Execution Version
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
ALLIQUA BIOMEDICAL, INC.,
EMBARK MERGER SUB INC.,
AND
ADYNXX, INC.,
Dated as of October 11, 2018
Exhibits
Exhibit A |
Certain Definitions |
Exhibit B-1 |
Form of Company Voting Agreement |
Exhibit B-2 |
Form of Parent Voting Agreement |
Exhibit C-1 |
Form of Certificate of Merger |
Exhibit C-2 |
Form of Certificate of Incorporation |
Exhibit D |
Form of FIRPTA Notice |
Exhibit E |
Form of Lock-up Agreement |
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION,
is made and entered into as of October 11, 2018 (this “Agreement”), by and among ALLIQUA BIOMEDICAL,
INC. a Delaware corporation (“Parent”), EMBARK MERGER SUB INC., a Delaware corporation (“Merger
Sub”) and ADYNXX, INC., a Delaware corporation (“Company”). Parent, Merger
Sub and Company are each a “Party” and referred to collectively herein as the “Parties.” Certain
capitalized terms used in this Agreement are defined in Exhibit A.
RECITALS:
WHEREAS, this Agreement contemplates a merger of the
Merger Sub with and into Company, with Company remaining as the surviving entity after the merger (the “Merger”),
whereby the Company Stockholders will receive Parent Common Stock in exchange for their Company Capital Stock;
WHEREAS, the Parties intend, by approving resolutions
authorizing this Agreement, to adopt this Agreement as a plan of reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder, and to cause the Merger
to qualify as a reorganization under the provisions of Section 368(a) of the Code;
WHEREAS, pursuant to the terms and conditions of this
Agreement, the holders of the outstanding equity of Company immediately prior to the Effective Time will own approximately 86%
of the outstanding equity of Parent immediately following the Effective Time and the holders of the outstanding equity of Parent
immediately prior to the Effective Time will own approximately 14 % of the outstanding equity of Parent immediately following the
Effective Time;
WHEREAS, the board of directors of Parent (i) has determined
that the Merger is fair to, and in the best interests of, Parent and its stockholders, (ii) has approved this Agreement, the Merger,
the issuance of shares of Parent Common Stock to the Company Stockholders pursuant to the terms of this Agreement, the change of
control of Parent, and the other actions contemplated by this Agreement, (iii) has approved the Parent Charter Amendment
and Reverse Split; and (iv) has determined to recommend that the stockholders of Parent vote to approve the Parent Stockholder
Approval Matters and such other actions as contemplated by this Agreement;
WHEREAS, the board of directors of Merger Sub (i) has
determined that the Merger is fair to, and in the best interests of, Merger Sub and its sole stockholder, (ii) has approved this
Agreement, the Merger, and the other actions contemplated by this Agreement and has deemed this Agreement advisable and (iii) has
determined to recommend that its sole stockholder vote to adopt this Agreement and thereby approve the Merger and such other actions
as contemplated by this Agreement;
WHEREAS, the board of directors of Company (i) has determined
that the Merger is advisable and fair to, and in the best interests of, Company and its stockholders, (ii) has approved this Agreement,
the Merger and the other transactions contemplated by this Agreement and the agreements entered into in connection herewith (the
“Transactions”) and has deemed this Agreement advisable and (iii) has determined to recommend that the
Company Stockholders vote or consent to approve the Company Stockholder Matters;
WHEREAS, as a condition to the willingness of, and an
inducement to each of Parent and the Company to enter into this Agreement, contemporaneously with the execution and delivery of
this Agreement, each of the Company Voting Agreement Signatories is entering into a voting agreement, in favor of Company, in substantially
the form of Exhibit B-1 attached hereto (the “Company Voting Agreements”), and each of
the Parent Voting Agreement Signatories is entering into a voting agreement, in favor of Parent, in substantially the form of Exhibit
B-2 attached hereto (individually, the “Parent Voting Agreements” and collectively, the “Voting
Agreement”) under which the Voting Agreement Signatories will agree, with respect to a portion of the shares of Company
Capital Stock or Parent Capital Stock, as applicable, held thereby, to vote as stockholders in favor of the Company Stockholder
Matters or Parent Stockholder Approval Matters, as applicable, pursuant to the terms and conditions of the Voting Agreements, as
applicable; and
WHEREAS, as a condition to the willingness of, and an
inducement to each of Parent and Company to enter into this Agreement, contemporaneously with the execution and delivery of this
Agreement, each of the Lock-up Signatories is entering into a lock-up agreement, in substantially the form of Exhibit E
attached hereto (the “Lock-up Agreements”) with respect to the shares of Parent Common Stock held thereby
from time to time;
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt, adequacy
and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
Article
I.
THE
MERGER
Section 1.01 The
Merger. Subject to and upon the terms and conditions of this Agreement and Delaware General Corporation Law
(“Delaware Law”), Merger Sub will be merged with and into Company at the Effective Time. From
and after the Effective Time, the separate corporate existence of Merger Sub will cease, and Company will continue as the surviving
corporation. Company as the surviving corporation after the Merger is hereinafter sometimes referred to as the “Surviving
Corporation.”
Section 1.02 Closing;
Effective Time. Unless this Agreement has been terminated and the Transactions herein contemplated have been
abandoned pursuant to Section 7.01 of this Agreement, and subject to the satisfaction or waiver of the conditions set forth in
Article VI of this Agreement, the consummation of the Merger (the “Closing”) will take place at the offices
of Haynes and Boone, LLP, 30 Rockefeller Plaza, 26th Floor, New York, NY 10112, at 10:00 a.m. on a date to be specified
by the Parties which will be no later than three Business Days after satisfaction or waiver of the conditions set forth in Article
VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver
of each such conditions), or at such other time, date and place as Parent and Company may mutually agree in writing. The
date on which the Closing actually takes place is referred to as the “Closing Date”. On the
Closing Date, the Parties will cause the Merger to be consummated by executing and filing a Certificate of Merger in accordance
with the relevant provisions of Delaware Law (the “Certificate of Merger”), in substantially the form
of Exhibit C-1 attached hereto, together with any required related certificates, with the Secretary of State of the
State of Delaware, in such form as required by, and executed in accordance with the relevant provisions of, Delaware Law. The
Merger will become effective at the time of the filing of such Certificate of Merger with the Secretary of State of the State of
Delaware or at such later time as may be specified in such Certificate of Merger with the consent of Parent and Company (the time
as of which the Merger becomes effective being referred to as the “Effective Time”).
Section 1.03 Effect
of the Merger. At the Effective Time, the effect of the Merger will be as provided in this Agreement, the Certificate
of Merger and the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and franchises of Company will vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of Company will become the debts, liabilities, obligations and
duties of the Surviving Corporation.
Section 1.04 Certificate
of Incorporation; Bylaws; Reverse Split; Parent Name Change. Unless otherwise determined by Parent and Company:
(a) the
certificate of incorporation of Company will be amended and restated at the Effective Time to read in its entirety as set forth
on Exhibit C-2 hereto, and, as so amended and restated, will be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided by Delaware Law and such certificate of incorporation;
(b) the
bylaws of Company will be amended and restated to read in the form of the bylaws of Merger Sub, as in effect on the date hereof
and, as so amended and restated, will be the bylaws of the Surviving Corporation until thereafter amended as provided by Delaware
Law, the certificate of incorporation of the Surviving Corporation and such bylaws; and
(c) immediately
prior to the Effective Time, Parent will amend its certificate of incorporation and take all other actions necessary to (i) cause
its name to be changed to Adynxx, Inc. and (ii) effect the Reverse Split to the extent applicable.
Section 1.05 Directors
and Officers of the Surviving Corporation and Parent. Unless otherwise determined by Parent and Company, the
parties will take all action such that:
(a) unless
otherwise determined by the Company prior to the Effective Time, the directors of the Company immediately prior to the Effective
Time will be the directors of the Surviving Corporation immediately following the Effective Time until such time as their respective
successors are duly elected or appointed;
(b) unless
otherwise determined by the Company prior to the Effective Time, the officers of Company immediately prior to the Effective Time
will be the officers of the Surviving Corporation immediately following the Effective Time until such time as their respective
successors are duly elected or appointed; and
(c) the
directors and officers of Parent immediately following the Effective Time shall be elected and appointed in accordance with Section
5.11.
Section 1.06 Conversion
of Company Securities. At the Effective Time, by virtue of the Merger and without any action on the part of
Parent, Merger Sub, Company, any stockholder of the Company or any other Person:
(a) Conversion
of Company Capital Stock. Each share of Company Capital Stock issued and outstanding immediately prior to, and contingent
upon the occurrence of, the Effective Time (excluding any shares to be canceled pursuant to Section 1.06(b) or Section 1.06(c)
and any Dissenting Shares to be treated in accordance with Section 1.07) will be converted into and represent the right to receive
a number of shares of validly issued, fully paid and nonassessable shares of common stock of Parent, $0.001 par value per share
(“Parent Common Stock”) equal to the Exchange Ratio (the “Merger Consideration”),
with any resulting fractional shares to be rounded down to the nearest whole share.
(b) Merger
Sub Common Stock. Each share of Merger Sub Common Stock then outstanding will be converted into one share of common
stock of the Surviving Corporation. Each stock certificate of Merger Sub evidencing ownership of any such shares will,
as of the Effective Time, evidence ownership of such shares of common stock of the Surviving Corporation.
(c) Cancellation. Each
share of Company Capital Stock held in the treasury of Company and each share of Company Capital Stock owned by Parent or by any
direct or indirect wholly owned Subsidiary of Company or Parent immediately prior to the Effective Time will, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and extinguished without
any conversion thereof and without payment of any consideration therefor and cease to exist.
(d) Company
Options. Each Company Option under the Company Option Plan that is outstanding and unexercised as of immediately
prior to the Effective Time will be subject to Section 5.16. Prior to the Closing Date, and subject to the review and
approval of Parent, Company will take all actions necessary to effect the transactions contemplated by this Section 1.06(d) under
applicable Legal Requirements and all such Company Options, including delivering all notices required thereby and, if required,
entering into termination agreements with the holders of such Company Options. In addition, promptly after the date
of this Agreement, and in any event within ten (10) Business Days before the Effective Time, and subject to the review and approval
of Parent, Company shall deliver notice to all holders of Company Options setting forth such holders’ rights pursuant to
this Agreement.
(e) Company
Warrants.
| (i) | Each Company Warrant that is outstanding and unexercised as of immediately prior to the Effective Time will be subject to Section
5.17. |
| (ii) | Prior to the Closing Date, and subject to the review and approval of Parent, Company will take all actions necessary to effect
the transactions contemplated by this Section 1.06(e) under applicable Legal Requirements and all Company Warrants, including delivering
all notices required thereby, and if required, entering into termination agreements with holders of such Company Warrants. In
addition, if required by any applicable Company Warrant, promptly after the date of this Agreement, and in any event within ten
(10) Business Days before the Effective Time, and subject to the review and approval of Parent, Company shall deliver notice to
the holders of such Company Warrants setting forth such holders’ rights pursuant to this Agreement. |
(f) Fractional
Shares. No fraction of a share of Parent Common Stock will be issued in connection with the Merger, and any fractional
shares will be rounded down to the nearest whole share. Company Stockholders will not be entitled to any voting rights,
rights to receive any dividends or distributions or other rights as a stockholder of Parent with respect to any such fraction of
a share that would have otherwise been issued to such Company Stockholder.
(g) Restrictions. If
any shares of Company Capital 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 or other Contract with Company
or under which Company has any rights, then the shares of Parent Common Stock issued in exchange for such shares of Company Capital
Stock, subject to Section 5.16, will also be unvested and subject to the same repurchase option, risk of forfeiture
or other condition, and the book-entry representing such shares of Parent Common Stock may accordingly be marked with appropriate
legends. Company will take all action that may be necessary to ensure that, from and after the Effective Time, Parent
is entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or
other Contract.
Section 1.07 Dissenting
Shares. For purposes of this Agreement, “Dissenting Shares” mean any shares of Company
Capital Stock outstanding immediately prior to the Effective Time and held by a person who has not voted such shares in favor of
the adoption of this Agreement and the Merger, has properly demanded appraisal for such shares in accordance with Delaware Law
and has not effectively withdrawn or forfeited such demand for appraisal. Notwithstanding anything to the contrary contained
herein, Dissenting Shares will not be converted into a right to receive the Merger Consideration unless such holder fails to perfect
or withdraws or otherwise loses its rights to appraisal or it is determined that such holder does not have appraisal rights in
accordance with Delaware Law. If after the Effective Time, such holder fails to perfect or withdraws or loses its right
to appraisal, or if it is determined that such holder does not have appraisal rights, such shares will be treated as if they had
been converted as of the Effective Time into the right to receive the Merger Consideration (if any). Company will give
Parent prompt notice of any demands received by Company for appraisal of shares of Company Capital Stock, withdrawals of such demands,
and any other instruments that relate to such demands received by Company. Company shall control all negotiations and proceedings
with respect to such demands, provided, however, (i) Company shall keep Parent reasonably apprised of all material
events, circumstance or changes with respect to any such demand following the making thereof (ii) the Company will not, except
with prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), make any payment with
respect to, or settle or offer to settle, any such demands, unless and to the extent required to do so under applicable Legal Requirements.
Section 1.08 Exchange
Of Certificates.
(a) Exchange
Agent. On or prior to the Closing Date, Parent will select Parent’s transfer agent or another reputable bank
or trust company reasonably acceptable to Company to act as exchange agent in connection with the Merger (the “Exchange
Agent”). As soon as practicable after the Effective Time, Parent will issue and cause to be deposited
with the Exchange Agent non-certificated shares of Parent Common Stock represented by book-entry issuable pursuant to Section 1.06(a). The
shares of Parent Common Stock so deposited with the Exchange Agent, together with any dividends or distributions received by the
Exchange Agent with respect to such shares, are referred to collectively as the “Exchange Fund.” For
purposes of clarity, the Parties acknowledge that such shares of Parent Common Stock constituting the Exchange Fund are “restricted
securities” within the meaning of the federal securities laws and may be annotated with an appropriate restrictive legend
in accordance with Section 5.26.
(b) Exchange
Procedures. As soon as reasonably practicable after the Effective Time, Parent will cause the Exchange Agent to
mail to the record holders of Company Stock Certificates (i) a letter of transmittal in customary form and containing such provisions
on which Parent and the Company may mutually agree (and which will include a provision confirming that delivery of Company Stock
Certificates will be effected, and risk of loss and title to Company Stock Certificates will pass, only upon delivery of such Company
Stock Certificates to the Exchange Agent), and (ii) instructions for use in effecting the surrender of Company Stock Certificates
in exchange for non-certificated shares of Parent Common Stock represented by book-entry issuable pursuant to Section 1.06(a). Upon
surrender of a Company Stock Certificate to the Exchange Agent for exchange, together with a duly executed letter of transmittal
and such other documents as may be reasonably required by the Exchange Agent or Parent, (A) the holder of such Company Stock Certificate
will be entitled to receive in exchange therefor non-certificated shares of Parent Common Stock represented by book-entry (via
DRS) equal to the number of whole shares of Parent Common Stock that such holder has the right to receive pursuant to the provisions
of Section 1.06(a), and (B) the Company Stock Certificate so surrendered will be canceled. Until surrendered as contemplated
by this Section 1.08(b), each Company Stock Certificate held by a Company Stockholder will be deemed, from and after the Effective
Time, to represent only the right to receive the Merger Consideration. If any Company Stock Certificate have been lost,
stolen or destroyed, the Exchange Agent will require the owner of such lost, stolen or destroyed Company Stock Certificate to provide
an appropriate affidavit and to deliver a bond as indemnity against any claim that may be made against the Exchange Agent, Parent
or the Surviving Corporation with respect to such Company Stock Certificate.
(c) Distributions
with Respect to Unexchanged Shares. No dividends or other distributions declared or made with respect to Parent
Common Stock with a record date after the Effective Time will be paid to the holder of any unsurrendered Company Stock Certificate
with respect to the shares of Parent Common Stock that such holder has the right to receive in the Merger until such holder surrenders
such Company Stock Certificate in accordance with this Section 1.08 (at which time such holder will be entitled, subject to the
effect of applicable escheat or similar laws, to receive all such dividends and distributions, without interest).
(d) Transfers
of Ownership. If any shares of Parent Common Stock are to be issued in a name other than that in which the Company
Stock Certificate surrendered in exchange therefor is registered, it will be a condition of the issuance thereof that the Company
Stock Certificate so surrendered will be properly endorsed and otherwise in proper form for transfer and that the Person requesting
such exchange will have paid to Parent or any Person designated by it any transfer or other taxes required by reason of the issuance
of the shares of Parent Common Stock in any name other than that of the registered holder of the Company Stock Certificate surrendered,
or established to the satisfaction of Parent or any agent designated by it that such tax has been paid or is not payable.
(e) Unclaimed
Portion of the Exchange Fund.
| (i) | Any portion of the Exchange Fund that remains undistributed to holders of Company Stock Certificates as of the date 180 days
after the date on which the Merger becomes effective will be delivered to Parent upon demand, and any holders of Company Stock
Certificates who have not theretofore surrendered their Company Stock Certificates in accordance with this Section 1.08 will thereafter
look only to Parent for satisfaction of their claims for Parent Common Stock and any dividends or distributions with respect to
Parent Common Stock. |
| (ii) | Neither Parent nor the Surviving Corporation will be liable to any holder or former holder of Company Capital Stock or to any
other Person with respect to any shares of Parent Common Stock (or dividends or distributions with respect thereto), or for any
cash amounts, delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Legal
Requirement. |
(f) Withholding
Rights. Each of the Exchange Agent, Parent and the Surviving Corporation will be entitled to deduct and withhold
from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Capital
Stock such amounts as are required to be deducted or withheld therefrom under the Code or any provision of state, local or foreign
tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted or withheld and
timely paid to the appropriate Governmental Body, such amounts will be treated for all purposes under this Agreement as having
been paid to the Person to whom such amounts would otherwise have been paid.
Section 1.09 Stock
Transfer Books. At the Effective Time: (a) all shares of Company Capital Stock outstanding immediately
prior to the Effective Time will automatically be canceled and retired and cease to exist, and all holders of Company Capital Stock
that were outstanding immediately prior to the Effective Time will cease to have any rights as stockholders of Company; and (b)
the stock transfer books of Company will be closed with respect to all shares of Company Capital Stock outstanding immediately
prior to the Effective Time. No further transfer of any such shares of Company Capital Stock will be made on such stock
transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any
shares of Company Capital Stock (a “Company Stock Certificate”) is presented to the Exchange Agent or
to the Surviving Corporation or Parent, such Company Stock Certificate will be canceled and exchanged as provided in Sections 1.06
and 1.08.
Section 1.10 No
Further Rights. The Merger Consideration delivered upon the surrender for exchange of Company Capital Stock
in accordance with the terms of this Agreement will be deemed to have been issued in full satisfaction of all rights pertaining
to such shares.
Section 1.11 Tax
Consequences. For United States federal income tax purposes, the Merger is intended to constitute a reorganization
within the meaning of Section 368(a) of the Code. The parties to this Agreement hereby adopt this Agreement as a “plan
of reorganization” within the meaning of Sections 1.368-2(g) of the Treasury Regulations, and will report consistently with
the foregoing, including by filing the statement required by Section 1.368-3(a) of the Treasury Regulations.
Section 1.12 Parent
Common Stock. The shares of Parent Common Stock issued pursuant to the terms of this Agreement will be issued in a transaction
exempt from registration under the Securities Act by reason of Section 4(a)(2) thereof and/or Regulation D promulgated under the
Securities Act and may not be re-offered or resold other than in conformity with the registration requirements of the Securities
Act and such other applicable rules and regulations or pursuant to an exemption therefrom. Until the resale by the holders
of Company Capital Stock of their shares of Parent Common Stock has become registered under the Securities Act, or otherwise transferable
pursuant to an exemption from such registration otherwise required thereunder, the shares of Parent Common Stock issued pursuant
to this Agreement shall be characterized as “restricted securities” under the Securities Act and, if certificated,
shall bear the following legend (or if held in book entry form, will be noted with a similar restriction):
“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY, AND THE RESALE OF SUCH SHARES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. SUCH SHARES MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION WITHOUT AN EXEMPTION
UNDER THE SECURITIES ACT.”
Parent agrees to cooperate in a timely manner
with the holders of Registrable Securities to remove any restrictive legends or similar transfer instructions from the Registrable
Securities upon the registration of the Registrable Securities or in the event that the Registrable Securities are otherwise transferable
pursuant to an exemption from registration otherwise required thereunder.
Section 1.13 Additional
Actions. If, at any time after the Effective Time, any further action is necessary, desirable or proper to carry
out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Company and Merger Sub, the Surviving Corporation and its proper officers and directors
or their designees are fully authorized (to the fullest extent allowed under applicable Legal Requirements) to execute and deliver,
in the name and on behalf of either Company or Merger Sub, all deeds, bills of sale, assignments and assurances and do, in the
name and on behalf of Company or Merger Sub, all other acts and things necessary, desirable or proper to vest, perfect or confirm
its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of Company
or Merger Sub, as applicable, and otherwise to carry out the purposes of this Agreement.
Article
II.
REPRESENTATIONS
AND WARRANTIES OF COMPANY
Except as set forth in the corresponding sections or subsections
of the Company Disclosure Schedule, the Company represents and warrants to Parent and Merger Sub as follows:
Section 2.01 Organization
and Qualification; Charter Documents.
(a) Part
2.01(a) of the Company Disclosure Schedule identifies each Subsidiary of Company and indicates its jurisdiction of organization. Neither
Company nor any of the Entities identified in Part 2.01(a) of the Company Disclosure Schedule owns any capital stock of, or any
equity interest of any nature in, any other Entity, other than the Entities identified in Part 2.01(a) of the Company Disclosure
Schedule. None of the Acquired Companies has agreed or is obligated to make, or is bound by any Contract under which
it may become obligated to make, any future investment in or capital contribution to any other Entity.
(b) Each
of the Acquired Companies is a corporation, limited liability company or similar entity duly organized, validly existing and, in
jurisdictions that recognize the concept, is in good standing under the laws of the jurisdiction of its incorporation, formation
or other establishment, as applicable, and has all necessary corporate power and authority: (i) to conduct its business
in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets
are currently owned and used; and (iii) to perform its obligations under all Contracts by which it is bound.
(c) Each
of the Acquired Companies (in jurisdictions that recognize the following concepts) is qualified to do business as a foreign corporation,
and is in good standing, under the laws of all jurisdictions where the nature of its business requires such qualification except
where the failure to be so qualified would not, individually or in the aggregate, have a Company Material Adverse Effect.
(d) Company
has made available to Parent accurate and complete copies of: (a) the certificate of incorporation, bylaws and other
charter and organizational documents of each Acquired Company, including all amendments thereto; (b) the stock records of each
Acquired Company; and (c) the minutes and other records of the meetings and other proceedings (including any actions taken by written
consent or otherwise without a meeting) of the stockholders of each Acquired Company, the board of directors of each Acquired Company
and all committees of the board of directors of each Acquired Company. The books of account, stock records, minute books
and other records of the Acquired Companies are accurate, up-to-date and complete in all material respects, and have been maintained
in accordance with prudent business practices.
Section 2.02 Capital
Structure.
(a) The
authorized capital stock of Company consists of (i) 148,000,000 shares of Company Common Stock, par value $0.001 per share, of
which 19,548,969 shares are issued and outstanding as of the date of this Agreement and (ii) 108,071,445 shares of Company Preferred
Stock, par value $0.001 per share, (A) 57,002,183 shares are designated as Series A Preferred Stock, of which 56,672,658 shares
are issued and outstanding as of the date of this Agreement and (B) 51,069,262 shares of which are designated as Series B Preferred
Stock, of which 51,069,262 shares are issued and outstanding as of the date of this Agreement. No shares of capital