Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 7

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 7
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 obligated thereunder representing at least a majority of the outstanding shares of Kaival common stock on
or prior to October 31, 2024.

If the Merger Agreement is terminated by us or Delta
as a result of a willful breach of a representation, warranty or covenant by the other party, then the breaching party will pay the non-breaching
party a termination fee in the amount of $750,000 plus disbursements of all documented, out-of-pocket expenses up to $250,000. In addition,
if we or Delta terminate the Merger Agreement, as a result of our accepting a superior offer to the transactions contemplated by Business
Combination from a third party, then a termination fee of $1.3 million plus reasonable expenses up to $1 million shall be payable by us
to Delta.

The foregoing description of the Merger Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement filed as Exhibit
2.1 to this Current Report on Form 8-K and incorporated herein by reference. The Merger Agreement provides investors with information
regarding its terms and is not intended to provide any other factual information about the parties. Any terms not defined herein shall
have the same meaning attributed to them in the Merger Agreement.

Voting Agreements

Concurrently with the entry into the Merger Agreement,
the Company, Delta and Pubco entered into voting and support agreements (“Voting Agreements”) with certain of our executive
officers and directors (the “Voting Support Parties”). Pursuant the Voting Agreements, the Voting Support Parties have agreed
to vote (in person or by proxy), or consent to any action by written consent or resolution with respect to, as applicable, their shares
of our Common Stock (i) in favor of, and adopt, Business Combination and the Merger Agreement, (ii) in opposition to: (A) any takeover
proposal as described in the Merger Agreement and any and all other proposals (x) for the acquisition of us, (y) that could reasonably
be expected to delay or impair our ability to consummate the Business Combination, or (z) which are in competition with or materially
inconsistent with the Merger Agreement or any related agreements; (B) other than as contemplated by the Merger Agreement, any material
change in (x) our capitalization or any amendment of our organizational documents or (y) our corporate structure or business; or