affect the obligations of the parties hereto set forth in the Confidentiality Agreement, all of which shall survive termination of this Agreement in accordance with their respective terms and remain fully enforceable in accordance with their respective terms.  For purposes of this Agreement, “Willful Breach” means a material breach that is a consequence of an intentional act or intentional failure to act undertaken by the breaching party with the actual knowledge that the taking of or the omission of taking such act would, or would reasonably be expected to, cause or constitute a material breach of this Agreement.  Notwithstanding anything to the contrary in this Agreement, and except in the case of Fraud by Parent or Merger Sub, the maximum aggregate liability for Parent or any of its Affiliates or any of their Representatives may be liable in connection with the termination of this Agreement shall not exceed a maximum of $5,110,000.

Section 8.4Company Termination Fees.

(a)In the event that this Agreement is terminated pursuant to Section 8.1(f), then as a condition to such termination of this Agreement, prior to or concurrently with such termination, the Company shall pay to Parent (or its designee) the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent. “Company Termination Fee” means an amount equal to $3,250,000.

(b)In the event that this Agreement is terminated pursuant to (i) Section 8.1(h), Section 8.1(g) or Section 8.1(i) (ii) Section 8.1(b) and at the time Parent could have terminated this Agreement pursuant to Section 8.1(h), Section 8.1(g) or Section 8.1(i), then within two (2) Business Days after the termination of this Agreement, the Company shall pay to Parent (or its designee) the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.

(c)In the event that:

(i)this Agreement is terminated by  either (A) Parent pursuant to Section 8.1(b) or (B) the Company pursuant to Section 8.1(b) and at the time Parent could not have terminated pursuant to Section 8.1(b) (each, an “Applicable Termination”);

(ii)following the execution and delivery of this Agreement and prior to an Applicable Termination, an Acquisition Proposal has been publicly announced or disclosed; and

(iii)within twelve (12) months of an Applicable Termination, the Company shall have entered into an Alternative Acquisition Agreement with respect to any Acquisition Proposal or an Acquisition Transaction  is consummated; provided, that for purposes of this Section 8.4(c)(iii), all references to “15%” in the definition of “Acquisition Proposal” shall be deemed to reference “50%”;

then the Company will, prior to or concurrently with the earlier of the execution of such Alternative Acquisition Agreement and the consummation of such Acquisition Transaction,

 

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pay to Parent (or its designee) the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent

(d)The parties hereto acknowledge and hereby agree that in no event shall the Company be required to pay the Company Termination Fee on more than one occasion, whether or not the Company Termination Fee may be payable under more than one provision of this Agreement at the same or at different times and the occurrence of different events.

(e)Recovery.  Parent, Merger Sub and the Company hereby acknowledge and agree that the covenants set forth in this Section 8.4 are an integral part of this Agreement and the Merger, and that, without these agreements, Parent, Merger Sub and the Company would not have entered into this Agreement.  Accordingly, if the Company fails to promptly pay any amounts due pursuant to Section 8.4 and, in order to obtain such payment, Parent commences a Legal Proceeding that results in a judgment against the Company for the amount set forth in Section 8.4 or any portion thereof, the Company will pay to Parent its out-of-pocket costs and expenses (including reasonable attorneys’ and experts’ fees and costs) in connection with such Legal Proceeding, together with interest on such amount or portion thereof at the annual rate equal to the prime rate as published in The Wall Street Journal in effect on the date that such payment or portion thereof was required to be made plus 1% through the date that such payment or portion thereof was actually received, or a lesser rate that is the maximum permitted by applicable Law.

(f)Acknowledgement.  Each of the parties acknowledges and agrees that the damages resulting from termination of this Agreement under circumstances where a Company Termination Fee is payable are uncertain and incapable of accurate calculation and therefore, the amounts payable pursuant to Section 8.4 are not a penalty but rather constitute liquidated damages in a reasonable amount that will compensate Parent for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions and shall be (together with all interest as described in Section 8.4(e)) the sole monetary remedy of Parent in the event of a termination of this Agreement where the Company Termination Fee is payable by the Company pursuant to Section 8.4 and the Company Termination Fee is actually paid to Parent.

Article IX
Miscellaneous Provisions

Section 9.1Amendment or Supplement.  This Agreement may be amended, modified and supplemented in any and all respects any time prior to the Effective Time with respect to any of the terms of this Agreement; provided, however, that (a) no such amendment, modification or supplement shall result in the per share Common Stock Merger Consideration not being the same amount and kind of cash, property, rights or securities as the consideration being offered to holders of Shares in the Offer, (b) after the Offer Closing, no such amendment, modification or supplement shall adversely affect the rights of the Company Stockholders (other than Parent, Purchaser or their respective Affiliates) under this Agreement without the approval of such Company Stockholders and (c) no amendment shall be made to this Agreement after the Effective Time. Any such amendment, modification or supplement shall be effective only if it is set forth in an instrument in writing executed by each Party.

 

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Section 9.2Extension of Time, Waiver, etc.  At any time prior to the Offer Closing, any party may, subject to applicable Law:  (a) waive any inaccuracies in the representations and warranties of any other party hereto; (b) extend the time for the performance of any of the obligations or acts of any other party hereto; or (c) to the extent permitted by applicable Law, waive compliance by the other party with any of the agreements contained in this Agreement.  Notwithstanding the foregoing, no failure or delay by the Company, Merger Sub or Parent in exercising any right hereunder shall operate as a waiver of rights, nor shall any single or partial exercise of such rights preclude any other or further exercise of such rights or the exercise of any other right hereunder.  Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

Section 9.3No Survival.  None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Closing.  This Section 9.3 shall not limit the survival of any covenant or agreement of the parties hereto contained in this Agreement which by its terms contemplates performance in whole or in part after the Closing.

Section 9.4Entire Agreement; No Third Party Beneficiary.  

(a)This Agreement, including the exhibits hereto, the Company Disclosure Letter and the documents and instruments relating to the Offer and the Merger referred to in this Agreement, constitutes, together with the Confidentiality Agreement, the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter of this Agreement, provided, however, the Confidentiality Agreement shall not be superseded, shall survive any termination of this Agreement and shall continue in full force and effect until the earlier to occur of (i) the Effective Time; and (ii) the date on which the Confidentiality Agreement is terminated in accordance with its terms.  

(b)EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR IN ANY CERTIFICATE DELIVERED IN CONNECTION WITH THE CONSUMMATION OF THE MERGER, NEITHER PARENT AND MERGER SUB, ON THE ONE HAND, NOR THE COMPANY, ON THE OTHER HAND, MAKES ANY REPRESENTATIONS OR WARRANTIES, AND EACH PARTY HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES (EXPRESS OR IMPLIED), AS TO THE ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION MADE AVAILABLE WITH RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION, EXECUTION OR DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.  

(c)This Agreement is not intended, and shall not be deemed, to create any agreement of employment with any person, to confer any rights or remedies upon any person other than the parties hereto and their respective successors and permitted assigns or to otherwise create any third-party beneficiary hereto, except (i) with respect to the Indemnified Persons who are express third party beneficiaries of Section 6.8, (ii) after the Offer Closing, for Section 1.1(b), which is intended to be for the benefit of, and shall be enforceable by, each holder of Shares that

 

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validly tendered their Shares of Company Common Stock in the Offer, which holders are express third-party beneficiaries of Section 1.1 from and after the Offer Closing, (ii) after the Effective Time, which is intended to be for the benefit of, and shall be enforceable by, each holder of Company Common Stock to receive the Merger Consideration payable in accordance with Section 2.3, which holders are express third-party beneficiaries of Section 2.3, and (iii) after the Effective Time, for Section 2.5, which is intended to be for the benefit of, and shall be enforceable by, each holder an Company Option, Company RSU or Company PSU, as applicable, which holders are express third party beneficiaries of Section 2.5

Section 9.5Applicable Law; Jurisdiction.

(a)THIS AGREEMENT, AND ANY CLAIM, CAUSE OF ACTION OR LEGAL PROCEEDING (WHETHER AT LAW, IN CONTRACT OR IN TORT) THAT MAY BE BASED UPON, RELATED TO OR ARISE OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREUNDER) SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE CONFLICTS OF LAW PRINCIPLES; PROVIDED, HOWEVER, NOTWITHSTANDING THE FOREGOING, THE LAWS OF THE STATE OF NEVADA (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE CONFLICTS OF LAW PRINCIPLES) SHALL GOVERN (I) THE MERGER (INCLUDING THE CONSUMMATION AND EFFECTS THEREOF) TO THE EXTENT THE APPLICATION OF NEVADA LAW IS REQUIRED AND (II) THE FIDUCIARY OBLIGATIONS AND/OR OF THE COMPANY BOARD OR OF THE OFFICERS, EMPLOYEES OR AGENTS OF THE COMPANY.  The parties hereto hereby irrevocably submit to the personal jurisdiction of the Court of Chancery of the State of Delaware or, if such Court of Chancery shall lack subject matter jurisdiction, the federal of the United States of America or state court located in the County of New Castle, Delaware, solely in respect of the interpretation and enforcement of the provisions of (and any claim or cause of action arising under or relating to) this Agreement and of the documents referred to in this Agreement, and in respect of the Transactions, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims relating to such action, suit or proceedings shall be heard and determined in such courts.  The parties hereto hereby consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 9.8 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.

(b)EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT SUCH PARTY MAY HAVE TO A

 

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TRIAL BY JURY IN RESPECT OF ANY ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS.  EACH PARTY HEREBY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 9.5.

Section 9.6Specific Performance.

(a)The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties hereto do not perform the provisions of this Agreement (including any party hereto failing to take such actions as are required of it hereunder in order to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions.  The parties hereto acknowledge and agree that, subject to Section 8.4, (A) the parties hereto will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of this Agreement and to enforce specifically the terms and provisions hereof, including the right of a party to cause each other party to consummate the Offer, the Merger and the other transactions contemplated by this Agreement, in any court specified in Section 9.5(a); (B) the provisions of Section 8.4 are not intended to and do not adequately compensate Parent and Merger Sub for the harm that would result from a breach of this Agreement, and will not be construed to diminish or otherwise impair in any respect any party’s right to an injunction, specific performance and other equitable relief; and (C) the right of specific enforcement is an integral part of the Transactions and without that right, neither the Company nor Parent would have entered into this Agreement.

(b)The parties hereto hereby agree not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of this Agreement by any party hereto, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of any party under this Agreement.  Any party hereto seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each party hereto irrevocably waives any right that it may have to require the obtaining, furnishing or posting of any such bond or other security.  The parties hereto further agree that (i) by seeking the remedies provided for in this Section 9.6, a party hereto shall not in any respect waive its right to seek any other form of relief that may be available to a party under this Agreement in the event that this Agreement has been terminated or in the event that the remedies provided for in this Section 9.6 are not available or otherwise are not granted, and (ii) nothing set forth in this Section 9.6 shall require any party hereto to institute any proceeding for (or limit any party’s right to institute any proceeding for) specific performance under this Section 9.6 prior or as a condition to exercising

 

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any termination right under Article VIII (and pursuing damages after such termination), nor shall the commencement of any legal proceeding pursuant to this Section 9.6 or anything set forth in this Section 9.6 restrict or limit any party’s right to terminate this Agreement in accordance with the terms of Article VIII or pursue any other remedies under this Agreement that may be available then or thereafter.  It is explicitly agreed that, the Company shall have the right to an injunction, specific performance, or other equitable remedies in connection with enforcing Parent’s and Merger Sub’s obligations to consummate the Offer (including, subject to the satisfaction (or to the extent waivable, waiver by Parent (on behalf of Merger Sub)) of the Offer Conditions, Merger sub’s obligation to accept payment, and pay for, shares of Company Common Stock tendered in the Offer and the Merger, and the Parent’s obligation under this Agreement to cause the Financing to be funded, including by exercising its rights in accordance with the Equity Commitment Letter, subject to the terms and conditions set forth therein and herein.

Section 9.7[Reserved].

Section 9.8Assignment.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties hereto, and any attempt to make any such assignment without such consent shall be null and void, except that each of Parent and Merger Sub may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any Affiliate or Parent or one or more direct or indirect wholly owned Subsidiaries of Parent without the consent of the Company, but no such assignment shall relieve Parent or Merger Sub of any of its obligations under this Agreement.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns.

Section 9.9Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with proof of delivery), (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (c) If sent by email, on the date sent by e-mail if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient, or (d) when received by the addressee if sent by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.9):

if to Merger Sub or Parent:

c/o EW Healthcare Partners
Berkeley Square House, Berkeley Square
London, UK W1J 6BR
Email:  evis.hursever@ewhealthcare.com
Attention: Evis Hursever

 

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with a copy to (which copy shall not constitute notice):

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention:  Marshall P. Shaffer, P.C.; Michael Amalfe

Email: [***]; [***]

if to the Company:

TherapeuticsMD, Inc.
951 Yamato Road, Suite 220
Boca Raton, FL 33431
Email: [***]
Attention:  Marlan D. Walker, General Counsel

with a copy to (which copy shall not constitute notice):

DLA Piper LLP (US)
200 South Biscayne Boulevard, Suite 2500
Miami, FL 33131-5341
Attention:Joshua Samek
E-mail:[***]

and

845 Texas Avenue, Suite 3800
Houston, TX 77002-5005
Attention:J.A. Glaccum
E-mail:[***]

Section 9.10Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If a final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.

 

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Section 9.11Fees and Expenses.  Except as expressly provided for in this Agreement, including Section 1.2(a) and Section 6.4(a), all fees and expenses shall be paid by the Party incurring such fees or expenses, whether or not the Merger is consummated.

Section 9.12Construction.

(a)For purposes of this Agreement, whenever the context requires:  (i) the singular number shall include the plural, and vice versa; (ii) the masculine gender shall include the feminine and neuter genders; (iii) the feminine gender shall include the masculine and neuter genders; and (iv) the neuter gender shall include the masculine and feminine genders.

(b)The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c)As used in this Agreement, (i) the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation”, (ii) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”, (iii) the word “or” shall not be exclusive, (iv) the word “will” shall be construed to have the same meaning as the word “shall” and (v) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof.

(d)Except as otherwise indicated, all references in this Agreement to “Sections” and “Exhibits” are intended to refer to Sections of this Agreement and Exhibits to this Agreement.  The headings contained in this Agreement and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(e)The phrases “made available to”, “provided to,” “furnished to,” by the Company, and phrases of similar import when used in this Agreement, unless the context otherwise requires, means that a copy of the information or material referred to (i) has been provided by the Company to Parent, including by means of being provided for review in the Electronic Data Room, in connection with this Agreement (ii) has been filed by the Company in the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) Database for the SEC, in each case, as of 5 p.m. ET on the day immediately prior to the date hereof.

(f)When calculating the period of time before which, within which or after which any act is to be done or step taken pursuant to this Agreement, (i) the date that is the reference date in calculating such period shall be excluded and (ii) if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day. All references in this Agreement to a number of days are to such number of calendar days unless Business Days are specified.

(g)Unless otherwise specifically indicated, any reference in this Agreement to $ means U.S. dollars.

 

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(h)The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”

(i)References to a person are also to is permitted successors and assigns.

(j)References to any Law shall be deemed to refer to such Law as amended from time to time and to any rules or regulations promulgated thereunder

(k)When used herein, references to “ordinary course” or “ordinary course of business” will be construed to mean “ordinary course of business, consistent with past practices.”

Section 9.13Counterparts; Signatures.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the same counterpart.  This Agreement may be executed and delivered by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, or by combination of such means.

[Signature page follows]

 

68

 


 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

ATHENE PARENT, INC.

 

 

 

By:

 

/s/ Scott Barry

 

 

Name:

 

Scott Barry

 

 

Title:

 

Co-President

 

ATHENE MERGER SUB, INC.

 

 

 

By:

 

/s/ Scott Barry

 

 

Name:

 

Scott Barry

 

 

Title:

 

Co-President

 

THERAPEUTICSMD, INC.

 

 

 

By:

 

/s/ Hugh O’Dowd

 

 

Name:

 

Hugh O’Dowd

 

 

Title:

 

Chief Executive Officer

 

 

 

 

[Signature Page]

 

 


 

 

Exhibit A
Definitions

1.1Cross Reference Table.  The following terms defined elsewhere in this Agreement in the Sections set forth below will have the respective meanings therein defined.

Terms

Definition

Acceptable Confidentiality Agreement

Section 6.3(b)

Acceptance Time

Section 1.1(b)

Agreement Date

Preamble

Agreement

Preamble

Alternative Acquisition Agreement

Section 6.3(a)(iv)

Applicable Termination

Section 8.4(c)(i)

Balance Sheet

Section 4.5(c)

Capitalization Date

Section 4.2(a)

Capitalization Representations

Annex A

CBAs

Section 4.15

Certificates

Section 2.3(a)

Change of Recommendation

Section 6.3(d)(i)

Closing Date

Section 2.1(b)

Closing

Section 2.1(b)

Common Stock Merger Consideration

Section 2.2(a)

Company

Preamble

Company Board

Recitals

Company Board Recommendation

Section 4.3(b)

Company Charter Documents

Section 4.1

Company Disclosure Letter

Article IV

Company Financial Advisor

Section 4.8

Company Material Contract

Section 4.17(a)

Company Preferred Stock

Section 4.2(a)

Company PSU Merger Consideration

Section 2.5(c)

Company Registered Intellectual Property

Section 4.14(a)

Company RSU Merger Consideration

Section 2.5(b))

Company SEC Reports

Section 4.5(a)

Company Subsidiaries

Section 4.1

Company Termination Fee

Section 8.4(a)

Confidentiality Agreement

Section 6.13

Continuation Period

Section 6.11(a)

Covered Employees

Section 6.11(a)

D&O Insurance

Section 6.8(c)

Debt Financing

Section 6.7(a)

Determination Notice

Section 6.3(e)(ii)

Effective Time

Section 2.1(c)

Equity Interests

Section 4.2(b)

Exchange Agent

Section 2.3(a)

Exchange Fund

Section 2.3(a)

Expiration Date

Section 1.1(d)

 

Exhibit A-1

 


 

Fundamental Representations

Annex A

Government Antitrust Entity

Section 6.4(d)(ii)

Indemnified Persons

Section 6.8(a)

Initial Expiration Date

Section 1.1(d)

Insurance Policies

Section 4.16

Interim Period

Section 6.1

Leased Real Property

Section 4.18(b)

Legal Restraint

Section 7.1(b)

Merger Sub

Preamble

Merger

Recitals

Minimum Condition

Section 1.1(b)

Notice Period

Section 6.3(e)(ii)

NRS

Recitals

Offer

Recitals

Offer Closing

Section 1.1(b)

Offer Closing Date

Section 1.1(b)

Offer Commencement Date

Section 1.1(a)

Offer Conditions

Section 1.1(b)

Offer Documents

Section 1.1(f)

Offer Price

Recitals

Parent Employee Benefit Plan

Section 6.11(c)

Parent

Preamble

Permits

Section 4.12(c)

SEC

Section 4.5(a)

Shares

Recitals

Schedule TO

Section 1.1(f)

Schedule 14D-9

Section 1.2(a)

Surviving Corporation

Section 2.1(a)

Takeover Provisions

Section 4.21

Termination Date

Section 8.1(b)

Transaction Litigation

Section 6.9

Uncertificated Shares

Section 2.3(a)

Willful Breach

Section 8.3

 

1.2Certain Definitions.  The following terms, as used herein, have the following meanings, which meanings shall be applicable equally to the singular and plural of the terms defined:

“11th Amendment Effective Date” means the “Amendment Effective Date” as defined in the 11th Amendment.

11th Amendmentmeans the Eleventh Amendment to the Financing Amendment, entered into on the date of this Agreement and effective as of the 11th Amendment Effective Date.

Acquisition Proposal” means any bona fide written offer, proposal or similar indication of interest contemplating or otherwise relating to an Acquisition Transaction (other than an offer,

 

Exhibit A-2

 


 

proposal or similar indication of interest by Parent, Merger Sub or one of Parent’s other Subsidiaries).

Acquisition Transaction” means any transaction or series of related transactions (other than the Transactions) involving:  (i) any acquisition or purchase by any Person, directly or indirectly, of more than fifteen percent (15%) of any class of outstanding voting or equity securities of the Company, or any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such Person beneficially owning more than fifteen percent (15%) of the total voting power of the Company; (ii) any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving the Company and any Person; or (iii) any sale, lease, exchange, transfer or other disposition to any Person of assets of the Company representing more than fifteen percent (15%) of the consolidated assets, revenue or net income of the Company and the Company Subsidiaries (with assets being measured by the fair market value thereof); provided that, for the avoidance of doubt, all references to “Person” in this definition shall include any “group” as defined pursuant to Section 13(d) of the Exchange Act but shall exclude Parent or any of its Affiliates or Representatives.

Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.  The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Other than in the case of Section 4.10, Section 5.4, Section 5.9, Section 6.6 and Article VIII, in no event shall Parent or any of its Subsidiaries be considered an Affiliate of any portfolio company or investment fund managed by Essex Woodlands Services Co., Inc., nor shall any such portfolio company or investment fund be considered to be an Affiliate of Parent or any of its Subsidiaries.

Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977; the Anti-Kickback Act of 1986; the UK Bribery Act of 2010; and the Anti-Bribery Laws of the People’s Republic of China or any applicable Laws of similar effect, in each case, as amended and the related regulations and published interpretations thereunder; and any other anti-bribery, anti-corruption or anti-money laundering Laws promulgated by any Governmental Authority.

Antitrust Law” means the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, the HSR Act, and all other Laws, including merger control Laws and Foreign Antitrust Laws, prohibiting, limiting, or promulgated or intended to govern conduct having the purpose or effect of monopolization, restraint of trade, or substantial lessening of competition.

Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York or London, United Kingdom are authorized or required by Law to be closed for business.

CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act of 2020 (Pub. L. 116–136) (including any changes in state or local law that are analogous to provisions of

 

Exhibit A-3

 


 

the CARES Act or adopted to conform to the CARES Act), including the Paycheck Protection Program Flexibility Act (P.L.116-142).

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

Company Common Stock” means the common stock, par value $0.001 per share, of the Company.

Company Employee” means any employee or officer of the Company or any of the Company Subsidiaries.

Company Equity Awards” means the Company Options, Company RSUs and Company PSUs, issued under the Stock Plans.

Company ESPP” means the TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan.

Company Intellectual Property” means all of the Intellectual Property Rights owned or purported to be owned by the Company or any Company Subsidiary (whether solely or jointly with one or more other Persons) or exclusively licensed to the Company or any Company Subsidiary.

Company Intervening Event” means any event, development or change in circumstances that materially affects the business, assets or operations of the Company (other than any event, occurrence, fact or change primarily resulting from a breach of this Agreement by the Company) and that was neither known to the Company Board nor reasonably foreseeable as of or prior to the date of this Agreement, which event, occurrence, fact or change becomes known to the Company Board, other than (a) changes in the Company Common Stock price, in and of itself (however, the underlying reasons for such changes may constitute a Company Intervening Event), (b) any Acquisition Proposal or (c) the fact that, in and of itself, the Company exceeds any internal or published projections, estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself (however, the underlying reasons for such events may constitute a Company Intervening Event).

 

Exhibit A-4

 


 

Company Material Adverse Effect” means any event, effect, occurrence, fact, circumstance, condition or change that, individually or in the aggregate, has had or would be reasonably likely to (a) have a material adverse effect the business, operations, condition (financial or otherwise) or results of operations of the Company and the Company Subsidiaries or (b) prevent or materially delay the ability of the Company to consummate the Transactions; provided, however, that solely for purposes of clause (a), none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and except as provided below, none of the following shall be taken into account in determining whether there is, or would reasonably be likely to be, a Company Material Adverse Effect:

(i)general economic or political conditions (or changes or disruptions in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally;

(ii)conditions (or changes or disruptions in such conditions) generally affecting the industries in which the Company and Company Subsidiaries operate;

(iii)conditions (or changes or disruptions in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries, (B) any suspension of trading in equity, debt, derivative or hybrid securities, securities generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world, and (C) any decline in the price or trading volume of any security (including Company Common Stock) or any market index (provided that the underlying causes of such decline with respect to the Company Common Stock (subject to the other provisions of this definition) shall not be excluded);

(iv)political conditions (or changes or disruptions in such conditions) in the United States or any other country or region in the world or acts of war (whether or not declared), armed or unarmed hostilities or attacks, acts of terrorism, sabotage, or the escalation or worsening thereof in the United States or any other country or region in the world;

(v)(A) any actions taken by Parent or any of its controlled Affiliate, (B) any actions taken by the Company or the Company Subsidiaries to which Parent has requested in writing or (C) the Company taking any action expressly required by this Agreement or the Velocity Transaction Documents;

(vi)any changes in applicable Law (including COVID-19 Measures), accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof, in each case after the date hereof;

(vii)other than for purposes of Section 4.3(c) and Section 4.3(d) (but subject to disclosure in the Company Disclosure Letter for such Sections) and clause (c)(iii) of Annex A, the announcement, pendency or completion of this Agreement, including, to the extent resulting therefrom, (A) the identity of Parent, (B) the termination of (or the failure or potential failure to renew or enter into) any Contracts with customers, suppliers, distributors or other business partners

 

Exhibit A-5

 


 

and (C) any other negative development in the Company’s and the Company Subsidiaries’ relationships with any of their employees, customers, suppliers, distributors, or other business partners;

(viii)any natural hurricane, earthquake, flood, disaster, acts of God, pandemic (including COVID-19) or other force majeure events in the United States or any other country or region in the world; and

(ix)changes in the Company’s stock price or the trading volume of the Company’s stock, in and of itself, or any failure by the Company to meet any internal or published forecasts, estimates, projections or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period (provided that the underlying causes of such changes or failures (subject to the other provisions of this definition) shall not be excluded);

except in the case of clauses (i) through (iv), (vi) and (viii), to the extent that any such event, effect, occurrence, fact, circumstance, condition or change has a disproportionate adverse effect on the Company and the Company Subsidiaries, taken as whole, relative to the adverse effect such event, effect, occurrence, fact, circumstance, condition or change has on other companies operating in the industries in which the Company and the Company Subsidiaries operate.

Company Option” means an option to purchase shares of Company Common Stock pursuant to a Stock Plan or otherwise.

Company Plan” means an Employee Benefit Plan maintained, adopted, sponsored, contributed or required to be contributed to by the Company, any Company Subsidiary or any Entity with which the Company or any Company Subsidiary is considered a single employer under Section 414(b), (c) or (m) of the Code (a “Company ERISA Affiliate”) with respect to any current or former employee, officer or director of the Company or any of the Company Subsidiaries or any beneficiary or dependent thereof or with respect to which the Company, any of the Company Subsidiaries or any Company ERISA Affiliate would reasonably be expected to have any liability.

Company Product(s)” means any and all products that currently are in development, marketed, offered, sold, licensed, provided or distributed by, or on behalf of, the Company or any Company Subsidiary.

Company PSU” means restricted stock units issued pursuant to a Stock Plan or otherwise whose vesting is conditioned in full or in part based on achievement of performance goals or metrics.

Company RSU” means restricted stock units issued pursuant to a Stock Plan or otherwise.

Contract” means any agreement, contract, subcontract, lease, license, understanding, instrument, note, bond, mortgage, indenture, option, warranty, insurance policy, benefit plan or other legally binding commitment.

COVID-19” means SARS-CoV-2 or COVID-19, and all evolutions, variations or mutations thereof.

 

Exhibit A-6

 


 

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

Electronic Data Room” means the online data room located at https://ws.onehub.com/home.

Employee Benefit Plan” means (i) each “employee benefit plan” (as such term is defined in ERISA § 3(3)); and (ii) each other benefit or compensation plan, program, policy, Contract or arrangement, including any retirement, post-retirement, paid time-off, deferred compensation, profit sharing, unemployment compensation, welfare, fringe benefit, bonus, incentive, equity or equity-based compensation, severance, termination, retention, transaction bonus, employment, consulting or change in control plan, program, policy, Contract or arrangement (whether or not subject to ERISA § 3(3)).

Entity” means any corporation (including any non‑profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

Environmental Law” means any federal, state, local or foreign Law relating to pollution or protection of human health, worker health or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any law or regulation relating to emissions, discharges, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.

FDA” means the United States Food and Drug Administration.

FDA Fraud Policy” means the policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991).

Financing Agreement” means that certain Financing Agreement, dated as of April 24, 2019, by and among the Company, as borrower, certain other subsidiaries of the Company, various lenders party thereto from time to time and Sixth Street Specialty Lending, Inc. (f/k/a TPG Specialty Lending, Inc.), as amended, restated, supplemented or modified from time to time, including as amended by the Tenth Amendment and the 11th Amendment thereto, entered into on the date of this Agreement.

 

Exhibit A-7

 


 

Fraud” means the actual, knowing and intentional fraud of any Person in connection with the representations and warranties set forth in Article IV and Article V.

GAAP” means United States generally accepted accounting principles, applied on a consistent basis, as in effect from time to time.

Governmental Authority means any federal, state, local, international, multinational, supranational or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority, or any arbitrator, court or tribunal of competent jurisdiction.

Governmental Authorization” means any: (a) permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law; or (b) right under any Contract with any Governmental Authority.

Governmental Health Program” means any federal health program as defined in 42 U.S.C. § 1320a-7b(f), including Medicare, Medicaid, TRICARE, CHAMPVA, and state health care programs (as defined therein), and any health insurance program for the benefit of federal employees, including those under chapter 89 of title 5, United States Code.

Hazardous Materials” means any waste, material, or substance that is listed, regulated or defined under any Environmental Law and includes any pollutant, chemical substance, hazardous substance, hazardous waste, special waste, solid waste, asbestos, mold, radioactive material, polychlorinated biphenyls, petroleum or petroleum-derived substance or waste.

Health Authority” means the Governmental Authorities that administer Health Laws, including the FDA, Centers for Medicare and Medicaid Services, and the U.S. Department of Health and Human Services Office of Inspector General.

Health Law” means any Law applicable to the business of the Company or Company Products, or biopharmaceutical or health care products and services applicable to the Company or Company Products, including any applicable Law the purpose of which is to ensure the safety, efficacy and quality of biopharmaceutical products by regulating the research, development, manufacturing and distribution of such products, any applicable Law relating to the import or export of the Company Products, any applicable Law relating to good laboratory practices, good clinical practices, investigational use, product marketing authorization, manufacturing facilities compliance, packaging, good manufacturing practices, labeling, advertising, promotional practices, safety surveillance, record keeping and filing of required reports, and relating to promotion and sales of pharmaceutical products to providers and facilities that bill or submit claims to a Governmental Health Program or Payor, or any and all Laws relating to the regulation, provision, management, administration of, ordering or arranging for, or payment or reimbursement for any health care items or services, including,: (i) the Federal Food, Drug, and Cosmetic Act, as amended, 21 U.S.C. § 301 et seq., and all regulations and informal and formal guidance issued by the FDA pursuant thereto, (ii) the Public Health Service Act, (iii) the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), (iv) the False Claims Act (31 U.S.C. § 3729 et seq.), (v) the Exclusion

 

Exhibit A-8

 


 

Laws (42 U.S.C. §§ 1320a-7 and 1320a-7a), (vi) the Program Fraud Civil Remedies Act (31 U.S.C. §§ 3801-3812), (vii) the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), (viii) the Federal Health Care Fraud Law (18 U.S.C. § 1347), (ix) Physician Payments Sunshine Act (42 U.S.C. § 1320a–7h), (x) HIPAA, (xi) Medicare (Title XVIII of the Social Security Act), (xii) Medicaid (Title XIX of the Social Security Act), (xiii) the Occupational Safety and Health Act and (xiv) all applicable state privacy and confidentiality laws.

HIPAA” means the following, as the same may be amended, modified or supplemented from time to time, any successor statute thereto, and together with any and all rules or regulations promulgated from time to time thereunder: (i) the Health Insurance Portability and Accountability Act of 1996; and (ii) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009).

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

Indebtednessmeans, with respect to any Person, all indebtedness for borrowed money (including the issuance of any debt security) to any Person (other than the Company or its Subsidiary), other indebtedness of such Person evidenced by credit agreements, notes, bonds, indentures, securities, debentures or similar Contracts to any Person, and any obligations in respect of letters of credit and bankers’ acceptances (other than letters of credit used as security for leases) and all indebtedness of another Person referred to in clauses (a) through (c) above guaranteed by such Person.

Intellectual Property Rights” means any and all of the following (and all statutory and/or common law rights throughout the world in, arising out of, or associated with any of the following):  (i) all United States and foreign patents and utility models and applications therefor (including provisional applications) and all reissues, divisions, renewals, reexaminations, extensions, provisionals, substitutions, continuations, continuations in part  and equivalents thereof (collectively, “Patents”); (ii) all Trade Secrets; (iii) copyrights and copyrightable works, database and design rights, including data collections, and all other rights, including “moral” rights corresponding thereto in any works of authorship (including copyrights in Software), whether published or unpublished (collectively, “Copyrights”); (iv) all trademark rights and similar rights in trade names, trade dress, logos, trademarks and service marks, brand names, corporate names and other indicia of commercial source or origin, together with the goodwill associated with any of the foregoing (collectively, “Trademarks”); (v) all rights in databases and data collections (including knowledge databases, customer lists and customer databases); (vi) all rights to uniform resource locators, web site addresses and domain names (collectively, “Domain Names”); (vii) any similar, corresponding or equivalent rights to any of the foregoing; and (viii) any registrations of or applications to register any of the foregoing.

Investor” means, EW Healthcare Partners Fund 2 LP, a Delaware limited partnership.

IT Assets” means all computers (including, servers, firewalls, workstations, desktops, laptops and handheld devices), Software, websites, hardware, networks, firmware, middleware, routers, hubs, switches, data communications lines, data storage devices, information security and telecommunications capabilities, data centers, operating systems and all other information

 

Exhibit A-9

 


 

technology equipment and other similar or related items of information technology systems, hardware and infrastructure, in each of the foregoing, owned, licensed or used by or for the Company or any of the Company Subsidiaries.

Knowledge” means, with respect to the Company, the actual knowledge of those individuals set forth in Section 1.1(a) of the Company Disclosure. With respect to Company Intellectual Property, “Knowledge” or “Known” includes reasonable inquiry of such Person’s direct reports but does not require the Company to conduct, have conducted, obtain, review or have reviewed any freedom to operate opinions or similar opinions of counsel.

Law” means any statute, law, ordinance, regulation, rule, code, Order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

Legal Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or arbitration panel.

Licensed Intellectual Property” means all of the Intellectual Property Rights owned by a third party that is licensed to the Company or any Company Subsidiary pursuant to a written Contract to which Company or a Company Subsidiary is a party.

Lien” means any lien, pledge, hypothecation, charge, mortgage, security interest, option, right of first refusal or offer, preemptive right, encumbrance or community property interest of any kind or nature whatsoever.

Nasdaq” means The NASDAQ Global Market.

Object Code” means computer Software in binary form that, is intended to be directly executable by a computer after suitable processing and linking but without the intervening steps of compilation or assembly.

Order” means, with respect to any Person, any order, judgment, decision, decree, injunction, ruling, writ, assessment or other similar requirement issued, enacted, adopted, promulgated or applied by any Governmental Authority or arbitrator that is binding on or applicable to such Person.

Payor” means any and all Governmental Health Programs and all other health care service plans, health maintenance organizations, health insurers and/or other private, commercial, or governmental third-party payors.

Permitted Lien” means (i) mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business that are not due and payable or that are being contested in good faith by appropriate proceedings; (ii) Liens for Taxes that are not due and payable or that are being contested in good faith by appropriate and for which adequate reserves have been established in accordance with GAAP; (iii) other than with respect to Intellectual Property Rights, minor defects or irregularities in title, easements, rights-of-way, covenants, restrictions, and other, similar Liens that would not, individually or in the

 

Exhibit A-10

 


 

aggregate, reasonably be expected to materially impair the value of or continued use and operation of the properties and assets to which they relate; (iv) zoning, building and other similar Laws (excluding violations thereof); (v) Liens discharged at or prior to the Closing; (vi) statutory Liens to secure obligations to landlords, lessors or renters under leases or rental agreements that have not been breached; (vii) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by applicable Law; (viii) non-exclusive licenses to Intellectual Property Rights granted in the ordinary course of business; and (ix) non-monetary Liens (excluding Liens on Intellectual Property Rights) that do not, individually or in the aggregate, materially interfere with the use, operation or transfer of, or any of the benefits of ownership of, the property of the Company and the Company Subsidiaries, taken as a whole.

Person” means any individual, Entity or Governmental Authority.

Personal Data” means (i) any information defined as “personal data”, “personally identifiable information” or “personal information” under any Privacy and Data Security Requirement, (ii) any information that, alone or in combination with other information, can reasonably be used to identify an individual natural person or relating to an identified or identifiable natural person, directly or indirectly, including name, a unique identification number, government-issued identifier (including Social Security number and driver’s license number), physical address, gender and date of birth and (iii) individually identifiable health information constituting “protected health information” as defined under 45 C.F.R. § 160.103.  Personal Data that has been pseudonymized shall also be considered Personal Data to the extent treated as such under any Privacy and Data Security Requirement.

Privacy and Data Security Requirements” means (i) any Laws and self-regulatory guidelines (including of any applicable foreign jurisdiction) regulating the Processing of Personal Data, (ii) obligations under all Contracts to which the Company or any of the Company Subsidiaries is a party that relate to Personal Data and (iii) all of the Company’s and the Company Subsidiaries’ internal and publicly posted policies and notices (including if posted on the Company’s or the Company Subsidiaries’ products or services) regarding the Processing of Personal Data.

Process” or “Processing” with regard to Personal Data or IT Systems means the collection, receipt, use, storage, safeguarding, securing (technical, physical or administrative), maintenance, retention, transmission, access, processing, recording, distribution, transfer (including cross-border), sharing, import, export, protection (including security measures), deletion, disposal or disclosure or other activity regarding or performed on Personal Data or IT Systems (whether electronically or in any other form or medium).

Real Property Leases” means the leases, subleases, licenses and occupancy agreements, together with all amendments thereto, underlying the Leased Real Property or otherwise affecting the Leased Real Property.

Registered Intellectual Property” means all United States, international and foreign:  (i) Patents; (ii) Trademarks; (iii) Copyrights; (iv) Domain Names; and (v) any other material

 

Exhibit A-11

 


 

Intellectual Property Rights, in each case, that are the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Authority.

Regulatory Permits” means any and all licenses, franchises, permits, certificates, certifications, qualifications, notices, waivers, privileges, consents, approvals, clearances, enrollments, accreditations, letters of non-reviewability, certificates of need,  supplier or provider numbers, exemptions, registrations, listing, concessions or other authorizations required to have been obtained from or submitted to, or filings required to have been made with, Governmental Authorities pursuant to a Health Law material to the operation of the business of the Company and Company Subsidiaries.

Release” means any presence, emission, spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal, migration, or release of Hazardous Materials from any source into or upon the environment, including the air, soil, improvements, surface water, groundwater, the sewer, septic system, storm drain, publicly owned treatment works, or waste treatment, storage, or disposal systems.

Representatives” means officers, directors, employees, agents, attorneys, accountants, advisors and investment bankers.

Sanctioned Country” means any country or region or government thereof that is, or has been in the last five years, the subject or target of a comprehensive embargo under Trade Control Laws (including Cuba, Iran, North Korea, Syria, Venezuela, and the Crimea, Donetsk, and Luhansk regions of Ukraine).

 

Sanctioned Person” means any Person that is the subject or target of sanctions or restrictions under Trade Control Laws including: (i) any Person listed on any U.S. or non-U.S. sanctions- or export-related restricted party list, including the U.S. Department of the Treasury Office of Foreign Assets Control’s (“OFAC”) List of Specially Designated Nationals and Blocked Persons, or any other sanctions- or export-related restricted party list maintained by OFAC, the U.S. Department of Commerce Bureau of Industry and Security, or the U.S. Department of State; (ii) any Person that is, in the aggregate, 50 percent or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (i); or (iii) any Person located, organized, or resident in or a national of a Sanctioned Country.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended and the regulations promulgated thereunder.

Securities Act” means the Securities Act of 1933, as amended, and the regulations promulgated thereunder.

Software” means any and all (i) computer programs, applications, files, user interfaces, application programming interfaces, diagnostics, software development tools and kits, templates, menus, analytics and tracking tools, compilers, libraries, version control systems, operating systems, including any and all software implementations of algorithms, models and methodologies for any of the foregoing, whether in Source Code, Object Code or other form, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or

 

Exhibit A-12

 


 

otherwise, (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing and (iv) all user documentation, including user manuals and training materials, relating to any of the foregoing.

Source Code” means computer Software and code, in form other than Object Code or machine readable form, including related programmer comments and annotations, help text, data and data structures, instructions and procedural, object-oriented and other code, which may be printed out or displayed in human readable form.

Stock Plans” means, collectively, the TherapeuticsMD, Inc. 2009 Long Term Incentive Compensation Plan, the TherapeuticsMD, Inc. Amended and Restated 2012 Stock Incentive Plan, and the TherapeuticsMD, Inc. 2019 Stock Incentive Plan, each as amended.

Subsidiary” An Entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns, beneficially or of record:  (a) an amount of voting securities of other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity’s board of directors or other governing body; or (b) a majority of the outstanding equity or financial interests of such Entity.

Superior Proposal” means a bona fide written Acquisition Proposal that did not result from a breach of Section 6.3 and if consummated would result in a Person owning, directly or indirectly, (a) more than 60% of the outstanding shares of the Company Common Stock or (b) more than 60% of the assets of the Company and the Company Subsidiaries, taken as a whole, in either case, which the Company Board determines in good faith, after consultation with its financial advisor and outside legal counsel: (i) to be reasonably likely to be consummated if accepted; and (ii) if consummated, would result in a transaction more favorable to the Company’s stockholders from a financial point of view than the Merger, in each case, taking into account at the time of determination (A) any changes to the terms of this Agreement offered by Parent in response to such Acquisition Proposal and (B) taking into account such financial, regulatory, legal and all other relevant aspects of such Acquisition Proposal (including the likelihood of such Acquisition Proposal to be consummated on a timely basis).

Tax” means any U.S. federal, state, local or non-U.S. tax (including, without limitation, any income tax, franchise tax, license tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated tax, unemployment tax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, premium tax, windfall profits tax, withholding tax, social security tax, or payroll tax), levy, assessment, tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty, interest or addition thereto), imposed, assessed or collected by or under the authority of any Governmental Authority.

Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax.

 

Exhibit A-13

 


 

Trade Control Laws” means all export, reexport, transfer, and import control Laws; U.S. anti-boycott Laws; and U.S. and applicable non-U.S. Laws relating to economic or trade sanctions, including the Laws administered or enforced by the United States (including by OFAC or the U.S. Department of State) and the United Nations Security Council.

Trade Secrets” means any and all inventions (whether or not patentable, reduced to practice or made the subject of a pending patent application), invention disclosures and improvements, all trade secrets, proprietary information, know-how and technology, Source Code, confidential or proprietary information, including ideas, compositions, research and development information, processes, specifications, designs, plans, proposals and all documentation and materials therefore.

Transactions” means the Merger and the other transactions contemplated by this Agreement.

Unvested Company Option” means a Company Option (or portion thereof) that is unvested as of immediately prior to the Effective Time.

Vested Company Option” means a Company Option (or portion thereof) that is vested as of immediately prior to the Effective Time.

vitaCare” means vitaCare Prescription Services, Inc., a Florida corporation.

vitaCare Agreement” means that certain Stock Purchase Agreement, dated March 6, 2022, by and between vitaCare Buyer and the Company, as may be amended from time to time.

vitaCare Buyer” means Good RX, Inc., a Delaware Corporation.

vitaCare Other Transaction Document” means each of the Transaction Documents (as defined in the vitaCare Agreement).

vitaCare Transaction” means the transactions contemplated by the vitaCare Transaction Documents.

vitaCare Transaction Documents” means, collectively, the vitaCare Agreement and the vitaCare Other Transaction Documents.

Warrants” means any outstanding and unexpired warrants to acquire Company Common Stock issued pursuant to the Warrant Documentation.

Warrant Documentation” means the applicable warrant, common stock purchase warrant or similar instrument or agreement granting Warrants of the Company Common Stock..

 

 

 

Exhibit A-14

 


 

 

Exhibit B
AMENDED AND RESTATED
ARTICLES of Incorporation of the Surviving Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

SECOND AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

THERAPEUTICSMD, INC.

 

ARTICLE I
NAME

The name of the corporation is TherapeuticsMD, Inc. (the “Corporation”).

ARTICLE II
purpose

The Corporation is formed for the purpose of engaging in any lawful activity for which corporations may be organized under the laws of the State of Nevada.

ARTICLE III
AUTHORIZED CAPITAL STOCK

The total authorized capital stock of the Corporation shall consist of One Thousand (1,000) shares of common stock, par value $0.001 per share.

ARTICLE IV
DIRECTORS

The members of the governing board of the Corporation are styled as directors.  The Board of Directors shall be elected in such manner as shall be provided in the bylaws of the Corporation.  The number of directors may be changed from time to time in such manner as provided in the bylaws of the Corporation.

ARTICLE V

INDEMNIFICATION; EXCULPATION

A.The liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the Nevada Revised Statutes (“NRS”).  If the NRS is amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors or officers, the liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS, as so amended from time to time.  

B.In addition to any other rights of indemnification permitted by the laws of the State of Nevada or as may be provided for by the Corporation in its bylaws or by agreement, the expenses of directors and officers incurred in defending a civil or criminal action, suit or proceeding, involving alleged acts or omissions of such directors or officers in their respective capacities as directors or officers of the Corporation must be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay

 


 

the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation.

C.

Any repeal or modification of this Article V approved by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the liability of a director or officer of the Corporation existing as of the time of such repeal or modification.  In the event of any conflict between this Article V and any other article of the Corporation’s articles of incorporation, the terms and provisions of this Article V shall control.

ARTICLE VI

SPECIAL PROVISIONS REGARDING DISTRIBUTIONS

Notwithstanding anything to the contrary in the articles of incorporation or the bylaws of the Corporation, the Corporation is hereby specifically allowed to make any distribution that otherwise would be prohibited by NRS 78.288(2)(b).

 

***

 

 

 


 

 

ANNEX A

CONDITIONS to the OFFER

Capitalized terms used in this Annex A and not otherwise defined herein will have the meanings assigned to them in the Agreement and Plan of Merger to which it is attached (the “Agreement”).

Notwithstanding any other term of the Offer or this Agreement, Merger Sub shall not be required to, and Parent shall not be required to cause Merger Sub to, accept for payment or, subject to any applicable rules and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act (relating to the obligation of Merger Sub to pay for or return tendered Shares promptly after termination or withdrawal of the Offer)), to pay for any Shares validly tendered and not validly withdrawn prior to any then-scheduled Expiration Date in connection with the Offer if:

(a) the Minimum Condition is not satisfied; or

(b) any of the following conditions shall exist as of the Expiration Date:

(i) the representations and warranties of the Company set forth in Section 4.2(a) and Section 4.2(b) of the Agreement (the “Capitalization Representations”) shall not be true and correct as of the Agreement Date and as of the Expiration Date with the same force and effect as if made on and as of such date, except for any de minimis inaccuracies (it being understood that the accuracy of those representations and warranties that address matters only as of a specified date shall be measured as set forth in this clause (c)(i) only as of such date);

(ii) (A) The representations and warranties of the Company set forth in Section 4.1, Section 4.3(a), Section 4.3(b), and Section 4.8 of the Agreement (the “Fundamental Representations) shall not be true and correct in all material respects as of the Agreement Date and as of the Expiration Date with the same force and effect as if made on and as of such date, (it being understood that the accuracy of those representations and warranties that address matters only as of a specified date shall be measured as set forth in this clause (c)(ii) only as of such date); and (B) the representations and warranties of the Company set forth in Section 4.6(c) shall be true and correct in all respects as of the Agreement Date and as of the Expiration Date with the same force and effect as if made on and as of such date;

(iii) The representations and warranties of the Company set forth in the Agreement (other than the Capitalization Representations, the Fundamental Representations and the representations and warranties set forth in Section 4.6(c)) shall not be true and correct as of the Agreement Date and as of the Expiration Date with the same force and effect as if made on and as of such date, except for any failure to be so true and correct which has not had, or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (it being understood that the accuracy of those representations and warranties that address matters only as of a specified date shall be measured as set forth in this clause (c)(iii) only as of such date); provided, however, that for

 


 

purposes of determining the accuracy of the representations and warranties of the Company set forth in this Agreement for purposes of this clause (c)(iv), all qualifications in the representations and warranties based on a “Company Material Adverse Effect” and all materiality qualifications and other qualifications based on the word “material” or similar phrases (but not dollar thresholds) contained in such representations and warranties shall be disregarded;

(iv) the Agreement shall have been terminated in accordance with its terms;

(v) the Company shall not have complied with or performed in all material respects its covenants, agreements and obligations required to be complied with or performed by it on or prior to the Expiration Time under the Agreement;

(vi) since the date hereof, there has been any event, effect, occurrence, fact, circumstance, condition or change that, individually or in the aggregate, has had or would be reasonably likely to have a Company Material Adverse Effect;

(vii) the Company shall not have delivered to Parent a certificate, signed on behalf of the Company by its chief executive officer and chief financial officer, to the effect that the conditions set forth in clauses (i), (ii), (iii), (v) and (vi) of paragraph (c) above shall not have occurred and be continuing as of immediately prior to the Expiration Date;

(viii) there is any “Default” or “Event of Default” (as such terms are defined in the Financing Agreement) that has occurred, is continuing to occur under, and has not been waived by the requisite parties to the Financing Agreement; and

(ix) a Governmental Authority of competent jurisdiction has announced, enacted, issued, promulgated, entered, enforced or deemed applicable to the Merger any applicable Law, or issued or granted any Legal Restraint that is in effect and that has the effect of making the consummation of the Offer or the Merger illegal or which has the effect of prohibiting, enjoining, preventing or restraining the consummation of the Offer or the Merger.

The foregoing conditions shall be in addition to, and not a limitation of, the rights and obligations of Merger Sub and Parent to extend, terminate or modify the Offer pursuant to the terms and conditions of the Agreement. The foregoing conditions are for the sole benefit of Merger Sub and Parent and, subject to the terms and conditions of the Agreement and applicable Law, may be waived by Merger Sub or Parent, in whole or in part at any time and from time to time prior to the Expiration Date in the sole discretion of Merger Sub or Parent (other than the Minimum Condition, which may be waived by Merger Sub and Parent only with the prior written consent of the Company). The failure by Merger Sub or Parent at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time, subject to the applicable rules and regulations of the SEC.

 

txmd-ex101_30.htm

Exhibit 10.1

 

AMENDMENT NO. 10
TO FINANCING AGREEMENT

AMENDMENT NO. 10 TO FINANCING AGREEMENT, dated as of May 27, 2022 (this “Amendment”), to the Financing Agreement, dated as of April 24, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), by and among THERAPEUTICSMD, INC., a Nevada corporation (“Company” or “Borrower”), certain Subsidiaries of Borrower, as Guarantors, the Lenders from time to time party thereto, and SIXTH STREET SPECIALTY LENDING, INC., a Delaware corporation (“Sixth Street”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”).

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend certain terms and conditions of the Financing Agreement; and

WHEREAS, the Administrative Agent and the Lenders are willing to amend such terms and conditions of the Financing Agreement on the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.   Definitions.  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.  

2.   Amendments.  

(a)   New Definitions.  Section 1.01 of the Financing Agreement is hereby amended by adding the following definitions, in appropriate alphabetical order:

(i) ““Amendment No. 10” means Amendment No. 10 to Financing Agreement, dated as of May 27, 2022, by and among the Loan Parties, the Administrative Agent and the Lenders.”

(ii)““Amendment No. 10 Effective Date” means the “Amendment Effective Date” as set forth in Amendment No. 10.”

(iii)““Amendment No. 10 PIK Fee” means $1,780,000, which will be paid in kind by being added to the principal balance of the Term Loans on the Amendment No. 10 Effective Date.”

(iv)““Merger Agreement” shall have the meaning set forth in Amendment No. 10.”

 


 

(b)   Existing Definitions.  Section 1.01 of the Financing Agreement is hereby amended as follows:

(i)The definition of “Obligations” is hereby amended and restated to read as follows:

““Obligations” means all obligations of every nature of each Loan Party and its Subsidiaries from time to time owed to the Administrative Agent (including former Administrative Agents), the Lenders or any of them, under any Loan Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Loan Party, would have accrued on any Obligation, whether or not a claim is allowed against such Loan Party for such interest in the related bankruptcy proceeding), fees (including, (i) the Amendment No. 9 PIK Fee but excluding the Waivable Portion of Amendment No. 9 PIK Fee and (ii) the Amendment No. 10 PIK Fee), expenses, indemnification or otherwise and whether primary, secondary, direct, indirect, contingent, fixed or otherwise (including obligations of performance).”

(ii)The definition of “Term Loan Maturity Date” is hereby amended and restated to read as follows:

““Term Loan Maturity Date” means the earlier of (a) July 13, 2022 and (b) the date that the Term Loan shall become due and payable in full hereunder, whether by acceleration or otherwise.”

(c)   Section 2.4 (Interest).  Section 2.4 of the Financing Agreement is hereby amended as follows:

(i)Clause (e) is hereby amended and restated to read as follows:

“(e)Interest on each Term Loan shall be payable in cash and in arrears (i) upon any prepayment of that Term Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid and (ii) on the Term Loan Maturity Date.”

(ii)Clause (f) is hereby amended and restated to read as follows:

“(f) From and after the Amendment No. 9 Effective Date  interest will accrue and be payable on the Amendment No. 9 PIK Fee other than the Waivable Portion of the Amendment No. 9 PIK Fee.”

(iii)By adding the following new paragraph (g) to read as follows:

“(g)From and after the Amendment No. 10 Effective Date interest will accrue and be payable on the Amendment No. 10 PIK Fee.”

(d)   Section 5.15 (Milestones). Section 5.15 of the Financing Agreement is hereby deleted in its entirety.

 


 

(e)   Section 6.8(a) (Minimum Qualified Cash).  Section 6.8(a) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

“(a)  Minimum Qualified Cash.  Borrower shall not permit Qualified Cash to be less than $10,000,000 at any time.”

(f)   Event of Default. A new Section 8.1(p) is hereby added to the Financing Agreement to read as follows:

“(p)  Termination of Merger or Tender Offer.  (i) The Merger Agreement shall have terminated for any reason or (ii) the public tender offer commenced by Athene Merger Sub, Inc., a Nevada corporation (“Merger Sub”), for all of the Borrower’s outstanding common stock shall not have commenced by June 10, 2022, or, after having been commenced, shall have terminated or been withdrawn.”

3.   Conditions to Effectiveness.  This Amendment shall become effective only upon satisfaction in full, in a manner satisfactory to the Administrative Agent, of the following conditions precedent on or before June 1, 2022 (the first date on or before June 1, 2022 upon which all such conditions shall have been satisfied being hereinafter referred to as the “Amendment Effective Date”):

(a)   Payment of Fees, Etc.  The Borrowers shall have paid on or before the Amendment Effective Date (i) the Amendment No. 10 PIK Fee, which fee shall be fully earned, due and payable to Administrative Agent on the Amendment Effective Date and added to the principal amount of the Term Loan, and (ii) all fees, costs, expenses and taxes then payable, if any, pursuant to Section 2.7 or 10.2 of the Financing Agreement.

(b)   Representations and Warranties.  The representations and warranties contained in this Amendment and in Article IV of the Financing Agreement and in each other Loan Document (with the exception of the representations and warranties made in Sections 4.5, 4.9, 4.19 and 4.23(d) of the Financing Agreement) shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as the Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date.

(c)   No Default; Event of Default.  No Default or Event of Default shall have occurred and be continuing on the Amendment Effective Date or result from this Amendment becoming effective in accordance with its terms.

 


 

(d)   Delivery of Documents.  The Administrative Agent shall have received on or before the Amendment Effective Date:

(i)this Amendment, duly executed by the Loan Parties, the Administrative Agent and the Lenders;

(ii)a copy of the Agreement and Plan of Merger by and among the Borrower, Athene Parent, Inc., a Nevada corporation (“Parent”), and Merger Sub, a wholly owned direct subsidiary of Parent, dated May 27, 2022 (the "Merger Agreement") and each material document related thereto, including the documents for the Tender Offer (collectively, the "Merger Documents"), duly executed by each of the parties thereto; and

(iii)Amendment No. 11 to the Financing Agreement (“Amendment No. 11”), duly executed by the Loan Parties, the Administrative Agent and the Lenders.

(e)   Liens; Priority.  The Administrative Agent shall be satisfied that the Administrative Agent has been granted, and holds, for the benefit of the Administrative Agent and the Lenders, a perfected, first priority Lien on and security interest in all of the Collateral, subject only to Permitted Liens, to the extent such Liens and security interests are required pursuant to the Loan Documents to be granted or perfected on or before the Amendment Effective Date.

(f)   Approvals.  All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person required in connection with any Loan Document or the transactions contemplated thereby or the conduct of the Loan Parties’ business shall have been obtained or made and shall be in full force and effect.  There shall exist no claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or derivative litigation) pending or, to the knowledge of any Loan Party, threatened in any court or before any arbitrator or Governmental Authority which (i) relates to the Loan Documents or the transactions contemplated thereby or (ii) could reasonably be expected to have a Material Adverse Effect.

4.   Continued Effectiveness of the Financing Agreement and Other Loan Documents.  Each Loan Party hereby (a) acknowledges and consents to this Amendment, (b) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Amendment Effective Date, all references in any such Loan Document to “the Financing Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended by this Amendment, and (c) confirms and agrees that, to the extent that any such Loan Document purports to assign or pledge to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, or to grant to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, a security interest in or Lien on any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect

 


 

of the Financing Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects.  This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of Financing Agreement or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under the Financing Agreement or any other Loan Document nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.

5.   No Novation.  Nothing herein contained shall be construed as a substitution or novation of the Obligations outstanding under the Financing Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby.  

6.   No Representations by Administrative Agent or Lenders.  Each Loan Party hereby acknowledges that it has not relied on any representation, written or oral, express or implied, by Administrative Agent or any Lender, other than those expressly contained herein, in entering into this Amendment.

7.   Release.  Each Loan Party hereby acknowledges and agrees that:  (a) neither it nor any of its Subsidiaries has any claim or cause of action against Administrative Agent or any Lender (or any of the directors, officers, employees, agents, attorneys or consultants of any of the foregoing) and (b) the Administrative Agent and the Lenders have heretofore properly performed and satisfied in a timely manner all of their obligations to the Loan Parties, and all of their Subsidiaries and Affiliates.  Notwithstanding the foregoing, the Administrative Agent and the Lenders wish (and the Loan Parties agree) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of their rights, interests, security and/or remedies.  Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Loan Party (for itself and its Subsidiaries and Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release, waive and forever discharge the Administrative Agent and the Lenders, together with their respective Affiliates and Related Funds, and each of the directors, officers, employees, agents, attorneys and consultants of each of the foregoing (collectively, the “Released Parties”), from any and all debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done, in each case, on or prior to the Amendment Effective Date directly arising out of, connected with or related to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of Administrative Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of any Loan Party, or the making of any Loans or other advances, or the management of such Loans or other advances or the Collateral.  Each Loan Party represents and warrants that it has no knowledge of any claim by any Releasor

 


 

against any Released Party or of any facts or acts or omissions of any Released Party which on the date hereof would be the basis of a claim by any Releasor against any Released Party which would not be released hereby.  

8.   Estoppel; Term Loan.  To induce the Administrative Agent and the Lenders to enter into this Amendment, each Loan Party hereby acknowledges and agrees that there exists no Default or Event of Default as of the Amendment Effective Date. Each Loan Party hereby acknowledges and agrees that as of the Amendment Effective Date (after giving effect to the effectiveness of this Amendment No. 10 and the payment in kind of the Amendment No. 10 PIK Fee), the outstanding principal amount of the Term Loan is $90,780,000 and no right of offset, defense, counterclaim or objection exists in favor of any Loan Party as against Administrative Agent or any Lender with respect to the Obligations.

9.   Further Assurances. The Loan Parties shall execute any and all further documents, agreements and instruments, and take all further actions, as may be required under applicable law or as Administrative Agent may reasonably request, in order to effect the purposes of this Amendment.

10.   Expenses. Notwithstanding anything to the contrary contained herein or in the Financing Agreement (including, for the avoidance of doubt, Section 10.2 thereof), the amount of out-of-pocket fees, costs, expenses and disbursements of counsel required to be paid or reimbursed by the Loan Parties in connection with (a) the preparation for any bankruptcy,  liquidation or similar reorganization and/or (b) any discussions with the Administrative Agent and the Lenders (or their respective representatives) with respect to any such bankruptcy, liquidation or similar reorganization; in each case for the period through and including (but not after) the Amendment Effective Date (as defined in Amendment No. 11), shall not exceed $500,000 in the aggregate.

11.   Miscellaneous.

(a)   This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.  

(b)   Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

(c)   This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

(d)   Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Financing Agreement.  Accordingly, it shall be an immediate Event of Default under the Financing Agreement if (i) any representation or warranty made by any Loan Party under or in connection with this Amendment shall have been incorrect in any respect when made or deemed made, or (ii)

 


 

any Loan Party shall fail to perform or observe any term, covenant or agreement contained in this Amendment.

(e)   Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

[Remainder of page intentionally left blank.]

 

 

 


 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

BORROWER:

 

THERAPEUTICSMD, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Michael C. Donegan

Name:

 

Michael C. Donegan

Title:

 

Interim Chief Financial Officer, Chief

Accounting Officer and Vice President Finance

 

 

GUARANTORS:

 

VITAMEDMD, LLC

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Hugh O’Dowd  

Name:

 

Hugh O’Dowd

Title:

 

Manager

 

 

BOCAGREENMD, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Hugh O’Dowd

Name:

 

Hugh O’Dowd

Title:

 

Chief Executive Officer

 

 


 

 

 

SIXTH STREET SPECIALTY LENDING, INC., as Administrative Agent and Lender

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Joshua Easterly

 

 

Name:

 

Joshua Easterly

 

 

Title:

 

Chief Executive Officer

 

 

 

 

 

 

 

TOP IV TALENTS, LLC, as Lender

 

 

 

 

 

 

By:

 

/s/ Steven S. Pluss

 

 

Name:

 

Steven S. Pluss

 

 

Title:

 

Vice President

 

 

 

 

 

 

 

TAO TALENTS, LLC, as Lender

 

 

 

 

 

 

By:

 

/s/ Steven S. Pluss

 

 

Name:

 

Steven S. Pluss

 

 

Title:

 

Vice President

 

 

 

 

 

 

 

txmd-ex102_90.htm

Exhibit 10.2

 

AMENDMENT NO. 11
TO FINANCING AGREEMENT

AMENDMENT NO. 11 TO FINANCING AGREEMENT, dated as of May 27, 2022 (this “Amendment”), to the Financing Agreement, dated as of April 24, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), by and among THERAPEUTICSMD, INC., a Nevada corporation (“Company” or “Borrower”), certain Subsidiaries of Borrower, as Guarantors, the Lenders from time to time party thereto, and SIXTH STREET SPECIALTY LENDING, INC., a Delaware corporation (“Sixth Street”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”).

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend certain terms and conditions of the Financing Agreement; and

WHEREAS, the Administrative Agent and the Lenders are willing to amend such terms and conditions of the Financing Agreement on the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.

Definitions.  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.

2.

Amendments.

(a)

Amended Financing Agreement.  The Financing Agreement is hereby amended (i) to delete the red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and (ii) to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: double-underlined text and double-underlined text), in each case, as set forth in the marked copy of the Financing Agreement attached as Annex A hereto and made a part hereof for all purposes.

(b)

Exhibit.  The Financing Agreement is hereby amended to insert a new Exhibit A-2 (Conversion/Continuation Notice) to the Financing Agreement with such replacement exhibit set forth on Annex B hereto.

(c)

Schedules. The schedules to the Financing Agreement may be updated as provided in Annex A, with such updates being reasonably acceptable to the Administrative Agent.

3.

Conditions to Effectiveness.  Section 2 of this Amendment shall become effective only upon satisfaction in full of the following conditions precedent on or before July 13, 2022 (the first date on or before July 13, 2022, upon which all such conditions shall have been satisfied being hereinafter referred to as the “Amendment Effective Date”):

(a)

Payment of Fees, Etc.  The Borrower shall have paid in cash (x) all accrued and unpaid interest on the Obligations through and including the Amendment Effective Date and (y) all fees, costs, expenses and taxes then payable pursuant to Section 2.7 or 10.2 of the Financing Agreement.

(b)

No Event of Default.  No Event of Default shall have occurred and be continuing on the Amendment Effective Date or result from this Amendment becoming effective in accordance with its terms.

 

 


 

 

(c)

Delivery of Documents.  The Administrative Agent shall have received:

(i)

this Amendment, duly executed by the Loan Parties, the Administrative Agent and the Lenders (it being further agreed that the condition precedent set forth in this clause (c)(i) was satisfied on the date hereof);

(ii)

the Second Amended and Restated Fee Letter, dated as of the date hereof, duly executed by the Borrower and the Administrative Agent (it being further agreed that the condition precedent set forth in this clause (c)(ii) was satisfied on the date hereof);

(iii)

the Capital Call Agreement, dated as of the Amendment Effective Date, duly executed by EW Healthcare Partners Fund 2, L.P., a Delaware limited partnership (the “Shareholder”), the Borrower and the Administrative Agent, in form attached hereto as Exhibit A or as modified in a manner reasonably acceptable to the Borrower and the Administrative Agent;

(iv)

the Pledge Agreement, dated as of the Amendment Effective Date, in form attached hereto as Exhibit B or as modified in a manner reasonably acceptable to the Borrower and the Administrative Agent, duly executed by Athene Parent, Inc., a Nevada corporation (“Holdings”), with respect to the pledge of 100% of the Capital Stock of the Borrower, together with the original certificates representing all of the Capital Stock required to be pledged thereunder, accompanied by undated powers executed in blank and other proper instruments of transfer; and

(v)

a customary opinion of counsel to the Shareholder, with respect to the Capital Call Agreement, and a customary opinion of counsel to Holdings, with respect to the Pledge Agreement, in each case, dated as of the Amendment Effective Date and otherwise in form and substance reasonably satisfactory to Administrative Agent.

(e)

The Merger. The  Merger shall have been  consummated in accordance with the terms of the Merger Agreement without any amendments, modifications or waivers to the Merger Agreement that are materially adverse to the interests of the Lenders (except for those delivered to and consented to by the Administrative Agent, such consent not to be unreasonably withheld, delayed or conditioned), it being understood that, without limitation to the foregoing, (A) any reduction in the total consideration payable under the Merger Agreement that is equal to or greater than 10% of the total consideration payable thereunder, or (B) any increase in or waiver of the Minimum Condition (as defined in the Merger Agreement), in each case, shall be deemed materially adverse to the interests of the Lenders.

(f)

Liens; Priority. The Administrative Agent shall be satisfied that the Administrative Agent has been granted, and holds, for the benefit of the Administrative Agent and the Lenders, a perfected, first priority Lien on and security interest in all of the Collateral, subject only to Permitted Liens, to the extent such Liens and security interests are required pursuant to the Loan Documents to be granted or perfected on or before the Amendment Effective Date.

4.

Continued Effectiveness of the Financing Agreement and Other Loan Documents. Each Loan Party hereby (a) acknowledges and consents to this Amendment, (b) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Amendment Effective Date, all references in any such Loan Document to “the Financing Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended by this Amendment, and (c) confirms and agrees that, to the extent that any such Loan Document purports to assign or pledge to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, or to grant to the Administrative Agent, for the benefit

 

 


 

of the Administrative Agent and the Lenders, a security interest in or Lien on any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect of the Financing Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects.  This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of Financing Agreement or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under the Financing Agreement or any other Loan Document nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.

5.

No Novation.  Nothing herein contained shall be construed as a substitution or novation of the Obligations outstanding under the Financing Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby.  

6.

No Representations by Administrative Agent or Lenders.  Each Loan Party hereby acknowledges that it has not relied on any representation, written or oral, express or implied, by Administrative Agent or any Lender, other than those expressly contained herein, in entering into this Amendment.

7.

Release.  Each Loan Party hereby acknowledges and agrees that, as of (and subject to the occurrence of) the Amendment Effective Date:  (a) neither it nor any of its Subsidiaries has any claim or cause of action against Administrative Agent or any Lender (or any of the directors, officers, employees, agents, attorneys or consultants of any of the foregoing) and (b) the Administrative Agent and the Lenders have heretofore properly performed and satisfied in a timely manner all of their obligations to the Loan Parties, and all of their Subsidiaries and Affiliates.  Notwithstanding the foregoing, the Administrative Agent and the Lenders wish (and the Loan Parties agree) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of their rights, interests, security and/or remedies.  Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Loan Party (for itself and its Subsidiaries and Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release, waive and forever discharge the Administrative Agent and the Lenders, together with their respective Affiliates and Related Funds, and each of the directors, officers, employees, agents, attorneys and consultants of each of the foregoing (collectively, the “Released Parties”), from any and all debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done, in each case, on or prior to the Amendment Effective Date directly arising out of, connected with or related to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of Administrative Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of any Loan Party, or the making of any Loans or other advances, or the management of such Loans or other advances or the Collateral.  Each Loan Party represents and warrants that it has no knowledge of any claim by any Releasor against any Released Party or of any facts or acts or omissions of any Released Party which on the date hereof would be the basis of a claim by any Releasor against any Released Party which would not be released hereby.  

8.

Estoppel; Term Loan.  To induce the Administrative Agent and the Lenders to enter into this Amendment, each Loan Party hereby acknowledges and agrees that, on the Amendment Effective Date, immediately after giving effect to this Amendment, there exists no Default or Event of Default. Each Loan Party hereby acknowledges and agrees that as of the Amendment Effective Date (after giving effect to the effectiveness of this Amendment No. 11, the payment of all accrued and unpaid interest on the Obligations through and including the Amendment Effective Date,

 

 


 

and the payment in kind of the Amendment No. 10 PIK Fee), the outstanding principal amount of the Term Loan is $90,780,000 and no right of offset, defense, counterclaim or objection exists in favor of any Loan Party as against Administrative Agent or any Lender with respect to the Obligations.

9.

Expenses. Notwithstanding anything to the contrary contained herein or in the Financing Agreement (including, for the avoidance of doubt, Section 10.2 thereof), the amount of out-of-pocket fees, costs, expenses and disbursements of counsel required to be paid or reimbursed by the Loan Parties in connection with (a) the preparation for any bankruptcy, liquidation or similar reorganization and/or (b) any discussions with the Administrative Agent and the Lenders (or their respective representatives) with respect to any such bankruptcy, liquidation or similar reorganization; in each case for the period through and including (but not after) the Amendment Effective Date, shall not exceed $500,000 in the aggregate.

10.

Miscellaneous.

(a)

This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.

(b)

Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

(c)

This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

(d)

Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Financing Agreement.  Accordingly, it shall be an immediate Event of Default under the Financing Agreement if (i) any representation or warranty made by any Loan Party under or in connection with this Amendment shall have been incorrect in any respect when made or deemed made, or (ii) any Loan Party shall fail to perform or observe any term, covenant or agreement contained in this Amendment.

(e)

Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

[Remainder of page intentionally left blank.]

 

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

BORROWER:

 

 

 

THERAPEUTICSMD, INC.

 

 

 

 

 

 

By:

 

/s/ Michael C. Donegan

Name:

 

Michael C. Donegan

Title:

 

Interim Chief Financial Officer, Chief

 

 

Accounting Officer and Vice President Finance

 

 

GUARANTORS:

 

 

 

VITAMEDMD, LLC

 

 

 

 

 

 

By:

 

/s/ Hugh O’Dowd  

Name:

 

Hugh O’Dowd

Title:

 

Manager

 

 

BOCAGREENMD, INC.

 

 

 

 

 

 

By:

 

/s/ Hugh O’Dowd  

Name:

 

Hugh O’Dowd

Title:

 

Chief Executive Officer

 

 

SIXTH STREET SPECIALTY LENDING, INC., as

Administrative Agent and Lender

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Joshua Easterly

 

 

Name:

 

Joshua Easterly

 

 

Title:

 

Chief Executive Officer

 

 

TOP IV TALENTS, LLC, as Lender

 

 

 

 

 

 

By:

 

/s/ Steven S. Pluss

 

 

Name:

 

Steven S. Pluss

 

 

Title:

 

Vice President

 

 

TAO TALENTS, LLC, as Lender

 

 

 

 

 

 

By:

 

/s/ Steven S. Pluss

 

 

Name:

 

Steven S. Pluss

 

 

Title:

 

Vice President

 

 

 


 

 

ANNEX A

Amended Financing Agreement

(See Attached)

 

 

 


 

 

ANNEX A CONFORMED THROUGH AMENDMENT NO. 1011

 

 

 

FINANCING AGREEMENT

 

dated as of April 24, 20192019,

 

as amended through Amendment No. 11 to Financing Agreement dated as of [  ], 2022

 

among

 

THERAPEUTICSMD, INC.

as the Borrower,

 

CERTAIN SUBSIDIARIES OF BORROWER

as Guarantors,

 

VARIOUS LENDERS FROM TIME TO TIME PARTY HERETO, AND

SIXTH STREET SPECIALTY LENDING, INC.,

as Administrative Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10733/74267-037 CURRENT/130835362v110733/74267-037 CURRENT/130835362v7

 

 

 


 

 

TABLE OF CONTENTS

 

 

 

 

Page

ARTICLE I DEFINITIONS AND INTERPRETATION

 

1

 

Section 1.1 Definitions

 

1

 

Section 1.2 Accounting and Other Terms

 

34

 

Section 1.3 Interpretation, etc.

 

3437

 

Section 1.4 Time References

 

3538

 

Section 1.5   Rates

 

38

 

 

 

 

ARTICLE II LOANS

 

3539

 

Section 2.1 Term Loans

 

3539

 

Section 2.2 Use of Proceeds

 

3741

 

Section 2.3  Evidence of Debt; Register; Lenders' Books and Records; Notes

 

3841

 

Section 2.4   Interest

 

3842

 

Section 2.5 Conversion/Continuation

 

3943

 

Section 2.6 Default Interest

 

4043

 

Section 2.7 Fees

 

4043

 

Section 2.8 Repayment of Term Loans

 

4044

 

Section 2.9 Voluntary Prepayments and Commitment Reductions

 

4144

 

Section 2.10 Mandatory Prepayments

 

45

 

Section 2.11 Application of Prepayments

 

4346

 

Section 2.12 General Provisions Regarding Payments

 

4447

 

Section 2.13 Ratable Sharing

 

4649

 

Section 2.14 Increased Costs; Capital Adequacy

 

50

 

Section 2.15 Taxes; Withholding, etc.

 

51

 

Section 2.16 Obligation to Mitigate

 

54

 

Section 2.17 Defaulting Lenders

 

5154

 

Section 2.18 Removal or Replacement of a Lender

 

55

 

Section 2.19 Making or Maintaining LIBORSOFR Rate Loans

 

5255

 

Section 2.20  Benchmark Replacement Setting

 

58

 

 

 

 

ARTICLE III CONDITIONS PRECEDENT

 

5559

 

Section 3.1 Closing Date

 

5559

 

Section 3.2 Conditions to Each Credit Extension

 

5862

 

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES