Agreement And Plan Of Merger by and among AQUAhydrate, Inc. a Nevada corporation (the “Company”), The Alkaline Water Company Inc. a Nevada corporation (the “Parent”), and AWC Acquisition Company Inc. a Nevada corporation and a wholly-owned Subsidiary...

The Merger

the Merger Sub will merge with and into the Company (the “Merger”);

the separate corporate existence of the Merger Sub will cease; and

the Company will continue its corporate existence under the NRS as the surviving corporation in the Merger and a Subsidiary of the Parent (sometimes referred to herein as the “Surviving Corporation”).

Merger Consideration

at the Closing issue to the holders of the Company Common Stock, on a pro-rata basis, such number of shares of the Parent Common Stock that is equal to 19,565,217 less any shares of the Parent Common Stock to be issued in connection with the Merger to any finders or placement agents, including ▇▇▇▇ Capital Partners LLC and Emerald Partners Pty Limited, and to any other Persons for the payment of any outstanding liabilities; and

at the Closing issue to the holders of the Company Preferred Stock, on a pro-rata basis, an additional 3,750,000 shares of the Parent Common Stock (the “Performance Shares”) as follows:

an aggregate of 1,000,000 shares of the Parent Common Stock which will be subject to escrow and not released until the Parent achieves Trailing Revenue of $60 million in any Period after the Closing;

(ii)

(iii)

Closing

Effective Time

Effects of the Merger

Articles of Incorporation; By-Laws

Effect of the Merger on Capital Stock

each share of the Company Common Stock or Company Preferred Stock that is owned by the Parent or the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly-owned Subsidiaries as of immediately prior to the Effective Time (the “Cancelled Shares”) will automatically be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor;

each share of the Company Common Stock issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares) will be converted into the right to receive:

such number of shares of Parent Common Stock, subject to the escrow provisions set forth in this Agreement, that is equal to (i) 19,565,217 less any shares of the Parent Common Stock to be issued in connection with the Merger to any finders or placement agents, including ▇▇▇▇ Capital Partners, LLC and Emerald Partners Pty Limited, and to any other Persons for the payment of liabilities, (ii) divided by the number of shares of Company Common Stock outstanding immediately prior to the Effective Time; and

any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of the Company Common Stock in accordance with Section 2.2(k);

each share of the Company Preferred Stock issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares) will be converted into the right to receive:

such number of Performance Shares, subject to the escrow provisions set forth in this Agreement that is equal to the quotient of 3,750,000 divided by the number of shares of Company Preferred Stock outstanding immediately prior to the Effective Time; and

any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of the Company Preferred Stock.

at the Effective Time, all shares of the Company Common Stock and the Company Preferred Stock will no longer be outstanding and all shares of the Company Common Stock and the Company Preferred Stock will be cancelled and retired and will cease to exist, and each holder of: (i) a certificate formerly representing any shares of the Company Common Stock or Company Preferred Stock (each, a “Certificate” or “Company Share Certificate”); or (ii) any book- entry shares which immediately prior to the Effective Time represented shares of the Company Common Stock or Company Preferred Stock (each, a “Book-Entry Share”) will cease to have any rights with respect thereto, except the right to receive:

(A) the Merger Consideration in accordance with Section 2.2 hereof; and

(B) any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of the Company Common Stock in accordance with Section 2.2(k);

each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid, and non-assessable 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. From and after the Effective Time, all certificates representing shares of the Merger Sub Common Stock shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence;

no certificates or scrip representing fractional shares of the Parent Common Stock shall be issued upon the conversion of the Company Common Stock pursuant to Section 2.1(b) or the conversion of the Company Preferred Stock pursuant to Section 2.1(c) and such fractional share interest shall not entitle the owner thereof to vote or to any other rights of a holder of shares of the Parent Common Stock. In the event that any holder of the Company Common Stock or Company Preferred Stock would otherwise be entitled to receive a fractional share of the Parent Common Stock (after aggregating all shares and fractional shares of the Parent Common Stock issuable to such holder), then such holder will receive an aggregate number of shares of the Parent Common Stock rounded down to the nearest whole share;

notwithstanding any other provisions of this Agreement, shares of the Company Common Stock and Company Preferred Stock issued and outstanding immediately prior to the Effective Time (other than shares cancelled in accordance with Section 2.1(a)) and held by a holder who has not voted in favor of approval of this Agreement or consented thereto in writing and who has properly exercised right of dissent of such shares in accordance with NRS 92A.300 to NRS 92A.500 (and, if the Company is subject to Section 2115 of the California Corporations Code, such rights as may be granted to such persons in Chapter 13 of the California Corporations Code) (such shares of the Company Common Stock and Company Preferred Stock being referred to collectively as the “Dissenting Shares” until such time as such holder fails to perfect or otherwise loses such holder’s right of dissent under the NRS with respect to such shares) shall not be converted into a right to receive the Merger Consideration, but instead shall be entitled to only such rights as are granted by NRS 92A.300 to NRS 92A.500 (and, if the Company is subject to Section 2115 of the California Corporations Code, such rights as may be granted to such persons in Chapter 13 of the California Corporations Code); provided, however, that if, after the Effective Time, such holder fails to perfect, withdraws or loses such holder’s right of dissent pursuant to NRS 92A.300 to NRS 92A.500 (or, if applicable, Chapter 13 of the California Corporations Code) or if a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by NRS 92A.300 to NRS 92A.500 (or, if applicable, Chapter 13 of the California Corporations Code), such shares of the Company Common Stock and Company Preferred Stock shall be treated as if they had been converted as of the Effective Time into the right to receive the Merger Consideration in accordance with Sections 2.1(b) and 2.2 (including the provision for the Escrow Shares pursuant to Section 2.2(j)), without interest thereon, upon surrender of such Certificate or Book-Entry Shares formerly representing the shares of the Company Common Stock and Company Preferred Stock. The Company shall provide the Parent prompt written notice of any demands received by the Company for appraisal of shares of the Company Common Stock and Company Preferred Stock, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to NRS 92A.300 to NRS 92A.500 (or, if applicable, Chapter 13 of the California Corporations Code) that relates to such demand (collectively, “Appraisal Demand Notices”), and the Parent shall have the opportunity and right to direct all negotiations and Proceedings with respect to such demands. Except with the prior written consent of the Parent, the Company shall not make any payment with respect to, or settle or offer to settle, any such demands; and

if any shares of the Company Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement, stock option exercise agreement or other agreement with the Company, then the shares of the Parent Common Stock issued in exchange for such shares of the Company Common Stock will also be unvested and/or subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such shares of the Parent Common Stock may be marked accordingly with appropriate legends.

Exchange Procedures

Prior to the Effective Time, the Parent shall appoint an exchange agent (the “Exchange Agent”) to act as the agent for the purpose of paying the Merger Consideration for the Certificates and the Book-Entry Shares. At or promptly following the Effective Time, the Parent shall deposit, or cause the Surviving Corporation to deposit, with the Exchange Agent certificates representing the shares of the Parent Common Stock to be issued as the Merger Consideration (or make appropriate alternative arrangements if uncertificated shares of the Parent Common Stock represented by book-entry shares will be issued). In addition, the Parent shall deposit or cause to be deposited with the Exchange Agent, as necessary from time to time after the Effective Time, any dividends or other distributions, if any, to which the holders of the Company Common Stock and Company Preferred Stock may be entitled pursuant to Section 2.2(k) for distributions or dividends, on the Parent Common Stock to which they are entitled to pursuant to Section 2.1(b), with both a record and payment date after the Effective Time and prior to the surrender of the Company Common Stock and Company Preferred Stock in exchange for such Parent Common Stock. Such cash and shares of the Parent Common Stock, together with any dividends or other distributions deposited with the Exchange Agent pursuant to this Section 2.2(a), are referred to collectively in this Agreement as the “Exchange Fund.”

Promptly after the Effective Time, the Parent shall send, or shall cause the Exchange Agent to send, to each record holder of shares of the Company Common Stock and Company Preferred Stock at the Effective Time, whose Company Common Stock or Company Preferred Stock was converted pursuant to Section 2.1(b) or Section 2.1(c) into the right to receive the Merger Consideration, a letter of transmittal and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Book-Entry Shares to the Exchange Agent, and which letter of transmittal will be in customary form and have such other provisions as the Parent and the Surviving Corporation may reasonably specify) for use in such exchange. Each holder of shares of the Company Common Stock and Company Preferred Stock that have been converted into the right to receive the Merger Consideration shall be entitled to receive the Merger Consideration into which such shares of the Company Common Stock and Company Preferred Stock have been converted pursuant to Section 2.1(b) or Section 2.1(c) in respect of the Company Common Stock and Company Preferred Stock represented by a Certificate or Book-Entry Share, subject to the escrow provisions provided in Section 2.2(j), and any dividends or other distributions pursuant to Section 2.2(k)) upon:

surrender to the Exchange Agent of a Certificate; or

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 Book-Entry Shares,

in each case, together with a duly completed and validly executed letter of transmittal and such other documents as may reasonably be requested by the Exchange Agent. No interest shall be paid or accrued upon the surrender or transfer of any Certificate or Book-Entry Share. Upon payment of the Merger Consideration pursuant to the provisions of this Article 2, each Certificate or Certificates or Book-Entry Share or Book-Entry Shares so surrendered or transferred, as the case may be, shall immediately be cancelled.

Until surrendered as contemplated by this Article 2, each Company Share Certificate and Book-Entry Share shall, subject to appraisal rights under the NRS (and if the Company is subject to Cal. Corp. Code §2115, Chapter 13 of the California Corporations Code) and Section 2.1(h), be deemed at any time after the Effective Time to represent only the right to receive upon surrender the applicable shares of the Parent Common Stock with respect to the shares of the Company Common Stock formerly represented thereby to which such holder is entitled pursuant to Section 2.2. No payments of any portion of the Merger Consideration will be made until the holder of the Company Common Stock or Company Preferred Stock surrenders such Certificate(s) or Book-Entry Shares pursuant hereto.

Until disbursed in accordance with the terms and conditions of this Agreement, the cash in the Exchange Fund will be invested by the Exchange Agent, as directed by the Parent or the Surviving Corporation. No losses with respect to any investments of the Exchange Fund will affect the amounts payable to the holders of Certificates or Book-Entry Shares. Any income from investment of the Exchange Fund will be payable to the Parent or the Surviving Corporation, as the Parent directs.

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 Book- Entry Share, as applicable, is registered, it shall be a condition to such payment that:

such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Book-Entry Share shall be properly transferred; and

the Person requesting such payment shall pay to the Exchange Agent any transfer or other Tax required as a result of such payment to a Person other than the registered holder of such Certificate or Book-Entry Share, as applicable, or establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is not payable.

Any portion of the Merger Consideration made available to the Exchange Agent in respect of any Dissenting Shares shall be returned to the Parent, upon demand.

In the event of a transfer of ownership of shares of the Company Common Stock or Company Preferred Stock that is not registered in the transfer records of the Company, the applicable shares of the Parent Common Stock may be issued to a Person other than the Person in whose name the Certificate or Book-Entry Shares so surrendered is registered if the Company Share Certificate representing such shares of the Company Common Stock or Company Preferred Stock is presented to the Parent, accompanied by all documents required to evidence and effect such transfer and evidence that:

the shares are transferable; and

any applicable stock transfer taxes have been paid.

All Merger Consideration paid upon the surrender of Certificates or transfer of Book-Entry Shares in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of the Company Common Stock formerly represented by such Certificate or Book-Entry Shares, and from and after the Effective Time, there shall be no further registration of transfers of shares of the Company Common Stock on the stock transfer books of the Surviving Corporation. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation, they shall be cancelled and exchanged as provided in this Article 2.

Promptly following the end of the twelve months after the Effective Time, any portion of the Exchange Fund that remains unclaimed by the holders of shares of the Company Common Stock and Company Preferred Stock shall be returned to the Parent and the Exchange Agent’s duties shall terminate. Thereafter, upon the surrender of a Company Share Certificate to the Parent, together with a properly executed letter of transmittal and forms of stock power and such other documents as may reasonably be required by the Parent, and subject to applicable abandoned property, escheat and similar Laws, any such holder who has not exchanged shares of the Company Common Stock or Company Preferred Stock for the Merger Consideration in accordance with this Section 2.2 prior to that time shall be entitled to receive in exchange therefore the applicable Merger Consideration without any interest. Notwithstanding the foregoing, neither the Parent nor the Surviving Corporation shall be liable to any holder of shares of the Company Common Stock or Company Preferred Stock for any amounts paid to a public official pursuant to applicable abandoned property, escheat, or similar Laws. Any amounts remaining unclaimed by holders of shares of the Company Common Stock or Company Preferred Stock two years after the Effective Time (or such earlier date, immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Body) shall become, to the extent permitted by Applicable Laws, the property of the Parent free and clear of any claims or interest of any Person previously entitled thereto.

Prior to or simultaneously with the Closing, the Stockholders’ Representative and the Parent shall enter into an escrow agreement (the “Company Escrow Agreement”) with an escrow agent selected by the Parent and reasonably acceptable to the Stockholders’ Representative (the “Escrow Agent”). Pursuant to the terms of the Company Escrow Agreement, the Parent shall deposit one or more certificates in the name of the Escrow Agent representing the Escrow Shares into an escrow account, which account is to be managed by the Escrow Agent (the “Escrow Account”). Any Escrow Shares in the Escrow Account are referred to herein as the “Escrow Fund.” In connection with such deposit of the Escrow Shares with the Escrow Agent and as of the Effective Time, each holder of the Company Common Stock and Company Preferred Stock will be deemed to have received and deposited with the Escrow Agent each stockholder’s pro rata interest in the Escrow Fund as determined as of the Closing by reference to such stockholder’s ownership of shares of the Company Common Stock and Company Preferred Stock (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by the Parent after the Effective Time with respect to shares constituting the Escrow Fund), without any act of the stockholders of the Company (the “Company Stockholders”). Distributions of any Escrow Shares from the Escrow Account shall be governed by the terms and conditions of the Company Escrow Agreement. The Stockholder Representative shall have the right to direct up to 261,000 shares of the Merger Consideration (not including any of the Performance Shares) to be issued to the Principal Shareholders to a separate account (the “Stockholder Representative Account”) to pay expenses, professional fees and other amounts required to be paid by the Stockholder Representative or the Company Stockholders pursuant to Article VIII. If the Stockholder Representative wishes to sell any of the Parent Common Stock so designated by the Stockholder Representative to the Stockholder Representative Account, then the Stockholder Representative must request the approval of the Parent Committee, provided that each request seeks reimbursement of a minimum of the lesser of (i) $50,000 and (ii) the balance of the Stockholder Representative Account, and a maximum of $200,000 of expenses and professional fees. Upon receipt of the approval of the Parent Committee and subject to compliance with all Applicable Laws, the Stockholder Representative shall be permitted to sell such shares of the Parent Common Stock in the amount and manner approved by the Parent Committee. The Stockholder Representative acknowledges that its ability to sell shares may be limited by federal and state securities laws. The approval of this Agreement and the Merger by the Company Stockholders shall constitute approval of the Company Escrow Agreement and of all the arrangements relating thereto, including, without limitation, the placement of the Escrow Shares in escrow and the appointment of the Stockholders’ Representative. No portion of the Escrow Fund shall be contributed in respect of any Company Stock Option or any warrant or other security exercisable or convertible into the Company Common Stock or Company Preferred Stock. No shares of Parent Common Stock contributed to the Escrow Fund shall be unvested or subject to any right of repurchase, risk of forfeiture or other condition in favor of the Surviving Corporation or the Parent other than as set out in Section 1.2 of this Agreement.

All shares of the Parent Common Stock to be issued pursuant to the Merger shall be deemed issued and outstanding as of the Effective Time and whenever a dividend or other distribution is declared by the Parent in respect of the Parent Common Stock, the record date for which is after the Effective Time, that declaration shall include dividends or other distributions in respect of all shares issuable pursuant to this Agreement. No dividends or other distributions in respect of the Parent Common Stock shall be paid to any holder of any unsurrendered Company Common Stock or Company Preferred Stock until the Certificate (or affidavit of loss in lieu of the Certificate as provided in Section 2.5) or Book-Entry Share is surrendered for exchange in accordance with this Section 2.2. Subject to the effect of Applicable Laws, following such surrender, there shall be issued or paid to the holder of record of the whole shares of the Parent Common Stock issued in exchange for the Company Common Stock or Company Preferred Stock in accordance with Section 2.2, without interest:

 at the time of such surrender, the dividends or other distributions with a  record date after the Effective Time theretofore payable with respect to such whole shares of the Parent Common Stock and not paid; and

at the appropriate payment date, the dividends or other distributions payable with respect to such whole shares of the Parent Common Stock with a record date after the Effective Time but with a payment date subsequent to surrender.

Adjustments

Withholding Rights

Lost Certificates

Treatment of Stock Options and Other Stock-Based Compensation

Prior to the Effective Time, the Company shall take such actions as may be necessary to provide that each option to acquire shares of the Company Common Stock or Company Preferred Stock (each, a “Company Stock Option”) then outstanding under the Company Stock Plan, as well as any arrangement for the issuance of Company Stock Options not covered by the Company Stock Plan, shall be of no further force or effect as of the Effective Time (either because such Company Stock Option shall have been exercised prior to the Effective Time or shall have been otherwise cancelled and terminated (without regard to the exercise price of the Company Stock Options) as of or prior to the Effective Time).

At or prior to the Effective Time, the Company Stock Plan shall be terminated and of no further force or effect.

Without limiting the foregoing, the Company shall take such actions as may be necessary to ensure that the Company will not, at the Effective Time, be bound by any options, stock appreciation rights, or other rights or agreements which would entitle any Person, other than the Parent and its Subsidiaries, to own any capital stock of the Company or the Surviving Corporation or to receive any payment in respect thereof.

Treatment of Warrants

Tax Treatment

Organization and Good Standing

The Company is a company duly organized, validly existing and in good standing under the laws of Nevada.

The Company has full corporate power, authority and capacity to conduct the Company Business as it has been and is presently conducted, to own, operate or use the properties and the Company Assets that it purports to own, operate or use, and to perform all of its obligations under any applicable Contracts to which it is a party.

The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the owning or leasing of any Company Assets or the operation of the Company Business makes such licensing or qualification necessary, except where the failure to be so qualified would not result in a Company Material Adverse Effect.

Capitalization

result in the imposition or creation of any Liens upon or with respect to any of the Company Assets or any of the Company Securities;

require the Company to obtain any consent from any Person in connection with the execution and delivery of the Agreement or the consummation or performance of any of the transactions contemplated herein.

Subsidiaries

Partnerships or Joint Ventures

Financial Statements

The audited financial statements for the years ended December 31, 2018, 2017 and the reviewed financial statements for 2016 and the interim reviewed financial statements for the three and six months ended June 30, 2019 (such 2019 financial statements to be completed prior to Closing) (collectively, the

“Company Financial Statements”):

are in accordance with the books and records of the Company;

present fairly the financial condition of the Company as of the respective dates indicated and the results of operations for such periods; and

have been prepared in accordance with GAAP and reflect the consistent application of GAAP throughout the periods involved.

All material financial transactions of the Company have been accurately recorded in the books and records of the Company and such books and records fairly present the financial position and the affairs of the Company.

To the Knowledge of the Company other than the costs and expenses incurred in connection with the negotiation and consummation of the transactions contemplated herein, the Company has no material liabilities, net of cash, which:

are not set forth in Company Financial Statements or have not heretofore been paid or discharged;

did not arise in the ordinary course of business under a Contract or plan that has been specifically disclosed in writing to the Parent; or

have not been incurred in amounts and pursuant to practices consistent with past business practice, in, or as a result of, the ordinary course of business since the Company Accounting Date, and otherwise disclosed in writing to the Parent.

To the Knowledge of the Company except to the extent reflected or reserved against in the Company Financial Statements or incurred subsequent to the Company Accounting Date in the ordinary course of business, the Company has no outstanding liabilities, and any liabilities incurred by the Company in the ordinary course business since the Company Accounting Date have not had, individually or in the aggregate, a Company Material Adverse Effect.

Since the Company Accounting Date, there have not been:

any changes in the condition or operations of the Company Business, the Company Assets or the financial affairs of the Company which have caused, individually or in the aggregate, a Company Material Adverse Effect; or

any damage, destruction or loss, labour trouble or other event, development or condition, of any character (whether or not covered by insurance), which has caused or may cause a Company Material Adverse Effect.

Since the Company Accounting Date, and other than as contemplated by the Agreement, the Company has not:

transferred, assigned, sold or otherwise disposed of any of the Company Assets shown or reflected in the Company Financial Statements or cancelled any debts or claims other than the sale of inventory in the ordinary course of business;

incurred or assumed any material liability (other than in the ordinary course of business except costs incurred in connection with the Merger);

issued or sold any Company Securities;

discharged or satisfied any liens, or paid any liabilities, other than current liabilities or the current portion of long term liabilities disclosed in the Company Financial Statements, or current liabilities incurred since the date thereof in the ordinary course of business;

declared, made, or committed itself to make any payment of any dividend or other distribution in respect of any of Company Securities, nor purchased, redeemed, subdivided, consolidated, or reclassified any Company Securities;

made any gift of money or of any of the Company Assets to any Person;

purchased or sold any of the Company Assets outside of the ordinary course of business;

made commitments or agreements for capital expenditures or capital additions or betterments exceeding $25,000;

amended or changed, or taken any action to amend or change, its organizational documents;

made payments of any kind to or on behalf of either a holder of Company Securities or any related parties of a holder of Company Securities, nor under any management agreement, save and except business related expenses and salaries in the ordinary course of business and at the regular rates payable;

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or subjected any of the Company Assets to any lien of any nature whatsoever;

made or suffered any amendment or termination of any Company Material Contract, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its directors, officers, Employees or consultants, or made any increase in, or any addition to, other benefits to which any of its directors, officers, Employees or consultants may be entitled;

adopted, or increased the payments to or benefits under, any Company Employee Plan; or

authorized or agreed, or otherwise have become committed, to do any of the foregoing.

The Company has no guarantees, indemnities or contingent or indirect obligations with respect to the liabilities of any other Person, including any obligation to service the debt of, or otherwise acquire an obligation of, another Person, or to supply funds to, or otherwise maintain any working capital or other balance sheet condition of, any other Person.

The Company is not a party to, bound by or subject to any Contract or Applicable Laws that would be violated or breached by, or under which default would occur, or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the consummation of any of the transactions provided for in this Agreement.

Books and Records/Minute Books

Title to Personal Property

Title to Real Property

Intellectual Property

For the purposes of this section and this Agreement, the following words have the following meanings:

“Company Intellectual Property” includes all Contracts whereby the Company licenses Intellectual Property from any other Person (other than off-the-shelf licenses), any item of Intellectual Property solely owned by the Company, and any item of Intellectual Property in which the Company has or purports to have a joint ownership interest; and

“Intellectual Property” means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to Applicable Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all:

trademarks, service marks, trade names, brand names, logos, slogans, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of, and symbolized by, and all registrations, applications and renewals for, any of the foregoing;

internet domain names, whether or not trademarks, web addresses, web pages, websites and related content, URLs (uniform resource locator) and accounts with Twitter, Facebook and other social media companies, and the content found thereon and related thereto;

works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights;

inventions, discoveries, trade secrets, software source code, business and technical information and know-how, databases, data collections and other confidential and proprietary information and all rights therein;

patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental Body-issued indicia of invention ownership (including inventor’s certificates, ▇▇▇▇▇ patents and patent utility models);

all licenses for listed intellectual property granted to third parties;

all future income and proceeds from any of the listed intellectual property and from the licenses listed in (F) above; and

all rights to damages, royalties and profits by reason of the past, present or future infringement or other misuse of any of the listed intellectual property.

The Company Disclosure Letter lists all:

registered Company Intellectual Property; and

Company Intellectual Property that is not registered but that is used in the Company Business.

All required filings and fees related to the Company Intellectual Property have been filed on a timely basis with, and paid to, the relevant Governmental Bodies, and all Company Intellectual Property is otherwise in good standing. The Company has provided the Parent with true and complete copies of file histories, documents, certificates, office actions, correspondence and other materials related to all of the Company Intellectual Property.

The Company Intellectual Property is valid and enforceable, and the Company has not received notice of any Proceeding challenging the extent, validity or enforceability of, or the Company’s ownership of, any of the Company Intellectual Property, in whole or in part, and in the case of pending applications for the Company Intellectual Property, the Company has not received notice of any Proceeding seeking to oppose any such application, or have any such application canceled, re-examined or found invalid, in whole or in part.

The Company Disclosure Letter lists all Contracts regarding, or related to, the Company Intellectual Property. The Company has provided the Parent with true and complete copies of all such Contracts, including all modifications, amendments and supplements thereto and waivers thereunder. Each of such Contracts is valid and binding on the Company, as applicable, in accordance with its terms and is in full force and effect. To the Knowledge of the Company, no other party to any such Contract is in breach of, or default under (or is alleged to be in breach of or default under), or has provided or received any notice of breach or default of, or any intention to terminate, any such Contract. Except as disclosed in the Company Disclosure Letter, the Company has not permitted or licensed any Person to use any of the Company Intellectual Property. Except pursuant to the terms of the Contracts, the Company has not agreed to indemnify any Person against any charge of infringement or other violation with respect to any Intellectual Property.

The Company has the valid right to use all other Intellectual Property used in or necessary for the conduct of the Company Business, in each case, free and clear of encumbrances. Without limiting the generality of the foregoing, the Company has entered into contracts with every current and former director, officer and Employee of the Company, and with every current and former independent contractor or consultant to the Company, whereby such director, officer, Employee(s), contractor(s) and consultant(s) have:

assigned to the Company any ownership interest and right they may have in any of the Company Intellectual Property and have waived any moral rights or any rights to similar effect in any country or at common law they may have therein for the benefit of the Company;

acknowledged exclusive ownership of all of the Company Intellectual Property by the Company; and

entered into nondisclosure agreements pursuant to which they have agreed to maintain the confidentiality of the Company Intellectual Property.

Except as otherwise disclosed in the Agreement, the consummation of the transactions contemplated in the Agreement will not result in the loss or impairment of, or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Company’s right to own, use or hold for use any Intellectual Property as owned, used or held for use in the conduct of the Company Business.

To the Knowledge of the Company, the rights of the Company in the Company Intellectual Property are valid, subsisting and enforceable. The Company has taken all reasonable steps to maintain the Company Intellectual Property and to protect and preserve the confidentiality of all trade secrets included in the Company Intellectual Property, including requiring all Persons having access thereto to execute written non-disclosure Contracts.

To the Knowledge of the Company, the conduct of the Company Business as currently and formerly conducted, and the products, processes and services of the Company, have not infringed, misappropriated, diluted or otherwise violated, and do not and will not infringe, dilute, misappropriate or otherwise violate, the Intellectual Property or other rights of any Person. To the Knowledge of the Company, no Person has infringed, misappropriated, diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, any of the Company Intellectual Property.

All of the Company Intellectual Property is either:

owned solely by the Company, free and clear of any Liens; or

rightfully used and authorized for use by the Company pursuant to a valid and enforceable written license.

The Company Intellectual Property constitutes all of the Intellectual Property necessary to carry on the Company Business by the Parent following the Closing, consistent with the manner in which it was conducted prior to the Closing, and the Company is not obligated to provide any consideration (whether financial or otherwise) to any other Person nor is any other Person otherwise entitled to any consideration, with respect to any exercise of rights by the Company, or the Parent in the Company Intellectual Property (other than with respect to maintenance costs associated with Company Intellectual Property owned by the Company and license fees and other payments associated with Company Intellectual Property licensed by the Company).

There is no Proceeding (including any oppositions, interferences or re- examinations) settled, pending or to the Knowledge of the Company threatened (including in the form of offers to obtain a license):

alleging any infringement, misappropriation, dilution or violation of the Intellectual Property of any Person by the Company;

challenging the validity, enforceability, registrability or ownership of any of the Company Intellectual Property or the rights of the Company with respect to any of the Company Intellectual Property; or

by the Company or any other Person alleging any infringement, misappropriation, dilution or other violation by any Person of Company Intellectual Property, and the Company is not party to any other Proceeding with respect to any of the Company Intellectual Property or any other rights arising with respect to any Intellectual Property.

The Company is not subject to any outstanding or, to the Knowledge of the Company, prospective Order (including any motion or petition therefor) that does or would restrict or impair the use of any of Company Intellectual Property.

To the Knowledge of the Company, the consummation of the Merger will not alter, impair or otherwise adversely affect any rights or obligations of the Company in any of the Company Intellectual Property, and, from and after the Closing, the Parent will be able to maintain all of the Company’s rights thereto as they existed at the Closing, without modification or impairment.

To the Knowledge of the Company, no third-party licensed Company Intellectual Property is subject to revocation or termination upon a change of control of the Company. Except for in respect of Company Intellectual Property licensed by the Company, the Company is not required to pay any royalty or other fees to any other Person.

Accounts Receivable

Inventories

Material Contracts

The Company has provided the Parent a list of each Employee of the Company, which includes:

the name of each Employee (except as prohibited under Applicable Laws);

each Employee’s current position and any prior positions held with the Company and any predecessor thereof;

the date of each Employee’s initial commencement of employment with the Company or any predecessor thereof;

each Employee’s current salary, accrued vacation, benefits, severance entitlements and other financial entitlements; and

each Employee’s term of employment.

The Company has provided the Parent:

correct and complete copies of all documents embodying each Company Employee Plan and each Employee Contract with respect to the Company, including all amendments thereto, and copies of all documents used in connection therewith, a list of which is included in the Company Disclosure Letter;

the most recent annual actuarial valuations, if any, prepared for each Employee Plan of the Company;

if any Employee Plan of the Company is funded, the most recent annual and periodic accounting of such Employee Plan assets; and

all communications material to any Employee of the Company relating to any Employee Plan and any proposed Employee Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events which would result in any material liability to the Company.

The Company has performed, in all material respects, all obligations required to be performed by it under, is not in default or violation of, and has no Knowledge of any default or violation by another party to any Employee Plan, and all Employee Plans have been established and maintained in all material respects in accordance with their respective terms and in substantial compliance with all Applicable Laws. There are no actions, suits or claims pending, or, to the Knowledge of the Company, threatened or anticipated (other than routine claims for benefits), against any Employee Plan or against the assets of any Employee Plan. The Employee Plans can be amended, terminated or otherwise discontinued after the Closing in accordance with their terms, and, to the Knowledge of the Company, without liability to the Company, the Parent or any Affiliate thereof (other than ordinary administration expenses typically incurred in a termination event). There are no audits, inquiries or Proceedings pending or, to the Knowledge of the Company, threatened, by any Governmental Body in respect of any Employee Plans or proposed Employee Plans.

The execution of the Agreement and the consummation of the transactions contemplated hereby will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under an Employee Plan, Employee Contract, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee of the Company.

The Company:

is in compliance in all material respects with all Applicable Laws respecting employment, employment practices, terms and conditions of employment, and wages and hours with respect to all of its Employees;

has withheld all amounts required by law or by agreement to be withheld by it from the wages or salaries of, and other payments to, Employees;

is not liable for any arrears of wages, taxes or any penalty for failure to comply with any of the foregoing;

is not liable for any payment to any trust or other fund or to any Governmental Body with respect to unemployment compensation benefits, social security or other benefits for its Employees (other than routine payments to be made in the ordinary course of business and consistent with past practice);

has provided or will provide its Employees with all wages, benefits, stock options, bonuses, incentives and all other compensation that are, or have become, due and payable through to the Closing; and

represents that in the three years prior to the Execution Date, no citation has been issued by any Governmental Body against it, and no notice of contest, claim, complaint, charge, investigation or other administrative enforcement Proceeding involving it has been filed or is pending or, to its knowledge, threatened, against it under any Applicable Law relating to occupational safety and health.

The Company has not received any written notice or other communication from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any material requirement of any Governmental Body, or any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification of any authorization of any Governmental Body.

All applications required to have been filed for the renewal of any authorizations required from any Governmental Body for the operation of the Company Business, up to the Execution Date, have been duly filed on a timely basis with each applicable Governmental Body, and all other filings required to have been made with respect to such authorizations have been duly made on a timely basis with each applicable Governmental Body.

Legal Proceedings

There is no pending Proceeding:

that has been commenced by or against the Company or that otherwise relates to or may affect the Company Business or any of Company Assets; or

that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated herein.

To the Knowledge of the Company, no Proceeding has been threatened in writing against the Company or with respect to the Company Business or the Company Assets, and no event has occurred or circumstance exists, that may give rise to or serve as a basis for the commencement of any such Proceeding.

There is no Order to which any of the Company, the Company Business or any of the Company Assets is subject.

To the Knowledge of the Company, no Employee or agent of the Company is subject to any Order that prohibits such Employee or agent from engaging in or continuing any conduct, activity or practice relating to the Company Business.

Operating Permits and Licenses

Compliance with Advertising Laws

Compliance with Environmental Laws

the Company is not in violation of any Environmental Laws, including, without limitation, laws and regulations relating to the release or threatened release of Hazardous Substances or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances except, in each case, whose such violation could not reasonably be expected to have a Company Material Adverse Effect;

the Company has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance in all material respects with their requirements;

there are no pending or, to the Knowledge of the Company, threatened in writing administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or Proceedings relating to any applicable Environmental Law against the Company; and

to the Knowledge of the Company, there are no existing events, conditions or facts that would reasonably be expected to form the basis of an Order for clean- up or remediation, or an action, suit or Proceeding by any private party or Governmental Body, against or affecting the Company relating to Hazardous Substances or any applicable Environmental Laws.

Expropriation

Rights of Other Persons

Rights on Business Activities

Relationships with Customers, Suppliers, Distributors and Sales Representatives

Regulatory Proceedings

Products

Protection of Personal Information

Certain Payments

made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services:

to obtain favorable treatment in securing business;

to pay for favorable treatment for business secured;

to obtain special concessions, or for special concessions already obtained, for or in respect of the Company or any Related Party of the Company; or

in violation of any Applicable Laws; or

established or maintained any fund or asset that has not been recorded in the books and records of the Company.

Sanctions

Anti-Money Laundering and Compliance with Anti-Corruptions Laws

made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any governmental agency, authority or instrumentality of any jurisdiction in violation of Applicable Laws; or

made any contribution to any candidate for public office,

Parent Disclosure Record

No Standstills

Anti-Takeover Statutes

Absence of Certain Changes or Events

incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice or in connection with the Merger, or discharged or satisfied any lien, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any Company Material Adverse Effect;

sold, encumbered, assigned or transferred any material fixed assets or properties;

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of the Company to any lien of any nature whatsoever;

made or suffered any amendment or termination of any Company Material Contract to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

declared, set aside or paid any dividend, or made or agreed to make any other distribution or payment in respect of any Company Securities or redeemed, purchased or otherwise acquired, or agreed to redeem, purchase or acquire any Company Securities;

suffered any damage, destruction or loss, whether or not covered by insurance, that has had a Company Material Adverse Effect;

suffered any Company Material Adverse Effect (financial or otherwise);

there has not been any material increase in or modification of the compensation payable to or to become payable by the Company to any of its Employees or any grant to any such Employee of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement made to, for or with any of such directors, officers, Employees or consultants;

made commitments or agreements for capital expenditures or capital additions or betterments exceeding $25,000;

entered into any transaction other than in the ordinary course of business consistent with past practice; or

agreed, whether in writing or orally, to do any of the foregoing.

Undisclosed Information

To the Knowledge of the Company, the Company does not have any information relating to the Company, the Company Business, or the Company Assets which is not generally known or which has not been disclosed to the Parent and which could reasonably be expected to have a Company Material Adverse Effect.

To the Knowledge of the Company, no representation or warranty of the Company in the Agreement, and no statement in Company Disclosure Letter, omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

Survival

Reliance

No Further Representations and Warranties

Organization and Good Standing

The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.

Each Subsidiary of the Parent is duly organized, validly existing and in good standing under the respective laws of its jurisdiction of incorporation or organization.

The Parent and each of its Subsidiaries has full corporate or limited liability company power, authority and capacity to conduct the Parent Business as it has been and is presently conducted, to own, operate or use the properties and the Parent Assets that it purports to own, operate or use, and to perform all its obligations under any applicable Contracts to which it is a party.

The Parent and each of its Subsidiaries is duly qualified to do business as a corporation or limited liability company and is in good standing in each jurisdiction in which the owning or leasing of any Parent Assets or the operation of the Parent Business makes such licensing or qualification necessary, except where such failure to be so qualified would not result in a Parent Material Adverse Effect.

Capitalization

Authorization of the Parent Common Stock Shares

Reporting Issuer Status

Stock Exchange Listing

Absence of Rights to Acquire Securities

Authority

Validity of Consideration Shares

No Conflict

contravene, conflict with, or result in a violation of any provision of the Charter Documents of the Parent or any of its Subsidiaries or any resolution adopted by the Parent Board or the board of directors of any of its Subsidiaries;

contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the transactions contemplated herein or to exercise any remedy or obtain any relief under, any Applicable Laws to which the Parent or the Parent Assets may be subject;

contravene, conflict with, or result in a violation of, any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any governmental authorization that is held by the Parent or any of its Subsidiaries, or that otherwise relates to the Parent Assets or the Parent Business;

cause any of the Parent Assets to be reassessed or revalued by any Governmental Body;

contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any subsisting contracts, oral or written, entered into by the Parent, by which the Parent is bound, or to which it or the Parent Assets are subject, which have total payment obligations on the part of the Parent which reasonably can be expected to exceed $250,000, or are for a term of or in excess of one year (each, a “Parent Material Contract”);

result in the imposition or creation of any liens upon or with respect to any of the Parent Assets or the Parent Securities; or

require the Parent or any of its Subsidiaries to obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the transactions contemplated herein.

Subsidiaries

Partnerships or Joint Ventures

Books and Records

Actions and Proceedings

Intellectual Property

For the purposes of this section and this Agreement, the following words have the following meanings:

“Parent Intellectual Property” includes all contracts whereby the Parent or any of its Subsidiaries licenses Intellectual Property from any other Person (other than off-the-shelf licenses), any item of Intellectual Property solely owned by the Parent or any of its Subsidiaries, and any item of Intellectual Property in which the Parent or any of its Subsidiaries has or purports to have a joint ownership interest; and

The Parent Disclosure Letter lists all:

registered Parent Intellectual Property; and

Parent Intellectual Property that is not registered but that is used in the Parent Business.

All required filings and fees related to the Parent Intellectual Property have been filed on a timely basis with, and paid to, the relevant Governmental Bodies, and all Parent Intellectual Property is otherwise in good standing. The Parent has provided the Company with true and complete copies of file histories, documents, certificates, office actions, correspondence and other materials related to all of the Parent Intellectual Property.

The Parent Intellectual Property is valid and enforceable, and the Parent has not received notice of any Proceeding challenging the extent, validity or enforceability of, or the Parent’s or any of its Subsidiaries’ ownership of, any Parent Intellectual Property, in whole or in part, and in the case of pending applications for the Parent Intellectual Property, neither the Parent nor any of its Subsidiaries has received notice of any Proceeding seeking to oppose any such application, or have any such application canceled, re-examined or found invalid, in whole or in part.

The Parent Disclosure Letter lists all Contracts regarding, or related to, the Parent Intellectual Property. The Parent has provided the Company with true and complete copies of all such Contracts, including all modifications, amendments and supplements thereto and waivers thereunder. Each of such Contracts is valid and binding on respectively the Parent or its appropriate Subsidiary in accordance with its terms and is in full force and effect. Neither the Parent, its Subsidiaries, nor, to the knowledge of the Parent, any other party to any such Contract is in breach of, or default under (or is alleged to be in breach of or default under), or has provided or received any notice of breach or default of, or any intention to terminate, any such Contract. Except as disclosed in the Parent Disclosure Record, the Parent has not permitted or licensed any Person to use any of the Parent Intellectual Property. Except pursuant to the terms of the Contracts, the Parent has not agreed to indemnify any Person against any charge of infringement or other violation with respect to Intellectual Property.

The Parent and its Subsidiaries have the valid right to use all other Intellectual Property used in or necessary for the conduct of the Parent Business, in each case, free and clear of encumbrances. Without limiting the generality of the foregoing, the Parent and its Subsidiaries have respectively entered into Contracts with every current and former Employee of the Parent or its Subsidiaries as appropriate, and with every current and former independent contractor or consultant to the Parent or its Subsidiaries as appropriate, whereby such Employee(s), contractor(s) and consultant(s) have:

respectively assigned to the Parent or any of its Subsidiaries any ownership interest and right they may have in any Parent Intellectual Property and have waived any moral rights or any rights to similar effect in any country or at common law they may have therein for the benefit of the Parent or such Subsidiary of the Parent;

acknowledged exclusive ownership of all Parent Intellectual Property by the Parent or its respective Subsidiary; and

entered into nondisclosure agreements pursuant to which they have agreed to maintain the confidentiality of the Parent Intellectual Property.

Except as otherwise disclosed in this Agreement, the consummation of the transactions contemplated in this Agreement will not result in the loss or impairment of, or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Parent’s or any of its Subsidiaries’ right to own, use or hold for use any Intellectual Property as owned, used or held for use in the conduct of the Parent Business.

To the knowledge of the Parent, the rights of the Parent and its respective subsidiaries in the Parent Intellectual Property are valid, subsisting and enforceable. The Parent has taken all reasonable steps to maintain the Parent Intellectual Property and to protect and preserve the confidentiality of all trade secrets included in the Parent Intellectual Property, including requiring all Persons having access thereto to execute written non-disclosure Contracts.

To the knowledge of the Parent, the conduct of the Parent Business as currently and formerly conducted, and the products, processes and services of the Parent, have not infringed, misappropriated, diluted or otherwise violated, and do not and will not infringe, dilute, misappropriate or otherwise violate, the Intellectual Property or other rights of any Person. To the knowledge of the Parent, no Person has infringed, misappropriated, diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, any Parent Intellectual Property.

All of the Parent Intellectual Property is either:

owned solely by the Parent or the respective Subsidiary of the Parent, free and clear of any Liens; or

rightfully used and authorized for use by the Parent or the respective Subsidiary of the Parent pursuant to a valid and enforceable written license.

Except as noted in the Parent Disclosure Letter, the Parent Intellectual Property constitutes all of the Intellectual Property necessary to carry on the Parent Business by the Parent following the Closing, consistent with the manner in which it was conducted prior to the Closing, and neither the Parent nor any of its Subsidiaries is obligated to provide any consideration (whether financial or otherwise) to any other Person nor is any other Person otherwise entitled to any consideration, with respect to any exercise of rights by the Parent, its Subsidiaries or the Parent in the Parent Intellectual Property (other than with respect to maintenance costs associated with Parent Intellectual Property owned by the Parent and license fees and other payments associated with Parent Intellectual Property licensed by the Parent).

There is no Proceeding (including any oppositions, interferences or re- examinations) settled, pending or threatened (including in the form of offers to obtain a license):

alleging any infringement, misappropriation, dilution or violation of the Intellectual Property of any Person by the Parent or the respective Subsidiary of the Parent;

challenging the validity, enforceability, registrability or ownership of any Parent Intellectual Property or the rights of the Parent or the respective Subsidiary of the Parent with respect to any Parent Intellectual Property; or

by the Parent or any other Person alleging any infringement, misappropriation, dilution or other violation by any Person of the Parent Intellectual Property, and neither the Parent nor any of its Subsidiaries is a party to any other Proceeding with respect to any Parent Intellectual Property or any other rights arising with respect to any Intellectual Property.

Neither the Parent nor any of its Subsidiaries is subject to any outstanding or, to the knowledge of the Parent, prospective Order (including any motion or petition therefor) that does or would restrict or impair the use of any Parent Intellectual Property.

To the Knowledge of the Parent, the consummation of the Merger will not alter, impair or otherwise adversely affect any rights or obligations of the Parent or any of its Subsidiaries in any of the Parent Intellectual Property.

To the Knowledge of the Parent, no third-party licensed Parent Intellectual Property is subject to revocation or termination upon a change of control of the Parent or any of its Subsidiaries. Except as otherwise disclosed in this Agreement or the Parent Disclosure Letter, neither the Parent nor any of its Subsidiaries is required to pay any royalty or other fees to any other Person.

Consents

consummate the transactions contemplated by this Agreement;

execute and deliver all of the documents in connection with the Merger;

duly perform and observe the terms and provisions of this Agreement; or

render this Agreement legal, valid, binding and enforceable.

Compliance

To the Knowledge of the Parent, the Parent and its Subsidiaries are in full compliance with, are not in default or violation in any material respect under, and have not been charged with or received any notice at any time of any material violation of, any Applicable Laws related to the Parent Business.

To the Knowledge of the Parent, neither the Parent nor any of its Subsidiaries are subject to any Order entered in any Proceeding applicable to the Parent Business that would have a Parent Material Adverse Effect.

The Parent and its Subsidiaries have duly filed all reports and returns required to be filed by them with any applicable Governmental Body and have obtained all governmental permits and other governmental consents, except as may be required after the Execution Date. All of such permits and consents are in full force and effect, and no Proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or, to the knowledge of the Parent, threatened, and none of them will be affected in a material adverse manner by the consummation of the Merger.

To the knowledge of the Parent, no event has occurred or circumstance exists that may (with or without notice or lapse of time) constitute or result, directly or indirectly, in a material violation of, or a failure to comply with, any material requirement of any Governmental Body required for the operation of the Parent Business, or could reasonably be expected to result directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any authorization of any Governmental Body required for the operation of the Parent Business.

Neither the Parent nor any of its Subsidiaries has received any written notice or other communication from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any material requirement of any Governmental Body, or any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification of any authorization of any Governmental Body.

All applications required to have been filed for the renewal of any authorizations required from any Governmental Body for the operation of the Parent Business, up to the Execution Date, have been duly filed on a timely basis with each applicable Governmental Body, and all other filings required to have been made with respect to such authorizations have been duly made on a timely basis with each applicable Governmental Body.

Disclosure Controls

Parent Disclosure Record

Exchange Act Reports

Financial Representations

Included with the Parent SEC Documents are true, correct, and complete copies of the Parent Financial Statements.

The Parent Financial Statements:

are in accordance with the books and records of the Parent;

present fairly the financial condition of the Parent as of the respective dates indicated and the results of operations for such periods; and

have been prepared in accordance with GAAP and reflect the consistent application of GAAP throughout the periods involved.

All material financial transactions of the Parent have been accurately recorded in the books and records of the Parent and such books and records fairly present the financial position and the affairs of the Parent.

To the Knowledge of the Parent other than the costs and expenses incurred in connection with the negotiation and consummation of the transactions contemplated herein, neither the Parent nor its Subsidiaries have material liabilities, net of cash, which:

are not set forth in the Parent Financial Statements or have not heretofore been paid or discharged;

did not arise in the ordinary course of business under any Contract or plan that has been specifically disclosed in writing to the Company; or

have not been incurred in amounts and pursuant to practices consistent with past business practice, in or as a result of the ordinary course of its business since the Parent Accounting Date, and otherwise disclosed in writing to the Parent.

To the Knowledge of the Parent except to the extent reflected or reserved against in the Parent Financial Statements or incurred subsequent to the Parent Accounting Date in the ordinary course of the Parent Business, the Parent has no outstanding indebtedness or liabilities, and any liabilities incurred by the Parent in the ordinary course of business since the Parent Accounting Date have not had a Parent Material Adverse Effect.

Since the Parent Accounting Date, there have not been:

any changes in the condition or operations of the Parent Business, or the assets or financial affairs of the Parent or its Subsidiaries which have caused, individually or in the aggregate, a Parent Material Adverse Effect; or

any damage, destruction or loss, labor trouble or other event, development or condition, of any character (whether or not covered by insurance), which has caused or may cause a Parent Material Adverse Effect.

Since the Parent Accounting Date, and other than as contemplated by this Agreement, neither the Parent nor any of its subsidiaries has:

transferred, assigned, sold or otherwise disposed of any of the assets shown or reflected in the Parent Financial Statements or cancelled any debts or claims;

incurred or assumed any material liability (other than costs incurred in connection with the Merger);

discharged or satisfied any Liens, or paid any liabilities, other than current liabilities or the current portion of long term liabilities disclosed in the Parent Financial Statements, or current liabilities incurred since the date thereof in the ordinary course of business;

declared, made, or committed itself to make any payment of any dividend or other distribution in respect of any of the Parent Securities, nor has it purchased, redeemed, subdivided, consolidated, or reclassified any of the Parent Securities;

made any gift of money or of any assets to any Person;

purchased or sold any assets;

made commitments or agreements for capital expenditures or capital additions or betterments exceeding $250,000;

amended or changed, or taken any action to amend or change, its organizational documents;

made payments of any kind to or on behalf of either shareholder or any Related Party of a shareholder, nor under any management agreement, save and except business related expenses in the ordinary course of business and at the regular rates payable;

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or subjected any of the material assets or properties of the Parent or any of its subsidiaries to any lien of any nature whatsoever;

increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Employees, or made any increase in, or any addition to, other benefits to which any of its Employees may be entitled;

made or suffered any amendment or termination of any Material Contract, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

adopted or increased the payments to or benefits under any employee plan; or

authorized or agreed, or otherwise have become committed, to do any of the foregoing.

Neither the Parent nor any of its Subsidiaries has any guarantees, indemnities or contingent or indirect obligations with respect to the liabilities of any other Person, including any obligation to service the debt of, or otherwise acquire an obligation of, another Person, or to supply funds to, or otherwise maintain any working capital or other balance sheet condition of, any other Person.

Neither the Parent nor any of its Subsidiaries is a party to, bound by or subject to any Contract or Applicable Laws that would be violated or breached by, or under which default would occur, or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the consummation of any of the transactions provided for in this Agreement.

Tax Matters

each of the Parent and its Subsidiaries has filed, or caused to be filed, all Tax Returns that are or were required to be filed by, or with respect to, the Parent or its Subsidiaries, either separately or as a member of a group of corporations, pursuant to all Applicable Laws, except for any Tax Returns the non-filing of which will not have a Parent Material Adverse Effect. The Parent has made available to the Company copies of all such Tax Returns filed by the Parent and its Subsidiaries. Neither the Parent nor its Subsidiaries has given, or been requested to give, waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment by the Parent or its Subsidiaries, or for which the Parent or its Subsidiaries may be liable;

the Parent and its Subsidiaries have paid all Taxes that have become or are due with respect to any period ended on or prior to the Execution Date and has established an adequate reserve therefore on its balance sheets for those Taxes not yet due and payable, except for any Taxes the non-payment of which will not have a Parent Material Adverse Effect;

the Parent and its Subsidiaries have withheld from each payment made to any of its past or present Employees or directors, and to any other Person, the amount of all Taxes and other deductions required to be withheld therefrom and has paid the same to the proper tax or other receiving officers within the time required under Applicable Laws;

neither the Parent nor any of its Subsidiaries is presently under, nor received notice of, any contemplated investigation or audit by any Governmental Body concerning any fiscal year or period ended prior to the Execution Date; and

to the knowledge of the Parent, the Parent Financial Statements contain full provision for all Taxes, including any deferred Taxes that may be assessed to the Parent or any of its Subsidiaries.

Legal Proceedings

Other than as set out in the Parent Disclosure Letter, there is no pending Proceeding:

that has been commenced by or against the Parent, any of its Subsidiaries or that otherwise relates to or may affect the Parent Business or any of the Parent Assets; or

that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated herein.

To the Knowledge of the Parent, no Proceeding has been threatened against the Parent, any of its Subsidiaries or with respect to the Parent Business or the Parent Assets, and no event has occurred or circumstance exists, that may give rise to or serve as a basis for the commencement of any such Proceeding.

There is no Order to which any of the Parent, any of its Subsidiaries, the Parent Business or any of the Parent Assets are subject.

To the Knowledge of the Parent, no Employee or agent of the Parent or any of its Subsidiaries is subject to any Order that prohibits such Employee or agent from engaging in or continuing any conduct, activity or practice relating to the Parent Business.

Regulatory Proceedings

Absence of Certain Changes or Events

incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice or in connection with the Merger, or discharged or satisfied any lien, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any Parent Material Adverse Effect;

sold, encumbered, assigned or transferred any material fixed assets or properties;

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of the Parent or any of its Subsidiaries to any lien of any nature whatsoever;

made or suffered any amendment or termination of any Parent Material Contract to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

declared, set aside or paid any dividend, or made or agreed to make any other distribution or payment in respect of any Parent Securities or redeemed, purchased or otherwise acquired, or agreed to redeem, purchase or acquire any Parent Securities;

suffered any damage, destruction or loss, whether or not covered by insurance, that has had a Material Adverse Effect;

suffered any Parent Material Adverse Effect (financial or otherwise);

there has not been any material increase in or modification of the compensation payable to or to become payable by the Parent or any of its Subsidiaries to any of their respective Employees or any grant to any such Employee of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement made to, for or with any of such directors, officers, employees or consultants;

made commitments or agreements for capital expenditures or capital additions or betterments exceeding $250,000;

entered into any transaction other than in the ordinary course of business consistent with past practice; or

agreed, whether in writing or orally, to do any of the foregoing.

Title to Personal Property

Material Contracts

Certain Transactions

Certain Payments

Compliance with Healthcare Laws

Compliance with Advertising Laws

Compliance with Environmental Laws

No Brokers

Title to Real Property

Employment Matters

The Parent and its Subsidiaries:

are in compliance in all material respects with all Applicable Laws respecting employment, employment practices, terms and conditions of employment, and wages and hours with respect to all of its Employees;

has withheld all amounts required by law or by agreement to be withheld by it from the wages or salaries of, and other payments to, Employees;

are not liable for any arrears of wages, taxes or any penalty for failure to comply with any of the foregoing;

are not liable for any payment to any trust or other fund or to any Governmental Body with respect to unemployment compensation benefits, social security or other benefits for its Employees (other than routine payments to be made in the ordinary course of business and consistent with past practice);

have provided or will provide its Employees with all wages, benefits, stock options, bonuses, incentives and all other compensation that are, or have become, due and payable through to the Closing; and

represent that in the three years prior to the Execution Date, no citation has been issued by any Governmental Body against it, and no notice of contest, claim, complaint, charge, investigation or other administrative enforcement Proceeding involving it has been filed or is pending or, to its knowledge, threatened, against it under any Applicable Law relating to occupational safety and health.

(i)

(ii)

each ERISA Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which could cause the loss of such qualification.

Operating Permits and License

Relationships with Customers, Suppliers, Distributors and Sales Representatives

Products

Survival

Reliance

No Further Representations and Warranties

Conduct of Business of the Company

amend or propose to amend its Charter Documents, other than as contemplated in the Seventh Amended and Restated Articles of Incorporation;

(i) split, combine, or reclassify any of the Company Securities;

repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any of the Company Securities; or

declare, set aside, or pay any dividend or distribution (whether in cash, stock, property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock;

issue, sell, pledge, dispose of, or encumber any of the Company Securities, other than the issuance of shares of the Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms;

except as required by Applicable Laws or by any Company Employee Plan or Contract in effect as of the date of this Agreement:

increase the compensation payable or that could become payable by the Company to directors, officers, Employees, or consultants, other than increases in compensation made to non-officer Employees in the ordinary course of business consistent with past practice;

promote any officers or Employees, except in connection with the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or Employee; or

establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than contributions required by Law, the terms of such Company Employee Plans as in effect on the date hereof, or that are made in the ordinary course of business consistent with past practice;

acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances, or capital contributions to or investments in any Person in excess of $25,000 in the aggregate;

(i)

adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, or other reorganization;

repurchase, prepay, or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls, or other rights to acquire any debt securities of the Company, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than in connection with the financing of ordinary course trade payables consistent with past practice;

enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;

institute, settle, or compromise any Legal Action involving the payment of monetary damages by the Company of any amount exceeding $25,000 in the aggregate, other than

any Legal Action brought against the Parent or the Merger Sub arising out of a breach or alleged breach of this Agreement by the Parent or the Merger Sub; and

the settlement of claims, liabilities, or obligations reserved against in the Company Financial Statements;

provided that the Company shall not settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company Business;

make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or Applicable Laws;

(i)

make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting;

amend any material Tax Returns or file claims for material Tax refunds; or

enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company;

enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding, or similar Contract with respect to any joint venture, strategic partnership, or alliance;

except in connection with actions permitted by Section 5.4 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to a Takeover Proposal or otherwise, except for the Parent, the Merger Sub, or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;

abandon, allow to lapse, sell, assign, transfer, grant any security interest in otherwise encumber or dispose of any Company Intellectual Property, or grant any right or license to any Company Intellectual Property other than pursuant to non-exclusive licenses entered into in the ordinary course of business consistent with past practice;

terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;

except to the extent expressly permitted by Section 5.4 or Article 7, take any action that is intended or that would reasonably be expected to, individually or in the aggregate, prevent, materially delay, or materially impede the consummation of the Merger, or the other transactions contemplated by this Agreement; or

agree or commit to do any of the foregoing.

Conduct of the Business of the Parent

amend its Charter Documents in a manner that would adversely affect the Company or the holders of the Company Common Stock relative to the other holders of the Parent Common Stock;

split, combine, or reclassify any of the Parent Securities or any securities of any of the Parent’s Subsidiaries (the “Parent Subsidiary Securities”) in a manner that would adversely affect the Company or the holders of the Company Common Stock relative to the other holders of the Parent Common Stock;

repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any of the Parent Securities or any of the Parent Subsidiary Securities; or

declare, set aside, or pay any dividend or distribution (whether in cash, stock, property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends from its direct or indirect wholly-owned Subsidiaries and ordinary quarterly dividends, consistent with past practice with respect to timing of declaration and payments);

issue, sell, pledge, dispose of, or encumber any of the Parent Securities or any of the Parent Subsidiary Securities, other than:

the issuance of shares of the Parent Common Stock upon the exercise of any Parent Stock Option or Parent Warrant or the conversion of a security outstanding as of the date of this Agreement in accordance with its terms;

the grant of Parent Stock Options in accordance with any Parent Equity Incentive Plan, the issuance of shares of the Parent Common Stock in accordance with any Parent Equity Incentive Plan, the issuance of shares of the Parent Common Stock upon the exercise of any Parent Stock Option granted after the date hereof in accordance with any Parent Equity Incentive Plan; and

sales or issuances of shares of the Parent Common Stock or convertible securities in an amount not exceeding 25% of the issued and outstanding shares of the Parent Common Stock (in the case of convertible securities, on an as-converted basis) as of the date of this Agreement;

except in connection with actions permitted by Section 5.4 hereof, acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances, or capital contributions to or investments in any Person, in each case that would reasonably be expected to prevent, impede, or materially delay the consummation of the Merger or other transactions contemplated by this Agreement;

adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, or other reorganization;

except to the extent expressly permitted by Section 5.4 or Article 7, take any action that is intended or that would reasonably be expected to, individually or in the aggregate, prevent, impede, or materially delay the consummation of the Merger, or the other transactions contemplated by this Agreement; or

agree or commit to do any of the foregoing.

Access to Information; Confidentiality

From the date of this Agreement until the earlier to occur of the Effective Time or the termination of this Agreement in accordance with the terms set forth in Article 7, the Company shall afford to the Parent and the Parent’s Representatives reasonable access, at reasonable times and in a manner as shall not unreasonably interfere with the business or operations of the Company, to the officers, employees, accountants, agents, properties, offices, and other facilities and to all books, records, contracts, and other assets of the Company, and the Company shall furnish promptly to the Parent such other information concerning the business and properties of the Company as the Parent may reasonably request from time to time. The Company shall not be required to provide access to or disclose information where such access or disclosure would jeopardize the protection of attorney-client privilege or contravene any Law (it being agreed that the Parties shall use their reasonable best efforts to cause such information to be provided in a manner that would not result in such jeopardy or contravention). No investigation shall affect the Company’s representations, warranties, covenants, or agreements contained herein, or limit or otherwise affect the remedies available to the Parent or the Merger Sub pursuant to this Agreement.

The Parent and the Company shall comply with, and shall cause their respective Representatives to comply with, all of their respective obligations under the Confidentiality Agreement, dated December 1, 2018, between the Parent and the Company (the “Confidentiality Agreement”), which shall survive the termination of this Agreement in accordance with the terms set forth therein.

Standstill

For the purposes of this Section 5.4:

the term “Transaction Proposal” means, other than the Transaction, any bona fide offer, proposal or inquiry made by any Person other than the other Party (or any Affiliate of such Party) with respect to: (a) any take- over bid, exchange offer, plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding-up or exclusive license involving a Party (the “Subject Party”); (b) any transaction or purchase (or any lease, long-term supply agreement or other arrangement having the same economic effect as a sale), direct or indirect, in a single transaction or a series of related transactions, of all or a significant portion of the assets of, or more than 20% of any class of the share capital, voting securities or other equity interests in the Subject Party (other than any such transaction with respect to a company in which the Subject Party does not have a controlling equity interest); (c) any other similar transaction or series of transactions involving the Subject Party; or (d) any other transaction, the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the transactions contemplated by this Agreement, or which could reasonably be expected to materially reduce the benefits to the other Party under this Agreement; and

“Superior Proposal” means any bona fide, unsolicited, written Transaction Proposal made by a Person (and not obtained in violation of this Section 5.4) that relates the Subject Party, and: (a) that is reasonably capable of being completed without undue delay, taking into account all financial, legal, regulatory and other aspects of such proposal and the Person making such proposal, (b) that, in the case of a Transaction Proposal to acquire 100% of the outstanding securities of a Party, is made available to all security holders of the Subject Party (the “Subject Holders”), (c) that is not subject to a due diligence condition, (d) that is not subject to a financing condition and in respect of which any required financing to complete such Transaction Proposal has been demonstrated to the satisfaction of the board of directors of the Subject Party (the “Subject Board”), acting in good faith, as having been obtained or reasonably likely to be obtained, and (e) in respect of which the Subject Board determines, in its good faith judgment, after consultation with its outside legal and financial advisors, that (i) failure to recommend such Transaction Proposal to the Subject Holders would be inconsistent with its fiduciary duties under Applicable Laws, and (ii) having regard for all of its terms and conditions, such Transaction Proposal would, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction more favourable to the Subject Holders from a financial point of view and in the case of the Company, more favourable than the transactions contemplated by this Agreement, after taking into account any change to the transactions contemplated by this Agreement proposed by the Parent.

From the date of this Agreement until 120 days following the date of this Agreement, except as provided herein, neither Party will, directly or indirectly, through any of its Representatives, or otherwise, and will not permit any Representative to:

solicit, initiate, encourage or otherwise facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any information, properties, facilities, books or records of such Party or entering into any form of agreement, arrangement or understanding), any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, a Transaction Proposal or potential Transaction Proposal;

enter into or otherwise engage or participate in any discussions or negotiations with any Person (other than the other Party and its Affiliates) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to a Transaction Proposal or potential Transaction Proposal; or

approve, accept, endorse or recommend, or propose publicly to accept, approve, endorse or recommend any Transaction Proposal;

Each Party will, and will cause its Representatives to, immediately cease and terminate any solicitation, encouragement, discussion, negotiations or other activities commenced prior to the date of this Agreement with any Person (other than the other Party and its affiliates) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, a Transaction Proposal or potential Transaction Proposal, and in connection therewith will:

discontinue access to and disclosure of all information, including any data room and any non-public or confidential information, properties, facilities, books and records of such Party; and

request, and exercise all rights it has to require: (i) the return or destruction of all copies of any information regarding such Party provided to any Person other than the other Party, and (ii) the destruction of all material including, incorporating or otherwise reflecting such information regarding such Party, using all necessary efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements.

Each Party represents and warrants that it has not waived any confidentiality, standstill or similar agreement or restriction to which it is a party, and further covenants and agrees: (i) that it will take all necessary action to enforce each confidentiality, standstill or similar agreement or restriction to which it is a party, and (ii) that neither it nor any of its Representatives have released or will release, without the prior written consent of the other Party (which may be withheld or delayed in the other Party’s sole and absolute discretion), any Person from, or waive, amend, suspend or otherwise modify such Person’s obligations respecting such Party under any confidentiality, standstill or similar agreement or restriction to which it is a party.

Notwithstanding Sections 5.4(b) and 5.4(c) and any other provision of this Agreement, if at any time following the date of execution of this Agreement and prior to Closing, either Party receives a bona fide written Transaction Proposal that did not result from a breach of this Section 5.4, or a Transaction Proposal is made to a Subject Holder, and the Subject Board determines in good faith, after consultation with the Subject Party’s financial advisors and outside counsel, that such Transaction Proposal constitutes or, if consummated in accordance with its terms, could reasonably be expected to be a Superior Proposal and in the opinion of the Subject Board, acting in the good faith judgment of the Subject Board, after consultation with outside legal counsel, failure to take such action would be inconsistent with such Subject Board’s exercise of its fiduciary duties, then the Subject Party may, in response to a request made by the Person making or proposing to make such Transaction Proposal, and provided it is in compliance with this Section 5.4: (i) furnish information with respect to the Subject Party to the Person making such Transaction Proposal; or (ii) enter into, participate, facilitate and maintain discussions or negotiations with, and otherwise cooperate with or assist, the Person making such Transaction Proposal; provided that the Subject Party shall not, and shall not allow its Representatives to, disclose any non-public information to such Person if such non-public information has not been previously provided to, or is not concurrently provided to the other Party and without entering into a confidentiality and standstill agreement with such Person.

If either Party or any of its Representatives receives or otherwise becomes aware of any inquiry, proposal or offer from any Person that constitutes, or may reasonably be expected to constitute or lead to, a Transaction Proposal, or any request by any Person for copies of, access to, or disclosure of, information relating to such Party, including but not limited to, information, access or disclosure relating to the properties, facilities, books or records of such Party, such Party will immediately notify the other Party, at first orally, and then promptly, and in any event within 48 hours, in writing, of:

such Transaction Proposal, inquiry, offer or request, including a description of its material terms and conditions and the identity of all Persons making the Transaction Proposal, inquiry, offer or request; and

the status of developments and negotiations with respect to such Transaction Proposal, inquiry, offer or request, including any changes, modifications or other amendments to any such Transaction Proposal, inquiry, offer or request,

and will provide the other Party with copies of all documents, correspondence or other material received in respect of, from or on behalf of any such Person. Such Party shall thereafter also provide the other Party with such other details of such proposal, inquiry, offer or request, or any amendment to any of the foregoing, information regarding the value in financial terms that the Subject Board has in consultation with its financial advisor determined should be ascribed to any non- cash consideration offered under the Transaction Proposal, and such other information as the other Party may reasonably request, and shall keep the other Party fully informed as to the status, including any changes to the material terms, of such proposal, inquiry, offer or request, or any amendment to any of the foregoing, and shall respond promptly to all inquiries from the other Party with respect thereto.

The Subject Party covenants that it will not accept, approve, endorse, recommend or enter into any agreement, understanding or arrangement in respect of a Transaction Proposal (other than a confidentiality and standstill agreement permitted by Section 5.4(e)) unless:

the Subject Board concludes in good faith that the Transaction Proposal constitutes a Superior Proposal;

the Subject Party has complied with the provisions of this Section 5.4;

the Transaction Proposal did not result from a breach of this Section 5.4; and

the Subject Party complies with the procedures set out in this Section 5.4.

Nothing contained in this Agreement shall prohibit the Subject Board from taking any action or from making any disclosure to any of the Subject Holders prior to Closing if, in the good faith judgment of the Subject Board, after consultation with outside legal counsel, failure to take such action or make such disclosure would be inconsistent with the Subject Board’s exercise of its fiduciary duties or such action or disclosure is otherwise required under Applicable Law.

The Subject Party covenants that it will not accept, approve, endorse, recommend or enter into any agreement in respect of a Superior Proposal (other than a confidentiality and standstill agreement permitted by Section 5.4(e)) unless:

the Subject Party has complied with its obligations under this Section 5.4 and has provided the other Party with a copy of the Superior Proposal and all related documentation described in Section 5.4(f); and

a period (the “Response Period”) of five Business Days has elapsed from the date that is the later of: (A) the date on which the other Party receives written notice from the Subject Board that it has determined, subject only to compliance with this Section 5.4, to accept, approve, endorse, recommend or enter into a binding agreement to proceed with such Superior Proposal; and (B) the date the other Party receives a copy of the Superior Proposal and all related documents described in Section 5.4(f).

During the Response Period, the other Party will have the right, but not the obligation, to offer to amend this Agreement, or make an offer to the Subject Party, as applicable. The Subject Board shall cooperate with the other Party with respect to the Superior Proposal, including by negotiating in good faith with the other Party, and shall review any such offer by the other Party to amend this Agreement, or any offer made by the other Party to the Subject Party, to determine whether the Superior Proposal to which the other Party is responding would continue to be a Superior Proposal when assessed against the written proposal of the other Party. If the Subject Board determines that the Superior Proposal no longer constitutes a Superior Proposal, when assessed against the written proposal of the other Party, the Subject Party shall enter into an amendment to this Agreement incorporating the amendments to this Agreement or an agreement incorporating the offer as set out in the written proposal. If the Subject Board determines that the Superior Proposal continues to be a Superior Proposal, it may recommend that the Subject Holders accept such Superior Proposal; provided that it is in compliance with the conditions set out in this Section 5.4, including by terminating this Agreement in order to accept or enter into an agreement, understanding or arrangement to proceed with the Superior Proposal.

Each successive amendment to any Transaction Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Subject Holders shall constitute a new Transaction Proposal for the purposes of this Section 5.4 and the other Party shall be afforded a new Response Period and the rights afforded in this Section 5.4 in respect of each such Transaction Proposal.

Preparation of Joint Proxy Statement/Prospectus

In connection with the Company Stockholders Meeting and the Parent Stockholders Meeting, as soon as reasonably practicable following the date of this Agreement, the Company and the Parent shall prepare the Joint Proxy Statement/Prospectus and the Parent shall prepare and file with the SEC the Form S-4 (which shall include the Joint Proxy Statement/Prospectus). The Company and the Parent shall each use its commercially reasonable efforts to:

cause the Form S-4 to be declared effective under the Securities Act as promptly as practicable after its filing;

ensure that the Form S-4 complies in all material respects with the applicable provisions of the Securities Act and the Exchange Act; and

keep the Form S-4 effective for so long as necessary to complete the Merger. The Parent shall notify the Company promptly of the time when the Form S-4 has become effective or any supplement or amendment to the Form S-4 has been filed, and of the issuance of any stop order or suspension of the qualification of the shares of the Parent Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction. Each of the Parent and the Company shall use commercially reasonable efforts to:

cause the Joint Proxy Statement/Prospectus to be mailed to the Company Stockholders and the Parent’s stockholders as promptly as practicable after the Form S-4 is declared effective under the Securities Act; and

see that the Joint Proxy Statement/Prospectus complies in all material respects with the applicable provisions of the Securities Act and Exchange Act. The Parent shall also take any other action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or “blue sky” Laws, and the rules and regulations thereunder in connection with the Parent Stock Issuance in the Merger.

The Company shall promptly furnish to the Parent all information concerning the Company and its Affiliates required by Applicable Laws and the rules and policies of the Nasdaq and TSXV to be set forth in the Form S-4 or the Joint Proxy Statement/Prospectus. Each of the Parent and the Company shall promptly correct any information provided by it for use in the Form S-4 or the Joint Proxy Statement/Prospectus if and to the extent that such information shall have become false or misleading in any material respect. Each of the Parent and the Company shall take all steps necessary to amend or supplement the Form S-4 or the Joint Proxy Statement/Prospectus, as applicable, and to cause the Form S-4 or the Joint Proxy Statement/Prospectus, as so amended or supplemented, to be filed with the SEC and disseminated to the holders of the Company Securities and/or the Parent Common Stock, in each case as and to the extent required by Applicable Laws.

Company Stockholders Meeting

solicit from the holders of the Company Securities proxies in favor of the approval of this Agreement and the Merger; and

take all other actions necessary or advisable to secure the vote or consent of the holders of the Company Securities required by Applicable Laws to obtain such approval.

Parent Stockholders Meeting; Approval by Sole Stockholder of the Merger Sub

The Parent shall take all action necessary to duly call, give notice of, convene, and hold the Parent Stockholders Meeting as soon as reasonably practicable after the Form S-4 is declared effective, and, in connection therewith, the Parent shall mail the Joint Proxy Statement/Prospectus to the holders of the Parent Common Stock in advance of the Parent Stockholders Meeting. The Joint Proxy Statement/Prospectus shall include the Parent Board Recommendation. The Parent shall use reasonable best efforts to:

solicit from the holders of the Parent Common Stock proxies in favor of the approval of the Parent Stock Issuance; and

take all other actions necessary or advisable to secure the vote or consent of the holders of the Parent Common Stock required by Applicable Laws to obtain such approval. The Parent shall keep the Company updated with respect to proxy solicitation results as requested by the Company.

Once the Parent Stockholders Meeting has been called and noticed, the Parent shall not postpone or adjourn the Parent Stockholders Meeting without the consent of Company (other than: (A) in order to obtain a quorum of its stockholders; or (B) as reasonably determined by the Parent to comply with Applicable Laws).

The Parent shall use its reasonable best efforts to cooperate with Company to hold the Parent Stockholders Meeting as soon as reasonably practicable after the date of this Agreement.

Immediately following the execution and delivery of this Agreement, the Parent, as sole stockholder of the Merger Sub, shall approve this Agreement and the Merger, in accordance with the NRS.

Notices of Certain Events; Stockholder Litigation

The Company shall notify the Parent and the Merger Sub, and the Parent and the Merger Sub shall notify the Company, promptly of:

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

any notice or other communication from any Governmental Body in connection with the transactions contemplated by this Agreement; and

any event, change, or effect between the date of this Agreement and the Effective Time which causes or is reasonably likely to cause the failure of the conditions set forth in Section 6.2(a), Section 6.2(b), or Section 6.2(c) of this Agreement (in the case of the Company) or Section 6.3(a), Section 6.3(b), or Section 6.3(c) of this Agreement (in the case of the Parent and the Merger Sub), to be satisfied.

The Company shall promptly advise the Parent in writing after becoming aware of any Legal Action commenced, or to the Company’s Knowledge threatened, after the date hereof against the Company or any of its directors by any stockholder of the Company (on their own behalf or on behalf of the Company) relating to this Agreement or the transactions contemplated hereby (including the Merger) and shall keep the Parent reasonably informed regarding any such Legal Action. The Company shall give the Parent the opportunity to consult with the Company regarding the defense or settlement of any such stockholder litigation and shall consider the Parent’s views with respect to such stockholder litigation and shall not settle any such stockholder litigation without the prior written consent of the Parent (which consent shall not be unreasonably withheld, delayed, or conditioned).

In no event shall:

the delivery of any notice by a Party pursuant to this Section 5.8 limit or otherwise affect the respective rights, obligations, representations, warranties, covenants, or agreements of the Parties or the conditions to the obligations of the Parties under this Agreement;

Directors’ and Officers’ Indemnification and Insurance

The Parent and the Merger Sub agree that all rights to indemnification, advancement of expenses, and exculpation by the Company now existing in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Effective Time an officer or director of the Company (each a “Company Indemnified Party”) as provided in the Charter Documents of the Company, in each case as in effect on the date of this Agreement, or pursuant to any other Contracts in effect on the date hereof and disclosed in Section 5.10 of the Company Disclosure Letter, shall be assumed by the Surviving Corporation in the Merger, without further action, at the Effective Time and shall survive the Merger and shall remain in full force and effect in accordance with their terms. For a period of two years from the Effective Time, (i) the Surviving Corporation shall, and the Parent shall cause the Surviving Corporation to, maintain in effect the exculpation, indemnification, and advancement of expenses equivalent to the provisions of the Charter Documents of the Company as in effect immediately prior to the Effective Time with respect to acts or omissions by any Company Indemnified Party occurring prior to the Effective Time, (ii) maintain a policy of director and officer liability insurance with commercially reasonable coverage, however, in no event shall such coverage be less than any such current policy maintained by the Company for the period prior to the Effective Time,] and (iii) shall not amend, repeal, or otherwise modify any such policies or provisions in the Charter Documents in any manner that would adversely affect the rights thereunder of any Company Indemnified Party; provided that all rights to indemnification in respect of any claim made for indemnification within such period shall continue until the disposition of such action or resolution of such claim.

The obligations of the Parent, the Merger Sub, and the Surviving Corporation under this Section 5.10 shall survive the consummation of the Merger and shallnot be terminated or modified in such a manner as to adversely affect any Company Indemnified Party to whom this Section 5.10 applies without the consent of such affected Company Indemnified Party (it being expressly agreed that the Company Indemnified Parties to whom this Section 5.10 applies shall be third party beneficiaries of this Sectioneach of whom may enforce the provisions of this Section 5.10).

In the event the Parent, the Surviving Corporation, or any of their respective successors or assigns:

consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger; or

transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of the Parent or the Surviving Corporation, as the case may be, shall assume all of the obligations set forth in this Section 5.10.

The agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any Company Indemnified Party is entitled, whether pursuant to Law, Contract, or otherwise. 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 its officers, directors, and employees, it being understood and agreed that the indemnification provided for in this Section 5.10 is not prior to, or in substitution for, any such claims under any such policies.

Commercially Reasonable Efforts

Upon the terms and subject to the conditions set forth in this Agreement (including those contained in this Section 5.11), each of the Parties shall, and the Parent shall cause its Subsidiaries to, use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper, or advisable to consummate and make effective, and to satisfy all conditions to, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including:

the obtaining of all necessary permits, waivers, and actions or nonactions from Governmental Bodies and the making of all necessary registrations and filings (including filings with Governmental Bodies) and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or Proceeding by, any Governmental Bodies;

the obtaining of all necessary consents or waivers from third parties; and

the execution and delivery of any additional instruments necessary to consummate the Merger and to fully carry out the purposes of this Agreement.

The Company and the Parent shall, subject to Applicable Laws, promptly:

cooperate and coordinate with the other in the taking of the  actions contemplated by clauses (i), (ii) and (iii) immediately above; and

 supply the other with any information that may be reasonably required in order to effectuate the taking of such actions.

Each Party shall promptly inform the other Parties of any communication from any Governmental Body regarding any of the transactions contemplated by this Agreement. If the Company, on the one hand, or the Parent or the Merger Sub, on the other hand, receives a request for additional information or documentary material from any Governmental Body with respect to the transactions contemplated by this Agreement, then it shall use commercially reasonable efforts to make, or cause to be made, as soon as reasonably practicable and after consultation with the other Party, an appropriate response in compliance with such request, and, if permitted by Applicable Laws and by any applicable

Governmental Body, provide the other Party’s counsel with advance notice and the opportunity to attend and participate in any meeting with any Governmental Body in respect of any filing made thereto in connection with the transactions contemplated by this Agreement. Neither the Parent nor the Company shall commit to or agree (or permit any of the Parent’s Subsidiaries to commit to or agree) with any Governmental Body to stay, toll, or extend any applicable waiting period under the HSR Act or other applicable antitrust laws (the “Antitrust Laws”), without the prior written consent of the other (such consent not to be unreasonably withheld, conditioned, or delayed).

Without limiting the generality of the undertakings pursuant to Section 5.11(a) hereof, the Parties shall:

provide or cause to be provided as promptly as reasonably practicable to Governmental Bodies with jurisdiction over the Antitrust Laws (each such Governmental Body, a “Governmental Antitrust Authority”) information and documents requested by any Governmental Antitrust Authority as necessary, proper, or advisable to permit consummation of the transactions contemplated by this Agreement, including, if applicable, preparing and filing any notification and report form and related material required under the HSR Act and any additional consents and filings under any other Antitrust Laws as promptly as practicable following the date of this Agreement and thereafter to respond as promptly as practicable to any request for additional information or documentary material that may be made under the HSR Act or any other applicable Antitrust Laws; and

subject to the terms set forth in Section 5.11(c) hereof, use commercially reasonable efforts to take such actions as are necessary or advisable to obtain prompt approval of the consummation of the transactions contemplated by this Agreement by any Governmental Body or expiration of applicable waiting periods.

In the event that any administrative or judicial action or Proceeding is instituted (or threatened to be instituted) by a Governmental Body or private party challenging the Merger or any other transaction contemplated by this Agreement, or any other agreement contemplated hereby, the Company shall cooperate in all respects with the Parent and the Merger Sub and shall use its commercially reasonable efforts to contest and resist any such action or Proceeding and to have vacated, lifted, reversed, or overturned any Order, whether temporary, preliminary, or permanent, that is in effect and that prohibits, prevents, or restricts consummation of the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, none of the Parent, the Merger Sub, or any of their respective Affiliates shall be required to defend, contest, or resist any action or Proceeding, whether judicial or administrative, or to take any action to have vacated, lifted, reversed, or overturned any Order, in connection with the transactions contemplated by this Agreement.

Notwithstanding anything to the contrary set forth in this Agreement, none of the Parent, the Merger Sub, or any of the Parent’s Subsidiaries shall be required to, and the Company may not, without the prior written consent of the Parent, which shall not be unreasonably withheld, become subject to, consent to, or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement, or Order to:

sell, license, assign, transfer, divest, hold separate, or otherwise dispose of any assets, business, or portion of business of the Company, the Surviving Corporation, the Parent, the Merger Sub, or any of the Parent’s Subsidiaries;

conduct, restrict, operate, invest, or otherwise change the assets, business, or portion of business of the Company, the Surviving Corporation, the Parent, the Merger Sub, or any of the Parent’s Subsidiaries in any manner; or

impose any restriction, requirement, or limitation on the operation of the business or portion of the business of the Company, the Surviving Corporation, the Parent, the Merger Sub, or any of the Parent’s Subsidiaries;

provided, that if requested by the Parent, the Company will become subject to, consent to, or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement, or Order so long as such requirement, condition, limitation, understanding, agreement, or Order is only binding on the Company in the event the Closing occurs.

Public Announcements

Anti-Takeover Statutes

Stock Exchange Matters

The Parent shall use its reasonable best efforts to obtain the acceptance by Nasdaq and the TSXV of the transactions contemplated hereby including the Parent Stock Issuance and the Merger and to cause the shares of the Parent Common Stock to be issued in connection with the Merger to be listed on Nasdaq and TSXV (or such other stock exchange as may be mutually agreed upon by the Company and the Parent), subject to official notice of issuance, prior to the Effective Time.

To the extent requested by the Parent, the Company shall cooperate with the Parent and use its 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 the rules and policies of Nasdaq and TSXV to obtain the acceptance by Nasdaq and the TSXV of the transactions contemplated hereby including the Parent Stock Issuance and the Merger and to cause the shares of the Parent Common Stock to be issued in connection with the Merger to be listed on Nasdaq and TSXV (or such other stock exchange as may be mutually agreed upon by the Company and the Parent).

Certain Tax Matters

Obligations of Merger Sub

Closing Conditions.

Expenses

if incurred by the Parent and the Merger Sub, shall be paid by the Parent; and

Conversion Schedule

Directors and Officers of the Parent:

At Closing, the Parent will cause the Parent Board to consist of seven directors, of which four will be nominees of the Parent and three will be nominees of the Company.

At Closing, the Parent will cause the officers of the Parent to consist of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as the Chief Executive Officer, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as President and such other persons as are mutually determined by the Parties.

Agreement with ▇▇▇▇ Capital Partners LLC

delete the reference to the requirement for the Parent to file a Form S-3 Registration Statement and to pay ▇▇▇▇ the M&A Transaction Fee in cash (on pages 2 and 3 of the ▇▇▇▇ Agreement);

delete the reference to the requirement for the Parent to provide ▇▇▇▇ with the right to act as lead placement agent or solo underwriter for a financing (on pages 3 and 4 of the ▇▇▇▇ Agreement);

amend the ▇▇▇▇ Agreement such that all shares of Parent Common Stock issued to ▇▇▇▇ pursuant to the ▇▇▇▇ Agreement will be subject to the escrow provisions set out in this Agreement; and

make any other amendments as may be reasonably requested by the Parent.

Capital Reorganization of the Company

Further Assurances

Conditions to Each Party’s Obligation to Effect the Merger

the Merger and other transactions contemplated in this Agreement shall have been accepted by the TSXV;

the Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order;

if applicable, the waiting period applicable to the consummation of the Merger under the HSR Act (or any extension thereof) shall have expired or been terminated and all required filings shall have been made and all required approvals obtained (or waiting periods expired or terminated) under applicable Antitrust Laws;

no Governmental Body having jurisdiction over any Party shall have enacted, issued, promulgated, enforced, or entered any Laws or Orders, whether temporary, preliminary, or permanent, that make illegal, enjoin, or otherwise prohibit consummation of the Merger, the Parent Stock Issuance, or the other transactions contemplated by this Agreement;

the number of Dissenting Shares that are the subject of Appraisal Demand Notices that have not been withdrawn shall not exceed 5% of the total number of shares of the Company Common Stock issued and outstanding prior to the Effective Time; and

all consents, approvals and other authorizations of any Governmental Body set forth in Section 6.1 of the Company Disclosure Letter and Section 6.1 of the Parent Disclosure Letter and required to consummate the Merger, the Parent Stock Issuance, and the other transactions contemplated by this Agreement (other than the filing of the Articles of Merger with the Secretary of State of the State of Nevada) shall have been obtained, free of any condition that would reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect.

Conditions to Obligations of the Parent and the Merger Sub

the representations and warranties of the Company set forth in Article 3 of this Agreement shall be true and correct in all respects (without giving effect to any limitation indicated by the words “Company Material Adverse Effect,” “in all material respects,” “in any material respect,” “material,” or “materially”) when made and as of immediately prior to the Effective Time, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;

the Company shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, in this Agreement required to be performed by or complied with by it at or prior to the Closing;

since the date of this Agreement, there shall not have been any Company Material Adverse Effect or any event, change, or effect that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect;

the Parent will have received a certificate, signed by the chief executive officer or chief financial officer of the Company, certifying as to the matters set forth in Section 6.2(a), Section 6.2(b), and Section 6.2(c) hereof;

the Parent and the Stockholders’ Representative shall have entered into the Company Escrow Agreement and the Company Escrow Agreement shall be in full force and effect and shall not have been anticipatorily breached or repudiated;

the Parent and each of the Principal Stockholders shall have entered into the Company Escrow Agreement and the Company Escrow Agreement shall be in full force and effect and shall not have been anticipatorily breached or repudiated;

each issued and outstanding share of the Original Company Preferred Stock shall have been converted into shares of the Company Common Stock and Company Preferred Stock in accordance with the Seventh Amended and Restated Articles of Incorporation, and each holder thereof shall have waived prior notice of the consummation of the Merger;

prior to the Effective Time, all of the convertible securities of the Company shall have been converted into shares of the Company Common Stock and Company Preferred Stock or shall have been otherwise cancelled and terminated and they shall be of no force or effect;

prior to the Effective Time, all of the Company Stock Options and the Company Warrants shall have been exercised or shall have been otherwise cancelled and terminated and they shall be of no force or effect;

an officer of the Company shall certify the Final Conversion Schedule and deliver such schedule to the Parent;

if applicable and requested by Parent, the Company shall have terminated the 401(k) Plan effective at least one day prior to the Closing Date and all contributions payable to the 401(k) Plan shall have been made. The Company shall have provided the Parent:

executed resolutions of the Company Board authorizing the termination; and

an executed amendment to the 401(k) Plan sufficient to ensure compliance with all applicable requirements of the Code and regulations thereunder so that the tax-qualified status of the 401(k) Plan will be maintained at the time of termination;

the Company’s total non-current liabilities (including, without limitation, any debt of any nature), as determined in accordance with GAAP, shall not exceed $50,000 as of the Closing; excluding $358,932 in building lease obligations through the full term of the lease and $64,567 in non-current obligations to Eventide for ionizer financing;

before the Closing, all shareholders loans (including all accrued interest thereon) made to the Company will be forgiven or converted into shares of the Company Common Stock;

the Company having a Working Capital Ratio of no less than 1.0 (as calculated in accordance with Exhibit B) on the Closing;

the Company shall have amended the ▇▇▇▇ Agreement in accordance with Section 5.21;

the Parent shall have been furnished evidence satisfactory to it that all rights granted by the Company to its stockholders and in effect prior to the Closing, including, but not limited to, rights of co-sale, voting, registration, first refusal, first offer, preemption, observation or information or operational covenants, shall have terminated prior to the Closing Date;

the Parent shall have received a mutually agreeable opinion of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Company, or another counsel reasonably satisfactory to the Parent;

none of the Celebrity Endorsement Agreements will have been terminated on or before the Closing; and

before the Closing, the Parent shall have received executed copies of the ▇▇▇▇ Escrow Agreement, the Emerald Escrow Agreement and the Creditor Escrow Agreement, and each such agreement shall be in full force and effect and not have been anticipatorily breached or repudiated.

Conditions to Obligation of the Company

the representations and warranties of the Parent and the Merger Sub set forth in Article 4 of this Agreement shall be true and correct in all respects (without giving effect to any limitation indicated by the words “Parent Material Adverse Effect,” “in all material respects,” “in any material respect,” “material,” or “materially”) when made and as of immediately prior to the Effective Time, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect;

the Parent and the Merger Sub shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, of this Agreement required to be performed by or complied with by them at or prior to the Closing;

since the date of this Agreement, there shall not have been any Parent Material Adverse Effect or any event, change, or effect that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect;

the Company will have received a certificate, signed by an officer of the Parent, certifying as to the matters set forth in Section 6.3(a), Section 6.3(b), and Section 6.3(c); and

the Company shall have received a mutually agreeable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to the Parent, or another counsel reasonably satisfactory to the Company.

Termination by Mutual Consent

Termination by Either the Parent or the Company

if the Merger has not been consummated on or before October 31, 2019 (the “End Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 7.2(a) shall not be available to any Party whose breach of any representation, warranty, covenant, or agreement set forth in this Agreement has been the cause of, or resulted in, the failure of the Merger to be consummated on or before the End Date;

if any Governmental Body of competent jurisdiction shall have enacted, issued, promulgated, enforced, or entered any Law or Order making illegal, permanently enjoining, or otherwise permanently prohibiting the consummation of the Merger, the Parent Stock Issuance, or the other transactions contemplated by this Agreement, and such Law or Order shall have become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 7.2(b) shall not be available to any party whose breach of any representation, warranty, covenant, or agreement set forth in this Agreement has been the cause of, or resulted in, the issuance, promulgation, enforcement, or entry of any such Law or Order;

if this Agreement has been submitted to the stockholders of the Company for approval at a duly convened Company Stockholders Meeting and the Requisite Company Vote shall not have been obtained at such meeting (unless such Company Stockholders Meeting has been adjourned or postponed, in which case at the final adjournment or postponement thereof);

if the Parent Stock Issuance has been submitted to the stockholders of the Parent for approval at a duly convened Parent Stockholders Meeting and the Requisite Parent Vote shall not have been obtained at such meeting (unless such Parent Stockholders Meeting has been adjourned or postponed, in which case at the final adjournment or postponement thereof);