Document:

Exhibit 10.2

 

Exhibit 10.2

 

LIMITED LIABILITY COMPANY AGREEMENT

OF ROUND TOP MOUNTAIN DEVELOPMENT, LLC

 

between and among

USA Rare Earth, LLC,

a Delaware limited liability company,

Texas Mineral Resources Corp.,

a Delaware corporation,

and

Round Top Mountain Development, LLC,

a Delaware limited liability company,

 

dated effective as of May 17, 2021

1

 

 

TABLE OF CONTENTS

 

	ARTICLE I DEFINITIONS AND ITERPRETATION 

	 

	1.1

	Definitions

	4

	1.2

	Interpretation

	12

	1.3

	Coordination with Exhibits

	13

	 

	 

	 

	ARTICLE II THE LIMITED LIABILITY COMPANY 

	 

	2.1

	General

	13

	2.2

	Name

	13

	2.3

	Purposes

	13

	2.4

	Limitation

	13

	2.5

	The Members

	13

	2.6

	Issuance of Additional Interests

	13

	2.7

	Term

	13

	2.8

	Registered Agent; Offices

	13

	 

	 

	 

	ARTICLE III INTERESTS; CAPITAL CONTRIBUTIONS

	 

	3.1

	Interests

	14

	3.2

	Initial Contributions

	14

	3.3

	Sole and Joint Funding

	14

	3.4

	Cash Calls

	14

	3.5

	Remedies for Failure to Meet Cash Calls

	15

	3.6

	Security

	16

	3.7

	Return of Contributions

	16

	 

	 

	 

	ARTICLE IV MEMBERS 

	 

	4.1

	Limited Liability

	16

	4.2

	Company Indemnification of Members

	16

	4.3

	Member Indemnification

	16

	4.4

	Member Reimbursement Obligations

	17

	4.5

	Coordination

	17

	4.6

	Exclusive Rights of Members

	18

	4.7

	Meetings; Written Consent

	18

	4.8

	No Member Fees

	18

	4.9

	No State-Law Partnership

	18

	4.10

	No Implied Covenants; No Fiduciary Duties

	18

	4.11

	Other Business Opportunities

	18

	4.12

	Cooperation with Financing Parties

	18

	4.13

	Financing Parties’ Right to Cure

	19

	 

	 

	 

	ARTICLE V COMPANY MANAGEMENT 

	 

	5.1

	Management Authority

	19

	5.2

	Management Committee

	19

	5.3

	Manager; Duties

	21

	5.4

	Standards of Care

	23

	5.5

	Exculpation

	23

	5.6

	Indemnification of Manager and Representatives

	23

	5.7

	Resignation; Removal; Replacement

	24

	5.8

	Payments to Manager

	24

	5.9

	Affiliate Transactions

	24

	5.10

	Changes to Mining Law

	24

	 

	 

	 

	ARTICLE VI PROGRAMS AND BUDGETS; ACCOUNTING AND REPORTING 

	 

	6.1

	Operations under Programs and Budgets

	25

	6.2

	Initial Program and Budget

	25

	6.3

	Presentation of Proposed Programs and Budgets

	25

	6.4

	Approval of Proposed Programs and Budgets

	25

	6.5

	Amendment of Adopted Program and Budget

	25

	6.6

	Election to Participate

	26

	6.7

	Recalculation and Restoration for Actual Contributions

	27

	6.8

	Deadlock on Proposed Programs and Budgets

	27

	6.9

	Budget Overruns; Program Changes

	27

	6.10

	Emergency or Unexpected Expenditures

	28

	6.11

	Pre-Feasibility and Feasibility Studies

	28

	6.12

	Reports

	29

	6.13

	Inspection Rights

	29

	6.14

	Independent Audit

	29

2

 

 

TABLE OF CONTENTS (CONTINUED)

 

	ARTICLE VII DISTRIBUTIONS DISPOSITION OF PRODUCTION 

	 

	7.1

	Distributions

	30

	7.2

	Liquidating Distributions

	30

	7.3

	Marketing of Products

	30

	 

	 

	 

	ARTICLE VIII TRANSFERS AND ENCUMBRANCES OF INTEREST 

	 

	8.1

	Restrictions on Transfer

	31

	8.2

	Permitted Transfers and Permitted Interest Encumbrances

	32

	8.3

	Additional Limitations on Transfers and Encumbrances

	33

	8.4

	Right of First Offer

	33

	8.5

	Drag-Along Right

	34

	8.6

	Substitution of a Member

	34

	8.7

	Conditions to Substitution

	35

	8.8

	Admission as a Member

	35

	8.9

	Economic Interest Holders

	35

	 

	 

	 

	ARTICLE IX RESIGNATION, DISSOLUTION AND LIQUIDATION 

	 

	9.1

	Resignation

	35

	9.2

	Non-Compete Covenant

	36

	9.3

	Dissolution

	36

	9.4

	Liquidation

	36

	9.5

	Termination

	37

	 

	 

	 

	ARTICLE X AREA OF INTEREST, ABANDONMENT 

	 

	10.1

	Acquisitions Within Area of Interest

	37

	10.2

	Surrender or Abandonment of Property

	38

	10.3

	Intellectual Property

	38

	 

	 

	 

	ARTICLE XI MISCELLANEOUS 

	 

	11.1

	Confidentiality

	39

	11.2

	Public Announcements

	40

	11.3

	Notices

	40

	11.4

	Headings

	40

	11.5

	Waiver

	40

	11.6

	Corrupt Practices.

	40

	11.7

	Amendment

	41

	11.8

	Severability

	41

	11.9

	Force Majeure

	41

	11.10

	Rules of Construction

	41

	11.11

	Governing Law

	41

	11.12

	Consent to Jurisdiction; Waiver of Jury Trial

	41

	11.13

	Further Assurances

	42

	11.14

	Survival

	42

	11.15

	No Third Party Beneficiaries

	42

	11.16

	Entire Agreement

	42

	11.17

	Parties in Interest

	42

	11.18

	Counterparts

	42

	11.19

	Rule Against Perpetuities

	43

 

	EXHIBITS

	Exhibit A

	 

	Property Description and Area of Interest

	Exhibit B

	 

	Accounting Procedure

	Exhibit C

	 

	Tax Matters

	Exhibit D

	 

	Net Proceeds Calculation

	Exhibit E

	 

	Insurance

	Exhibit F

	 

	Initial Program and Budget

3

 

 

LIMITED LIABILITY COMPANY AGREEMENT

OF

ROUND TOP MOUNTAIN DEVELOPMENT, LLC

 

This Limited Liability Company Agreement (this “Agreement”), dated to be effective as of May 17, 2021 (the “Effective Date”), is among USA Rare Earth, LLC, a Delaware limited liability company (“USARE”), Texas Mineral Resources Corp., a Delaware corporation (“TMRC”), and Round Top Mountain Development, LLC, a Delaware limited liability company (the “Company”). 

 

Recitals

 

A.The Company was formed under the laws of the State of Delaware on June 26, 2020 by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware. 

 

B.USARE, TMRC and the Company are parties to the Contribution Agreement, dated effective as of May [12], 2021 (the “Contribution Agreement”). Pursuant to the Contribution Agreement, each of USARE and TMRC are making its initial Capital Contribution to the Company of the Contributed Assets, as described in Section 2.4 of the Contribution Agreement. 

 

C.USARE, TMRC and the Company now desire to execute this Agreement to govern the business and affairs of the Company. 

 

Agreement

 

In consideration of the covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows:

 

Article I

Definitions and Interpretation

 

1.1Definitions. In addition to the capitalized terms defined above or in other provisions of this Agreement, as used in this Agreement, capitalized terms have the meanings given as follows: 

 

“Accounting Procedure” means the accounting and other procedures in Exhibit B.

 

“Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq.

 

“Adverse Consequences” mean with respect to a Person, claims, actions, causes of action, damages, losses, liabilities, obligations, penalties, judgments, amounts paid in settlement, assessments, costs, disbursements and expenses (including reasonable attorneys’ fees and costs, experts’ fees and costs, and consultants’ fees and costs) of any kind or nature against, suffered or incurred by the Person, including, if the Person is a Member, any of the foregoing suffered or incurred by the Company to the extent funded by Capital Contributions of the Member to the Company, but excluding any diminution in the value of the Company or its Assets or any Interest.

 

“Affiliate” means with respect to a Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with, the subject Person. Notwithstanding the previous sentence, the Company will not be considered an Affiliate of either Member or any of their respective Affiliates.

 

“Anti-Corruption Law” means the U. S. Foreign Corrupt Practices Act (including all associated rules and regulations), and all other applicable Laws (including all associated rules and regulations) concerning or relating to Bribery or corruption in any jurisdiction to which a Member or the Company or any of their respective Affiliates is located or in which it is doing business.

 

“Approved Purchaser” means a Person who is not a Sanctioned Person or a Sanctioned Entity and whose ownership interest in the Company has been approved by CFIUS, if necessary.

 

“Approved Purchaser Test” has the meaning set forth in Section 8.1(b).

 

“Area of Interest” means the area described as the “Area of Interest” in Exhibit A.

4

 

 

“Assets” means the Properties, the Existing Data, the Underlying Agreements, the Pilot Plant, and all other real and personal property, tangible and intangible, including the Remaining Committed Sole Funding Amount, contributed to the Company on the Effective Date, all Products produced from the Properties and all after-acquired real and personal property, tangible and intangible, including plant and equipment, contract rights, knowledge and Intellectual Property, including all licenses with respect thereto, in each case held by the Company. 

 

“Available Cash” means cash generated by the Company from the sale of Products, cash not needed in reserve accounts established pursuant to Section 3.4 or Section 5.3(p), and cash available to the Company from other sources, which as determined by the Management Committee, acting reasonably, is available for distribution to the Members. 

 

“Background IP” means any and all discoveries, inventions, processes, methods, techniques, know how, and improvements or modifications to the same and Intellectual Property Rights and other proprietary rights, expressed in whatever form and may include technical information, procedures, formulae, protocols, software, specifications, flowcharts, instructions, data, and other documents and materials of a Member that were conceived, created, or developed prior to the Effective Date, or were conceived, created, or developed independently of a Member’s obligations under this Agreement, excluding any Trade-marks.

 

“Bribery” means the offering, authorizing, giving, soliciting or accepting any monetary or other benefit to influence action of a Government Official in an official capacity, or to otherwise influence any person to act improperly, including making facilitation payments, which are improper payments made to induce required routine official action.

 

“Budget” means a detailed estimate of all costs to be incurred and a schedule of Capital Contributions to be made by the Members with respect to a Program.

 

“Business” means the conduct of the business of the Company in furtherance of the purposes stated in Section 2.3 and in accordance with this Agreement.

 

“Business Account” means the account maintained by the Manager for the Company in accordance with the Accounting Procedure. The Business Account may be segregated into one or more interest and non-interest-bearing accounts, which collectively will be referred to as the Business Account.

 

“Business Day” means any day on which federally chartered banks are generally open for business in Dallas, Texas.

 

“Capital Account” means the capital account maintained for each Member in accordance with Treasury Regulations section 1.704-1(b)(2)(iv).

 

“Capital Contribution” means, with respect to a Member, the sum of (a) the dollar amounts of any cash and cash equivalents contributed by the Member to the capital of the Company, plus (b) the fair market value, as agreed by all of the Members, or if they cannot agree, as determined by the Management Committee, of any property (other than cash or cash equivalents) contributed by the Member to the capital of the Company (net of liabilities secured by the contributed property that the Company is considered to assume or take subject to). In the context of a proposed or adopted Program and Budget, Capital Contribution means the proposed or actual amount of capital that each Member is required to contribute to the Company from time to time to fund the Program and Budget.

 

“Capital Contribution Effective Date” means April 2, 2021. 

 

“CFIUS” means the Committee on Foreign Investment in the United States.

 

“Change in Control” means: (i) the acquisition by a REE Mining Company of shares, or their equivalent, or rights, warrants or options to acquire shares, or their equivalent, of the Member or securities which are exchangeable or convertible into shares, or their equivalent, of the Member or any combination thereof such that after the completion of such acquisition such Person would be entitled to exercise 50% or more of the voting power of the Member, and which exercises such voting power to elect a majority of the board of directors, or their equivalent, of the Member; or (ii) the acquisition by a REE Mining Company of more than 50% of the material assets of the Member, including the transfer of more than 50% of the material assets of the Member to a joint venture entity formed with a REE Mining Company of which the Member holds an interest of less than 80%.

 

“Code” means the Internal Revenue Code of 1986.

5

 

 

“Concessions” means the interests in real property, including the Owned Surface, the Surface Option and the Surface Lease, which has been contributed to the Company by TMRC. 

 

“Confidential Information” means all information, data, knowledge and know-how (including formulas, patterns, compilations, programs, devices, methods, techniques and processes) provided by the Company, a Member or the Manager, any of their respective Affiliates, or any of their respective employees or agents, to any of the foregoing that either (a) derive independent economic value, actual or potential, as a result of not being generally known to, or readily ascertainable by, third parties and that are the subject of efforts that are reasonable under the circumstances to maintain their secrecy, or (b) that are designated by the providing Person as confidential, in each case including all analyses, interpretations, compilations, studies and evaluations based on the information, data, knowledge and know-how that are generated or prepared by or on behalf of the recipient of the information, data, knowledge or know-how.

 

“Continuing Obligations” means obligations or responsibilities that are reasonably expected to or actually continue or arise after Operations on a particular area of the Properties have ceased or are suspended, such as future monitoring, stabilization, or Environmental Compliance.

 

“Contributed Capital” means the aggregate amount of Capital Contributions made by each Member to the Company; provided, however, that for purposes of determining Contributed Capital (but not for purposes of maintaining the Capital Accounts) after an election under Section 3.5(b)(i) or 3.5(c)(v)(A), (a) the Contributed Capital of the Non-Defaulting Member will be increased by the Default Amount and the Contributed Capital of the Delinquent Member will be decreased by the Default Amount. In the case of an election under Section 3.5(d), the Contributed Capital of the Non-Defaulting Member will be increased by the Default Amount multiplied by (ii) the Dilution Multiple, and (b) the Contributed Capital of the Delinquent Member will be decreased by (i) the amount calculated in clause (a) above; minus (ii) the Default Amount. In the case of an election under Section 3.5(d)(v)(B), the amount contributed on behalf of the Delinquent Member will be a Capital Contribution of the Delinquent Member but will not affect the Members’ Capital Accounts.

 

“Control” means (a) when used as a verb, (i) with respect to an entity, the ability, directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of the entity through the legal or beneficial ownership of voting securities or the right to appoint managers, directors or corporate management, or by contract, operating agreement, voting trust or otherwise, and (ii) with respect to a natural person, the actual or legal ability to control the actions of another, through family relationship, agency, contract or otherwise, and (b) when used as a noun, an interest that gives the holder the ability to exercise any of the powers described in clause (a).

 

“Default Rate” means a rate per annum equal to the lesser of (a) the Prime Rate plus four percentage points, and (b) the maximum non-usurious rate permitted by applicable Law. 

 

“Developed IP” means any and all discoveries, inventions, processes, methods, techniques, know-how, and Intellectual Property Rights and other proprietary rights, expressed in whatever form and may include technical information, procedures, formulae, protocols, software, specifications, flowcharts, instructions, data, and other documents and materials that are learned, owned, generated, developed or acquired by or on behalf of the Company in the course of Operations but explicitly excludes any Background IP, including any Member Licensed IP.

 

“Development” means all preparation (other than Exploration) for the removal and recovery of Products, including, but not limited to, pre-stripping, stripping and the construction or installation of a mill, leach facilities, or any other improvements to be used for the mining, handling, milling, processing or other beneficiation of Products, and all related Environmental Compliance.

 

“Dilution Multiple” means 150%.

 

“Encumbrance” means any mortgage, pledge, assessment, security interest, deed of trust, lease, lien, right of first refusal, right of first offer, adverse claim, levy, royalty interest, charge or other encumbrance of any kind, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

 

“Environmental Compliance” means actions performed during or after Operations to comply with the requirements of all Environmental Laws or contractual commitments related to reclamation of the Properties or other compliance with Environmental Laws.

 

“Environmental Compliance Fund” means the account established under Section 2.14 of Exhibit B.

6

 

 

“Environmental Laws” means Laws aimed at reclamation or restoration of the Properties; abatement of pollution; protection of the environment; protection of wildlife, including endangered species; ensuring public safety from environmental hazards; employee health and safety; protection of cultural or historic resources; management, storage or control of hazardous materials and substances; releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment, including ambient air, surface water and groundwater; and all other Laws relating to the existence, manufacture, processing, distribution, use, treatment, storage, disposal, recycling, handling or transport of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes.

 

“Environmental Liabilities” means any and all Adverse Consequences (including liabilities for studies, testing or investigatory costs, cleanup costs, response costs, removal costs, remediation costs, containment costs, restoration costs, corrective action costs, closure costs, reclamation costs, natural resource damages, property damages, business losses, personal injuries, penalties or fines) that are asserted against the Company, either Member or the Manager, by any Person other than the other Members, arising out of, based on or resulting from (a) the presence, release, threatened release, discharge or emission into the environment of any hazardous materials or substances existing or arising on, beneath or above the Properties or emanating, migrating or threatening to emanate or migrate from the Properties to off-site properties, (b) physical disturbance of the environment, or (c) the violation of, or non-compliance with, or alleged violation of, or non-compliance with, any Environmental Laws.

 

“Existing Data” means (a) all records, information and data relating to title to the Properties or environmental conditions at or pertaining to the Properties, (b) all maps, assays, surveys, technical reports, drill logs, samples, mine, mill, processing and smelter records, and metallurgical, geological, geophysical, geochemical, and engineering data, and interpretive reports derived therefrom, including, but not limited to, that associated with the Pilot Plant and the Preliminary Economic Assessment, Round Top Project, dated August 16, 2019, prepared by Gustavson Associates, and (c) all production reports, accounting and financial records, and other material information, in each case pertaining to or developed in operations on the Properties and existing on the Effective Date, which has been contributed to the Company by USARE and TMRC.

 

“Exploration” means all activities directed toward ascertaining the existence, location, quantity, quality or commercial value of deposits of Products, including drilling required after discovery of potentially commercial mineralization, and all related Environmental Compliance. 

 

“Feasibility Study” means a study completed for the Approved Alternative in a form and of a scope generally acceptable to reputable financial institutions that provide financing to the mining industry, including an analysis and refinement of the information presented in the Pre-Feasibility Study for the Approved Alternative.

 

“Financing Parties” means lenders, financial institutions, security holders, investors, export credit agencies, multilateral institutions, equity providers and other Persons providing Project Financing to the Company, and all trustees, agents, nominees and Persons acting in similar capacities on behalf of any such Persons, and the successors and assigns of any of them.

 

“Force Majeure Event” means, with respect to the Manager or any Member, any cause, condition, event or circumstance, whether foreseeable or unforeseeable, beyond its reasonable control, including the following to the extent beyond its reasonable control (but specifically excluding any event that is caused by unavailability of funds): (a) labor disputes (however arising and whether or not employee demands are reasonable or within the power of the Member or Manager to grant), (b) the inability to obtain on reasonably acceptable terms any Permit or private license, consent or other authorization, and any actions or inactions by any Governmental Authorities or private third parties that delay or prevent the issuance or granting of any Permits or other authorization required to conduct Operations beyond the reasonable expectations of the Member or Manager seeking the Permit or other authorization, including (i) the failure to complete any review and analysis required by the National Environmental Policy Act or any similar state law within 18 months of initiation of that process, and (ii) an appeal of the issuance of a Permit or authorization that revokes, suspends or curtails the right under the Permit or authorization to conduct Operations, (c) changes in Law, and instructions, requests, judgments and orders of Governmental Authorities, (d) curtailments or suspensions of activities to remedy or avoid an actual or alleged, present or prospective violation of Environmental Laws, (e) acts of terrorism, acts of war, and conditions arising out of or attributable to terrorism or war, whether declared or undeclared, (f) riots, civil strife, insurrections and rebellions, (g) fires, explosions and acts of God, including epidemics or pandemics, earthquakes, storms, floods, sink holes, droughts and other adverse weather conditions, (h) delays and failures of suppliers to supply, or of transporters to deliver, materials, parts, supplies, services or equipment, (i) contractors’ or subcontractors’ shortage of, or inability to obtain, labor, transportation, materials, machinery, equipment, supplies, utilities or services, (j) accidents, (k) breakdowns of equipment, machinery or facilities, (l) actions by native rights groups, environmental groups, or other similar special interest groups, and (m) other similar causes, conditions, events and circumstances, whether similar or dissimilar to the foregoing, beyond its reasonable control.

7

 

 

“GAAP” means generally accepted accounting principles in the United States.

 

“Government Official” includes any:

 

(i)individual who is employed by or acting on behalf of a Governmental Authority, a person Controlled by a Governmental Authority (including state owned enterprises) or a public international organization; 

 

(ii)political party, party official or political office candidate; 

 

(iii)individual who holds or performs the duties of an appointment, office or position created by custom or convention, including, potentially, some tribal leaders and members of royal families; or  

 

(iv)individual who holds themselves out to be the authorized intermediary of any person specified above. 

 

“Governmental Authority” means any domestic or foreign national, regional, state, tribal, or local court, governmental department, commission, authority, central bank, board, bureau, agency, official, or other instrumentality exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government.

 

“Governmental Fees” means all rental fees, maintenance payments, recording or filing fees and other payments required by Law to be paid to any Governmental Authority to acquire or maintain any licenses, permits, concessions, fee lands, mining leases, surface leases or other tenures included in the Properties.

 

“Initial Program and Budget” means the Program and Budget adopted by the Members and the Manager and attached as Exhibit F.

 

“Insolvency Event” means, with respect to a Person, the occurrence of any of the following events: (a) a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for a substantial part of the Person’s assets is appointed and the appointment is neither made ineffective nor discharged within 60 days after the making thereof, or the appointment is consented to, requested by, or acquiesced in by the Person, (b) the Person commences a voluntary case, or consents to the entry of any order for relief in an involuntary case, under any applicable bankruptcy, insolvency or similar Law, (c) the Person consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of any substantial part of its assets, (d) the Person makes a general assignment for the benefit of creditors or fails generally to pay its debts as they become due, or (e) entry is made against the Person of a judgment, decree or order for relief affecting a substantial part of its assets by a court of competent jurisdiction in an involuntary case commenced under any applicable bankruptcy, insolvency or other similar Law. 

 

“Intellectual Property” means any and all discoveries, inventions, processes, methods, techniques, know how, and improvements or modifications to the same related in any way to the Assets or Operations, including all associated Intellectual Property Rights and other proprietary rights, expressed in whatever form and may include technical information, procedures, formulae, protocols, software, specifications, flowcharts, instructions, data, and other documents and materials of a Member or the Company, whether were conceived, created, or developed prior to or after the Effective Date.

 

“Intellectual Property Rights” means any and all proprietary rights related to the Assets that are provided under patent law, copyright law, trade-mark law, design patent or industrial design law, or any other applicable Laws, including trade secret law, that may provide a right in ideas, formulae, algorithms, concepts, inventions, know-how, computer software, database or design, or the expression or use thereof.

 

“Interest” means, with respect to a Member (a) the limited liability company interest of the Member, including the Member’s Capital Account and share of items of Profit, Loss and credits of, and the right to receive distributions (liquidating or otherwise) from the Company under the terms of this Agreement, (b) the Member’s status as a Member, (c) all other rights, benefits and privileges enjoyed by the Member in its capacity as a Member, including the Member’s rights to vote, consent and approve those matters described in this Agreement, and (d) all obligations, duties and liabilities imposed on the Member under this Agreement in its capacity as a Member (but not in the capacity of a Manager or other capacity). The Interest of a Member will be reflected as a percentage, reflecting the percentage interest of the Member in certain allocations of items of Profit, Loss and credit and certain distributions of cash or property, as the percentage interest may from time to time be adjusted under this Agreement. Interests will be calculated to three decimal places and rounded to two (e.g., 1.519% rounded to 1.52%). Decimals of 0.005 or more will be rounded up to 0.01. Decimals of less than 0.005 will be rounded down. The initial Interests of the Members as of the Effective Date are in Section 3.1(a). 

8

 

 

“Law” means all applicable federal, state, local, municipal, tribal and foreign laws (statutory or common), rules, ordinances, regulations, grants, concessions, franchises, licenses, orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar requirements, whether legislative, municipal, administrative or judicial in nature.

 

“Leased Property” means the leasehold interest in certain lands and water rights in Hudspeth County, Texas, more particularly described in the Mining Leases, the Surface Leases and the Water Lease.

 

“Loss” means any item of loss or deduction of the Company as determined under the capital accounting rules of Treasury Regulation § 1.704-1(b)(2)(iv) for purposes of adjusting the capital accounts of the Members including, without limitation, the provisions of paragraphs (b), (f) and (g) of those regulations relating to the computation of items of deduction and loss. 

 

“Manager” means the person appointed to manage, direct and control Operations appointed pursuant to Section 5.3 and any Person appointed as the subsequent or replacement Manager pursuant to Section 5.7. 

 

“Member” and “Members” mean USARE and TMRC and any other Person admitted as a substituted or additional Member of the Company under this Agreement. The term “Member” also includes a former Member, but only to the extent of any rights or obligations under this Agreement that expressly survive the resignation of the Member, the Transfer of the Member’s Interest or the dissolution and liquidation of the Company. 

 

“Member Licensed IP” has the meaning set out in Section 10.3(c).

 

“Mining” means the mining, extracting, producing, handling, milling or other processing of Products, including processing through the Pilot Plant. 

 

“Mining Leases” means the mining leases included in the Leased Property in Hudspeth County, Texas, more particularly described in Exhibit A, which has been contributed to the Company by TMRC.

 

“Misconduct” means, with respect to a Member (a) an unauthorized act or assumption of liability by the Member, or any of its directors, officers, employees, agents and attorneys done or undertaken, or apparently done or undertaken, on behalf of the Company or the other Member, except under the authority expressly granted in this Agreement or as otherwise agreed in writing by the Members, (b) a material breach by the Member in its capacity as a Member (but not in its capacity as a Manager or Representative) of any covenant contained in this Agreement, or (c) if the Member or an Affiliate of the Member is the Manager, a material breach by the Manager of any of its material obligations under this Agreement that (i) constitutes a breach of its standard of care under Section 5.4, as limited by Section 5.5 and (ii) continues for 30 days after notice from any other Member demanding performance (unless the Manager in good faith disputes the existence of the material breach or the material obligation).

 

“Net Proceeds” means the amounts calculated as provided in Exhibit D payable to a Member after the resignation or deemed resignation of the Member as provided in this Agreement.

 

“OFAC” means the Office of Foreign Asset Control of the U.S. Department of the Treasury.

 

“Operations” means the activities and operations of the Company.

 

“Owned Surface” means the surface estate in Hudspeth County, Texas, more particularly described in Exhibit A, which has been contributed to the Company by TMRC.

 

“Permit” means the permits described in Exhibit A and any permit, franchise, license, authorization, order, certificate, registration, variance, settlement, compliance plan or other consent or approval granted by any Governmental Authority and acquired by the Company.

9

 

 

“Permitted Encumbrance” means, with respect to any Asset, (a) Encumbrances specifically approved by the Management Committee, (b) mechanic’s, materialmen’s or similar Encumbrances if payment of the secured obligation is not yet overdue or being contested in good faith, (c) Encumbrances for Taxes, assessments, obligations under workers’ compensation or other social welfare legislation or other requirements, charges or levies of any Governmental Authority, in each case not yet overdue or being contested in good faith, (d) Encumbrances existing at the time of, or created concurrent with, the acquisition of the Assets, (e) easements, servitudes, rights-of-way and other rights, exceptions, reservations, conditions, limitations, covenants and other restrictions that do not materially interfere with, materially impair or materially impede the Business or Operations or the value or use of the Assets, (f) pledges and deposits to secure the performance of bids, tenders, trade or government contracts (other than for repayment of borrowed money), leases, licenses, statutory obligations, surety bonds, performance bonds, completion bonds and other similar obligations that are incurred in the ordinary course of Operations on the Assets, and (g) Encumbrances consisting of (i) rights reserved to or vested in any Governmental Authority to control or regulate the Assets, (ii) the terms and conditions of any agreement included in the Assets, including the Mining Leases, the Water Lease, the Surface Lease, the Surface Option and the Contracts and the rights of the counterparties to such agreements, including the rights to payments and royalties, (iii) obligations or duties to any Governmental Authority with respect to any Permits and the rights reserved or vested in any Governmental Authority to terminate any such Permits or to condemn or expropriate any property, and (iv) zoning or other land use or Environmental Laws of any Governmental Authority, and (f) Encumbrances arising under the Contribution Agreement and this Agreement.

 

“Person” means a natural person, corporation, joint venture, partnership, limited liability partnership, limited partnership, limited liability limited partnership, limited liability company, trust, estate, business trust, association, Governmental Authority or other entity. 

 

“Personnel” means: (a) in relation to a party, any of its (or any Affiliates) directors, officers, employees, agents, Subcontractors (including Subcontractors’ Personnel) and representatives; and (b) in relation to a Subcontractor, any of its directors, officers, employees, agents, subcontractors or representatives.

 

“Pilot Plant” means the CIX/CIC processing facility located in Wheat Ridge, Colorado and all associated equipment, spare parts, technology and Intellectual Property and Intellectual Property Rights, which have been contributed to the Company by USARE.

 

“Pilot Plant Developed IP” has the meaning set forth in Section 10.3(a).

 

“Pilot Plant IP” has the meaning set forth in Section 10.3(b).

 

“Pre-Feasibility Study” means a study in a form typically acceptable in the mining industry that considers the economic, engineering and operational feasibility of Development and of conducting Mining Operations on the Properties and which may consider, among other things: (i) analyses of the various alternatives for mining, processing and beneficiation of Products; (ii) analyses of alternative mining, milling, and production rates; (iii) analyses of alternative sites for placement of facilities (i.e., water supply facilities, transport facilities, reagent storage, offices, shops, warehouses, stock yards, explosives storage, handling facilities, housing, public facilities); (iv) analyses of alternatives for waste treatment and handling (including a description of each alternative of the method of tailings disposal and the location of the proposed disposal site); (v) estimates of recoverable proven and probable reserves of Products and of related substances, in terms of technical and economic constraints (extraction and treatment of Products), including the effect of grade, losses, and impurities, and the estimated mineral composition and content thereof, and review of mining rates commensurate with such reserves; (vi) analyses of environmental impacts of the various alternatives, including an analysis of the permitting, environmental liability and other Environmental Law implications of each alternative, and costs of Environmental Compliance for each alternative; (vii) conduct of appropriate metallurgical tests to determine the efficiency of alternative extraction, recovery and processing techniques, including an estimate of water, power, and reagent consumption requirements; (viii) conduct of hydrology and other studies related to any required dewatering; and (ix) such other studies and analyses as are typically considered in the mining industry. 

 

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as reasonably determined by USARE) or any similar release by the Federal Reserve Board (as reasonably determined by USARE). Each change in the Prime Rate will be effective from and including the date such change is publicly announced or quoted as being effective. 

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“Products” means all ores, minerals and mineral resources, including raw, intermediate or final products produced from the Properties.

 

“Profit” means any item of income or gain of the Company as determined under the capital accounting rules of Treasury Regulation § 1.704-1(b)(2)(iv) for purposes of adjusting the Capital Accounts of the Members including, without limitation, the provisions of paragraphs (b), (f) and (g) of those regulations relating to the computation of items of income or gain.

 

“Program” means a description in reasonable detail of Operations to be conducted and objectives to be accomplished by the Manager for a year or any longer period. 

 

“Project Financing” means any financing approved by the Management Committee and obtained by the Company for the purpose of placing a mineral deposit situated on the Properties into commercial production, and any replacement, renewal or extension financing or refinancing approved by the Management Committee. Project Financing will not include any financing obtained individually by a Member to finance payment or performance of its obligations under this Agreement.

 

“Properties” means (a) the Mining Leases, the Concessions, the water and water rights in the Water Lease, easements, rights-of-way and other appurtenances attached to or associated with the foregoing interests in land and water, and (b) all other interests in real property and water rights that are acquired by the Company within the Area of Interest. 

 

“Rare Earth Elements” means the lanthanide group of 15 metallic elements on the periodic table plus scandium and yttrium.

 

“REE Mining Company” means any company engaged in extracting or processing Rare Earth Elements as its principal product, unless such extraction or processing is from a waste or byproduct stream, such as the reprocessing of tailings from other activities, remediation of acid mine drainage, or processing of waste from coal mining. 

 

“Remaining Committed Sole Funding Amount” means $3,761,780, which has been contributed to the Company by USARE pursuant to the Contribution Agreement as of the Capital Contribution Effective Date, and which has been deposited in the Business Account by the Manager for use in funding adopted Programs and Budgets. To the extent that USARE makes additional contributions to the Company prior to the Effective Date the Company shall reimburse USARE. 

 

“Sanctioned Entity” means:

 

(i)a country or a government of a country; 

 

(ii)an agency of the government of a country; 

 

(iii)an organization directly or indirectly controlled by a country or its government; or 

 

(iv)a person resident in or determined to be resident in a country, 

 

in each case, that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC or by any United States Governmental Authority.

 

“Sanctioned Person” means at any time (a) any person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained by any Governmental Authority, (b) a person or legal entity that is a target of Sanctions, (c) any person operating, organized or resident in a Sanctioned Entity, or (d) any person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such person or persons described in clauses (a) through (c) above.

 

“Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by the United States of America, including those administered by OFAC, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order or any other Governmental Authority with jurisdiction over any party or any of their respective Subsidiaries or Affiliate.

 

“Securities Act” means the Securities Act of 1933, together with the rules and regulations promulgated by the United States Securities and Exchange Commission under the statute. 

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“Surface Lease” means the lease of surface estate in Hudspeth County, Texas, more particularly described in Exhibit A, which has been contributed to the Company by TMRC.

 

“Surface Option” means the option to purchase the surface estate in Hudspeth County, Texas, more particularly described in Exhibit A, which has been contributed to the Company by TMRC.

 

“Suspension Option” has the meaning set forth in Section 5.2.

 

“Tax Distribution Amount” means, with respect to each Member, the remainder of the amount calculated in clause (a) below minus the amount calculated in clause (b) below. 

 

(a)The amount under this clause (a) is the product of Tax Rate multiplied by the remainder of (i) the cumulative amounts of items of income and gain allocated to the Member for federal income tax purposes for all periods (excluding gains from the sale of all or substantially all the assets of the Company), minus (ii) the cumulative amounts of items of deduction, loss and expense allocated to the Member for federal income tax purposes for all periods (excluding losses from the sale of all or substantially all of the assets of the Company).  

 

(b)The amount under this clause (b) is the cumulative distributions distributed to the Member pursuant to this Agreement for all periods. 

 

“Tax Rate” means the U.S. federal corporate tax rate, currently 21%, as may be changed from time to time. 

 

“Transfer” means, with respect to any asset, including any Interest or other interest in the Company (including any right to receive distributions from the Company or any other economic interest in the Company), a sale, assignment, transfer, conveyance, gift, exchange or other disposition of the asset, whether the disposition is voluntary, involuntary or by merger, exchange, consolidation, bankruptcy or other operation of Law, including (a) in the case of an asset owned by a natural person, a transfer of the asset upon the death of its owner, whether by will, intestate succession or otherwise, (b) in the case of an asset owned by a Person that is not a natural person, a distribution of the asset, including in connection with the dissolution, liquidation, winding up or termination of the Person (other than a liquidation under a deemed termination solely for tax purposes), and (c) a disposition in connection with, or in lieu of, a foreclosure of an Encumbrance on the asset; provided, that the creation of an Encumbrance on an asset will not constitute a Transfer of the asset.

 

“Underlying Agreement” means any agreement, conveyance or instrument to which any of the Properties are subject and that contain unperformed, ongoing or surviving obligations or liabilities of any party, including the Mining Lease, Surface Lease and the other agreements, conveyances and instruments, which have been contributed to the Company by USARE and TMRC. 

 

“Water Lease” means the lease of water rights in Hudspeth County, Texas, more particularly described in Exhibit A, which has been contributed to the Company by TMRC.

 

1.2Interpretation. In interpreting this Agreement, except as otherwise indicated in this Agreement or as the context may otherwise require, (a) the words “include,” “includes,” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by those words or words of similar import, (b) the words “hereof,” “herein,” “hereunder,” and comparable terms refer to the entirety of this Agreement, including the Appendix or Exhibits, and not to any particular Article, Section, or other subdivision of this Agreement or Appendix or Exhibit to this Agreement, (c) any pronoun will include the corresponding masculine, feminine, and neuter forms, (d) the singular includes the plural and vice versa, (e) references to any agreement (including this Agreement) or other document are to the agreement or document as amended, modified, supplemented, and restated now or from time to time in the future, (f) references to any Law are to it as amended, modified, supplemented, and restated now or from time to time in the future, and to any corresponding provisions of successor Laws, (g) except as otherwise expressly provided in this Agreement, references to an “Article,” “Section,” “preamble,” “recital,” or another subdivision, or to the “Appendix” or an “Exhibit,” are to an Article, Section, preamble, recital or subdivision of this Agreement, or to the “Appendix” or an “Exhibit” to this Agreement, (h) references to any Person include the Person’s respective successors and permitted assigns, (i) references to “dollars” or “$” will mean the lawful currency of the United States of America, (j) references to a “day” or number of “days” (without the explicit qualification of “Business”) refer to a calendar day or number of calendar days, (k) if interest is to be computed under this Agreement, it will be computed on the basis of a 360-day year of twelve 30-day months, (l) if any action or notice is to be taken or given on or by a particular calendar day, and the calendar day is not a Business Day, then the action or notice may be taken or given on the next succeeding Business Day, and (m) any financial or accounting terms that are not otherwise defined herein will have the meanings given under GAAP. 

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1.3Coordination with Exhibits. Notwithstanding Section 1.2(g), except as otherwise expressly provided in an Exhibit, references in the Exhibit to an “Article,” or “Section” or another subdivision, are to an “Article,” “Section” or subdivision of the Exhibit. Except as otherwise provided in an Exhibit, capitalized terms used in the Exhibit that are not defined in the Exhibit will have the meanings given to them in this Agreement. If any provision of an Exhibit, other than Exhibit C, conflicts with any provision in the body of this Agreement, the provision in the body of this Agreement will control. If any provision of Exhibit C conflicts with any provision in the body of this Agreement, the provision in Exhibit C will control. 

 

Article II

The Limited Liability Company

 

2.1General. The Company has been duly organized under the Act by the filing of its certificate of formation in the Office of the Delaware Secretary of State by an authorized person. The Members agree that their rights relating to the Company, the Assets and Operations will be subject to and governed by this Agreement. To the fullest extent permitted by the Act, this Agreement will control as to any conflict between this Agreement and the Act or as to any matter provided for in this Agreement that also is provided for in the Act. 

 

2.2Name. The name of the Company is “Round Top Mountain Development, LLC.” The Manager will accomplish any filings or registration required by jurisdictions in which the Company conducts its Business. 

 

2.3Purposes. The Company is formed for the following purposes: 

 

(a)to conduct Exploration on the Properties and within the Area of Interest; 

 

(b)to acquire additional real property and other interests within the Area of Interest; 

 

(c)to evaluate the possible Development and Mining of the Properties and other Assets acquired within the Area of Interest;  

 

(d)to engage in Development and Mining on the Properties and other Assets acquired within the Area of Interest; 

 

(e)to engage in the marketing, sale and distribution of Products, to the extent provided in Section 7.3; and 

 

(f)to perform any other activities necessary, appropriate or incidental to any of the foregoing or to satisfy or comply with Environmental Compliance obligations, Continuing Obligations and Laws. 

 

2.4Limitation. Unless the Management Committee makes a decision to the contrary in such regard, the Business of the Company will be limited to the purposes described in Section 2.3, and nothing in this Agreement will be construed to enlarge those purposes. 

 

2.5The Members. The Manager will maintain a register containing the name, business address, Interest and Representatives of each Member, updated to reflect the admission of additional or substituted Members, changes of address, changes in Interests and other changes in accordance with this Agreement, and will provide the updated register to any Member promptly after the written request of the Member. 

 

2.6Issuance of Additional Interests. Additional Interests may be issued for such Capital Contributions and with such rights, privileges and preferences as approved by the Management Committee. If the issuance of additional Interests has been properly approved under this Section 2.6, the Persons to whom such additional Interests have been issued will automatically be admitted to the Company as Members.  

 

2.7Term. The Company has perpetual existence; provided, that the Company will be dissolved upon the occurrence of an event described in Section 9.3. 

 

2.8Registered Agent; Offices. The initial registered office of the Company and the initial registered agent for service of process on the Company in the State of Delaware are in the Company’s certificate of formation. The Manager may from time to time designate a successor registered office and registered agent and may amend the certificate of formation of the Company to reflect the change without the approval of the Members or the Management Committee. The location of the principal place of business of the Company will be the Manager’s principal place of business or other location selected by the Manager. The Manager will make such additional filings and registrations as are necessary to conduct business in the State of Texas.  

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Article III

Interests; Capital Contributions

 

3.1Interests. 

(a)Initial Interests. Pursuant to the Option Agreement (as defined in the Contribution Agreement) and as implemented in the Contribution Agreement, concurrently with execution of this Agreement, TMRC has sold to USARE one-third of the 30.000% Interest it was entitled to receive pursuant to the Option Agreement which will result in USARE owning an 80.000% Interest in the Company and TMRC owning a 20.000% Interest in the Company.  

 

(b)Adjustments to Interests. In addition to the provisions of Section 3.1(a), the Interests of the Members will be adjusted (i) upon the resignation or deemed resignation of a Member under Sections 3.3, 3.5(d) or 9.1 or upon the redemption of a Member’s Interest, to reflect the cancellation of the Member’s Interest, (ii) upon an election by a Non-Contributing Member to contribute less to an adopted Program and Budget than the percentage reflected by the Non-Contributing Member’s Interest, or an election by a Contributing Member to make an Excess Contribution of an Underfunded Amount, in each case as provided in Section 6.6, (iii) upon the recalculation or restoration of Interests after the completion of a Program and Budget under Section 6.7, (iv) upon the default by a Member in making its required Capital Contributions to an adopted Program and Budget, followed by a proper election by the Non-Defaulting Member under Section 3.5(c), (v) upon the Transfer by a Member of all or less than all of its Interest under Article X, and (vi) upon the issuance of additional Interests in the Company under Section 2.6. 

 

3.2Initial Contributions. 

 

(a)USARE Initial Contribution. As its initial Capital Contribution, USARE has contributed to the Company as of the Effective Date the Assets to be contributed by USARE under the Contribution Agreement. As a result of the sale set forth in Section 3.1(a), the Members agree that the fair market value of the initial Capital Contributions of USARE is $11,428,571.  

 

(b)TMRC Initial Contribution. As its initial Capital Contribution, TMRC has contributed to the Company as of the Effective Date the Assets to be contributed by TMRC under the Contribution Agreement. As a result of the sale set forth in Section 3.1(a), the Members agree that the fair market value of the initial Capital Contributions of TMRC is $2,857,143.  

 

3.3Sole and Joint Funding.  

 

(a)Sole Funding. Until such time as the Remaining Committed Sole Funding Amount is fully expended pursuant to the Initial Program and Budget, all expenditures made under such Programs and Budgets will be funded solely from the Remaining Committed Sole Funding Amount and neither Member will be required to meet cash calls issued pursuant to Section 3.4. 

 

(b)Joint Funding. From and after, but only from and after, the expenditure by the Company of the Remaining Committed Sole Funding Amount pursuant to an adopted Program and Budget, the Members will, subject to an election under Section 6.6, be obligated to make additional Capital Contributions to adopted Programs and Budgets in accordance with Section 3.4, pro rata in proportion to their respective Interests (“Joint Funding”). 

 

3.4Cash Calls. Upon commencement of Joint Funding, on the basis of the adopted Program and Budget then in effect, the Manager will submit to each Member at least 10 days before the last day of each month, a billing for the estimated cash requirements of the Company for the next month. Within 10 days after receipt of such a billing, each Member will pay to the Company, as an additional Capital Contribution, its proportionate share of the estimated amount based on its Interest. Time is of the essence in the payment of such billings. Subject to receipt of such Capital Contributions or other funds under this Agreement, the Manager will maintain a minimum cash reserve of the amount the Manager estimates will be required to pay Company costs and expenses that are, or will become, payable within 30 days after the date of determination. All funds in excess of the immediate cash requirements of the Company will be invested in the Business Account. 

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3.5Remedies for Failure to Meet Cash Calls. 

 

(a)Event of Default. Except as provided in Section 7.3(c), if a Member (the “Delinquent Member”) does not contribute all or any portion of any additional Capital Contribution that such Member is required to contribute under Section 3.4 (the “Default Amount”), then the other Member (the “Non-Defaulting Member”) may elect to exercise its rights under either Section 3.5(b), 3.5(c) or 3.5(d) by written notice to the Delinquent Member within 10 Business Days after the occurrence of the default (the “Election Notice”). 

 

(b)Ordinary Dilution. If the Non-Defaulting Member makes an election under this Section 3.5(b), the Delinquent Member will have 15 days from the date of receipt of the Election Notice to contribute the Default Amount with interest at the Default Rate to the Company; failing which, the Non-Defaulting Member may elect under this Section 3.5(b): (i) to contribute the Default Amount to the Company, or (ii) not to contribute the Default Amount to the Company and, in both cases, the Interests of the Members will be recalculated at the time and in the manner prescribed in Section 6.7(b). 

 

(c)Default Loan. If the default by the Delinquent Member is the second or any subsequent default during the period of any adopted Budget, the Non-Defaulting Member has the option, but not the obligation, to elect under this Section 3.5(c) to pay the entire Default Amount to the Company on behalf of the Delinquent Member within such 10 Business Day period and the Default Amount will be treated as a loan (a “Default Loan”) from the Non-Defaulting Member to the Delinquent Member, and a Capital Contribution of that amount to the Company by the Delinquent Member, with the following results: 

 

(i)the amount of the Default Loan will bear interest at the Default Rate from the date that the Non-Defaulting Member makes the Default Loan until the date that the Default Loan, together with all accrued and unpaid interest, is repaid by the Delinquent Member to the Non-Defaulting Member or from distributions as provided in Section 3.5(c)(ii) (with all payments or distributions being applied first to accrued and unpaid interest and then to principal); 

 

(ii)all distributions and distributions of the proceeds of sales under Section 7.1(b)) that otherwise would be made to the Delinquent Member after the date of the default (whether before or after the dissolution of the Company) instead will be made to the Non-Defaulting Member until the Default Loan and all accrued and unpaid interest have been paid in full to the Non-Defaulting Member; 

 

(iii)The Default Loan will have a term of one year, payable in 12 equal monthly installments of principal and interest with the first installment due on the fifth day of the full calendar month next following the date of the Default Loan, with all payments applied first to accrued but unpaid interest and then to principal; 

 

(iv)Upon payment in full of the Default Loan (except as provided in Section 3.5(c)), the Default Loan will be satisfied and the amount of Capital Contribution made on behalf of the Delinquent Person will be deemed made by the Delinquent Member;  

 

(v)Upon any default in the payment of the principal of or interest on the Default Loan, the Non-Defaulting Member may, by Notice to the Delinquent Member, (A) elect to satisfy the Default Loan by taking an exchange of the unpaid balance of the Default Loan for a portion of the Interest of the Delinquent Person calculated as provided in Section 3.5(d) or (B) seek to foreclose upon the Default Loan in any court of competent jurisdiction; 

 

(d)Accelerated Dilution. If the default by the Delinquent Member is the second or any subsequent default during the period of any adopted Budget, the Non-Defaulting Member may elect under this Section 3.5(d), to contribute the Default Amount to the Company on behalf of the Delinquent Member and to reduce the Interest of the Delinquent Member by an amount (expressed as a percentage) equal to: (i) the Dilution Multiple; multiplied by the Default Amount; divided by (ii) the aggregate Contributed Capital of all Members (determined after taking into account the contribution of the Default Amount on behalf of the Delinquent Member). The Interest of the Non-Defaulting Member will be increased by the reduction in the Interest of the Delinquent Member.  

 

(e)Sole Remedy. The applicable provisions of this Section 3.5 will be the sole and exclusive remedies available to the Non-Defaulting Member for a default by the Defaulting Member.  

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3.6Security. Each Member hereunder grants to the other a security interest in its Interest and share of distributions (or sales of Products by the Company under Section 7.3 and distributions of the proceeds of such sales under Section 7.1(b)) that otherwise would be made to the Delinquent Member after the date of the default, to secure the payment obligations of the Non-Defaulting Member hereunder. Each Member hereby authorizes the other to file and record all financing statements, continuation statements and other instruments necessary or desirable to perfect or effectuate the provisions of this Section 3.6.  

 

3.7Return of Contributions. Except as expressly provided in this Agreement, no Member will be entitled to the return of any part of its Capital Contributions or to be paid interest on either its Capital Account or its Capital Contributions. No Capital Contribution that has not been returned will constitute a liability of the Company, the Manager or any Member. A Member is not required to contribute or to lend cash or property to the Company to enable the Company to return any Member’s Capital Contributions. The provisions of this Section 3.7 will not limit a Member’s rights or obligations under Section 7.2. 

 

Article IV

Members

 

4.1Limited Liability. The liability of each Member will be limited as provided by the Act. No Member or the Manager, or any combination, will be personally liable under any judgment of a court, or in any other manner, for any debt, obligation or liability of the Company, whether such debt, obligation or liability arises in contract, tort or otherwise, solely by reason of being a Member or the Manager or any combination. 

 

4.2Company Indemnification of Members. Except as provided in Section 4.5, the Company will indemnify, defend and hold harmless each Member and its Affiliates, and their respective directors, officers, employees, agents and attorneys from and against any and all Adverse Consequences incurred or suffered by them that arise out of or relate to (a) the Company or Operations, including Environmental Liabilities and Continuing Obligations, (b) any Assets distributed to such Member as an objecting Member under Section 10.2, but only to the extent arising out of or relating to Operations, including Environmental Liabilities and Continuing Obligations, conducted before the date of such distribution, and (c) any reimbursements by the Member under Section 4.4. In all cases of this Section 4.2, and without limiting Sections 4.3 or 4.4, indemnification will be provided only out of and to the extent of the net assets of the Company, and no Member will have any personal liability whatsoever for indemnification under this Section 4.2. Notwithstanding the previous provisions of this Section 4.2, the Company’s indemnification obligations under this Section 4.2 as to third party claims will be only with respect to Adverse Consequences not otherwise compensated by insurance carried for the benefit of the Company or carried by the Company for the benefit of the Members. 

 

4.3Member Indemnification. 

 

(a)Indemnification Obligations. Except as provided in Section 4.5, each Member (the “Indemnifying Member”) will indemnify, defend and hold harmless each other Member and its Affiliates, and their respective directors, officers, employees, agents and attorneys (collectively, the “Indemnified Member Parties”) and the Company from and against any and all Adverse Consequences that arise out of or result from the Misconduct of the Indemnifying Member (including in its capacity as the Manager). 

 

(b)Notice. If any claim or demand is asserted against an Indemnified Member Party or the Company with respect to which the Indemnified Member Party or the Company may be entitled to indemnification under this Agreement, then the Indemnified Member Party will cause notice of the claim or demand (together with a reasonable description), to be given to the Indemnifying Member promptly after the Indemnified Member Party has knowledge or notice of the claim or demand. Failure to promptly provide the notice will not relieve the Indemnifying Member of its indemnification obligations, except to the extent the Indemnifying Member is materially prejudiced by the failure. 

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(c)Assumption of Defense by Indemnifying Member. The Indemnifying Member will have the right, but not the obligation, by written notice to the Indemnified Member Party with a copy to the Company delivered within 30 days after the receipt of a notice under Section 4.3(b), to assume the entire control of the defense, compromise and settlement of the claim or demand that is the subject of the notice, including the use of counsel chosen by the Indemnifying Member, all at the sole cost and expense of the Indemnifying Member. Notwithstanding the foregoing, the Indemnified Member Party may participate in the defense at the sole cost and expense of the Indemnified Member Party. The assumption of the defense of the claim or demand by the Indemnifying Member will constitute a waiver by the Indemnifying Member of its right to contest or dispute its indemnification obligation for the claim or demand. Any Adverse Consequences to the assets or business of the Indemnified Member Party or the Company caused by the failure of the Indemnifying Member to defend, compromise or settle a claim or demand in a diligent manner after having given notice that it will assume control of the defense, compromise and settlement of the matter will be included in the Adverse Consequences for which the Indemnifying Member will be obligated to indemnify the Indemnified Member Parties and the Company. Any settlement or compromise of any claim or demand by the Indemnifying Member will be made only with the consent of the Indemnified Member Party, which may not be unreasonably withheld or delayed. An Indemnified Member Party will not be considered unreasonable in withholding its consent unless the settlement or compromise includes a full release of all claims and liabilities against the Indemnified Member Parties and the Company arising out of or relating to the claim or demand, provides for the payment of only money damages, and the Indemnifying Member has provided to the Indemnified Member Parties assurance acceptable to the Indemnified Member Parties of the payment of such money damages immediately upon the settlement or compromise. 

 

(d)Defense by Indemnified Member Party or Company. Before the assumption of the defense of any claim or demand subject to indemnification by an Indemnifying Member, the Indemnified Member Party or the Company may file any motion, answer or other pleading, or take such other action as it deems appropriate, to protect its interests or those of the Company or the Indemnifying Member. If it is finally determined that the Indemnifying Member is responsible for indemnification of any such claim or demand, or if the Indemnifying Member elects to assume the defense of the claim or demand under Section 4.3(c), then the Indemnifying Member will promptly reimburse the Indemnified Member Party or the Company for all costs and expenses incurred under the previous sentence. If the Indemnifying Member does not elect to control the defense, compromise and settlement of a claim or demand under Section 4.3(c), and it is finally determined that the Indemnifying Member is responsible for indemnification of the claim or demand, then the Indemnifying Member will be bound by the results of the defense, compromise or settlement, and all costs and expenses incurred by the Indemnified Member Parties and the Company in conducting the defense, compromise or settlement will be included in the Adverse Consequences for which the Indemnifying Member is obligated to indemnify the Indemnified Member Parties and the Company. 

 

4.4Member Reimbursement Obligations. Each Member will be liable to each other Member (including in its capacity as the Manager) to reimburse and pay to such other Member its respective share, based on Interests, of any and all Adverse Consequences incurred or suffered by such other Member and its Affiliates that arise out of or relate to (a) the Operations of the Company, including Environmental Liabilities and Continuing Obligations, conducted after the Effective Date, and (b) any Properties distributed to the other Member as an objecting Member under Section 10.2, but only to the extent in the case of this clause (b) arising out of or relating to Operations, including Environmental Liabilities and Continuing Obligations, arising before the date of such distribution. For purposes of this Section 4.4, each Member’s share of such liability will be equal to its Interest at the time of the actions, omissions or events giving rise to the Adverse Consequences (or as to any actions, omissions or events arising or existing before the Effective Date, such Member’s initial Interest). Neither the resignation nor deemed resignation of a Member, any Transfer or redemption of all or any portion of a Member’s Interest, any reduction of a Member’s Interest, the distribution to the other Member of Properties under Section 10.2, nor the dissolution, liquidation nor termination of the Company, will relieve a Member of its share of any such liability accruing before such resignation, deemed resignation, Transfer, redemption, reduction, distribution, dissolution, liquidation or termination. Notwithstanding the foregoing provisions of this Section 4.4, this Section 4.4 will apply only in the case that the Member from whom the other Member is requesting reimbursement or any of its Affiliates is finally determined to be personally liable for the Adverse Consequences, and will not be construed as a waiver or reduction of the limitations under the Act or other applicable Law of the liability of a Member or the Manager for Company debts, obligations and liabilities. 

 

4.5Coordination. Notwithstanding anything to the contrary in this Article IV, (a) the provisions of Sections 4.2, 4.3 and 4.4 will not apply to Adverse Consequences arising out of or relating to the breach of any representations or warranties under the Contribution Agreement that are covered by the indemnification obligations under the Contribution Agreement, and (b) no Member, or any of its Affiliates, or any of their respective directors, officers, employees, agents or attorneys will be entitled to indemnification or reimbursement under Sections 4.2, 4.3 and 4.4 for Adverse Consequences, to the extent the Adverse Consequences arise out of or result from the Misconduct of such Member, any of its Affiliates, or any of their respective directors, officers, employees, agents or attorneys. 

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4.6Exclusive Rights of Members. Notwithstanding anything in this Agreement to the contrary, no Person other than a Member (on its own behalf and on behalf of the Company and its Indemnified Member Parties) will have the right to enforce any representation, warranty, covenant or agreement of a Member or the Manager under this Agreement or the Contribution Agreement, and specifically neither the Company nor any lender or other third party will have any such rights, it being expressly understood that the representations, warranties, covenants and agreements contained in this Agreement and the Contribution Agreement will be enforceable only by a Member (on its own behalf and on behalf of the Company and its Indemnified Member Parties) against another Member or the Manager. For the avoidance of doubt, the Company will be bound by the provisions of this Agreement but will have no right to enforce those provisions against a Member or the Manager, such rights being exclusively vested in the Members. Any Member may bring a direct action on behalf of the Company against any other Member or the Manager without the requirement to bring a derivative action or otherwise satisfy the requirements of sections 18-1001 through 18-1004 of the Act or other similar requirements. 

 

4.7Meetings; Written Consent. Meetings of the Members will not be required for any purpose. Any action required or permitted to be taken by Members may be taken without a meeting if the action is evidenced by a written consent describing the action taken, signed by all of the Members. 

 

4.8No Member Fees. Except as otherwise provided in this Agreement, no Member will be entitled to compensation for attendance at Member meetings or for time spent in its capacity as a Member. 

 

4.9No State-Law Partnership. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member, Manager or Representative be a partner or joint venturer of any other Member, Manager or Representative for any purposes other than federal and state tax purposes, and this Agreement may not be construed to suggest otherwise. 

 

4.10No Implied Covenants; No Fiduciary Duties. There are no implied covenants contained in this Agreement other than the contractual duty of good faith and fair dealing. The Members, the Manager and the Representatives will not have any fiduciary or other duties to the Company or the other Members except as specifically provided by this Agreement, and the Members’, the Representatives’, and the Manager’s duties and liabilities otherwise existing at law or in equity are restricted and eliminated by the provisions of this Agreement to those duties and liabilities specifically set forth in this Agreement. 

 

4.11Other Business Opportunities. Except as provided in Sections 9.2 and 10.1, (a) each Member (including in its capacity as a Manager) and its Representatives will have the right independently to engage in and receive the full benefits from business activities, whether or not competitive with the Operations, without consulting the Company or any other Member, (b) the doctrines of “corporate opportunity” and “business opportunity” will not be applied to any other activity, venture, or operation of any Member or Representative or the Manager, and (c) no Member or Representative or the Manager will have any obligation to any other Member or the Company with respect to any opportunity to acquire any property outside the Area of Interest at any time, or within the Area of Interest after the termination of the Company. 

 

4.12Cooperation with Financing Parties. Each Member and the Manager acknowledges that if the Company seeks Project Financing, the Financing Parties may from time to time request modifications to this Agreement and certain documents from such Member or Manager. Each Member and Manager will furnish to the Financing Parties such written information, certificates, opinions, affidavits, lien waivers and other like documents as may be requested by the Financing Parties and approved by the Management Committee. The Members will negotiate in good faith modifications to this Agreement reasonably requested by the Financing Parties; provided, that such modifications do not increase any Member’s obligations and liabilities under this Agreement, unless the Members mutually agree to negotiate such modifications. Each Member and Manager will promptly execute any additional documentation as may be reasonably requested by the Financing Parties and approved by the Management Committee, including documents evidencing such Member’s or Manager’s consent to the Project Financing, Encumbrances on the Assets of the Company or the pledge of the Members’ Interests as security for the Project Financing subordination of any Encumbrances its holds in the Interest of the other Member under Section 3.6 or otherwise, or to cause to be subordinated any permitted Encumbrances or Permitted Interest Encumbrances outstanding on its Interest, but no Member will be required to provide a guarantee of repayment of such financing. 

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4.13Financing Parties’ Right to Cure. If the Company obtains Project Financing, the Financing Parties will have the right to cure any default of the Company under any agreement or arrangement with any Member or Manager or their respective Affiliates, without affecting the duties and obligations of such Member, Manager or Affiliate. The Financing Parties will have (a) 30 days from the date notice of default is delivered by such Member, Manager or Affiliate to the Company and the Financing Parties if the default is the failure to pay amounts to such Member, Manager or Affiliate when due and payable, or (b) at least 60 days from the date notice of default is delivered by such Member, Manager or Affiliate to the Company and the Financing Parties to cure, or begin to cure, such default if the default cannot be cured by the payment of money to such Member, Manager or Affiliate so long as the Financing Parties, the Company or their respective designees diligently pursue cure to completion and continue to perform any related monetary obligations, and all other obligations under the agreement or arrangement are performed by the Company, the Financing Parties or their respective designees. If possession of the Assets is necessary to cure the breach or default, and the Financing Parties declare the Company in default and commence foreclosure proceedings, the Financing Parties will be allowed a reasonable period to complete the proceedings and to thereafter cure the default. If the Financing Parties are prohibited by any court order or proceedings from curing the default or from commencing or prosecuting foreclosure proceedings, the time periods will be extended by the period of the prohibition. 

 

Article V

Company Management

 

5.1Management Authority. Except as delegated to the Manager under Section 5.3, the Management Committee will have the exclusive power and authority to approve Major Decisions. The Manager will have the power and authority to make any other decision or take any other action on behalf of the Company that does not require the approval of the Management Committee under this Agreement. In connection with the implementation, consummation or administration of any matter within the scope of the Manager’s authority, the Manager is authorized, without the approval of the Members or the Management Committee, to execute and deliver on behalf of the Company contracts, instruments, conveyances, checks, drafts and other documents of any kind or character to the extent the Manager deems it necessary or desirable. The Manager may delegate to officers, employees, agents, contractors or representatives of the Company or the Manager, any or all of its powers by written authorization identifying specifically or generally the powers delegated or acts authorized, but no such delegation will relieve the Manager of its obligations hereunder. 

 

5.2Management Committee; Organization and Composition. The Members hereby establish a committee (the “Management Committee”) consisting of three representatives (“Representatives”), of which (i) two Representatives will be appointed by USARE, and (ii) one Representative will be appointed by TMRC. The number of Representatives will not change if (i) a portion of Interests of either Member are transferred and following such transfer there are more than two Members, or (ii) additional Members are admitted pursuant to the provisions of this Agreement. A Representative of the Member that holds greater than 50.000% of the Interests of the Members will serve as the chair of the Management Committee. Each Member may appoint one or more alternate Representatives to act in the absence of a regular Representative. Appointments of Representatives may be made or changed at any time by notice to the other Member. Representatives will not be considered managers under the Act, but derive all of their right, power and authority from the Members. No Member or Representative will have the power to bind the Company or to execute documents and instruments on behalf of the Company, unless such Member or Representative also is a Manager or officer duly authorized by the Management Committee to undertake such action or such power and authority has been delegated by the Manager to such Member or Representative, and then only in that capacity. If: (i) there has been a Change in Control of TMRC; or (ii) a change in the appointment by TMRC to its Representative to the Management Committee if such Representative is both (1) not an executive officer of TMRC and (2) is in a position whereby a conflict of interest would arise between the Representative and either USARE or RTMD; or (iii) a Transfer of Interests by TMRC (or its successors and permitted assigns) to a REE Mining Company and such Transfer has not received the prior written approval of USARE (including without limitation, after the failure by USARE to exercise its rights of first offer contained in Section 8.4); then, in each case, USARE will have the sole right and option, to be exercised at any time or times after USARE first becomes aware of the occurrence of any such event (each, a “Suspension Event”), to elect to suspend the operation of Section 5.2(e) (the “Suspension Option”), either on a temporary basis or a permanent basis. If, as and when USARE has exercised the Suspension Option, the provision of Section 5.2(e) will cease to apply for the period so elected by USARE in the notice pursuant to which it exercises the Suspension Option and all decisions listed in Sections 5.2(e)(i) through and including (ix), inclusive, will only require the approval of the Representatives appointed by the Member holding an Interest of greater than 50.000%. 

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(a)Voting. Each Member, acting through its Representatives, will vote on the Management Committee in accordance with its Interest. The Representatives appointed by a Member will vote as a group. If all Representatives appointed by a Member are not present at a meeting of the Management Committee, the Representatives appointed by such Member that are present will have the entire Interest of the appointing Member. Whenever any provision of this Agreement requires or permits the vote, consent or approval of the Members or the Management Committee, such provision will be deemed to require or permit, as applicable, the vote, consent or approval of Representatives with an Interest of greater than 50.000%, unless the provision specifically requires a greater percentage, or the consent or approval of a greater number or percentage of Members or Representatives. In the event of a tie, the Manager will have a casting vote. 

 

(b)Meetings. Management Committee meetings will be held at least every three months, at such times and at such place as the Management Committee will determine unless the Members agree to less frequent meetings. In addition to regularly scheduled meetings, the Manager or any Representative may call a special meeting of the Management Committee upon five days’ notice. In case of emergency, reasonable notice of a special meeting will suffice. There will be a quorum if a majority of the Representatives are present. Each notice of a meeting will include an agenda or statement of the purpose of the meeting prepared by the Manager in the case of a regular meeting, or by the Manager or Representative calling the meeting in the case of a special meeting, but any matters may be considered at the meeting. 

 

(c)Conduct of Meetings. Meetings of the Management Committee may be held in person or by means of conference telephone or other communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in a meeting by such communications equipment will constitute presence in person at the meeting. The Manager will prepare minutes of all meetings and will distribute copies of such minutes to the Representatives within seven Business Days after the meeting. The minutes, when approved by one or more Representatives appointed by each Member, will be the official record of the decisions made by the Management Committee and will be binding on the Management Committee, the Manager and the Members. If the Representatives are unable to agree on the minutes within 30 days after receipt of the Manager’s proposed minutes, then the minutes prepared by the Manager together with proposed objections submitted to the Manager before the expiration of such 30 day period will be the official record of the meeting. Each Representative may authorize another individual (who may or may not be a Representative) to act for such Representative by proxy at any meeting of the Management Committee, or to express consent or dissent to a Company action in writing without a meeting; provided, however, that any such individual must sign a confidentiality agreement with the Company prior to receiving any Management Committee materials or attending any Management Committee meetings. Any such proxy may be granted in writing, by electronic transmission or as otherwise permitted by applicable Law. The reasonable costs of the attendance of Representatives, officers and Personnel at meetings will be charged to the Business Account. 

 

(d)Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting and without prior notice if the action is evidenced by a written consent describing the action taken, signed by at least one Representative of each Member. 

 

(e)Major Decisions. Subject to the provisions of Section 5.2, which provide for the suspension of the provisions of this Section upon the occurrence of a Suspension Event, neither the Manager nor any Representative, nor any officer, employee or agent of the Company or of the Manager, will have any authority to bind or take any action on behalf of the Company, unless: (i) if the Interest of the Member with the lower Interest is at least 15.00%, a Major Decision, Group I or a Major Decision, Group II has been approved by the unanimous vote of the Management Committee; and (ii) if the Interest of the Member who has the lower Interest is less than 15.00%, a Major Decision, Group I has been approved by the unanimous vote of the Management Committee; in each such case in accordance with this Section 5.2, it being understood and agreed that in such event a Major Decision, Group II may be approved by the Management Committee by votes of Representatives appointed by the Member holding 50.1% of the Interests. A “Major Decision, Group I” means any or all of those matters specified in clauses (i), (iii), (iv), (v) and (ix); and a “Major Decision, Group II” means any or all of those matters specified in clauses (ii), (vi), (vii) and (viii). “Major Decisions” means collectively, Major Decisions, Group I and Major Decisions, Group II. For clarity, save and except for Major Decisions, all other decisions of the Management Committee require the approval of Representatives appointed by a Member with an Interest of greater than 50.000%. 

 

(i)approval of an Amendment to any Program and Budget (including the Initial Program and Budget) in accordance with Article VI that causes the Program and Budget (as initially adopted) to increase by 15.0% or more; provided that expenditures with respect to emergencies under Section 6.10 will be deemed automatically to amend such Program and Budget;  

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(ii)acquisition or disposition of significant mineral rights, other real property or water rights outside of the Area of Interest or outside of the ordinary course of business; 

 

(iii)other than purchase money security interests or other security interests in Company equipment to finance the acquisition or lease of Company equipment used in Operations, the proposal or consummation of a Project Financing or the incurrence by the Company of any indebtedness for borrowed money that requires the guarantee by any Member or any Affiliate of any Member of any obligations of the Company; provided, that nothing in this clause (iii) will be deemed to prohibit or restrict the right of a Member to create any Permitted Interest Encumbrance; 

 

(iv)except as specifically contemplated in this Agreement, the redemption of all or any portion of an Interest; 

 

(v)the issuance of an Interest or other equity interest in the Company, or the admission of any Person as a new Member of the Company other than in accordance with Section 8.4; provided, that this clause (v) will not be deemed to prohibit or restrict the adjustment of Interests under Section 3.1; 

 

(vi)a decision to grant authorization for the Company to file a petition for relief under any chapter of the United States Bankruptcy Code, Title 11 U.S.C. or to consent to such relief in any involuntary petition filed against the Company by any third party, or to admit in writing any insolvency of the Company or inability to pay its debts as they become due or to consent to any receivership (or similar proceeding) of the Company;  

 

(vii)the merger or amalgamation of the Company into or with any other entity;  

 

(viii)the sale of all or substantially all of the Company’s Assets;  

 

(ix)as contemplated in Section 8.6(a), 8.6(b) and Section 9.3. 

 

5.3Manager; Duties. The Company will be managed by one manager (the “Manager”). The initial Manager will be USARE. Subject to Sections 5.4 and 5.5 and the other provisions of this Agreement, the Manager will have the following duties: 

 

(a)Programs and Budgets. The Manager will manage, direct and control Operations in accordance with adopted Programs and Budgets, and will prepare and present to the Management Committee proposed Programs and Budgets under Section 6.3 and proposed Amendments under Section 6.5. 

 

(b)Implementation. The Manager will implement Major Decisions, will make from Company funds all expenditures necessary to carry out adopted Programs, and will promptly advise the Management Committee if the Company lacks sufficient funds for the Manager to carry out its responsibilities under this Agreement. 

 

(c)Procurement. The Manager will (i) purchase or otherwise acquire all material, supplies, equipment, water, utility and transportation services required for Operations, such purchases and acquisitions to be made to the extent reasonably possible on the best terms available, taking into account all of the circumstances, and (ii) obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions. 

 

(d)Title; Encumbrances. The Manager will conduct such title examinations and cure such title defects as may be advisable in the Manager’s reasonable judgment, and keep the Assets free and clear of Encumbrances, except for Permitted Encumbrances. 

 

(e)Taxes. The Manager will (i) make or arrange for all payments required by any Underlying Agreements, and (ii) pay all Taxes on Operations and Assets, except (A) Taxes determined or measured by a Member’s revenue or net income; provided, that if authorized by the Management Committee, the Manager will have the right to contest the validity or amount of any Taxes the Manager deems to be unlawful, unjust, unequal or excessive, and to undertake such other steps or proceedings as the Manager may deem reasonably necessary to secure a cancellation, reduction, readjustment or equalization of such Taxes before such Taxes are required to be paid, but the Manager will not permit or allow title to the Assets to be lost as the result of the nonpayment of any such Taxes. 

 

(f)Compliance with Laws. The Manager will (i) apply for all necessary Permits, (ii) comply with applicable Laws, (iii) promptly provide notice to the Management Committee of any allegations of a material violation of Laws, and (iv) prepare and file all reports or notices required by any Governmental Authority for Operations. The Manager will timely cure or dispose of any violation of Laws through performance, or payment of fines and penalties, or both, the cost of which will be charged to the Business Account. 

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(g)Litigation. The Manager will prosecute and defend, but will not initiate without the approval of the Management Committee, all litigation, arbitrations or administrative proceedings arising out of Operations. The Manager will keep the Management Committee reasonably informed of the progress of any such litigation, arbitrations or proceedings. The Management Committee will approve in advance any settlement involving payments, commitments or obligations in excess of $250,000 in cash or value. 

 

(h)Insurance. The Manager will obtain insurance for the benefit of the Company, the Members and the Manager as provided in Exhibit E or as may otherwise be determined from time to time by the Management Committee. 

 

(i)Disposition of Assets. The Manager may dispose of Assets, whether by abandonment, surrender or Transfer in the ordinary course of business, except that Properties may be abandoned or surrendered only as provided in Section 10.2.  

 

(j)Maintenance of Assets. The Manager will perform all work and pay all Governmental Fees required by Law in order to maintain the Properties. The Manager will not be liable for any determination by any Governmental Authority that the work performed by the Manager did not constitute the required work or occupancy to preserve or maintain ownership of the Properties; provided that the work was performed in accordance with accepted industry standards and the adopted Program and Budget. The Manager will timely file with the appropriate agency, any required affidavits and other documents in proper form attesting to the payment of Governmental Fees or the performance of required work, in each case in sufficient detail to reflect compliance with applicable requirements. 

 

(k)Accounting. The Manager will (i) keep and maintain all required accounting and financial records under the Accounting Procedure and in accordance with customary cost accounting practices in the mining industry, (ii) keep and maintain current balances of Contributed Capital, (iii) keep and maintain Capital Accounts of the Members in accordance with Exhibit C, and (iv) keep all Company accounts separate and segregated from the individual accounts of the Manager. 

 

(l)Reporting; Audits. The Manager will (i) provide the reports to the Members required under Section 6.11 and 6.12, (ii) permit the audits, inspections and access rights under Section 6.13, and (iii) obtain the independent audit required under Section 6.14. 

 

(m)Environmental Compliance Plan. The Manager will prepare an Environmental Compliance plan for all Operations consistent with the requirements of applicable Laws or contractual obligations and will include in each proposed Program and Budget sufficient funding to implement the Environmental Compliance plan and to satisfy the financial assurance requirements of applicable Laws and contractual obligations pertaining to Environmental Compliance. To the extent practical, the Environmental Compliance plan will incorporate concurrent reclamation of Properties disturbed by Operations. 

 

(n)Continuing Obligations. The Manager will undertake to perform Continuing Obligations when and as economic and appropriate, whether before or after termination of Operations. The Manager will have the right to delegate performance of Continuing Obligations to Persons having demonstrated skill and experience in relevant disciplines. As part of each proposed Program and Budget, the Manager will specify the measures to be taken for performance of Continuing Obligations and the cost of such measures. The Manager will keep the Management Committee reasonably informed about the Manager’s efforts to discharge Continuing Obligations. Authorized representatives of each Member will have the right from time to time to enter the Properties to inspect work directed toward satisfaction of Continuing Obligations, and to audit books, records, and accounts related thereto. 

 

(o)Environmental Compliance Fund. Funds deposited into the Environmental Compliance Fund will be maintained by the Manager in a separate, interest bearing cash management account, which may include money market investments and money market funds, or longer-term investments approved by the Management Committee. Such funds will be used solely for Environmental Compliance and Continuing Obligations, including committing such funds, interests in property, insurance or bond policies, or other security to satisfy Laws regarding financial assurance for the reclamation or restoration of the Properties, and for other Environmental Compliance requirements. 

 

(p)Reserves. The Management Committee may establish, in addition to the Environmental Compliance Fund, one or more cash reserves as the Management Committee determines from time to time, and may apply such reserves for Operations as may be Approved by the Management Committee, provided that cash reserves will be limited only to those reserves and to such amounts as are necessary to support Operations or to satisfy the Company’s third party lender requirements, including pursuant to approved Project Financing. 

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(q)Other Activities. The Manager will undertake all other activities reasonably necessary to fulfill the foregoing. 

 

(r)Delegation. The Manager will have the right to carry out its duties and responsibilities under this Agreement through Affiliates, agents, consultants or independent contractors engaged in arm’s-length transactions, but no such Persons will have any rights under this Agreement. 

 

5.4Standards of Care. Subject to Section 5.5, the Manager will discharge its duties under Section 5.3 and conduct all Operations in a good, workmanlike and efficient manner, in accordance with sound mining and other applicable industry standards and practices, and in accordance with the terms and provisions of all Underlying Agreements and Permits pertaining to the Assets. 

 

5.5Exculpation. Notwithstanding any contrary provision of this Agreement, the Manager will not be liable or responsible to the Company or any Member and will not be in breach or default of its duties under this Agreement for any act or omission (a) that is not caused by or attributable to the Manager’s willful misconduct or gross negligence, (b) if the inability to perform results from (i) the failure of any Member or Representatives (other than the Manager, any Affiliate of the Manager, or any Representative designated by the Manager or any such Affiliate), to perform acts or to contribute amounts required under this Agreement, (ii) a lack of Company funds, to the extent the Manager and its Affiliates have made all Capital Contributions required to be made by them under this Agreement, or (iii) the failure to carry out or perform in accordance with a Program and Budget for any period, if a Program and Budget has not been adopted for the period, or (c) taken in good faith reliance on an adopted Program and Budget or information, opinions, reports or statements presented by any other Member or Representative of any other Member, or by any other Person as to matters the Manager reasonably believes are within the other Person’s professional or expert competence. The preceding sentence will in no way limit any Person’s right to rely on information to the extent provided in Section 18-406 of the Act. 

 

5.6Indemnification of Manager and Representatives. Subject to the limitations of the Act, the Company will indemnify, defend and hold harmless the Representatives and the Manager from and against any Adverse Consequences arising as a result of any act or omission of any such Representative or the Manager with respect to the Company believed in good faith to be within the scope of authority conferred in accordance with this Agreement, except for Misconduct or for willful misconduct or gross negligence. 

 

(a)Contract Rights. The rights granted under this Section 5.6 are contract rights, and no amendment, modification or repeal of this Section 5.6 will have the effect of limiting or denying any such rights with respect to actions taken, omissions, or proceedings arising before any such amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Section 5.6 could involve indemnification for negligence or strict liability. Notwithstanding the foregoing, the Company’s indemnification of the Manager and the Representatives as to third party claims will be only with respect to such Adverse Consequences that are not otherwise compensated by insurance. 

 

(b)Advancement of Expenses. The rights to indemnification conferred in this Section 5.6 will include the right to be paid or reimbursed by the Company the reasonable expenses incurred by any Person entitled to be indemnified who was, is or is threatened to be made a named defendant or respondent in an action, suit, proceeding or arbitration in advance of the final disposition of the action, suit, proceeding or arbitration and without any determination as to the Person’s ultimate entitlement to indemnification; provided, that the payment of such expenses in advance of the final disposition or award of an action, suit, proceeding or arbitration will be made only upon delivery to the Company of a written affirmation by such Person of his or its good faith belief that he or it has met the standard of conduct necessary for indemnification under this Section 5.6 and a written undertaking, by or on behalf of such Person, to repay all amounts so advanced if it will ultimately be determined that such indemnified Person is not entitled to be indemnified under this Section 5.6 or otherwise. 

 

(c)Non-Exclusive Rights. The right to indemnification and the advancement and payment of expenses conferred in this Section 5.6 are not exclusive of any other right that any such indemnified Person may have or acquire under any Law, provision of this Agreement, vote of the Management Committee or the Members or otherwise. 

 

(d)Invalidity. If this Section 5.6 or any portion will be invalidated on any ground by any court of competent jurisdiction or arbitration panel, then the Company will indemnify and hold harmless the Manager or Representatives indemnified under this Section 5.6 as to the Adverse Consequences to the full extent permitted by any portion of this Section 5.6 that has not been invalidated, and to the fullest extent permitted by applicable Law. 

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(e)Insufficient Funds. If the assets of the Company are insufficient to fund any indemnity to which the Manager or any Representative is entitled under this Section 5.6, the Members will make Capital Contributions to the Company (or if the Company has been terminated, pay to the indemnified Person) in accordance with their respective Interests to fund any such indemnification obligations. In the case of Continuing Obligations, proportionate liability of the Members (including the Manager) for any indemnification hereunder arising from such Continuing Obligations will be determined in accordance with Section 4.4. 

 

5.7Resignation; Removal; Replacement.  

 

(a)Voluntary Resignation. The Manager may voluntarily resign at any time upon three months’ prior notice to the Management Committee. Acceptance of such resignation will not be necessary. 

 

(b)Deemed Resignation. The Manager will automatically be deemed to resign without the requirement of notice or other notice of any kind effective immediately upon the occurrence of an Insolvency Event with respect to the Manager. 

 

(c)Removal. The Manager may be removed by notice of the other Member to the Manager for Misconduct of the Manager; provided, such notice will be delivered to the Manager within 90 days after the date such other Member has notice or knowledge of the event giving rise to the removal right. 

 

(d)Replacement. If the Manager resigns voluntarily under Section 5.7(a), the other Member may elect to become the successor Manager by notice to the Management Committee within 30 days after the date of the voluntary resignation. If the other Member does not make such an election within such 30-day period, the successor Manager (who may be a Member, an Affiliate of a Member or a third party) will be elected by the Management Committee. If the Manager is deemed to resign under Section 5.7(b) or is removed under Section 5.7(c), the Representatives of the other Member may appoint the successor Manager (who may be a Member, an Affiliate of a Member or a third party) by notice to the Management Committee. Any successor Manager will execute a joinder to this Agreement agreeing to be bound by the provisions of this Agreement that relate to the Manager. The appointment of a successor Manager will be deemed to pre-date any event causing a deemed resignation of the Manager under Section 5.7(b). 

 

(e)No Effect on Interest. The resignation or removal of a Person as the Manager will not require or result in the resignation or removal of such Person as a Member, reduce the Interest of such Member or its Representatives, or restrict the right of such Member to appoint Representatives to the Management Committee. 

 

5.8Payments to Manager. The Manager will be compensated for its services and reimbursed for its costs in accordance with the Accounting Procedure attached as Exhibit B. 

 

5.9Affiliate Transactions. The Company will not enter into any agreement or contract (including the payment of any fees or other compensation) with the Manager, any Affiliate of the Manager or any Member, or any material modification or amendment to any such agreement or contract, except (a) on terms no less favorable than would be the case with unrelated third parties in arms’ length transactions, or (b) with the approval of the Representatives of each Member that is not a party (and whose Affiliates are not a party) to the agreement, contract, modification or amendment, or (c) as specifically provided in this Agreement; provided that the Members acknowledge that the services to be performed by the Manager may be delegated to any Affiliate of the Manager and performed by such Affiliate, and costs and charges for such services will be paid and reimbursed by the Company from the Business Account to the same extent as if such services were performed directly by the Manager. 

 

5.10Changes to Mining Law. The Members are aware that the Laws of the State of Texas pertaining to mining activities within the state may be amended or new Laws may be enacted. In that event, the Manager will have the option (but not the obligation, except to the extent required under the Mining Leases) of maintaining the rights and obligations of the Company in and to the Properties and the lands covered thereby pursuant to those new or amended Laws, subject to this Agreement and to the extent allowable, including the right to convert the Properties to any new property rights that may be created, and all of the terms and conditions of this Agreement will apply to such new property rights. The Members agree to cooperate with the Manager in this regard. 

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Article VI

Programs and Budgets; Accounting and Reporting

 

6.1Operations under Programs and Budgets. All Operations will be conducted, expenses will be incurred, and Assets will be acquired consistent with adopted Programs and Budgets. Each Program and Budget will provide for (a) accrual of reasonably anticipated Environmental Compliance expenses for all Operations contemplated under the Program and Budget, and (b) payment of all obligations of the Company under the Underlying Agreements. 

 

6.2Initial Program and Budget. The Initial Program and Budget will provide for the expenditure of the Remaining Committed Sole Funding Amount, but will not be limited to the expenditure of such amount.  

 

6.3Presentation of Proposed Programs and Budgets. At least 60 days in advance of the anticipated completion of the Initial Program and Budget, the Manager will prepare a proposed Program and Budget for the succeeding one year or such longer period approved by the Management Committee, and submit the proposed Program and Budget for such year or other period to the Management Committee for its review and approval. The proposed Program and Budget will be accompanied by a notice of the date and time of the meeting to be held under Section 6.4 to consider the proposed Program and Budget, which date will not be less than 30 days after the submission of the proposed Program and Budget to the Management Committee. 

 

6.4Approval of Proposed Programs and Budgets. At the meeting of the Management Committee, for which notice was provided under Section 6.3, the Representatives of each Member will submit in writing to the Management Committee whether such Representatives (a) approve the proposed Program and Budget, (b) propose modifications to the proposed Program and Budget, or (c) reject the proposed Program and Budget. If the Representatives of a Member do not approve the proposed Program and Budget, then the Management Committee will call another meeting to be held within 30 days after the first meeting to consider the Program and Budget and to vote on a revised Program and Budget. During such 30 day period, the Manager will negotiate in good faith with the Representatives to develop a revised Program and Budget that is acceptable to all of the Representatives, and will deliver its revised Program and Budget to the Representatives at or before the subsequent meeting.. At the subsequent meeting to again vote on the Program and Budget (taking into account any revisions proposed by the Representatives during the negotiation period), the Representatives of each Member will vote to either accept or reject the revised Program and Budget, but may not propose additional modifications. If one or more Representatives do not attend any meeting of the Management Committee, the purpose of which is to review and approve a Program and Budget or an Amendment, then the Representatives present at the meeting may approve the proposed Program and Budget, but no other action may be taken at the meeting. 

 

6.5Amendment of Adopted Program and Budget. 

 

(a)Consideration and Voting. The Manager may propose amendments (“Amendments”) to any currently approved Program and Budget from time to time before incurring costs under the Amendment. The Representative or Representatives of each Member will have 15 days after the proposal of an Amendment by the Manager to submit in writing to the Management Committee one of the responses described in Section 6.4(a), (b) or (c) (substituting “Amendment” for “Program and Budget” in each case). If the Representative or Representatives of a Member fail to respond within the 15-day period, then the Representative or Representatives will be deemed to have approved the proposed Amendment. If the Representative or Representatives of a Member timely submit to the Management Committee its rejection of, or proposed modifications to, the proposed Amendment, then the Manager will call a special meeting of the Management Committee under Section 5.2(c) to vote on an Amendment. In advance of such meeting, the Manager will negotiate in good faith with the Representative or Representatives to develop an Amendment that is acceptable to all of the Representatives, and will deliver its revised Amendment to the Representatives at or before the meeting. At the meeting to vote on the Amendment (taking into account any revisions made by the Manager during the negotiation period), the Representatives will vote to either accept or reject the revised Amendment as provided in Section 5.2(a) or 5.2(e), as applicable, but may not propose additional modifications.  

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(b)Participation in Amended Program and Budget. If the Amendment relates to Operations on existing Properties and does not increase the aggregate original Budget by more than 15% (taking into account other Amendments adopted after the date of the original Budget), then the Members will continue to participate in the Joint Funding of the Program and Budget, as amended, based on their original elections under Section 6.6. If the Amendment does not relate to Operations on existing Properties or increases the aggregate original Budget by more than 15% (taking into account other Amendments adopted after the date of the original Budget), then the Program and Budget, if amended by a vote taken in accordance with Section 5.2(e) will be treated as a new Program and Budget and each Member will be entitled to make new elections under Section 6.6 as to its participation in Joint Funding with respect to the remaining period under the amended Program and Budget. 

 

6.6Election to Participate. 

 

(a)Non-Contribution. By notice to the Management Committee (a “Non-Contribution Notice”) within 20 days after the final vote adopting a Program and Budget or as provided in Section 6.5, a Member (a “Non-Contributing Member”) may elect to contribute to such Program and Budget in some lesser amount than in accordance with its Interest, or may elect not to contribute any amount to such Program and Budget. If a Member does not timely provide a Non-Contribution Notice to the Management Committee, such Member will be deemed to have elected to contribute to the Program and Budget in proportion to its Interest as of the beginning of the period covered by the Program and Budget. The difference, if any, between the amount that the Non-Contributing Member would otherwise be required to contribute in accordance with its Interest and the amount, if any, that the Non-Contributing Member elects or is deemed to elect to contribute, is referred to as the “Underfunded Amount.” 

 

(b)Excess Contribution. If a Non-Contributing Member timely delivers a Non-Contribution Notice, and the other Member has or is deemed to have elected to contribute its proportion amount to the Program and Budget in accordance with its Interest, such other Member (the “Contributing Member”) will have the right (but not the obligation) to elect by notice to the Non-Contributing Member delivered within 10 days after its receipt of the Non-Contribution Notice, to contribute all or any portion (an “Excess Contribution”) of the Underfunded Amount to such Program and Budget, which contribution will be treated as a Capital Contribution. 

 

(c)Adjustment of Interests. If a Non-Contributing Member timely delivers a Non-Contribution Notice, the Interest of each Member will, subject to Section 6.7, be adjusted, effective as of the beginning of the period covered by the Program and Budget, to equal a fraction, expressed as a percentage: 

 

(i)the numerator of which equals: 

 

(A)the Contributed Capital of the Member as of the beginning of the period covered by the Program and Budget; plus  

 

(B)the amount, if any, that the Member has agreed to contribute to the Program and Budget; plus  

 

(C)if the Member is a Contributing Member, the Excess Contribution, if any, that the Contributing Member has agreed to contribute to the Program and Budget with respect to the Underfunded Amount; and 

 

(ii)the denominator of which equals the sum of the amounts calculated under Section 6.6(c)(i) above for all Members. 

 

(d)Adjustment of Program and Budget. If a Non-Contributing Member delivers a Non-Contribution Notice and the Contributing Member does not elect to contribute the entire Underfunded Amount, (i) if the Manager or its Affiliate is the Contributing Member, the Manager will adjust the Program and Budget to the extent the Manager reasonably deems necessary to take into account the reduced contributions, and (ii) if the Member that is not the Manager or an Affiliate of the Manager is the Contributing Member, the Representatives of that Member will adjust the Program and Budget to the extent such Representatives reasonably deem necessary to take into account the reduced contributions. The Program and Budget as adjusted under this Section 6.6(d) will replace the Program and Budget previously adopted by the Management Committee for the Program and Budget period. 

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6.7Recalculation and Restoration for Actual Contributions. 

 

(a)Report of Contributions. Within 30 days after the completion of the Program and Budget, the Manager will deliver a written report to the Members of the total amount of Capital Contributions actually made by the Members under cash calls for the Program and Budget. 

 

(b)Adjustment for Actual Contributions. If the actual amount of Capital Contributions made by the Members is more or less than the budgeted amount in the adopted Budget, the Interests will be recalculated under Section 6.6(c) by substituting the actual amount of Capital Contributions made by each Member (including any deemed Capital Contributions made by the Non-Contributing Member under Section 6.7(c)) during the Program and Budget period for the estimated amounts used in calculating the adjustments to the Interests at the beginning of the Program and Budget period; provided that if the actual amount of Capital Contributions are more than the budgeted amount they will not be included in the recalculation to the extent they exceed 15.0% of the budgeted amount in the adopted Budget. 

 

(c)Option to Contribute. If the actual amount of Capital Contributions made by the Members is less than 90.0% of the budgeted amount in the adopted Budget, within 30 days of receiving the Manager’s report on expenditures, the Non-Contributing Member may notify the Manager of its election to reimburse the Contributing Member for the difference between any amount contributed by the Non-Contributing Member to such Program and Budget and the Non-Contributing Member’s full proportionate share (at the Non-Contributing Member’s former Interest) of the actual amount expended or incurred for the adopted Budget plus interest on the difference accruing at the Prime Rate and if the Non-Contributing Member delivers the appropriate amount (including interest) to the Contributing Member with such notice, its Interest will be restored and the Capital Accounts of the Members will be adjusted accordingly.  

 

(d)Adjustment of Allocations. If the Interests are recalculated under Section 6.7(b) or (c), and either distributions were made, or any items of Profit, Loss or credit were allocated to the Members during the period covered by the Program and Budget based on the Interests as adjusted under Section 6.6(b) or (c) at the beginning of the Program and Budget period, (i) in the case of distributions, the amount of subsequent distributions to be made to the Contributing Member will be decreased, and the amount of subsequent distributions to the Non-Contributing Member will be increased, until the Non-Contributing Member has received distributions from the Company, to the extent possible, in the amounts that the Non-Contributing Member would have received, and (ii) in the case of allocations, the Manager will cause the Company to make such offsetting allocations of items of Profit, Loss or credit in a manner reasonably determined by the Manager, so that the Members have been allocated, to the extent possible, the amounts that the Members would have been allocated, in each case if the Members’ Interests at the beginning of the period covered by the Program and Budget had equaled the Interests recalculated under Section 6.7(b), taking into account any reimbursement of the Excess Contribution under Section 6.7(c). 

 

6.8Deadlock on Proposed Programs and Budgets. If the Members, acting through the Management Committee, fail to approve a Program and Budget by the beginning of the period to which the proposed Program and Budget applies, subject to the contrary direction of the Management Committee and to the receipt of necessary funds, the Manager will continue Operations (a) if an initial Mining Program and Budget has not been adopted, at levels sufficient to maintain the then current Operations and Properties, and (b) if an initial Mining Program and Budget has been adopted, at levels substantially comparable with the last adopted Program and Budget. The Members will continue to make Capital Contributions in accordance with the Interests applicable to the last adopted Program and Budget in response to capital calls from the Manager to fund such Operations during a deadlock. 

 

6.9Budget Overruns; Program Changes. The Manager will immediately provide notice to the Management Committee of any material departure from an adopted Program and Budget. If the Manager exceeds an adopted Budget (as amended under Section 6.5) by more than 15.0%, then the excess over 15.0%, unless directly caused by an emergency or unexpected expenditure made under Section 6.10 or unless otherwise authorized by the approval of the Management Committee under Section S.2(f), will be at the sole cost and expense of the Manager and will not be considered a Capital Contribution or taken into account in the calculation of Interests. Budget overruns of 15.0% or less will be considered costs and expenses of the Company, and will be funded by the Members making additional Capital Contributions to the Company in proportion to their respective Interests. 

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6.10Emergency or Unexpected Expenditures. In case of an emergency, the Manager may take any reasonable action it deems necessary to protect life, limb or property, to protect the Assets or to comply with Laws. The Manager may also make reasonable expenditures for unexpected events that are beyond its reasonable control and that do not result from a breach by it of its standard of care in Section 5.4, subject to Section 5.5. The Manager will promptly provide notice to the Members of the emergency or unexpected expenditure, and will be reimbursed for all resulting costs by the Company, which costs will be funded by the Members making additional Capital Contributions to the Company under Sections 3.3 and 3.4 in proportion to their respective Interests at the time the emergency or unexpected expenditures are incurred.  

 

6.11Pre-Feasibility and Feasibility Studies. 

 

(a)Pre-Feasibility Study. Prior to the Effective Date, the Manager commenced preparation of a Pre-Feasibility Study to analyze whether economically viable Mining Operations may be possible on the Properties. 

 

(b)Initial Program and Budget. The Initial Program and Budget, which addresses completion of the Pre-Feasibility Study referred to in Section 6.11(a) and of the Feasibility Study referred to in Section 6.11(e), is attached as Exhibit F. As soon as the Manager deems practicable, the proposed Initial Program and Budget will be submitted to the Management Committee along with a notice of the date and time of the meeting to be held under Section 6.4 to consider the proposed Initial Program and Budget, which date will not be less than 30 days after the submission of the proposed Initial Program and Budget to the Management Committee. If the Management Committee approves the Initial Program and Budget, the Manager will cause the Company to have the Pre-Feasibility Study completed. Any engineering firms or other contractors engaged to complete the Pre-Feasibility Study and the other requirements for the Feasibility Study must be approved by the Management Committee. 

 

(c)Summary Report. As soon as reasonably practicable following completion of the Pre-Feasibility Study required under the Initial Program and Budget for the Pre-Feasibility Study, the Manager will prepare and submit to the Management Committee a report (the “Pre-Feasibility Study Summary Report”) summarizing the results of the analyses of the alternatives and other matters evaluated in the Pre-Feasibility Study, including a description of any alternative that the Manager has determined should no longer be considered as a feasible alternative and the reasons for its conclusion. For those alternatives that the Manager has determined should continue to be considered, the Pre-Feasibility Study Summary Report will include a detailed analysis of the conclusions reached in the Pre-Feasibility Study.  

 

(d)Feasibility Study. Following delivery by the Manager of the Pre-Feasibility Study Summary Report, to the extent warranted by the Pre-Feasibility Study Summary Report, the Manager may call a meeting of the Management Committee in accordance with the provisions of this Agreement to determine whether to proceed with the preparation of a Feasibility Study for any alternative summarized in the Pre-Feasibility Study Summary Report. If the Management Committee determines to proceed with the preparation of the Feasibility Study, it may select an alternative summarized in the Pre-Feasibility Study Summary Report (an “Approved Alternative”), and within 45 days following the selection of the Approved Alternative, the Manager will submit to the Management Committee a proposed Program and a Budget for preparation of a Feasibility Study along with a notice of the date and time of the meeting to be held under Section 6.4 to consider the proposed Program and Budget, which date will be determined by the Manager but will not be less than 30 days after the submission of the proposed Program and Budget to the Management Committee. If the Management Committee adopts the Feasibility Study Program and Budget, to the extent deemed appropriate and based on the receipt of necessary funds, the Manager will cause the Company to have the Feasibility Study completed as necessary to satisfy the requirements of the Approved Alternative and the adopted Program and Budget. Any such adopted Program and Budget will replace the Program and Budget then in effect and the provisions of Sections 6.5, 6.6 and 6.7 will apply. Any engineering firms or other contractors engaged to prepare the Feasibility Study and other requirements for the Feasibility Study must be approved by the Management Committee. 

 

(e)Development P&B. Upon completion of a Feasibility Study, if directed by the Management Committee, the Manager will prepare and submit to the Management Committee a proposed Program and Budget that provides for the Development of a mine on the Properties. The proposed Program and Budget will be based on the scope of Development recommended in the Feasibility Study and the estimated costs for Development described in the Feasibility Study. If the Management Committee approves the Development Program and Budget, based on the receipt of necessary funds, the Manager will cause the Company to commence Development based on the Feasibility Study and the adopted Program and Budget. Any such adopted Program and Budget will replace the Program and Budget then in effect and the provisions of Sections 6.5, 6.6 and 6.7 will apply. Any engineering firms or other contractors engaged to prepare the Feasibility Study and the audit and other requirements for Development must be approved by the Management Committee. 

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(f)Project Financing. At the time the Management Committee meets to consider the Development Program and Budget (and at the time of any reconsideration of the Development Program and Budget), the Management Committee may determine whether to seek Project Financing for the Development, and the estimated amount of Project Financing to be sought. All fees, charges and costs (including attorneys’ and technical consultants’ fees) paid in connection with a Project Financing will be Company costs. 

 

6.12Reports. The Manager will promptly submit to the Management Committee the following reports: 

 

(a)monthly statements of account reflecting in reasonable detail the charges and credits to the Business Account during the preceding month; 

 

(b)quarterly progress reports that include statements of expenditures and comparisons of such expenditures to the adopted Budget;  

 

(c)periodic summaries of data acquired by or on behalf of the Company;  

 

(d)copies of any reports prepared by or on behalf of the Company concerning Operations;  

 

(e)a detailed final report within 45 days after completion of each Program and Budget, which report will include comparisons between actual and budgeted expenditures and comparisons between the objectives and results of Programs; and  

 

(f)such other reports as the Management Committee may reasonably request.  

 

6.13Inspection Rights. The Manager will, during normal business hours, and upon at least 48 hours prior written notice (a) provide to the Representatives and the accountants, advisors and other representatives of each Member, access to, and the right to inspect and copy all maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations, technical, accounting and financial records, and other information in the possession or control of the Manager pertaining to the Company or the Operations, and (b) at the sole risk of the requesting Member, and subject to the safety requirements of applicable Laws and the Manager’s reasonable safety policies and procedures, permit the Representatives, accountants, advisors and other representatives of each Member to audit the books and records of the Company, including all accounting and financial records, and to inspect the Assets and Operations. The requesting Member will use commercially reasonable efforts to prevent any such inspections from unreasonably interfering with Operations or the other business and operations of the Manager. The cost and expense of any such access, inspection or copies will be borne entirely by the requesting Member, and the requesting Member will indemnify, defend and hold harmless the Company, the Manager and the Affiliates of the Manager, and their respective directors, officers, managers, employees and agents, from and against any Adverse Consequences for bodily injury or property damage arising from or caused by any such inspections. 

 

6.14Independent Audit. Upon request made by any Member within 12 months after the end of any calendar year (or, if the Management Committee has adopted an accounting period other than the calendar year, within 12 months after the end of such period), the Manager will cause Marcum LLC or another independent accounting firm selected by the Manager and reasonably acceptable to the requesting Member (the “Independent Accountant”) to conduct an independent audit of the financial statements of the Company for such calendar year (or other accounting period). Promptly after the completion of any such independent audit, the Manager will deliver a copy of the report of the Independent Accountant on the financial statements of the Company, together with a detailed report of costs and expenditures of the Company (including all costs and expenditures for which the Manager sought reimbursement) for such year or other accounting period prepared in accordance with GAAP and reconciled to the financial statements audited by the Independent Accountant and to the monthly reports provided to the Members under Section 6.11. All written exceptions to and claims (other than exceptions or claims based on fraud) upon the Manager by any Member relating to costs and expenditures incurred by or on behalf of the Company for such year or other accounting period will be made by notice to the Manager delivered not more than three months after receipt of the audit report and the related report of costs and expenditures or will be deemed forever waived and released. If the audit reflects that the Manager has made cash calls to the Members in excess of 5.0% of the amounts permitted in Section 3.4 (subject to the 15.0% overrun as provided in Section 6.9 or an emergency expenditure as provided in Section 6.10) or if the audit reflects that the Manager has made expenditures for items not reasonably included in an adopted Program and Budget, than the inappropriate amount of any cash call or expenditure will be returned to the Members within 30 days of the date of the notice with interest at the Default Rate, calculated from the date of the cash call or of the expenditure, as applicable and (a) the Default Interest will be paid by the Manager and not the Company, (b) the amount of an inappropriate expenditure will be refunded to the Members by the Manager and not the Company, (c) if the discrepancy is more than 5.0% of appropriate cash calls or appropriate expenditures, the cost of such audit will be paid by the Manager, without reimbursement by the Company. 

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Article VII

Distributions Disposition of Production

 

7.1Distributions. 

 

(a)General. Except as otherwise provided in this Article VII, all Available Cash will be distributed to the Members on a periodic basis as determined by the Management Committee.  

 

(b) Cash Distributions. Except as provided in Section 7.2 and 7.3, cash distributions will be made to the Members pro rata in proportion to their respective Interests.  

 

(c)Distributions in Kind. During the existence of the Company, no Member will be entitled or required to receive as distributions from the Company any Company asset other than money. Upon the dissolution and winding-up of the Company, those Members that agree in writing may be distributed in-kind undivided interests in the Assets of the Company in accordance with Section 9.4. Except as otherwise provided in this Article VII or as otherwise determined by the Management Committee, (i) all distributions to the Members will be in cash, (ii) no Member will have the right to demand distributions in cash or in kind, and (iii) all distributions to the Members in kind will be made to the Members pro rata in proportion to their respective Interests.  

 

(d)Tax Distributions. Notwithstanding other provisions of this Article VII, prior to making non-liquidating distributions pursuant to any other provisions of this Section 7.1, the Company will make cash distributions (“Tax Distributions”) to the Members, pro rata in proportion to their relative positive Tax Distribution Amounts, until all positive Tax Distribution Amounts are reduced to zero. Amounts withheld and paid to a tax authority with respect to a Member will be treated as Tax Distributions made to the Member. Tax Distributions will (i) be treated (for purposes of Section 7.1, but not for Capital Account purposes) as nonrecourse advances on future distributions payable to the Members under Section 7.1, (ii) reduce amounts otherwise distributable under the preceding provisions of this Section 7.1 to the recipient Members as quickly as possible, and (iii) reduce the Capital Account balances of the recipient Members in the same manner as other distributions. The Company will use commercially reasonable efforts to cause Tax Distributions to be made within 30 days after the end of each calendar quarter, based on the Tax Distribution Amounts of each member as of the end of each such quarter after giving effect to allocations pursuant to Exhibit C for such quarter. 

 

7.2Liquidating Distributions. Notwithstanding Section 7.1, all distributions made in connection with the sale or exchange of all or substantially all of the Company’s Assets and all distributions made in connection with the liquidation of the Company will be made to the Members in accordance with their respective Capital Account balances at the time of distribution after taking into account the adjustments to the Capital Accounts under Section 5.2 of Exhibit C, all allocations of items of Profit and Loss under Article III of Exhibit C, all sales of Products and all distributions through the date of the final distribution. All distributions to the Members under this Section 7.2 will be made in accordance with the time requirements under Treasury Regulations §§ 1.704-1(b)(2)(ii)(b)(2) and (3). 

 

7.3Marketing of Products.  

 

(a)Marketing of Products by the Manager. The Manager will have the right, but not the obligation, for a period of time consistent with the minimum needs of the industry, to purchase Products for its own account on the best terms reasonably available for such Products, but in no case for less than the prevailing price in the United States. The Manager will have the right, but not the obligation, to sell Products as agent for the Members. If the Manager undertakes to sell Products as agent, such undertaking will not give rise to any implied covenant or duty with respect to such sales, other than the duty to act in good faith, and the Manager’s sole obligation arising from such undertaking will be to sell the Products on the best terms reasonably available for such Products, but in no case for less than the prevailing price in the United States. If the Manager sells Products, the fee payable to the Manager or its Affiliate in connection with such sales will be fair and on market terms. 

 

(b)Marketing Agent for the Company. The Manager will have the right to undertake marketing of Products through a marketing agent, who may be an Affiliate of Manager. If the Manager exercises such right, the Manager will execute a written agreement with the marketing agent, upon terms and conditions acceptable to the Manager and based on a fair fee to be earned by the marketing agent comparable to the marketing skills of the marketing agent and other like agents, to appoint the marketing agent as the sole and exclusive marketing representative for Products for the Company, with the authority and responsibility for marketing Products and the administration of all contracts for the sale and purchase of all Products.  

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(c)Sale of Products. If, during any period, (i) Products have been produced by the Company and are available for sale, (ii) the Manager does not undertake the sale of such Products as contemplated by Section 7.3(a) or does not appoint a marketing agent who undertakes the sale of such Products as contemplated by Section 7.3(b), and (iii) the Manager issues a monthly cash call or monthly cash calls, then (iv) USARE will fund the monthly cash call or monthly cash calls on behalf of TMRC, at no cost or expense to TMRC, and (v) the monthly cash call or monthly cash calls will be recovered by USARE solely out of TMRC’s proportional Interest in such Products when sold.  

 

(d)Recovery for Taxes and Royalties. Any costs of the Company for severance taxes, net proceeds taxes, ad valorem taxes and other taxes, fees or royalties imposed (including any potential federal royalties or fees that may be imposed in the future) in connection with the production (as opposed to the sale or disposition) of Products will be an expense of the Company subject to monthly capital calls. To the extent a Member fails to contribute to monthly capital calls or timely make such reimbursements, the Manager will have the right, but not the obligation, to recover from amounts otherwise distributable to such Member such amounts as are necessary to cover that Member’s share of such costs. Any amounts so recovered will be treated as distributed to the Member and contributed by the Member as part of a monthly capital call.  

 

(e)Operating Costs. If a Member either (i) fails to contribute to an adopted Program and Budget that provides for Capital Contributions for operating costs, or (ii) fails to make required Capital Contributions for operating costs under Section 3.5, then the Manager may recover from amounts otherwise distributable to such Member such amounts as are necessary to pay that Member’s share of the operating costs, and will treat the amounts so recovered as having been distributed to the Member and contributed by the Member to the Company as otherwise required. In the event of such action, the Non-Contributing Member’s Interest will not be reduced under Section 3.5(c) unless and only to the extent that the amounts so recovered are insufficient to pay that Member’s share of operating costs. For purposes of this Section 7.3(e), “operating costs” will not include any capital expenditures, other than replacement capital costs.  

 

(f)Withholding for Taxes. If the Company is required by the Code or by state, local or foreign law to pay any Tax that is specifically attributable to a Member, the Company shall withhold any required amount from any distribution to a Member for payment to the appropriate taxing authority. Any amount so withheld from a Member will be treated as a distribution by the Company to such Member for all purposes of this Agreement. Each Member agrees to timely file any document that is required by any taxing authority in order to avoid or reduce any withholding obligation that would otherwise be imposed on the Company. To the extent any amount of tax is required to be withheld with respect to a Member and paid over to an appropriate taxing authority and which amount is in excess of the amounts distributed or deemed distributed to such Member in respect of such withholding, the Member to whom such tax relates shall indemnify and reimburse the Company the amount of such Member’s allocable share of such tax (including any interest or penalties), which such reimbursement shall not be treated as a Capital Contribution. 

 

Article VIII

Transfers and Encumbrances of Interests 

 

8.1Restrictions on Transfer.  

 

(a)Types of Permitted Transfers. Except for Permitted Transfers, Permitted Encumbrances and Permitted Interest Encumbrances, no Member will Transfer or create an Encumbrance on all or any part of its Interest. Any attempted Transfer of, or creation of an Encumbrance on, all or any portion of an Interest not in accordance with the terms of this Article VIII will be null and void and of no legal effect. 

 

(b)Approved Transferees. All Transfers must be to an Approved Purchaser. Prior to consummation of any Transfer, a transferring Member must provide to the other Member reasonable evidence that the proposed transferee is an Approved Purchaser (the “Approved Purchaser Test”). If the other Member demonstrates, acting reasonably, that the transferee is not an Approved Purchaser (such demonstration to be provided to the transferring Member in writing within 15 Business Days after receipt of the last of all supporting materials and due diligence information provided by the transferring Member), then the Transfer to the transferee will not be consummated. 

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8.2Permitted Transfers and Permitted Interest Encumbrances. 

 

(a)Permitted Transfers. To the extent not otherwise prohibited under Section 8.3, the following Transfers (“Permitted Transfers”) are permitted: 

 

(i)A Member may Transfer all (but not less than all) of its Interest to an Affiliate of such Member without the approval of the other Member or the Manager or any other Person; provided, however, that the Member so Transferring will remain liable for all of the obligations of such Member under this Agreement and if the Affiliate ceases to be an Affiliate, the Interest will be deemed to have been Transferred back to the transferring Member effective as of the date immediately prior to such cessation. 

 

(ii)A Member may Transfer all or any portion of its Interest to the other Member without the approval of the Manager or any other Person; 

 

(iii)A Member may Transfer all or any portion of its Interest to any Person with the written approval of the other Member, which approval may be withheld in the sole discretion of the other Member; 

 

(iv)A Member may Transfer all or any portion of its Interest in connection with the merger, amalgamation, consolidation or reorganization of such Member with or into any other Person without the approval of the other Member or the Manager or any other Person; provided, that the surviving entity in such merger, amalgamation, consolidation or reorganization (A) possesses all or substantially all of the stock, limited liability company or other equity interests, or all of the property rights and interests of the transferring Member, and (B) is subject to all or substantially all of the liabilities and obligations of the transferring Member under this Agreement; and 

 

(v)A Member may Transfer all or any portion of its Interest to any Person without the approval of the other Member or the Manager or any other Person if and only if such Member complies with the provisions of Section 8.4. 

 

(b)Permitted Encumbrances. To the extent not otherwise prohibited under Sections 8.1 or 8.3, the following Encumbrances (“Permitted Interest Encumbrances”) are permitted: 

 

(i)A Member may create an Encumbrance on all or any portion of its Interest with the written approval of the other Member, which approval will not be unreasonably withheld or delayed; and 

 

(ii)A Member may create an Encumbrance on all or any portion of its Interest to secure debt for borrowed money incurred for the purpose of satisfying such Member’s Capital Contribution obligations under this Agreement, without the approval of the other Member or the Manager or any other Person, provided that such money is segregated into a separate account of such Member and used solely for satisfaction of the Member’s Capital Contribution obligations. 

 

(iii)Upon a foreclosure or other enforcement of rights under any Encumbrance of an Interest, the other Member will have a pre-emptive right to acquire the Interest to be sold at the foreclosure or other sale from the acquiring third party, which right will be exercised within 30 calendar days after such sale occurs, by Notice delivered to the acquiring third party, reflecting such other Member’s election to acquire such interest at the price paid by such acquiring third party at the foreclosure or other sale. If the other Member does so elect, the transfer to such other Member will be consummated promptly after the delivery of such notice. The pre-emptive right created under this Section 8.2(b)(iii) will be subject to all of the redemption rights or other rights to recover property created by Law. If the other Member does not exercise such right, then upon the foreclosure or transfer or power of sale in lieu of foreclosure of any Permitted Interest Encumbrance, the transferee will automatically be admitted as an additional Member of the Company, subject to Sections 8.3, 8.5(d), 8.6 and 8.7. 

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8.3Additional Limitations on Transfers and Encumbrances. Notwithstanding Section 8.2: 

 

(a)If a Transfer is made that causes the termination of the Company as a partnership for Federal income tax purposes, the transferring Member and the transferee will jointly and severally indemnify, defend and hold harmless the other Member and its Member Indemnified Parties from and against any and all Adverse Consequences arising from such tax termination; 

 

(b)No Transfer permitted by this Article VIII will relieve the transferring Member of its share of any liability, whether accruing before or after such Transfer, that arises out of Operations conducted before such Transfer, including as provided in Section 4.4; 

 

(c)The transferring Member and the transferee will bear all tax consequences of any Transfer; 

 

(d)If a Transfer of Interests is permitted under Section 8.2 results in the Company having more than two Members, the Members will act in a reasonable manner and will make such conforming changes to this Agreement as may reasonably be required to give effect to the fact that there are more than two Members; 

 

(e)No Member will create an Encumbrance on all or any portion of an Interest or any economic interest therein, unless the Encumbrance expressly is subordinate to the terms of any pledge or security interest of the Interest or portion thereof that secures any existing obligation of the Company to any third party lenders, including any Project Financing; and 

 

(f)If any part of the Transfer is for non-cash consideration, such as stock or other property, the fair market value of such non-cash consideration, together with any cash component, will be the “Offered Price” defined in Section 8.4(a). 

 

8.4Right of First Offer. 

 

(a)Offer Notice. Except for Permitted Transfers described in Section 8.2(a)(i) through (a)(iv) and except for Transfers in connection with the foreclosure or transfer in lieu of foreclosure of a Permitted Interest Encumbrance, no Member (the “Selling Member”) may Transfer all or any portion of its Interest to any Person, unless the Selling Member first provides an offer notice (an “Offer Notice”) to the other Member (the “Notified Member”) stating that the Selling Member desires to Transfer all or a portion of its Interest, designating the specific portion of the Interest (the “Offered Interest”) that the Selling Member desires to Transfer, and specifying the proposed purchase price (the “Offered Price”) and all of the other proposed terms and conditions of the proposed Transfer of the Offered Interest (the “Offered Terms”). 

 

(b)Acceptance Notice. The Notified Member will have the right, but not the obligation, for a period of 30 Business Days after its receipt of the Offer Notice, to elect to purchase all, but not less than all, of the Offered Interest for the Offered Price and on the other Offered Terms. Any such election will be made by providing notice of such election to the Selling Member within such 30 Business Day period. (the “Acceptance Notice”). 

 

(c)Closing. If the Notified Member timely elects to purchase the Offered Interest, the parties will close the sale of the Offered Interest for the Offered Price and on the Offered Terms on the later of (i) 30 Business Days after the Selling Member receives Acceptance Notice, or (ii) 10 Business Days after the receipt of all required consents and approvals, if any, with respect to such Transfer from all Governmental Authorities. If the Notified Member does not elect to purchase the Offered Interest or the Notified Member fails to close the purchase thereof within the time period specified above, the Selling Member may Transfer all, but not less than all, of the Offered Interest to any third party purchaser during the later of (1) the 90 day period after the expiration of such 30 Business Day election period, or (2) if the Notified Member delivers the Acceptance Notice but fails to close within the time period specified above, the 90 day period after the expiration of such period, but only for a cash value of the consideration received by the Selling Member that is greater than or equal to the Offered Price and on the Offered Terms, and only in accordance with Section 8.3. If the Selling Member does not sell the Offered Interest in accordance with the terms described above within the foregoing 90 day period, the Selling Member will again afford the Notified Member the purchase rights in this Section 8.4 with respect to any offer to sell, assign or dispose of all or any portion of the Offered Interest or any other Interest held by the Selling Member. 

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8.5Drag-Along Right. If USARE accepts a bona fide offer to purchase its entire Interest and all other rights under this Agreement from an unrelated third party, USARE will give TMRC notice of such offer and TMRC will then be obligated to sell its entire Interest and all other rights under this Agreement to the unrelated third party on the same terms and conditions as are accepted by USARE. TMRC agrees (i) to execute and deliver all related documentation and take such other action in support of the sale of such Interests as may reasonably be requested by USARE or the Company in order to carry out the terms and provision of this Section 8.5, including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of Encumbrances), and any similar or related documents; and (ii) to refrain from (a) exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such sale of Interests or (b) asserting any claim or commencing any suit (x) challenging the sale of Interests or this Agreement, or (y) alleging a breach of any fiduciary duty of USARE or any Affiliate or associate thereof (including, without limitation, aiding and abetting breach of fiduciary duty) in connection with the evaluation, negotiation or entry into the sale of the Interests, or the consummation of the transactions contemplated thereby. 

 

8.6Substitution of a Member. 

 

(a)Substitution. Except as provided in Section 8.6(c), no transferee (by conveyance, foreclosure, operation of Law or otherwise) of all or any portion of an Interest will become a substituted Member without the approval of the Representatives of the Management Committee as a Major Decision, Group I, which approval may be withheld in the sole discretion of each such Representative. A transferee of an Interest that receives such approval to become a Member will succeed to all of the rights and interest of his transferor in the Company. A transferee of a Member that does not receive such approval to become a Member will not become a Member, and will have no rights under this Agreement or the Act applicable to a Member.  

 

(b)Successors in Interest. Except as provided in Section 8.6(c), if a Member will be dissolved, merged or consolidated, its successor in interest will have the same obligations and rights to profits or other compensation that such Member would have had if it had not been dissolved, merged or consolidated, except that the representative or successor will not become a substituted Member without the approval of the Representatives of the Management Committee as a Major Decision, Group I, which approval may be withheld in the sole discretion of each such Representative. Such a successor in interest that receives such approval to become a Member will succeed to all of the rights and interests of his predecessor in the Company. A successor in interest that does not receive such approval to become a Member will not become a Member, and will have no rights under this Agreement or the Act applicable to a Member.  

 

(c)Automatic Admission. Notwithstanding Sections 8.6(a) and (b), subject to compliance with Sections 8.3, 8.6(d), 8.7 and 8.8, a transferee of all or a portion of an Interest in connection with a Permitted Transfer or in connection with the foreclosure or transfer in lieu of foreclosure of a Permitted Interest Encumbrance will automatically be admitted to the Company as a substituted Member with respect to the transferred interest without the consent of any other Member or the Management Committee. 

 

(d)Assumption of Obligations. No Transfer of any interest in the Company otherwise permitted under this Agreement, including a Permitted Transfer, will be effective for any purpose whatsoever until the transferee will have assumed the transferor’s obligations to the extent of the interest Transferred, and will have agreed to be bound by all the terms and conditions of this Agreement, by written instrument in form and substance reasonably satisfactory to the non-transferring Members. 

 

(e)Amendments. Upon the determination of the Management Committee that a transferee or the successor or representative of a Member has met the requirements for admission as a Member, the Manager will have the authority and duty to amend this Agreement and to execute on behalf of the Members and the Company such amendments and other documents to the extent necessary to reflect the admission of such transferee as a substituted Member. 

 

(f)Release of Transferor. Upon the admission of a transferee as a substituted Member, the transferor will have no further obligations under this Agreement with respect to that portion of its Interest Transferred to the transferee; provided, that no Member or former Member will be released, either in whole or in part, from any liability of such Member to the Company or the other Members under this Agreement or otherwise relating to periods through the date of such Transfer (whether as the result of a voluntary or involuntary Transfer) or any obligation that under Section 11.13 survives the Transfer of all or any portion of a Member’s Interest, unless each other Member agrees in writing to any such release. 

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8.7Conditions to Substitution. As conditions to its admission as a Member, an assignee, transferee or successor of a Member will (a) execute and deliver any instruments, in form and substance satisfactory to the non-transferring Members, as the non-transferring Members reasonably request, and (b) pay all reasonable expenses in connection with its admission as a substituted Member. 

 

8.8Admission as a Member. No Person will be admitted to the Company as a Member unless either (a) the Interest or part thereof acquired by such Person has been registered under the Securities Act, and any applicable state securities Laws or (b) the Company has received a favorable opinion of the transferor’s legal counsel or of other legal counsel acceptable to the non-transferring Members to the effect that the Transfer of the Interest to such Person is exempt from registration under those Laws. The non-transferring Members, however, may waive the requirements of this Section 8.7. 

 

8.9Economic Interest Holders. A transferee or successor to all or any portion of an Interest that is not admitted as a substituted Member of the Company will be subject to all of the economic and non-economic obligations of a Member under this Agreement, including obligations to make Capital Contributions and reimbursement obligations, but will not have any of the non-economic rights of a Member under this Agreement. For clarity, the non-economic rights of a Member include, without limitation, rights to vote, consent or approve matters under this Agreement, inspection rights, audit rights, rights to indemnification, and all rights to make any claims or demands against the Company, any Member or the Manager under this Agreement, the Act or otherwise. Each Member, by execution of this Agreement, acknowledges and agrees that any of its transferees or successors that is not admitted as a substituted Member of the Company will be bound by this Section 8.8 and the other provisions of this Agreement.  

 

Article IX

Resignation, Dissolution and Liquidation

 

9.1Resignation. A Member may resign from the Company only pursuant to the provisions of this Section 9.1. 

 

(a)Voluntary Resignation. Any Member may resign from the Company for any reason or no reason effective as of the end of the then current Program and Budget period by giving notice to the other Member not later than 60 days before the end of such Program and Budget period. Upon such resignation, the resigning Member will, subject to and in accordance with Section 9.1(d), relinquish to the Company its entire Interest, free and clear of Encumbrances created by, through or under the resigning Member, for no consideration whatsoever, other than the rights of such Member that under Section 11.13 expressly survive the resignation of a Member. 

 

(b)Involuntary Resignation - Elimination of Minority Interest. Subject to Section 9.1(c), a Member will be deemed to have resigned from the Company as a Member under section 18-306(2) of the Act upon the reduction of the Member’s Interest to less than 5.000%. Upon the deemed resignation, the resigning Member will, subject to and in accordance with Section 9.1(d), relinquish to the Company its entire Interest, free and clear of Encumbrances created by, through or under the Member, in exchange for the right to receive 5.000% of Net Proceeds, if any. Other than the consideration described in the previous sentence and the rights of the Member that under Section 11.13 expressly survive the resignation or deemed resignation of a Member, the relinquishment by a Member of its Interest under this Section 9.1(b) will be for no consideration whatsoever. Net Proceeds, if any, will be paid in accordance with Exhibit D. 

 

(c)Recalculation and Restoration of Interest. Notwithstanding Section 9.1(b), if a Member’s Interest would be relinquished under Section 9.1(b) because of an adjustment to Interests under Section 6.6(c) in connection with the Member’s election not to contribute, or to contribute less than its Interest, to a Program and Budget, the resignation of the Member and the relinquishment of its Interest will be deferred until after the completion of the Program and Budget period to take into account any recalculation of the Member’s Interest under Section 6.7(b) and any reimbursement by the Member under Section 6.7(c). If, after taking into account the recalculation and reimbursement, if any, the Interest should be relinquished under Section 9.1(b), then the Member will immediately be deemed to resign as a Member and relinquish its Interest subject to and in accordance with Section 9.1(d); provided, however, that the resignation and relinquishment will be deemed effective as of the beginning of the Program and Budget period. If, after taking into account the recalculation and reimbursement, if any, the Interest should not be relinquished, then the Member will not be required to resign or relinquish its Interest under Section 9.1(b). The Manager will make, and the Members will cooperate with the Manager in making, the distributions and allocations of items of Profit, Loss and credit required by Section 6.7(d), and such other distributions, allocations of items of Profit, Loss and credit, and payments of Net Proceeds as the Manager reasonably determines are necessary or appropriate to effect the intent and accomplish the purposes of this Section 9.1(c). 

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(d)Actions Upon Resignation. Upon the resignation or deemed resignation of a Member, or the relinquishment of a Member’s Interest, the Member will execute and deliver such instruments of assignment and conveyance, conveying its Interest to the Company (or to a designee of the Company designated by the other Member, which may include the other Member or its Affiliates) as the other Member reasonably requests. 

 

9.2Non-Compete Covenant. A Member that has resigned or is deemed to have resigned or that has relinquished its Interest under Section 9.1, will not, and will cause its Affiliates not to, directly or indirectly acquire any interest in property within the Area of Interest for 24 months after the effective date of the resignation, deemed resignation, or relinquishment. If such former Member, or any Affiliate of such former Member, breaches this Section 9.2, such former Member will or will cause its Affiliate to offer to convey to the Company (or any other Person designated by the Company), without cost, any such property or interest so acquired. Such offer will be made in writing and may be accepted by the Company at any time within 60 days after its receipt by the Company. In addition to any other remedies provided by this Agreement and applicable Law, each Member agrees that the Company (or any remaining Member, on behalf of the Company), may enforce this Section 9.2 through such legal or equitable remedies, including an injunction, as a court of competent jurisdiction will allow without the necessity of proving actual damages or bad faith, and each Member waives, and will cause its Affiliates to waive, any claim or defense that the Company (or any remaining Member, on behalf of the Company) has an adequate remedy at law and any requirement for the securing or posting of any bond in connection with such equitable remedy. 

 

9.3Dissolution. The Company will be dissolved only upon the agreement of the Representatives of the Management Committee as a Major Decision, Group I. 

 

9.4Liquidation.  

 

(a)Liquidator. Promptly after the dissolution of the Company, the Manager will appoint in writing one or more liquidators (who may be a Member or the Manager) who will have full authority to wind up the affairs of the Company and to make a final distribution as provided in this Agreement. The liquidator will continue to conduct Operations with all of the power and authority of the Management Committee and the Manager. Without limiting the previous sentence, the liquidator will have the power and authority to complete any transaction and satisfy any obligation, unfinished or unsatisfied, at the time of dissolution, if the transaction or obligation arises out of Operations before the time of dissolution. The liquidator will have the power and authority to grant or receive extensions of time or change the method of payment of an already existing liability or obligation, prosecute and defend actions on behalf of the Company, encumber Assets, and take any other reasonable action in any matter with respect to which the Company continues to have, or appears or is alleged to have, an interest or liability. 

 

(b)Steps of Liquidator. The steps to be accomplished by the liquidator are as follows: 

 

(i)As promptly as possible after dissolution, the liquidator will cause a proper accounting to be made of the Company’s assets, liabilities and Operations through the last day of the month in which the dissolution occurs. 

 

(ii)The liquidator will pay all of the debts and liabilities of the Company or otherwise make adequate provision for such debts and liabilities (including, the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidator may reasonably determine) to the extent required by the Act. 

 

(iii)The liquidator will then by payment of cash or property (at the election of the liquidator, and, in the case of property, valued under Section 5.3 of Exhibit C) distribute to the Members such amounts or property as are required to distribute all remaining amounts or property to the Members in accordance with Section 7.2. 

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(c)Distributions in Liquidation. In connection with the liquidation of the Company, those Members that agree in writing may be distributed in-kind undivided interests in the Assets of the Company. For purposes of this Section 9.4, a distribution of an asset or an undivided interest in an asset in-kind to a Member will be considered a distribution of an amount equal to the fair market value of such asset or undivided interest as determined under Section 5.3 of Exhibit C. Each Member will have the right to designate another Person to receive any property that otherwise would be distributed in kind to that Member under this Section 9.4. Any real property, including any mineral interests, distributed to the Members will be conveyed by special warranty deed subject to all Encumbrances, contracts and commitments then in effect with respect to such property, which will be assumed by the Members receiving such real property. The distribution of cash or property to the Members in accordance with the provisions of this Section 9.4 will constitute a complete return to the Members of their respective Capital Contributions and a complete distribution to the Members of their respective interests in the Company and all Company property. Without limiting the provisions of this Agreement that under Section 11.13 survive the termination of the Company, no Member will have any obligation to contribute to the Company or pay to any other Member any deficit balance in such Member’s Capital Account. 

 

(d)Compliance with Laws; Timing. Except as expressly provided herein, the liquidator will comply with any applicable requirements of the Act and all other applicable Laws pertaining to the winding up of the affairs of the Company and the final distribution of its assets. Liquidation of the Company will be completed within the time limits imposed by Treasury Regulations section 1.704-1(b)(2)(ii) and 1.704-1(b)(2)(g). 

 

9.5Termination. Upon the completion of the distribution of the Company’s Assets as provided in Section 9.4, the Company will be terminated and the liquidator will file a certificate of cancellation of the certificate of formation of the Company and will take such other actions as may be necessary to terminate the existence of the Company. 

 

Article X

Area of Interest; Abandonment

 

10.1Acquisitions Within Area of Interest.  

 

(a)General. Except as provided in this Section 10.1, no Member will, or permit any of its Affiliates to, acquire any interest or right to acquire any interest in any real property, minerals or water rights relating to real property wholly or partially within the Area of Interest (collectively, “Covered Real Property”), either directly or indirectly, alone, or as a member, partner, stockholder or other investor in any Person, at any time until the earlier of (i) the termination of the Company and (ii) the date that is 24 months after the date that such Person no longer is a Member in the Company for any reason. In addition to any other remedies provided by this Agreement and applicable Law, each Member agrees that the Company (or any Member, on behalf of the Company), may enforce this Section 10.1 through such legal or equitable remedies, including an injunction, as a court of competent jurisdiction will allow without the necessity of proving actual damages or bad faith, and each Member waives, and will cause its Affiliates to waive, any claim or defense that the Company (or any remaining Member, on behalf of the Company) has an adequate remedy at law and any requirement for the securing or posting of any bond in connection with such equitable remedy. 

 

(b)Notice to Other Member. Within 30 days after the acquisition by any Member (the “Acquiring Member”) or any Affiliate of the Acquiring Member of any Covered Real Property (excluding Covered Real Property acquired by or on behalf of the Company under a Program), the Acquiring Member will provide notice to the other Member of such acquisition. The Acquiring Member’s notice will describe in detail the terms of the acquisition (including the associated costs), the Covered Real Property subject to the acquisition, whether or not the Acquiring Member believes the acquisition of the Covered Real Property by the Company is in its best interests, and the reasons for its conclusions. In addition to the notice, the Acquiring Member will make any and all information concerning the Covered Real Property and the terms of the acquisition available for inspection by the other Member. 

 

(c)Option Exercised. If, within 30 days after receiving the Acquiring Member’s notice, the other Member provides notice to the Acquiring Member that it elects to participate in the Covered Real Property, the Acquiring Member will, or will cause its Affiliate to, convey to the Company, or as may otherwise be agreed upon by the Members, its entire interest or right to acquire the Covered Real Property, free and clear of all Encumbrances arising by, through or under the Acquiring Member and its Affiliates, other than those to which both Members have agreed. If conveyed to the Company, the Covered Real Property will become a part of the Properties for all purposes of this Agreement immediately upon the notice of such other Member’s election to participate. Such other Member will, within 15 days of the date of conveyance of the Covered Real Property to the Company, pay to the Acquiring Member its proportionate share, based on the Members’ proportionate Interests, of the Acquiring Member’s and its Affiliates’ actual out-of-pocket acquisition costs. 

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(d)Option Not Exercised. If the other Member does not give notice of its election to participate within the 30 day period in Section 10.1(c), neither such other Member nor the Company will have any interest in the Covered Real Property, and the Covered Real Property will not be a part of the Properties or otherwise be subject to this Agreement. 

 

(e)Use of Concessions Outside of the Area of Interest. A portion of the Concessions contributed by TMRC to the Company extend outside of the Area of Interest. The Company grants to TMRC a non-exclusive, fee-free, royalty-free and perpetual license to explore for, and potentially develop and mine, ores and minerals other than ores and minerals whose principal values are for Rare Earth Elements on such portion of the Concessions. TMRC will periodically develop plans for such exploration, development and mining and will consult with the Company with respect to such plans before they are implemented to ensure that such plans do not conflict with planned or foreseen uses of such portions of the Concessions by the Company, acting reasonably. If, in the course of its activities, TMRC discovers commercial, or potentially commercial, deposits of Rare Earth Elements on such portions of the Concessions, it will promptly inform the Company of such discovery and, if requested by the Company, relinquish the applicable portions of the Concessions to the Company.  

 

10.2Surrender or Abandonment of Property. Either Member may request that the Management Committee authorize the Manager to surrender or abandon part or all of the Properties. If the Management Committee does not authorize such surrender or abandonment after such a request, or authorizes such surrender or abandonment over the objection of a Member, subject to the terms of any Project Financing, other Company indebtedness or other contractual or legal restrictions binding on the Company, the Member that desires to retain such Properties will be distributed such Properties without cost to such Member, free and clear of all Encumbrances created by, through or under the Member that desires for such Properties to be surrendered or abandoned (but subject to any Encumbrances previously created thereon by the Company or existing at the time such Properties were acquired by the Company), which Properties the Members agree will be assigned an agreed fair market value as of the time of distribution of zero dollars. As and to the extent provided in Section 4.4, the Member that desires to abandon or surrender such Properties will remain liable to reimburse the acquiring Member and its Indemnified Member Parties for its share (determined by Interests as of the date of such distribution) of any Adverse Consequences with respect to such Properties, including Continuing Obligations, Environmental Liabilities and Environmental Compliance, whether accruing before or after the date of such distribution, arising out of activities before the date of such distribution. 

 

10.3Intellectual Property 

 

(a)Developed IP. The Members acknowledge and agree that save and except as provided in the next following sentence with respect to Pilot Plant Developed IP, the Company shall be the owner of all right, title, and interest in and to all Developed IP, whether such Developed IP was developed by the Manager, the Company or otherwise. The foregoing will not apply to the Developed IP that is derived or related to the Background IP of USARE relative to the Pilot Plant, and USARE will be the owner of all right, title and interest in and to all Developed IP derived or related to the Background IP of USARE relative to the Pilot Plant (the “Pilot Plant Developed IP”). To the extent any of the Members or the Manager acquire any right, title, or interest in and to any aspect of the Developed IP (other than Pilot Plant Developed IP which is the sole property of USARE), it will, subject to applicable Law, formally assign (for nominal consideration) such right, title, and interest to the Company immediately following such acquisition. If any Member that is other than USARE acquires any right, title or interest in and to any aspect of Pilot Plant Developed IP, it will, subject to applicable Law, formally assign (for nominal consideration) such right, title and interest to USARE immediately following such acquisition. 

 

(b)Background IP. The Members acknowledge and agree that each of them is the owner of all right, title and interest, including all Intellectual Property Rights, in and to its own Background IP and which as at the Effective Date for USARE includes the Intellectual Property Rights that are used in the processes of the Pilot Plant (the “Pilot Plant IP”). 

 

(c)License to the Company. Each Member hereby grants the Company a non-exclusive, fee-free, royalty-free, and irrevocable license to use such Member’s Background IP (and in the case of USARE, the Pilot Plant Developed IP), and to sublicense such use to the Manager, solely for the purpose of performing their obligations under this Agreement and not for any other purposes (the “Member Licensed IP”). However, as relates to USARE, in the event that it shall cease to own at least 50.1% of the Interests of the Company, the non-exclusive, fee-free royalty free and revocable license to use the Pilot Plant IP, including without limitation, the Pilot Plant Developed IP, shall terminate effective as of a period of 60 days after such cessation, it being understood and agreed that the Company and USARE may utilize such 60 day period to negotiate and, if agreed upon, settle a mutually agreeable license for such Pilot Plant IP, including without limitation, the Pilot Plant Developed IP, on a fee basis and such other terms as may be agreed upon. 

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(d)License to TMRC. TMRC will have a non-exclusive, fee-free, royalty-free and irrevocable license to use the Pilot Plant IP, the Pilot Plant Developed IP and the Developed IP subject to the following: (i) the project of TMRC which utilizes or licenses the Pilot Plant IP, the Pilot Plant Developed IP and the Developed IP will not have, as its primary products, Rare Earth Elements produced by an entity that constitutes a REE Mining Company; and (ii) USARE will be granted a preferential right of first offer from TMRC to purchase products produced by it at market competitive rates from such projects of TMRC that utilize or license the Pilot Plant IP and the Pilot Plant Developed IP. 

 

(e)Limitations. Save and except as otherwise specifically provided in this Section 10.3, the Company and the Manager have no other rights whatsoever with respect to a Member’s Background IP, the granting Member does not grant to any of them any other express or implied rights in and to its Background IP and all Member Licensed IP made available by a Member for use by the Company will constitute confidential information of such Member and will not be disclosed to third parties without the prior written consent of the Member who made the Member Licensed IP available. To the extent a Member, the Company or the Manager, acquires any right, title, or interest in and to any aspect of another Member’s Background IP, it will assign such right, title, and interest to such owner Member, immediately following such acquisition. Except for the license granted to TMRC in Section 10.3(d), any license rights granted under this Section will terminate upon the termination of this Agreement.  

 

(f)Trade-marks. The Members acknowledge and agree that each of them is the owner of all right, title, and interests in and to its respective Trade-marks, whether registered or unregistered. To the extent the Company wishes to use the Trade-marks of any of the Members or their respective Affiliates, the Company may only do so pursuant to a Trade-mark license agreement in writing between the owner of the applicable Trade-mark and the Company, as applicable, as agreed upon between them. 

 

Article XI

Miscellaneous

 

11.1Confidentiality.  

 

(a)Exceptions. Subject to Section 11.1(b), each Member and the Manager will keep confidential and not use, reveal, provide or transfer to any third party any Confidential Information that it obtains or has obtained concerning the Company or the other Member without the prior written consent of the other Member, which consent will not be unreasonably withheld or delayed, except (i) to the extent that disclosure to a third party is required by Law or is necessary in order to enforce a the Manager’s or a Member’s rights under this Agreement, (ii) information that, at the time of disclosure, is generally available to the public (other than as a result of a breach of this Agreement or any other confidentiality agreement to which such Person is a party or of which it has knowledge), as evidenced by generally available documents or publications, and (iii) information that was in the disclosing party’s possession before the Effective Date (as evidenced by appropriate written materials) and was not acquired directly or indirectly from the Company or the other Member (including in its capacity as the Manager). 

 

(b)Permitted Disclosures. Notwithstanding Section 11.1(a), Confidential Information may be disclosed without consent to (i) a consultant, contractor, subcontractor, officer, director or employee of the Company, the Manager or any Member or any of their respective Affiliates that has a bona fide need to be informed of the Confidential Information, (ii) any third party to whom the disclosing Member or Manager contemplates a Transfer of all or any part of its Interest or the Assets, (iii) any actual or potential lender, underwriter or investor for the sole purpose of evaluating whether to make a loan to or an investment in the disclosing Member or the Company, or (iv) in connection with a press release or public announcement under Section 11.2. 

 

(d)Limitations. As to any disclosure under clause (i), (ii) or (iii) of Section 11.1(b), (i) only such Confidential Information as the recipient has a legitimate business need to know will be disclosed, (ii) the recipient will first agree in writing to protect the Confidential Information from further disclosure to the same extent as the Members and the Manager are obligated under this Section 11.1, and (iii) the disclosing Member or Manager will be responsible and liable for any use or disclosure by any such recipient that would constitute an impermissible use or disclosure by the disclosing Member or Manager. 

 

(e)Term. A Member or Manager will continue to be bound by this Section 11.1 until the earlier of (i) the date that is two years after the cancellation of the certificate of formation of the Company (notwithstanding the resignation or deemed resignation of such Member or Manager or the Transfer by such Member of its entire Interest), and (ii) the date that is two years after the resignation or deemed resignation of such Member or Manager or, in the case of a Member, the Transfer by such Member of its entire Interest; provided that with respect to any Confidential Information that constitutes “trade secrets” of a Member or the Company under the Uniform Trade Secrets Act or similar applicable Laws, the provisions of this Section 11.1 will survive indefinitely. 

39

 

 

11.2Public Announcements. Any Member may issue any press release or make any public disclosure concerning the Company or Operations that it believes in good faith is required by applicable Law or any listing or trading agreement concerning its publicly traded securities or the publicly traded securities of any of its Affiliates; provided that if a Member or any of its Affiliates intends to issue such a press release or make such a disclosure, it will use commercially reasonable efforts to advise the other Member before issuing the press release or making the disclosure. Except as provided in the previous sentence, neither the Company, any Member, the Manager, nor any of their respective Affiliates, will issue any press release or make any public announcement relating to the Company or Operations without the prior written approval of all of the Members. 

 

11.3Notices. All notices to the Members or the Manager will be in writing to the applicable address on the signature page to this Agreement, and will be given (i) by personal delivery or recognized international overnight courier, (ii) by electronic communication, with a confirmation sent by registered or certified mail return receipt requested, or (iii) by registered or certified mail return receipt requested. All notices will be effective and will be deemed delivered (a) if by personal delivery or by overnight courier, on the date of delivery if delivered before 5:00 p.m. local destination time on a Business Day, otherwise on the next Business Day after delivery, (b) if by electronic communication on the Business Day after receipt of the electronic communication, and (c) if solely by mail, on the Business Day after actual receipt. A Member or Manager may change its address by notice to the other Members. 

 

11.4Headings. The subject headings of the Articles, Sections and subsections of this Agreement and the Exhibits to this Agreement are included for purposes of convenience only, and will not affect the construction or interpretation of any of their provisions. 

 

11.5Waiver. Except for waivers specifically provided for in this Agreement, rights under this Agreement may not be waived except by an instrument in writing signed by the Member or Manager to be charged with the waiver. The failure of a Member or the Manager to insist on the strict performance of any provision of this Agreement or to exercise any right, power or remedy upon a breach of this Agreement will not constitute a waiver of any provision of this Agreement or limit the Member’s or the Manager’s rights thereafter to enforce any provision or exercise any right. 

 

11.6Corrupt Practices. 

 

(a)Limitation on Practices. Each Member, including the Manager, represents, warrants and agrees that, in connection with this Agreement, the Properties, and Operations: 

 

(i)neither it, nor any of its Affiliates nor its Personnel, directly or indirectly, has engaged (prior to entering into this Agreement), or will engage, in the Bribery of a Government Official or any Person; 

 

(ii)it (including its Affiliates and Personnel) has complied with any Anti-Corruption Laws and will comply with any Law related to Bribery that is applicable to any party; 

 

(iii)except as disclosed to the other party, neither it (including any of its Personnel) nor any other entity in which the party has an ownership interest: 

 

(A)is directly or indirectly owned or controlled, in whole or in part, by any Government Official unless the interest held is less than 5% of any securities of the party that are publicly traded on a major stock exchange; and  

 

(B)has an officer, director, or employee who is, or currently expects to become, such a Government Official during the term of this Agreement; 

 

(iv)it must notify each other party promptly, and in any event not less than seven days, upon becoming aware that any officer, director, employee or owner becomes, or expects to become, a Government Official who is in a position to take or influence official action for or against this Agreement, the Properties, or Operations; 

 

(v)if it engages a Subcontractor or other third party to interact with others on its behalf, it will perform appropriate risk based anti-corruption due diligence on that Subcontractor or third party, will keep records of the same, and take reasonable measures to ensure they comply with the provisions of this Section 11.6; and (vi) it will notify each other party promptly upon becoming aware of any actual or potential breach of this Section 11.6; 

40

 

 

(b)Books and Records. Each Member, including the Manager, represents, warrants and agrees that, in connection with this Agreement, it will: 

 

(i)keep and maintain accurate and reasonably detailed books and financial records of expenses and receipts in connection with its performance under, and payments made or received in connection with, this Agreement; and 

 

(ii)upon request, as soon as reasonably practicable but no later than seven days, provide any information and reasonable assistance to the other party to audit any books and financial records to verify compliance with the representations, warranties and undertakings under this Agreement, and otherwise reasonably co-operate with any Party investigation of any related matters. 

 

11.7Amendment. Except for (a) amendments executed by the Manager in connection with the admission of additional or substituted Members under Sections 2.6 or 8.5(e), and (b) deemed amendments under Section 11.7, notwithstanding the definition of “limited liability company agreement” contained in section 18-101(7) of the Act or any other contrary provision of the Act, no amendment, restatement, modification, or supplement of or to this Agreement will be valid or will constitute part of the “limited liability company agreement” of the Company unless it is made in a writing duly executed by each Member or at least one Representative of each Member, which writing specifically indicates that it is amending, restating, modifying or supplementing this Agreement. To the extent reasonably possible, minutes, resolutions and consents of the Management Committee that are executed or approved by at least one Representative of each Member will be read in a manner consistent with this Agreement. To the extent of any irreconcilable conflict between any provision of this Agreement and any such minutes, resolutions or consents, this Agreement will control. Under no circumstances will any consent or approval of the Management Committee that is not executed or approved by each Member or at least one Representative of each Member amend, restate, modify or supplement this Agreement. 

 

11.8Severability. If at any time any covenant or provision contained in this Agreement is deemed in a final, non-appealable ruling of a court of competent jurisdiction to be invalid or unenforceable, such covenant or provision will be considered divisible and will be deemed immediately amended and reformed to include only such portion of such covenant or provision as such court has held to be valid and enforceable. Such covenant or provision, as so amended and reformed, will be valid and binding as though the invalid or unenforceable portion had not been included in this Agreement. 

 

11.9Force Majeure. Except for any obligation to make Capital Contributions or other payments when due under this Agreement, the obligations of a Member or the Manager will be suspended to the extent and for the period that performance is prevented in whole or in part by a Force Majeure Event. The affected Member or Manager will promptly give notice to the other Member(s) of the Force Majeure Event and the suspension of performance, stating in the notice the nature of and the reasons for the Force Majeure Event and its estimated duration. The affected Member(s) or Manager will resume performance as soon as reasonably possible. 

 

11.10Rules of Construction. Each Member, Manager or other party to or bound by this Agreement acknowledges that it has been represented by counsel during the negotiation, preparation and execution of this Agreement or the acquisition of its Interest or other interest in the Company. Each such party therefore waives the application of any Law or rule of construction providing that ambiguities in an agreement or other document will be construed against the drafter of the agreement or document. 

 

11.11Governing Law. This Agreement, and the rights and liabilities of the Members under this Agreement, will be governed by and interpreted in accordance with the Laws of the State of Delaware, except for its rules as to conflicts of Laws that would apply the Laws of another state. 

 

11.12Consent to Jurisdiction; Waiver of Jury Trial. Each party to or bound by this Agreement agrees and consents to be subject to the exclusive jurisdiction of the Delaware Court of Chancery and the appellate courts sitting in the State of Delaware in any action or proceeding seeking to enforce any provision of or based on any right arising under or relating to this Agreement or the Contribution Agreement or otherwise relating to the Company or Operations. THE PARTIES TO THIS AGREEMENT HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING, WHETHER NOW EXISTING OR ARISING IN THE FUTURE, ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE CONTRIBUTION AGREEMENT OR OTHERWISE RELATING TO THE COMPANY OR OPERATIONS, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH SUCH PARTY AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION 11.12 WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT IRREVOCABLY TO WAIVE A TRIAL BY JURY.  

41

 

 

11.13Further Assurances. Each Member and the Manager agrees to take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement. 

 

11.14Survival. 

 

(a)Resignation, Relinquishment, Redemption and Transfer. After the resignation or deemed resignation of a Member, the relinquishment or redemption of a Member’s Interest, or the Transfer by a Member of its entire Interest in the Company, such former Member will have no further rights or obligations as a Member of the Company relating to periods after the date of the resignation, deemed resignation, relinquishment, redemption or Transfer; provided, that after such resignation, deemed resignation, relinquishment, redemption or Transfer, such former Member will (i) not be released, either in whole or in part, from any liability of such Member to the Company or the other Members under this Agreement or otherwise relating to periods through the date of such resignation, deemed resignation, relinquishment, redemption or Transfer, unless each other Member agrees in writing to any such release, (ii) remain liable to each other Member and former Member and their respective Indemnified Member Parties for its reimbursement and indemnification obligations under Sections 4.3 and 4.4, and (iii) will continue to have the right to enforce the indemnification and reimbursement obligations of the Company, the other Members and the former Members under Sections 4.2, 4.3 and 4.4 with respect to actions, omissions or events occurring before the date of such resignation, deemed resignation, relinquishment, redemption or Transfer, notwithstanding any amendment, restatement, modification or supplement to this Agreement adopted after the date of such resignation, deemed resignation, relinquishment, redemption or Transfer that attempts to limit or restrict such rights. In addition, a former Member will continue to be subject to its obligations, if any, under Sections 9.1(d) and 9.2 after the resignation or deemed resignation of such former Member. 

 

(b)Dissolution, Liquidation and Termination. After the dissolution, liquidation and termination of the Company, (i) each Person that was a Member as of the date of the dissolution of the Company will be entitled to copies of all information acquired by or on behalf of the Company on or before the date of termination and not previously furnished to such Person, (ii) if any former Member continues to own all or any portion of the Properties, each Person that was a Member as of the date of dissolution of the Company will continue to have rights of ingress and egress to such Properties for purposes of ensuring Environmental Compliance, and (iii) each former Member (regardless whether such Person was a Member as of the date of the dissolution of the Company) will remain liable for (A) its indemnification and reimbursement obligations under Sections 4.3 and 4.4, subject to Section 4.5, and (B) its Capital Contribution obligations under Sections 3.3 and 3.4, but only in the case of this clause (B) to the limited extent provided in Section 5.6(e).  

 

(c)Survival of Provisions. The provisions of this Agreement will survive any event described in Section 11.14(a) and (b) to the fullest extent necessary for the enforcement of such provisions and the protection of the Members, the Manager or other Persons in whose favor such provisions run. 

 

11.15No Third Party Beneficiaries. Except to the extent specifically provided in this Agreement with respect to the Indemnified Member Parties (who are express third party beneficiaries of this Agreement solely to the extent provided in this Agreement), this Agreement is for the sole benefit of the Members, the Manager and the Representatives, and no other Person (including any creditor of the Company, the Members, the Indemnified Member Parties and the Manager), is intended to be a beneficiary of this Agreement or will have any rights under this Agreement. Except as specifically provided in this Agreement, no Person (including any named third party beneficiary) will have a right to approve any amendment or modification, or waiver under, this Agreement. 

 

11.16Entire Agreement. This Agreement and the Contribution Agreement contain the entire understanding of the Members and the Manager with respect to the Company and supersede all prior agreements, understandings and negotiations relating to the subject matter of this Agreement and the Contribution Agreement. 

 

11.17Parties in Interest. This Agreement will inure to the benefit of the permitted successors and permitted assigns of the Members and the Manager, and will be binding upon the successors and assigns of the Members and the Manager (whether or not permitted). In the event of any conflict between this Agreement, on the one hand, and the Contribution Agreement, on the other hand, the terms of this Agreement will control. 

 

11.18Counterparts. This Agreement may be executed in multiple counterparts, and all such counterparts taken together will constitute the same document. 

42

 

11.19Rule Against Perpetuities. The Members do not intend that there will be any violation of the Rule Against Perpetuities, the Rule Against Unreasonable Restraints on the Alienation of Property, or any similar rule. Accordingly, if any right or option to acquire any interest in the Properties, in an Interest, in the Assets, or in any real property exists under this Agreement, such right or option must be exercised, if at all, so as to vest such interest within time periods permitted by applicable rules. If, however, any such violation should inadvertently occur, the provisions of this Agreement will be revised in such a way as to approximate most closely the intent of the Members within the limits permissible under such rule. 

43

 

 

The parties have executed this Agreement on the dates indicated below to be effective for all purposes as of the Effective Date.

 

	MEMBERS:

	 

	USA Rare Earth, LLC

	 

	 

	 

	 

	By: 

	/s/ Douglas Newby

	Name:

	Douglas Newby

	Title: 

	Chief Operating Officer

	Date: 

	5/17/2021

	 

	 

	Texas Mineral Resources Corp.

	 

	 

	By: 

	/s/ Daniel Gorski

	Name:

	Daniel Gorski

	Title: C

	hief Executive Officer

	Date: 

	5/17/2021

	 

	 

	Acknowledged and agreed as to those provisions applicable to the Manager:

	 

	 

	MANAGER:

	 

	 

	Round Top Mountain Development, LLC

	 

	 

	By: 

	/s/ Douglas Newby

	Name:

	Douglas Newby

	Title: 

	Chief Operating Officer of USA Rare Earth, LLC, its manager

	Date: 

	5/17/2021

44Exhibit 10.1

 

EQUITY
PURCHASE AGREEMENT

 

made
and entered into as of May 18, 2021

 

by
and among

 

GUARDION
HEALTH SCIENCES, INC.,

 

ADARE
PHARMACEUTICALS, INC.

 

and

 

ACTIV
NUTRITIONAL, LLC

 

THIS
DOCUMENT IS INTENDED SOLELY TO FACILITATE DISCUSSIONS AMONG THE PARTIES REFERENCED HEREIN. IT IS NOT INTENDED TO, AND DOES NOT, CREATE
A LEGALLY BINDING AGREEMENT OF ANY TYPE PRIOR TO THE DUE EXECUTION AND DELIVERY OF THIS DOCUMENT BY THE PARTIES.

 

    	 

     

    

 

TABLE
OF CONTENTS

 

	 	Page
	 	 
	Article
    1 PURCHASE AND SALE OF INTERESTS	1
	 	 	 
	Section
    1.1	Purchase
    and Sale of Interests	1
	Section
    1.2	Purchase
    Price and Payment for the Interests	1
	Section
    1.3	Adjustment
    for Tax Purposes	5
	 	 	 
	Article
    2 CLOSING; DELIVERABLES	5
	 	 	 
	Section
    2.1	Closing	5
	Section
    2.2	Closing
    Deliverables	6
	Section
    2.3	Tax
    Withholding	7
	 	 	 
	Article
    3 REPRESENTATIONS AND WARRANTIES OF THE SELLER	8
	 	 	 
	Section
    3.1	Organization
    and Qualification	8
	Section
    3.2	Authority;
    Due Execution	8
	Section
    3.3	No
    Subsidiaries; Joint Ventures	9
	Section
    3.4	Title
    to Interests; Capitalization	9
	Section
    3.5	Noncontravention	10
	Section
    3.6	Financial
    Statements	10
	Section
    3.7	Undisclosed
    Liabilities; Indebtedness.	11
	Section
    3.8	Absence
    of Certain Changes	11
	Section
    3.9	Litigation	13
	Section
    3.10	Compliance
    with Laws; Material Permits	14
	Section
    3.11	Material
    Contracts	14
	Section
    3.12	Tax
    Matters	16
	Section
    3.13	Employees	18
	Section
    3.14	Employee
    Benefits	18
	Section
    3.15	Real
    and Personal Property	18
	Section
    3.16	Intellectual
    Property	19
	Section
    3.17	Insurance	22
	Section
    3.18	Customers,
    Suppliers and Distributors	22
	Section
    3.19	Affiliate
    Arrangements	23
	Section
    3.20	Product
    Liability	23
	Section
    3.21	Certain
    Payments	23
	Section
    3.22	Compliance
    with FDA and Related Laws	24
	Section
    3.23	Accounts
    Receivable; Accounts Payable	26
	Section
    3.24	Inventory	27
	Section
    3.25	PPP
    Loan	27
	Section
    3.26	Environmental
    Matters	27
	Section
    3.27	No
    Omissions of Material Fact	27
	Section
    3.28	Brokers
    and Finders	27
	Section
    3.29	Exclusivity
    of Representations and Warranties	27

 

    	i

     

    

 

	Article
    4 REPRESENTATIONS AND WARRANTIES OF THE BUYER	28
	 	 	 
	Section
    4.1	Organization
    and Qualification	28
	Section
    4.2	Authority;
    Due Execution	28
	Section
    4.3	Noncontravention	28
	Section
    4.4	Litigation	29
	Section
    4.5	Compliance
    with Laws	29
	Section
    4.6	Financing	29
	Section
    4.7	Solvency	29
	Section
    4.8	Brokers
    and Finders	29
	Section
    4.9	Exclusivity
    of Representations and Warranties	29
	 	 	 
	Article
    5 CERTAIN COVENANTS AND AGREEMENTS OF THE PARTIES	30
	 	 	 
	Section
    5.1	Conduct
    of the Business Prior to the Closing Date	30
	Section
    5.2	Expenses
    and Fees	32
	Section
    5.3	Access
    to Information	32
	Section
    5.4	Confidentiality	33
	Section
    5.5	Public
    Announcements	35
	Section
    5.6	Tax
    Matters	35
	Section
    5.7	Notice
    of Certain Events; Schedules Update	40
	Section
    5.8	Company
    Records	41
	Section
    5.9	Company
    Required Financial Statements	42
	Section
    5.10	Governmental
    and Non-Governmental Consents; Other Actions	43
	Section
    5.11	Intercompany
    Accounts	44
	Section
    5.12	R&W
    Insurance Policy	44
	Section
    5.13	No
    Solicitation of Other Bids	45
	Section
    5.14	Non-Competition;
    Non-Solicitation	45
	Section
    5.15	Company
    Insurance Policies	47
	Section
    5.16	General
    Release	47
	Section
    5.17	Cash	48
	Section
    5.18	Further
    Assurances	48
	 	 	 
	Article
    6 CONDITIONS PRECEDENT	49
	 	 	 
	Section
    6.1	Conditions
    Precedent to Each Party’s Obligations to Effect the Closing	49
	Section
    6.2	Conditions
    to Obligations of the Buyer	49
	Section
    6.3	Conditions
    to Obligations of the Seller	50
	 	 	 
	Article
    7 TERMINATION	51
	 	 	 
	Section
    7.1	Termination	51
	Section
    7.2	Effect
    of Termination	51
	 	 	 
	Article
    8 DEFINITIONS AND INTERPRETATION	52
	 	 	 
	Section
    8.1	Definitions	52
	Section
    8.2	Interpretation	65

 

    	ii

     

    

 

	Article
    9 MISCELLANEOUS	65
	 	 	 
	Section
    9.1	Non-Survival	65
	Section
    9.2	Indemnity
    by Seller	65
	Section
    9.3	Indemnity
    by Buyer	66
	Section
    9.4	Limitations
    on Indemnification	66
	Section
    9.5	Other
    Provisions	66
	Section
    9.6	[Reserved]	67
	Section
    9.7	Characterization
    of Indemnification Payments	67
	Section
    9.8	Third
    Party Beneficiaries	67
	Section
    9.9	Exclusive
    Remedy	67
	 	 	 
	Article
    10 MISCELLANEOUS	68
	 	 	 
	Section
    10.1	Independent
    Investigation by the Buyer	68
	Section
    10.2	Exhibits
    and Schedules	68
	Section
    10.3	Notices	69
	Section
    10.4	Governing
    Law	69
	Section
    10.5	Submission
    to Jurisdiction	70
	Section
    10.6	Waiver
    of Jury Trial	70
	Section
    10.7	Entire
    Agreement	70
	Section
    10.8	Amendment
    and Modification	70
	Section
    10.9	Waiver	71
	Section
    10.10	Binding
    Effect; Benefits	71
	Section
    10.11	Severability	71
	Section
    10.12	Assignability	71
	Section
    10.13	Counterparts	71
	Section
    10.14	Remedies	72
	Section
    10.15	Non-Recourse	72
	Section
    10.16	Waiver
    of Conflicts	72
	 	 	 
	EXHIBIT
    A	Example
    Net Working Capital Statement	 

 

    	iii

     

    

 

EQUITY
PURCHASE AGREEMENT

 

This
EQUITY PURCHASE AGREEMENT (together with the Schedules and Exhibits as defined herein and attached hereto, herein referred to as this
“Agreement”) is entered into as of May 18, 2021, by and between Guardion Health Sciences, Inc.,
a Delaware corporation (the “Buyer”), Adare Pharmaceuticals, Inc. a Nevada corporation (the “Seller”),
and Activ Nutritional, LLC, a Delaware limited liability company (the “Company”). Capitalized terms used in this Agreement
are defined or otherwise referenced in Section 8.1. The Buyer and the Seller are referred to herein collectively as the “Parties”
and individually as a “Party.”

 

BACKGROUND

 

A. The
Seller directly owns all of the issued and outstanding equity securities (the “Interests”) of the Company.

 

B. The
Seller wishes to sell to the Buyer, and the Buyer wishes to purchase from the Seller, all of the Interests, subject to the terms and
conditions of this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in reliance upon the representations and warranties made herein and in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

 

Article
1

PURCHASE AND SALE OF INTERESTS

 

Section
1.1 Purchase and Sale of Interests. At the Closing,
and subject to the terms and conditions set forth herein, the Seller will sell, assign, transfer and deliver to the Buyer, free and clear
of all Encumbrances other than restrictions imposed by applicable federal or state securities laws, and the Buyer will purchase and acquire
from the Seller, all of the Seller’s right, title and interest in and to the Interests for the consideration specified in Section
1.2(a).

 

Section
1.2 Purchase Price and Payment for the Interests.

 

(a) Purchase
Price. The aggregate consideration for the Interests will be an amount equal to (i) Twenty-Six Million Dollars ($26,000,000) (the
“Base Purchase Price”) (A)(x) plus the amount, if any, by which the Net Working Capital as of immediately prior
to the Closing (the “Closing Net Working Capital”) exceeds the Target Working Capital (“Closing Net Working
Capital Surplus”) or (y) less the amount, if any, by which the Closing Net Working Capital is less than the Target Working
Capital (“Closing Net Working Capital Deficiency”), as applicable, (B) plus the amount of the Cash and Cash
Equivalents, (C) less the amount of Closing Date Funded Indebtedness, and (D) less the amount of Unpaid Transaction Expenses
(such amount determined in accordance with clauses (A) through (D), the “Purchase Price”).

 

    	 

     

    

 

(b) Estimated
Closing Consideration Schedule. At least five (5) Business Days prior to the Closing, the Seller shall prepare and deliver to the
Buyer an estimated balance sheet of the Company (the “Estimated Closing Balance Sheet”) as of 11:59 p.m. New York
City time on the Closing Date (the “Effective Time”), together with a statement (the “Estimated Closing Consideration
Schedule”) setting forth its good faith estimate, including reasonable details and reasonable supporting documentation, of
the following: (i) the amount of Closing Net Working Capital (the “Estimated Closing Net Working Capital”); (ii) the
amount of Closing Date Funded Indebtedness (such estimated amount, the “Estimated Funded Indebtedness Amount”); (iii)
the amount of Unpaid Transaction Expenses (including a list of each Person entitled to or has invoiced any Unpaid Transaction Expenses)
(such estimated amount, the “Estimated Unpaid Transaction Expenses”); (iv) the aggregate amount of Closing Cash and
Cash Equivalents, and (v) the Purchase Price calculated based thereon (such estimated amount, the “Estimated Purchase Price”).
The Estimated Closing Balance Sheet and the Estimated Closing Consideration Schedule (including each element thereof) will be prepared
in accordance with the Accounting Principles (and, in the case of the Estimated Closing Net Working Capital, consistent with the Example
Net Working Capital Statement). If Buyer objects to the Estimated Closing Balance Sheet or any amounts or calculations set forth on the
Estimated Closing Consideration Schedule (which objection must be delivered to Seller no later than two (2) Business Days following the
delivery by Seller to Buyer of the Estimated Closing Balance Sheet and the Estimated Closing Consideration Schedule), Buyer and Seller
shall cooperate in good faith to resolve such objection before the Closing. If such objection is not resolved within two (2) Business
Days following receipt of the objection by the Seller, then Seller shall consider such objection in good faith. For the avoidance of
doubt, (A) nothing in this Section 1.2(b) shall impose an obligation on Seller to incorporate Buyer’s objection into the
Estimated Closing Balance Sheet or the Estimated Closing Consideration Schedule, and (B) an objection of Buyer and the resulting resolution
process described in this Section 1.2(b) shall not, in and of itself, delay Closing. After delivery of the Estimated Closing Balance
Sheet and the Estimated Closing Consideration Schedule, Buyer and its Representatives shall have reasonable access to Seller’s
and the Company’s relevant Representatives, and the records and materials used by Seller in the preparation of the Estimated Closing
Balance Sheet and the Estimated Closing Consideration Schedule for purposes of verifying the information set forth therein. For the avoidance
of doubt, Buyer’s objection to the Estimated Closing Balance Sheet and/or the Estimated Closing Consideration Schedule (or the
lack thereof), and any resolution thereof, shall not prejudice or otherwise affect Buyer’s rights with respect to the preparation
of the Proposed Closing Balance Sheet and the Proposed Closing Date Calculations, and/or any dispute resolution with respect thereto.

 

(c) Payment
of the Estimated Purchase Price.

 

(i) At
the Closing, the Buyer shall deliver, or cause to be delivered, by wire transfer of immediately available funds:

 

(A) to
each applicable recipient, the amount of the Estimated Unpaid Transaction Expenses payable to such recipient, as set forth in the applicable
Transaction Invoice, in accordance with the wire instructions set forth in the applicable Transaction Invoice;

 

    	 	2	 

     

    

 

(B) to
the Escrow Agent, the Escrow Amount, for deposit into an escrow account (the “Escrow Account”), which will be established
pursuant to an escrow agreement in form and substance reasonably satisfactory to Buyer and Seller (the “Escrow Agreement”);
and

 

(C) to
the Seller, cash in an aggregate amount equal to the Estimated Purchase Price, less the amounts set forth in Section 1.2(c)(i)(A)
and Section 1.2(c)(i)(B)), to a bank account designated prior to the Closing Date by the Seller by written notice to the Buyer.

 

(d) Determination
of Final Purchase Price.

 

(i) As
soon as practicable, but no later than ninety (90) days after the Closing Date, the Buyer shall prepare and deliver to Seller a balance
sheet of the Company (the “Proposed Closing Balance Sheet”) as of the Effective Time, together with a statement (the
“Proposed Closing Date Calculations”) setting forth its good faith estimate, including reasonable details and reasonable
supporting documentation, of the following: (i) the Closing Net Working Capital; (ii) the amount of Closing Date Cash and Cash Equivalents,
(iii) the amount of Closing Date Funded Indebtedness; (iv) the amount of Unpaid Transaction Expenses; and (v) the Purchase Price. The
Proposed Closing Balance Sheet and the Proposed Closing Date Calculations (including each element thereof) will be prepared in accordance
with the Accounting Principles (and, in the case of the Closing Net Working Capital, consistent with the Example Net Working Capital
Statement).

 

(ii) If
the Seller does not give written notice of any dispute (a “Purchase Price Dispute Notice”) to the Buyer within forty-five
(45) days of receiving the Proposed Closing Date Calculations, the Proposed Closing Balance Sheet and the Proposed Closing Date Calculations
will be deemed to set forth the final amounts of Closing Net Working Capital, Closing Date Funded Indebtedness, Unpaid Transaction Expenses,
and Purchase Price, in each case, for purposes of determining the Actual Adjustment. Prior to the end of such forty-five (45) day period,
the Seller may accept the Proposed Closing Balance Sheet and the Proposed Closing Date Calculations by delivering written notice to that
effect to the Buyer, in which case the Purchase Price will be finally determined (as set forth in the Proposed Closing Date Calculations)
when such notice is given. If the Seller delivers a Purchase Price Dispute Notice to the Buyer within such forty-five (45) day period,
the Buyer and the Seller shall use good faith, commercially reasonable efforts to resolve the dispute during the thirty (30) day period
commencing on the date the Buyer receives the Purchase Price Dispute Notice from the Seller. The Parties acknowledge and agree that the
Federal Rules of Evidence Rule 408, and any applicable analogous state law, will apply to the Buyer and the Seller during such thirty
(30) day period of negotiations and any subsequent dispute arising therefrom. If the Seller and the Buyer do not agree upon a final resolution
with respect to any disputed items within such thirty (30) day period, then the remaining items in dispute will be submitted promptly
to the Independent Accountant. Any item not specifically submitted to the Independent Accountant for evaluation will be deemed final
and binding on the Buyer and the Seller (as set forth in the Proposed Closing Date Calculations, the Purchase Price Dispute Notice, or
otherwise, in each case, as resolved in writing by the Buyer and the Seller). The Independent Accountant shall be requested to render
a determination of each disputed item within forty-five (45) days after referral of the matter to such Independent Accountant, which
determination must be in writing and must set forth, in reasonable detail, the basis therefor and must be based solely on (i) the definitions
and other applicable provisions of this Agreement, (ii) a single presentation (which presentations will be limited to the remaining items
in dispute set forth in the Proposed Closing Date Calculations and Purchase Price Dispute Notice) submitted by each of the Buyer and
the Seller to the Independent Accountant within fifteen (15) days after the engagement thereof (which the Independent Accountant shall
forward to the Buyer or the Seller, as applicable) and (iii) one written response by the Buyer and the Seller submitted to the Independent
Accountant within five (5) Business Days after receipt of each such presentation (which the Independent Accountant shall forward to the
Buyer or the Seller, as applicable), and not on independent review, which such determination will be conclusive and binding on each party
to this Agreement absent Fraud or manifest error. The terms of appointment and engagement of the Independent Accountant shall be as reasonably
agreed upon between the Seller and the Buyer, and any associated engagement fees will be initially borne fifty percent (50%) by the Seller
and fifty percent (50%) by the Buyer; however, such fees will ultimately be borne by the Buyer and the Seller in the same proportion
as the aggregate amount of the disputed items that is unsuccessfully disputed by such party (as determined by the Independent Accountant)
bears to the total amount of the disputed items submitted to the Independent Accountant. Except as provided in the preceding sentence,
all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Independent Accountant
will be borne by the Party incurring such cost and expense. The Independent Accountant shall resolve each disputed item by choosing a
value not in excess of, nor less than, the greatest or lowest value, respectively, set forth in the presentations (and, if applicable,
the responses) delivered to the Independent Accountant pursuant to this Section 1.2(d)(ii). The Proposed Closing Date Calculations
will be deemed revised as appropriate to reflect the resolution of any objections thereto pursuant to this Section 1.2(d)(ii)
and, as so revised, such Proposed Closing Date Calculations will be deemed to set forth the final amounts of Closing Net Working Capital,
Closing Date Funded Indebtedness, Unpaid Transaction Expenses, and Purchase Price, in each case, for all purposes hereunder (including
the determination of the Actual Adjustment).

 

    	 	3	 

     

    

 

(iii) Following
the Closing and until the final resolution of the Proposed Closing Date Calculations and the calculation of the Purchase Price pursuant
to this Section 1.2(d), the Buyer shall, and shall cause the Company to, provide the Seller and its accountants and other Representatives
of the Seller, at reasonable times and upon reasonable advance notice, access to such financial records of the Company and personnel
of Buyer and the Company, in each case, as is reasonably required by Seller for the sole purpose of reviewing and resolving any objection
with respect to the Proposed Closing Date Calculations.

 

(iv) The
Parties agree that the procedures set forth in this Section 1.2(d) for resolving disputes with respect to the Proposed Closing
Date Calculations constitute the sole and exclusive method for resolving any such disputes; provided, however, nothing
contained in this Agreement will be deemed to prohibit the Buyer or the Seller from instituting litigation to enforce any final determination
of the Purchase Price by the Independent Accountant pursuant to Section 1.2(d)(ii) in any court or other tribunal of competent
jurisdiction in accordance with Section 10.5; provided, further, that nothing herein shall be deemed to limit the
rights of Buyer Indemnified Parties pursuant to Article 9. The substance of the Independent Accountant’s determination will
not be subject to review or appeal, absent a showing of Fraud or manifest error. It is the intent of the Parties to have any final determination
of the Purchase Price by the Independent Accountant proceed in an expeditious manner. Any deadline or time period contained in Section
1.2(d)(ii) may be extended or modified by the written agreement of the Buyer and the Seller and the Parties agree that the failure
of the Independent Accountant to strictly conform to any deadline or time period contained herein will not be a basis for seeking to
overturn any determination rendered by the Independent Accountant which otherwise conforms to the terms of this Section 1.2(d).

 

    	 	4	 

     

    

 

(e) Adjustment
to Estimated Purchase Price.

 

(i) If
the Actual Adjustment is a positive amount, the Buyer shall pay to the Seller an amount equal to such positive amount, if any, by wire
transfer or delivery of immediately available funds, within two (2) Business Days after the date on which the Purchase Price is finally
determined pursuant to Section 1.2(d).

 

(ii) If
the Actual Adjustment is a negative amount, (A) the Buyer and the Seller shall deliver, within two (2) Business Days after the date on
which the Purchase Price is finally determined pursuant to Section 1.2(d), a joint written instruction to the Escrow Agent instructing
the Escrow Agent to distribute to the Buyer from the Escrow Account, an amount in cash by wire transfer of immediately available funds
equal to the absolute value of the Actual Adjustment, up to the Escrow Amount, and (B) to the extent the absolute value of the Actual
Adjustment exceeds the amount in the Escrow Account, then the Seller shall pay to the Buyer an amount equal to such excess by wire transfer
or delivery of immediately available funds, within two (2) Business Days after the date on which the Purchase Price is finally determined
pursuant to Section 1.2(d).

 

Section
1.3 Adjustment for Tax Purposes. Any payments
made pursuant to Section 1.2(e) will be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless
otherwise required by Law.

 

Article
2

CLOSING; DELIVERABLES

 

Section
2.1 Closing. The consummation of the transactions
contemplated by this Agreement (the “Closing”) will take place on the date that is three (3) Business Days following
the satisfaction or written waiver of each condition set forth in Article 6, except for any conditions that, by their nature,
cannot be satisfied prior to the Closing, or such other date as may be mutually agreed by the Parties (such date, in any case, the “Closing
Date”), and may, upon mutual agreement of the Parties, take place by conference call and via exchange of electronic copies.
To the extent permitted by Law and GAAP, for tax and accounting purposes, the Parties will treat the Closing as being effective as of
the Effective Time.

 

    	 	5	 

     

    

 

Section
2.2 Closing Deliverables.

 

(a) At
or prior to the Closing, the Seller shall deliver or cause to be delivered to the Buyer:

 

(i) an
assignment of the Interests to the Buyer in form and substance satisfactory to the Buyer, duly executed by the Seller;

 

(ii) a
certificate, dated as of the Closing Date, duly executed by the secretary or another duly appointed officer of Seller, (A) attaching
copies of (1) the Governing Documents of the Seller (which must, in the case of the certificate of incorporation of the Seller, be certified
by the applicable Governmental Entity as of a date not more than thirty (30) days prior to the Closing Date) and (2) all resolutions
adopted by the board of directors of the Seller authorizing the execution and delivery of this Agreement and the other Transaction Documents
to which the Seller is a party, and the consummation of the transactions contemplated hereby and thereby and (B) certifying the names
and signatures of the officers of Seller authorized to sign this Agreement and the other documents to be delivered by Seller hereunder;

 

(iii) a
certificate, dated as of the Closing Date, duly executed by the secretary or another duly appointed officer of the Company, (A) attaching
copies of (1) the Governing Documents of the Company (which must, in the case of the certificate of formation of the Company, be certified
by the applicable Governmental Entity as of a date not more than thirty (30) days prior to the Closing Date) and (2) all resolutions
adopted by the sole member of the Company authorizing the execution and delivery of this Agreement and the other Transaction Documents
to which the Company is a party, and the consummation of the transactions contemplated hereby and thereby and (B) certifying the names
and signatures of the officers of the Company authorized to sign this Agreement and the other documents to be delivered by the Company
hereunder;

 

(iv) a
written certificate, dated as of the Closing Date, duly executed by an executive officer of Seller, as to the satisfaction of the closing
conditions set forth in Section 6.2(a), Section 6.2(b) and Section 6.2(c).

 

(v) a
certificate of good standing of the Company from the State of Delaware, dated not earlier than fifteen (15) days prior to the Closing
Date;

 

(vi) a
non-foreign affidavit dated as of the Closing Date from the Seller, in form and substance required under the Treasury Regulations issued
pursuant to Code Section 1445 stating that the Seller is not a “foreign person” for purposes of Code Section 1445;

 

(vii) duly
executed resignation letters of each officer, manager, and, if applicable, director, of the Company, effective at or prior to the Closing;

 

(viii) the
Escrow Agreement, duly executed by the Seller;

 

(ix) the
Transition Services Agreement, duly executed by the Seller; and

 

    	 	6	 

     

    

 

(x) a
final invoice from each creditor of Transaction Expenses set forth on the Estimated Closing Consideration Schedule, if any, issued not
earlier than two (2) Business Days prior to the Closing Date, which sets forth (A) the amounts required to pay in full all Unpaid Transaction
Expenses owed to such creditor on the Closing Date, and (B) the wire transfer instructions for the payment of such Unpaid Transaction
Expenses to such creditor (collectively, the “Transaction Invoices”); and

 

(xi) such
other instruments and documents, in form and substance reasonably acceptable to the Buyer, as may be reasonably necessary to effect the
Closing.

 

(b) At
the Closing, the Buyer will deliver to the Seller:

 

(i) the
Estimated Purchase Price in accordance with Section 1.2(b);

 

(ii) a
certificate, dated as of the Closing Date, duly executed by the secretary or another duly appointed officer of the Buyer, (A) attaching
copies of resolutions adopted by the board of directors of the Buyer authorizing the execution and delivery of this Agreement and the
other Transaction Documents to which the Buyer is a party, and the consummation of the transactions contemplated hereby and thereby and
(B) certifying the names and signatures of the officers of the Buyer authorized to sign this Agreement and the other documents to be
delivered by the Buyer hereunder;

 

(iii) a
written certificate, dated as of the Closing Date, duly executed by an executive officer of the Buyer, as to the satisfaction of the
closing conditions set forth in Section 6.3(a) and Section 6.3(b);

 

(iv) a
certificate of good standing of the Buyer from the appropriate Governmental Entity in its jurisdiction of its organization, dated not
earlier than fifteen (15) days prior to the Closing Date;

 

(v) the
Escrow Agreement, duly executed by the Buyer;

 

(vi) the
Transition Services Agreement, duly executed by the Buyer; and

 

(vii) such
other instruments and documents, in form and substance reasonably acceptable to the Seller, as may be reasonably necessary to effect
the Closing.

 

Section
2.3 Tax Withholding. The Buyer will be entitled
to deduct and withhold from any payment to be made under this Agreement all Taxes that the Buyer is required to deduct and withhold with
respect to such payment under any provision of applicable Tax Law. Taxes withheld pursuant to this Section 2.3 by the Buyer will
be treated for all purposes of this Agreement as having been paid to the Seller, so long as such amounts are timely remitted to the applicable
Governmental Entity pursuant to applicable Tax Law. In the event that the Buyer determines that withholding from the payments made under
this Agreement is required under applicable Tax Law, the Buyer will use commercially reasonable efforts to notify the Seller, in writing,
at least three (3) Business Days prior to the Closing Date or prior to any subsequent date on which the applicable payment is to be made,
which notice shall include the basis for the proposed deduction or withholding, to provide the Seller with the reasonable opportunity
to provide any form or documentation or take such other steps in order to avoid such withholding to the extent allowed under applicable
Tax Law, provided that such notification shall not apply with respect to withholding on any compensatory payments hereunder or resulting
from a failure to deliver a non-foreign affidavit in accordance with Section 2.2(a)(vi) hereof.

 

    	 	7	 

     

    

 

Article
3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

Except
as set forth in the Schedules, the Seller hereby represents and warrants to the Buyer as follows.

 

Section
3.1 Organization and Qualification. 

 

(a) The
Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.
The Company is qualified to do business and is in good standing as a foreign entity in each jurisdiction where the ownership or operation
of its properties or conduct of its business requires such qualification, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not reasonably be expected to have a Material Adverse Effect. The Company has all requisite
power and authority to own (or, as applicable, lease) and operate its properties and assets and to carry on its business as it is currently
conducted, except where the failure to have such power or authority would not have a Material Adverse Effect.

 

(b) Seller
is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Seller is qualified to
do business and is in good standing as a foreign entity in each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except in such jurisdictions where the failure to be so duly qualified or licensed and in
good standing would not reasonably be expected to have a material adverse effect on the ability of the Seller to consummate the transactions
contemplated by this Agreement in accordance with the terms hereof.

 

(c) Seller
has provided to Buyer copies of the Governing Documents of the Company.

 

Section
3.2 Authority; Due Execution. The Seller
and the Company have all requisite power and authority to enter into this Agreement and each of the Transaction Documents to which each
is or will be a party, to carry out their respective obligations hereunder and thereunder, and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Seller and the Company of this Agreement and the Transaction Documents to which each
is or will be a party, the performance by Seller and Company of their obligations hereunder and thereunder, and the consummation by Seller
and Company of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part
of Seller and Company. This Agreement has been duly executed and delivered by Seller and Company, and (assuming due authorization, execution
and delivery by Buyer) this Agreement constitutes (and, when executed and delivered by Seller and Company, each of the Transaction Documents
to which they are or will be a party will constitute) a legal, valid and binding obligation of Seller and Company, enforceable against
Seller and Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).

 

    	 	8	 

     

    

 

Section
3.3 No Subsidiaries; Joint Ventures. The
Company does not have any Subsidiaries or any voting, economic or other ownership interest in any other Person. The Company is not a
participant in any joint venture, partnership, or similar arrangement. There are no contractual obligations of the Company to provide
funds to, or make any investment in (whether in the form of a loan, capital contribution or otherwise), any other Person. 

 

Section
3.4 Title to Interests; Capitalization.

 

(a) The
Seller is the record and beneficial owner of, and has good and valid title to, the Interests, free and clear of all Encumbrances other
than Permitted Encumbrances and restrictions imposed by applicable federal or state securities laws, and, at the Closing, Seller will
deliver to Buyer good and valid title to the Interests, free and clear of all Encumbrances other than restrictions imposed by applicable
federal or state securities laws. The Interests owned by the Seller represent one hundred percent (100%) of the issued and outstanding
equity interests in the Company.

 

(b) All
of the Interests are validly issued in compliance with applicable Laws, and are (i) duly authorized, are validly issued, fully paid and
non-assessable, and (ii) not subject to any preemptive rights created by statute, the Governing Documents of the Company or any agreement
to which the Company is a party.

 

(c) There
are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of
any character relating to the equity interests of the Company or obligating Seller or the Company to issue or sell any equity interest
or any other interest in, the Company, except for this Agreement. The Company has no outstanding or authorized any stock appreciation,
phantom stock, profit sharing or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings
in effect with respect to the voting or transfer of any of the Interests. There are no restrictions on the ability of the Company to
make distributions or pay dividends, of cash or otherwise, to its equity holders and the Company has no obligations to make distributions
or pay dividends.

 

(d) There
is no agreement, written or oral, relating to the sale or transfer (including agreements relating to rights of first refusal, co-sale
rights or “drag-along” rights), registration under the Securities Act, or voting, of the Interests or other equity interests
of the Company.

 

    	 	9	 

     

    

 

Section
3.5 Noncontravention.

 

(a) No
Conflicts; Consents. Except as set forth on Schedule 3.5(a), the execution, delivery and performance by Seller and the Company
of this Agreement and the Transaction Documents to which each is or will be a party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not, directly or indirectly (with or without notice or lapse of time) (i) conflict with, violate,
result in a breach of any provision of the Governing Documents of Seller or the Company, or (ii) require notice, consent or approval
under, materially conflict with, materially violate, result in a materially breach of, result in the acceleration of any material obligation,
loss of a material benefit or material increase in Liabilities or fees under, create in any Person the right to terminate, cancel or
modify, or cause a default under or give rise to any rights or penalties against the Company under (A) any Law or Governmental Order
applicable to Seller or the Company or to which Seller or the Company or any of their respective properties are subject, or (B) any provision
of any Contract to which the Seller or the Company is a party or by which the Seller or the Company is bound.

 

(b) Governmental
Approvals. Except as set forth on Schedule 3.5(b), no Governmental Consent is required by or with respect to Seller or the
Company in connection with the execution and delivery by Seller and the Company of this Agreement and the Transaction Documents to which
each is or will be a party and the consummation by Seller and the Company of the transactions contemplated hereby and thereby.

 

Section
3.6 Financial Statements.

 

(a) Schedule
3.6(a) contains the following financial statements of the Company (the “Financial Statements”): (i) the unaudited
balance sheet of the Company as of December 31, 2020, and the related unaudited statement of income for the year then ended, and (ii)
the unaudited balance sheet of the Company as of March 31, 2021, and the related unaudited statement of income for the three (3) months
then ended (the balance sheet of the Company as of March 31, 2021, the “Reference Balance Sheet,” and the date of
such Reference Balance Sheet the “Reference Balance Sheet Date”). Except as may otherwise be set forth therein, and
subject in the case of unaudited Financial Statements, to the absence of certain footnotes not customarily included in the unaudited
quarterly financial statements and normal year-end adjustments, the Financial Statements (i) have been prepared in accordance with GAAP
applied on a consistent basis in all material respects throughout the periods covered thereby, except as may be indicated in the notes
thereto, and (ii) fairly present in all material respects the financial condition and results of operations of the Company as of the
respective dates thereof and for the periods referred to therein. There are no outstanding material liabilities or obligations (whether
accrued, absolute, contingent or otherwise and whether due or to become due) of the Company other than: (1) liabilities reserved against
or reflected in the Financial Statements or disclosed in the notes thereto; (2) liabilities not required under GAAP to be reserved against
or reflected in the Financial Statements; (3) liabilities disclosed in the Schedules; or (4) liabilities incurred in the Ordinary Course
of Business since the Reference Balance Sheet Date, which has not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

 

(b) The
books of account and financial records of the Company relating to or in respect of the Financial Statements are true and correct in all
material respects and have been prepared and are maintained in accordance with GAAP, applied on a consistent basis throughout the period
involved. Company maintains a standard system of accounting established and administered in accordance with GAAP.

 

    	 	10	 

     

    

 

(c) Company
maintains no “off balance sheet arrangement” within the meaning of Item 303 of Regulation S-K promulgated under the Securities
Act of 1933, as amended.

 

(d) Company
maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting and
record-keeping controls that provide reasonable assurance that (i) it maintains no off-the-book accounts and its assets and properties
are used only in accordance with management’s directives, (ii) transactions are executed in accordance with management’s
authorizations, (iii) transactions are recorded as necessary to permit preparation of financial statements and to maintain asset accountability,
(iv) access to assets is permitted only in accordance with management’s authorization, (v) the recorded accounting for assets is
compared with the existing assets at regular intervals and appropriate action is taken with respect to any differences, (vi) accounts,
notes and other receivables are recorded accurately and do not include any amounts for which there is no written contractual commitment
to pay, and proper and adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a current
and timely basis, and (vii) it maintains records in accordance with statutory records retention requirements.

 

(e) Company
is Solvent.

 

Section
3.7 Undisclosed Liabilities; Indebtedness.

 

(a) Except
as set forth in Schedule 3.7(a), the Company has no Liabilities except (a) those which are adequately reflected or reserved against
in the applicable Reference Balance Sheet, (b) those which have been incurred in the Ordinary
Course of Business since the date of the Reference Balance Sheet Date and which are not, individually or in the aggregate, material in
amount and which do not relate to or arise from any breach of contract or violation of applicable Law by the Company, and (c) Liabilities
that arise under this Agreement or the other Transaction Documents pursuant to their respective terms and conditions.

 

(b) Schedule
3.7(b) sets forth all of the Funded Indebtedness of the Company as of the date hereof.

 

Section
3.8 Absence of Certain Changes. Between the
Reference Balance Sheet Date and the date of this Agreement, (a) the business of the Company has been conducted in the Ordinary Course
of Business; (b) no Material Adverse Effect has occurred and (c) except as set forth in Schedule 3.8, there has not been with
respect to the Company any:

 

(a) amendment
of its Governing Documents;

 

(b) split,
combination or reclassification of any equity interest in the Company;

 

    	 	11	 

     

    

 

(c) issuance,
sale or other disposition of any of its equity interests, or grant of any options, warrants or other rights to purchase or obtain (including
upon conversion, exchange or exercise) any of its equity interests;

 

(d) declaration
or payment of any non-cash dividends or non-cash distributions on or in respect of any of its equity interests or redemption, purchase
or acquisition of its equity interests;

 

(e) change
in any method of its accounting or accounting practice, except as required by GAAP;

 

(f) change
in its cash management practices and its policies, practices and procedures with respect to collection of Accounts Receivable, establishment
of reserves for uncollectible accounts, accrual of Accounts Receivable, inventory control, prepayment of expenses, payment of trade accounts
payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

 

(g) entry
into or modification or amendment of any Material Contract;

 

(h) termination
of a Contract that, if in existence on the date hereof, would have been a Material Contract;

 

(i) incurrence,
assumption or guarantee of any Funded Indebtedness;

 

(j) transfer,
assignment, sale or other disposition of any material assets or cancellation of any debts or entitlements, except for sale of Inventory
in the Ordinary Course of Business;

 

(k) transfer,
assignment or grant of any license or sublicense of any material rights under or with respect to any Intellectual Property;

 

(l) capital
investment in, or any loan to, any other Person;

 

(m) material
capital expenditures;

 

(n) imposition
of any Encumbrance (other than Permitted Encumbrance) upon any of its properties, equity interests or assets, tangible or intangible;

 

(o) (i)
grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits
in respect of its employees, officers, directors, independent contractors or consultants, other than as provided for in any written agreements
or required by applicable Law, (ii) change in the terms of employment for any employee of the Company or any termination of any employees
of the Company for which the aggregate costs and expenses exceed Fifty Thousand Dollars ($50,000), or (iii) action to accelerate the
vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant
of the Company;

 

    	 	12	 

     

    

 

(p) hiring
or promoting any individual;

 

(q) adoption,
modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer,
director, independent contractor or consultant, or (ii) collective bargaining or other agreement with a union, in each case whether written
or oral;

 

(r) entry
into the settlement or compromise of any Action or any default or consent to entry of any judgment or admission of any liability with
respect thereto;

 

(s) entry
into a new line of business or abandonment or discontinuance of existing material lines of business;

 

(t) adoption
of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions
of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

 

(u) purchase,
lease or other acquisition of the right to own, use or lease any property or assets for an amount in excess of Twenty-Five Thousand Dollars
($25,000), individually (in the case of a lease, per annum) or One Hundred Thousand Dollars ($100,000) in the aggregate (in the case
of a lease, for the entire term of the lease, not including any option term), except for purchases of supplies in the Ordinary Course
of Business;

 

(v) acquisition
by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business
or any Person or any division thereof;

 

(w) adoption
of, rescission or change in any Tax accounting method or Tax election, amendment of any Tax Return, settlement of any Tax claim or assessment,
surrender of any right to claim a refund of Taxes, or extension or waiver of the limitation period applicable to any Tax claim or assessment
or entering into of any voluntary disclosure or similar process or proceeding with respect to Taxes; or

 

(x) entry
into any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

 

Section
3.9 Litigation. 

 

(a) There
are no, and since December 6, 2016 (the “Lookback Date”) have not been, any Actions pending or, to Seller’s
Knowledge, threatened (a) against or by the Company affecting any of its business, properties or assets (or against or by Seller and
relating to the Company) or (b) against or by Seller or the Company that challenges or seeks to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement.

 

    	 	13	 

     

    

 

(b) There
are no, and since the Lookback Date there has not been any, outstanding Governmental Orders and no unsatisfied judgments, penalties or
awards against or affecting the Company or any of its properties or assets. To the Seller’s Knowledge, no event has occurred or
circumstances exist that may constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

 

Section
3.10 Compliance with Laws; Material Permits.

 

(a) The
Company is, and since the Lookback Date has been, in compliance in all material respects with all Laws applicable to it or its business,
properties or assets. Since the Lookback Date, Company has not received written (or, to Seller’s Knowledge, verbal) notice that
it has failed to comply in any material respect with any provision or requirement of any Law applicable to Company or its business, properties
or assets. Since the Lookback Date, the Company has not been charged in writing with, or, to Seller’s Knowledge, under investigation
with respect to, any violation of Law.

 

(b) The
Company holds all federal, state, local and foreign Permits that are required or necessary for the operation of its business as presently
conducted, or that are necessary for the lawful ownership of its properties and assets. Schedule 3.10(a) lists all current Permits
held by the Company. Each of the Permits is valid and in full force and effect, and no such Permit will be terminated or materially impaired
as a result of the transactions contemplated by the Transaction Documents. The Company is, and since the Lookback Date has been, in compliance
in all material respects with the Permits. No written (or to Seller’s Knowledge, verbal) notice of cancellation of, revocation
of, suspension of or default under any Permit has been received by the Company since the Lookback Date.

 

Section
3.11 Material Contracts.

 

(a) Except
as set forth in Schedule 3.11(a), the Company is not a party to or bound by any of the following Contracts:

 

(i) Contracts
with Material Customers and Material Suppliers;

 

(ii) IP
Contracts;

 

(iii) any
Contract (A) with respect to the employment of any managers, members, directors, officers, employees, or with regards to the provision
of services similar to those provided by an employee, independent contractors or consultants, (B) which would entitle any present or
former director, officer, employee, independent contractor, consultant or agent of the Company or Seller to indemnification from the
Company, (C) which provides for the payment by the Company of severance or other compensation upon a merger, consolidation, acquisition,
asset purchase, stock purchase or other business combination transaction involving the Company; and

 

(iv) Contracts
evidencing Funded Indebtedness owed by Company;

 

    	 	14	 

     

    

 

(v) Contracts
under which Company (A) leases any property or asset and (B) is required to make lease payments in excess of $25,000 per year;

 

(vi) Contracts
that relate to the acquisition or disposition of any business, a material amount of stock or assets of any other Person or any real property
(whether by merger, sale of stock, sale of assets or otherwise), in each case, outside the Ordinary Course of Business;

 

(vii) Contracts
for joint ventures, partnerships or sharing of profits;

 

(viii) Contracts
with Governmental Entities;

 

(ix) (A)
Contracts with distributors and sales representatives and (B) agency, sales promotion, market research, marketing consulting and advertising
Contracts;

 

(x) Contracts
that require Company to purchase its total requirements of any product or service from a third party;

 

(xi) Contracts
providing for Company to be the exclusive provider of any product or service to any Person, or that otherwise involve the granting by
any Person to Company or by Company to any Person of exclusive rights of any kind;

 

(xii) Contracts
that provide for the assumption of any environmental Liability of any Person;

 

(xiii) Contracts
that limit or purport to limit the ability of Company to compete in any line of business or with any Person or in any geographic area
or during any period of time, that restriction the ability of Company to do business with any Person or hire or solicit any Person, or
that restricts the right of Company to sell to or purchase from any Person, or that grants the other party or any third person “most
favored nation” status or any type of special discount rights;

 

(xiv) Contracts
providing for indemnification to or from any Person and that was not entered into the Ordinary Course of Business;

 

(xv) collective
bargaining agreements or Contracts with any union;

 

(xvi) settlement,
conciliation or similar Contracts pursuant to which Company is obligated to pay consideration in excess of $25,000 or pursuant to which
Company will have any obligations after the date of this Agreement;

 

(xvii) Company
Insurance Policies; and

 

(xviii) Contracts
or group of related Contracts that have future sums due to or from the Company, taken as a whole, in any consecutive twelve (12) month
period in excess of an aggregate amount of $50,000 and which is not terminable without penalty upon not more than sixty (60) days’
notice to the counterparty.

 

    	 	15	 

     

    

 

(b) Each
Material Contract is a valid and binding obligation of the Company and, to the Seller’s Knowledge, any other party to such Material
Contract, and is in full force and effect and enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing. Except as set forth in Schedule 3.11(b), (i) neither the Company nor, to the Seller’s Knowledge, any other party
to any Material Contract, is in breach of any material obligations under any Material Contract, (ii) no party to a Material Contract
has exercised any termination rights with respect thereto or has given written (or to Seller’s Knowledge, verbal) notice of any
significant dispute with respect thereto or that it intends to cancel, terminate (or reduce the level of services under) or not renew
such Material Contract, and (iii) no event or circumstance has occurred that, with notice or lapse of time or both, would constitute
an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other
changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including
all modifications, amendments and supplements thereto and waivers thereunder) have been provided to Buyer.

 

Section
3.12 Tax Matters.

 

(a) All
Tax Returns required to be filed by the Company have been duly and timely filed, and all such Tax Returns are true, correct and complete
in all material respects. All Taxes of the Company (whether or not shown as due on such Tax Returns) have been paid when due.

 

(b) The
Company has at all times since its formation been treated as a disregarded entity for federal and, where applicable state and local,
income Tax purposes and no election has ever been filed to treat the Company as an association taxable as a corporation for federal,
state or local income Tax purposes.

 

(c) The
Company has not received any written (or, to Seller’s Knowledge, verbal) notification of any Proceedings currently pending or being
conducted against the Company with respect Taxes.

 

(d) The
Company has not received from any Governmental Entity any written notice of proposed adjustment, deficiency or underpayment of material
Taxes, which have not since been paid, settled or withdrawn.

 

(e) There
are no pending or outstanding agreements or waivers with any Governmental Entity extending the statutory period of limitations applicable
to the assessment or collection of any Tax against the Company (other than automatic extensions arising from an extension of the due
date for filing a Tax Return obtained in the Ordinary Course of Business).

 

(f) The
Company has not received any written (or, to Seller’s Knowledge, verbal) notification from any Governmental Entity in a jurisdiction
in which the Company has not filed Tax Returns that the Company is required to file or may be subject to taxation in that jurisdiction.

 

    	 	16	 

     

    

 

(g) The Company has complied with all applicable Laws relating
to the withholding and collection of Taxes in connection with amounts paid or owing to any employee, independent contractor, creditor
or other third party and has complied with all Tax information reporting provisions of all applicable Laws.

 

(h) There
are no Encumbrances for Taxes on any assets of the Company, other than Permitted Encumbrances.

 

(i) The
Company (i) has never been a member of an affiliated group of corporations (as defined in Section 1504(a) of the Code) or included in
a combined, consolidated or unitary Tax Return other than a group of which the Seller was the parent of the group, and (ii) has no liability
for the Taxes of any other Person (including pursuant to Treasury Regulation Section 1.1502-6 or any similar provision of state, local,
or non-U.S. Law), as a transferee or successor, by Contract (other than a Contract entered into in the Ordinary Course of Business, the
primary purpose of which is not related to Taxes), or otherwise.

 

(j) The
Company is not a party to any agreement or arrangement that would result, separately or in the aggregate, in the payment by the Company
of any “excess parachute payments” within the meaning of Section 280G of the Code (without regard to Section 280G(b)(4) of
the Code).

 

(k) The
Company has not been at any time a member of any partnership or joint venture or the holder of a beneficial interest in any trust for
any period for which the statute of limitations for any Tax has not expired.

 

(l) The
Company has no indemnity or gross-up obligation on or after the Closing for any Taxes imposed under Section 4999 or Section 409A of the
Code (or any corresponding provisions of state, local or non-U.S. Tax Law).

 

(m) Within
the past two (2) years, the Company has not distributed stock of another Person, and has not had its stock distributed by another Person,
in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.

 

(n) The
Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income
for any taxable period (or portion thereof) beginning after the Closing Date as a result of any (A) change in method of accounting requested
or initiated on or prior to the Closing Date or the use of an improper method of accounting for a taxable period ending on or prior to
the Closing Date, (B) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or non-United States income Tax Law) executed on or prior to the Closing Date, (C) intercompany transaction occurring
or excess loss amount existing on or prior to the Closing Date, in each case, as described in Treasury Regulations under Section 1502
of the Code (or any corresponding or similar provision of state, local or non-United States Income Tax Law) or, (D) installment sale
or open transaction disposition made on or prior to the Closing Date, (E) prepaid amounts received or deferred revenues accrued on or
prior to the Closing Date, or (F) an election under Section 108(i) or Section 965 of the Code (or any similar provisions of Law).

 

    	 	17	 

     

    

 

(o) The
Company has complied with all applicable transfer pricing rules.

 

(p) The
Company uses the accrual method of accounting for U.S. federal income Tax purposes.

 

(q) The
Company has not deferred any payroll Taxes or availed itself of any of the Tax deferral, credits or benefits pursuant to CARES Act, the
Payroll Tax Executive Order, or any similar applicable federal, state or local Law, or otherwise taken advantage of any change in applicable
Law in connection with the COVID-19 Event that has the result of temporarily reducing (or temporarily delaying the due date of) otherwise
applicable Tax payment obligations of the Company to any Governmental Entity.

 

Section
3.13 Employees. The Company does not have
and has never had any employees or independent contractors.

 

Section
3.14 Employee Benefits. The Company does not sponsor,
maintain, contribute to, or have any Liability with respect to, and has never sponsored, maintained, contributed to, or had an Liability
with respect to, any “employee benefit plan” as such term is defined in Section 3(3) of the U.S. Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or any equity, compensation, change of control, deferred compensation arrangements,
bonus compensation plans or policies vacation, sick leave or other material fringe or material incentive benefits, plans or arrangements.
Neither Seller, nor any Person, trade or business, that is under common control or treated as a single employer with the Company for
purposes of Section 414 of the Code, maintains, sponsors, or contributes to any employee benefit plan that is subject to Title IV of
ERISA or Section 412 of the Code.

 

Section
3.15 Real and Personal Property.

 

(a) The
Company does not now own or lease, and has not at any time owned or leased, any real property.

 

(b) The
Company has good and marketable title to, or a valid leasehold interest in, or a valid license to use, all of the properties and assets
used by it or shown on the Reference Balance Sheet or acquired after the date thereof, in each case whether real, personal, tangible
or intangible, free and clear of all Encumbrances (other than properties and assets disposed of in the Ordinary Course of Business since
the Reference Balance Sheet Date and except for Permitted Encumbrances).

 

    	 	18	 

     

    

 

Section
3.16 Intellectual Property.

 

(a) Scheduled
Intellectual Property.

 

(i) Schedule
3.16(a)(i) identifies any and all Patents, filed Patent applications, registered trademarks and registered copyrights, applications
for trademark and copyright registrations, domain names, social media accounts and handles, registered design rights, and other forms
of registered Intellectual Property and filed applications therefor, owned by or exclusively licensed to the Company (collectively, the
“Company Registrations”).

 

(ii) Schedule
3.16(a)(ii) identifies each proprietary software program, each trade name, each unregistered trademark, service mark, service name,
trade dress, brand name, logo, symbol, slogan, tag line, and social media account name, and each unregistered copyright (including website
content, advertising content and promotional materials) owned or exclusively licensed to the Company that, in each case, is material
to the business of the Company as presently conducted.

 

(b) Ownership.
Except as disclosed on Schedule 3.16(b), (i) the Company owns all worldwide rights, titles, and interests in and to, or is the
exclusive licensee as described in Schedule 3.16(a)(i) of, each item of material Company Intellectual Property, free and clear
of any Encumbrance (other than Permitted Encumbrances, non-exclusive licenses granted to customers pursuant to the Company’s standard
customer agreement(s) in the Ordinary Course of Business, and licenses granted in the Outbound IP Contracts identified on Schedule
3.16(f)); and (ii) the Company is the owner of record or exclusive licensee of all Company Registrations.

 

(c) Sufficiency.
Except as disclosed on Schedule 3.16(c), the Company owns or has adequate rights to use all material Intellectual Property and
material items of Embodiments used in connection with the business of the Company as presently conducted. The Company will continue to
own or have valid rights or licenses immediately after the Closing as are sufficient to use all of the material Company Intellectual
Property and material items of Embodiments to the same extent as prior to the Closing Date.

 

(d) Infringement
of Third Party IP. Except as disclosed on Schedule 3.16(d), (i) to the Seller’s Knowledge, none of the sale, manufacture,
importation into the United States or use of any products or services of the Company interferes with, infringes upon, dilutes, misappropriates,
or in any way violates any Intellectual Property of any Person, and (ii) the Company has not received any written (or to Seller’s
Knowledge, verbal) charge, complaint, claim, demand or notice, alleging interference, infringement, dilution, misappropriation, false
advertising, or violation of the Intellectual Property of any Person (including any invitation to license or request or demand to refrain
from using or selling any product or service of the Company) that remains unresolved.

 

(e) Infringement
of Company IP. Except as set forth on Schedule 3.16(e), to the Seller’s Knowledge, no Person is interfering with, infringing
upon, diluting, misappropriating, or violating any Company Intellectual Property, and the Company has not made any written (or, to Seller’s
Knowledge, verbal) charge, complaint, claim, demand or given notice to any Person alleging interference, infringement, dilution, misappropriation,
false advertising or violation of Company Intellectual Property (including sending any Person invitations to license or requests or demands
to refrain from using or selling any product or service) that remains unresolved.

 

    	 	19	 

     

    

 

(f) IP
Contracts. Schedule 3.16(f) identifies under separate headings each Contract (i) under which the Company (A) uses or licenses
a material item of Embodiments or any material Intellectual Property that any Person besides the Company owns, or (B) owes any royalties
or other payments to any Person for the use of any Intellectual Property or Embodiments, other than Contracts related to off-the-shelf
Software (the “Inbound IP Contracts”), (ii) under which the Company has granted any Person any right or interest in
any material Company Intellectual Property including any right to use any material item of Embodiments, other than non-exclusive licenses
granted to customers pursuant to the Company’s standard customer agreement(s) in the Ordinary Course of Business (the “Outbound
IP Contracts”), (iii) that otherwise affects the Company’s use of or rights in the material items or Embodiments used
by the business of the Company or any material Company Intellectual Property (including co-existence agreements, covenants not to sue,
and Software escrow and release agreements), and (iv) under which the Company has agreed to or has an obligation to indemnify any Person
for or against any interference, infringement, dilution, misappropriation or violation with respect to any Intellectual Property (other
the Company’s standard customer and supplier agreement(s) entered into in the Ordinary Course of Business) (collectively, (i) through
(iv), the “IP Contracts”). To the Seller’s Knowledge, the IP Contracts are valid, binding and enforceable between
the Company and the other parties thereto and are in full force and effect. Neither the Company, nor, to the Seller’s Knowledge,
the other party thereto has materially breached any of the IP Contracts.

 

(g) Compliance.
Company is complying in all material respects with all applicable Laws, contracts, and its own rules, policies and procedures, relating
to privacy, data protection, and the collection and use of personal information. Company has provided adequate notice, obtained any necessary
consents required for, and complied with any and all obligations regarding the collection and use of personal information. Company has
abided by any applicable opt-outs related to personal information. Company has not received written or electronic notice of any claims
asserted against Company or threatened against Company alleging a violation of any Person’s privacy, personal information or data
rights. Except as set forth in Schedule 3.16(g), since the Lookback Date, the Company has not experienced any actual or reasonably
suspected breach of security with respect to, or any unauthorized use, disclosure, acquisition of; loss of; or other unauthorized access
to, its information technology systems or any personal information in Company’s possession, custody or control (any such breach,
a “Security Incident”). No actual or reasonably suspected security vulnerabilities exist in Company products, services,
or Software owned by, used in or necessary for the conduct of the business of Company which present a material risk of a Security Incident.
Company has contractually obligated third parties that service, host, manage, access, or otherwise process personal information to comply
with such applicable Laws, rules, policies, and procedures relating to privacy, data protection, and the collection and use of personal
information. To Seller’s knowledge, no third party has breached such contractual obligations in its provision of services to Company,
nor does Company have any knowledge or reason to know that any such third party has failed to comply with such contractual obligations.
Company has not received any written notice from any vendor or other third-party company that Company uses to process personal information
or who otherwise provides services on Company’s behalf, including ecommerce and payment processing services, that such vendor or
other third-party company suffered an actual or suspected breach of security with respect to, or any unauthorized use, disclosure, acquisition
of, loss of or other unauthorized access to, its information technology systems or any personal information collected or processed in
connection with the provision of those services.

 

    	 	20	 

     

    

 

(h) Information
Technology Systems. To Seller’s Knowledge, Company’s information technology systems do not contain any device or feature
designed to disrupt, disable or otherwise impair the functioning of Company’s information technology systems. In the three (3)
years preceding the date hereof, there have been no disruptions in the Company’s information technology systems that materially
adversely affected Company’s business or operations. Company has implemented, and Company maintains, industry standard measures
designed to prevent the introduction of malicious code into Company’s information technology systems. Company has implemented a
reasonable vulnerability management program to detect, manage, mitigate and patch bugs, vulnerabilities, defects, and errors in Company’s
information technology systems.

 

(i) Effect
of the Agreement. Neither the execution, delivery, or performance of this Agreement nor the consummation of any of the transactions
contemplated by this Agreement will, with or without notice or lapse of time, give any other Person a contractual right or option to
cause or declare, (i) a loss of, or encumbrance on, Company Intellectual Property; (ii) a breach of or default under any contract involving
any Company Intellectual Property; (iii) the release, disclosure, or delivery of any Company Intellectual Property, including any source
code, by or to any escrow agent or other Person; or (iv) the grant, assignment, or transfer to any other Person of any license or other
right or interest under, to, or in any Company Intellectual Property.

 

(j) Confidentiality
Practices. The Company has maintained commercially reasonable practices to maintain the confidentiality of and otherwise protect
and enforce the Company’s rights in its proprietary information, confidential information, trade secrets, and any confidential
information provided by any other Person to the Company. Without limiting the foregoing, except as described in Schedule 3.16(j),
all current and former employees and consultants of Company and other Persons involved in the development of Company Intellectual Property
have entered into an agreement regarding confidentiality and assignment of Intellectual Property sufficient to transfer to Company ownership
of all right, title and interest in Company Intellectual Property. In each case in which Company has acquired any Intellectual Property
from any Person, Company has obtained a valid and enforceable assignment sufficient to irrevocably transfer all rights in such Intellectual
Property to Company.

 

    	 	21	 

     

    

 

Section
3.17 Insurance. Schedule 3.17 sets
forth a true and complete list of each current insurance policy (the “Company Insurance Policies”) that covers the
Company or its business, properties, assets or employees, together with the name of the insurer, coverage amount and renewal and expiration
dates. Each of the Company Insurance Policies is in full force and effect, and all premiums due thereunder have been paid, and will be
in full force and effect until Closing. The Company has not received any written (or to Seller’s Knowledge, verbal) notice of cancellation
of, any of the Company Insurance Policies. None of the Company Insurance Policies have been subject to any lapse in coverage. There are
no claims related to the Company pending under any of the Company Insurance Policies as to which coverage has been questioned, denied
or disputed or in respect of which there is an outstanding reservation of rights. The Company Insurance Policies are of the type and
in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all
applicable Laws and Contracts to which the Company is a party or by which it is bound.

 

Section
3.18 Customers, Suppliers and Distributors. 

 

(a) Schedule
3.18(a) sets forth a list of the ten (10) largest customers of the Company, including, for the avoidance of doubt, customers who
purchase the Company’s products through the Company’s third party distributors and sales agents (collectively, “Material
Customers”), as measured by the dollar amount of revenues recognized by the Company during the three (3)-month period ended
March 31, 2021, and the twelve (12)-month period ended December 31, 2020, showing the amount of revenues recognized by the Company from
such customer during such period. To the Seller’s Knowledge, there are no bankruptcies filed by, on behalf of, or against any Material
Customer. Neither the Company nor any third party distributor or sales agents of the Company (whether on behalf of the Company or otherwise)
is engaged in any material dispute with any Material Customer, and no such Material Customer has (i) terminated, suspended or materially
reduced its business relations with the Company or the Company’s third party distributor or sales agent, or (ii) notified or indicated,
in each case in writing or, to the Seller’s Knowledge, otherwise, to the Company or the Company’s third party distributor
or sales agent that it intends to terminate, suspend or materially reduce its business relations with the Company or the Company’s
third party distributor or sales agent, or renegotiate the terms of its Contracts with the Company or the Company’s third party
distributor or sales agent in any material respect.

 

(b) Schedule
3.18(b) sets forth a list of five (5) largest vendors and suppliers of the Company (“Material Vendors”), as measured
by the dollar volume of purchases from such suppliers by the Company during the three (3)-month period ended March 31, 2021, and for
the twelve (12)-month period ended December 31, 2020, showing the amount of payments made by the Company to each such supplier during
such period. To the Seller’s Knowledge, there are no bankruptcies filed by, on behalf of, or against any Material Vendor. The Company
is not engaged in any material dispute with any Material Vendor, and no such Material Vendor has (i) terminated, suspended or materially
reduced its business relations with the Company, or (ii) notified or indicated, in each case in writing or, to the Seller’s Knowledge,
otherwise, to the Company that it intends to terminate, suspend or materially reduce its business relations with the Company or renegotiate
the terms of its agreements with the Company in any material respect.

 

    	 	22	 

     

    

 

(c) Schedule
3.18(c) sets forth the name of the Company’s sole distributor (the “Material Distributor”). To the Seller’s
Knowledge, there are no bankruptcies filed by, on behalf of, or against the Material Distributor. The Company is not engaged in any material
dispute with the Material Distributor, and the Material Distributor has not (i) terminated, suspended or materially reduced its business
relations with the Company, or (ii) notified or indicated, in each case in writing or, to the Seller’s Knowledge, otherwise, to
the Company that it intends to terminate, suspend or materially reduce its business relations with the Company or renegotiate the terms
of its agreements with the Company in any material respect.

 

Section
3.19 Affiliate Arrangements. Except as set forth
on Schedule 3.19, neither Seller nor any Affiliate thereof (i) owns any direct or indirect interest of any kind in, or controls
or has controlled, or is a manager, officer, director, shareholder, member or partner of, or consultant to, or lender to or borrower
from or has the right to participate in the profits of, any Person which is a competitor, supplier, publisher, vendor, customer, landlord,
tenant, creditor or debtor of the Company, (ii) owns or has an interest in, directly or indirectly, any property, asset or right, which
is material to the Company, (iii) owes any money to or is owed any money by the Company, or (iv) is a party to a Contract, or is involved
in any business arrangement or other relationship, with the Company (whether written or oral), nor has the Company pledged any assets
or guaranteed any obligations on behalf of any such Person.

 

Section
3.20 Product Liability. The Company has not had
and does not have any Liability (and, to the Seller’s Knowledge, there is no basis for any present or future Proceeding against
the Company that could give rise to any Liability) arising out of the use of any product distributed, sold, or delivered by the Company,
including any product liability, recall, warranty or other similar Proceedings alleging that any of the products that the Company manufactures,
distributes, services, markets, sells or produces (whether on its own or through a third party) is defective or fails to meet any product
or guaranties provided by the Company. All products manufactured, distributed, serviced, marketed, sold and/or produced by the Company
(whether on its own or through a third party) have been in conformity in all material respects with all applicable contractual commitments
and all express and implied warranties, and the Company does not have any Liability for replacement thereof or otherwise. No product
manufactured, distributed, serviced, marketed, sold and/or produced by the Company (whether on its own or through a third party) is subject
to any guaranty, warranty or other indemnity beyond the applicable standard terms and conditions of such sale or those otherwise set
forth on a Contract made available to Buyer (including as a result of any course of conduct between the Company, on the one hand, and
any other Person, on the other hand).

 

Section
3.21 Certain Payments. 

 

(a) The
Company is in compliance with all applicable foreign, federal, state and local anti-bribery, anticorruption and anti-money laundering
Laws, including the U.S. Foreign Corrupt Practices Act, as amended. Neither the Company nor Seller nor any Representative thereof or
any other Person authorized to act for or on behalf of the Company, has directly or indirectly, (i) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback or other payment to any Person, public or private, regardless of form, whether in money,
property or services (A) to obtain favorable treatment in securing business; (B) to pay for favorable treatment of business secured;
(C) to obtain special concessions or for special concessions already obtained; or (D) in violation of any Law, or (ii) established or
maintained any fund or asset that has not been recorded in the books and records of the Company.

 

    	 	23	 

     

    

 

(b) Neither
the Company nor Seller, nor any of their respective director, officer, employee, agent or other Representative thereof is a Person with
whom dealings are restricted or prohibited under the export control and economic sanctions laws of any jurisdictions.

 

(c) Company
has not engaged in any unauthorized transaction or dealing with any Person with whom transactions or dealings are prohibited or restricted
by the export control or sanctions laws of any jurisdiction.

 

Section
3.22 Compliance with FDA and Related Laws.

 

(a) No
Violations of FDA and Related Laws. The Company is, and at all times since the Lookback Date has been, in compliance in all material
respects with FDA and Related Laws, applicable to the conduct or operation of the Company’s business, or by which the Company is
bound, (including but not limited to the extent applicable, current good manufacturing practice (GMP), adulteration and misbranding).
Neither the Company nor, to the Seller’s Knowledge, any of its executive officers has received since the Lookback Date, nor is
there any basis for, any written (or to Seller’s Knowledge, verbal) notice, order, complaint or other communication, from any Governmental
Entity or any other Person that the Company is not in compliance in all material respects with any such Laws.

 

(b) Compliance
with FDA Permits. Schedule 3.22(b) sets forth a list of all of the FDA Permits held by the Company pursuant to FDA and Related
Laws. The Company is in compliance in all material respects with all such FDA Permits and all such FDA Permits are valid, in full force
and effect and sufficient for the services currently provided by the Company. The Company has not received written (or, to Seller’s
Knowledge, verbal) notice from any Governmental Entity regarding any proposed modification, non-renewal, revocation, suspension, cancellation
or termination of any such FDA Permits, and, to the Seller’s Knowledge, no event has occurred which could reasonably be expected
to result in the modification, non-renewal, suspension, cancellation or termination of any such FDA Permit. There is no Action or Proceeding
pending or, to the Seller’s Knowledge, threatened by any Governmental Entity with respect to: (i) any alleged violation by Company
of any Law, policy or guideline of any Governmental Entity, (ii) any alleged failure of the Company to have any FDA Permit required in
connection with the operation of the business of Company, or (iii) any revocation, cancellation, rescission, modification, termination
or refusal to renew in the ordinary course, any of the FDA Permits. Since the date that is four (4) years prior to the date hereof, no
FDA Permit has been revoked, cancelled, terminated, rescinded, modified or been subject to a refusal to renew. To the Seller’s
Knowledge, there is no proposed change in any applicable Law that would require the Company to obtain any FDA Permit not set forth on
Schedule 3.22(b) in order to conduct the business of the Company as presently conducted.

 

    	 	24	 

     

    

 

(c) Product
Ingredients. The Company has performed commercially reasonable due diligence with respect to the regulatory and legal status of all
ingredients in any Company products being sold, including, as applicable, as to whether the ingredients in such products are generally
recognized as safe as the term is used in 21 U.S.C. 321(s), and that such ingredients are not new dietary ingredients as defined in 21
U.S.C. 350b(d) or that they comply with any legal and regulatory requirements for new dietary ingredients. The Company has not received
any written (or to Seller’s Knowledge, verbal) notification or assertion from any Governmental Entity asserting a position contrary
to the Seller’s and the Company’s representations herein. The Company performs commercially reasonable due diligence to ensure
the accuracy of the nutritional information that is included on product labels.

 

(d) Product
Safety. Except as set forth on Schedule 3.22(d), none of the products of the Company has been the subject of any recall, market
withdrawal, or similar action required by any Governmental Entity or undertaken by the Company on a voluntary basis for reasons relating
to safety or quality, and there is no reasonable basis for any such request. During the past three (3) years, no Governmental Entity
or customer has commenced or threatened to initiate any recall or requested the recall or return, as applicable, of any product of the
Company for reasons relating to safety or quality. There have been no material Proceedings against or involving the Company giving rise
to material Liability arising out of an injury to any Person or property relating to the products of the Company or any alleged failure
to warn or any alleged breach of warranties for any products of the Company. Since the Lookback Date, no Governmental Entity has required
any facility of the Company to shut down.

 

(e) Promotion
and Advertising. The Company has been in material compliance with all applicable Laws governing product promotion and advertising,
including Section 5 of the FTC Act.

 

(f) No
Convictions. Since the Look Back Date, neither the Company nor any of Company’s officers, directors, manager or members, has
been convicted of, and to Seller’s Knowledge, no employee of the Company has ever been convicted of, or, to Seller’s Knowledge,
no officer, director, manager, member or employee has been charged with or investigated for, a violation of federal or state Law related
to fraud, theft, embezzlement, breach of fiduciary responsibility, financial misconduct, obstruction of an investigation of controlled
substances, use or distribution of a controlled substance, or been subject to any Governmental Order or consent decree of, or criminal
or civil fine or penalty imposed by, any Governmental Entity since the Lookback Date. Since the Lookback Date, no exclusion, suspension,
or debarment claims, Actions or Proceedings, audits or investigations relating to the Company is pending or, to Seller’s Knowledge,
threatened against the Company, nor to Seller’s Knowledge, are there any exclusion, suspension or debarment claims, actions, proceedings,
audits or investigations pending against the Company’s or the Company’s officers, directors, managers, members, employees
or agents or, to the Seller’s Knowledge, threatened against the Company’s officers, directors, managers, members, employees
or agents.

 

    	 	25	 

     

    

 

(g) Enforcement.
Except as set forth on Schedule 3.22(g), since the Lookback Date, the Company has not received any written (or to Seller’s
Knowledge, verbal) notice, observation, assessment, untitled letter, warning letter, seizure, injunction, prosecution or other compliance
or enforcement action by the FDA, FTC, USDA or any other Governmental Entity. Since the Lookback Date, the Company has not received written
(or to Seller’s Knowledge, verbal) notice of any notices from any Person or any citations or decisions by any customers who purchase
the Company’s products through the Material Distributor, any customers who purchase directly from the Company through e-commerce
and direct sales, any distributor or any Governmental Entity that any of the products are materially defective, materially unsafe or
materially fail to meet any standards promulgated by any applicable Laws, FDA Permits or Governmental Entity. Since the Lookback Date,
the Company has not received any written (or to Seller’s Knowledge, verbal) notice, including any pending investigation, of any
noncompliance from any Governmental Entity or has been charged, or threatened with a charge of violating any Law, nor to the Seller’s
Knowledge, does any basis for any such action exist.

 

(h) Imports/Exports.
Except as set forth on Schedule 3.22(h), the Company has at all times conducted its import and export transactions in material
compliance with all applicable import/export controls (including applicable provisions of United States export or import control Laws
(or similar provisions of applicable foreign Laws), including but not limited to the FDCA, the Export Administration Act, the Export
Administration Regulations, U.S. Customs regulations, and the requirements of the United States Department of Commerce’s Bureau
of Industry and Security) in countries in which the Company conducts business. Without limiting the foregoing, (i) the Company has obtained
all required export and import licenses and other authorizations from any applicable Governmental Entity required from it, in accordance
with its respective obligations under such import and export transactions, for the import and export, of its products (“Import
and Export Approvals”); (ii) the Company is in compliance in all material respects with the terms of all applicable Import
and Export Approvals; and (iii) there are no pending or, to the Seller’s Knowledge, threatened claims against the Company with
respect to such Import and Export Approvals or import or export or transactions.

 

Section
3.23 Accounts Receivable; Accounts Payable.

 

(a) The
Accounts Receivable reflected on the Reference Balance Sheet and the Accounts Receivable arising after the date thereof (a) have arisen
from bona fide transactions entered into by the Company involving the sale of goods or the rendering of services in Ordinary Course of
Business; (b) constitute valid, undisputed claims of the Company not subject to claims of set-off or other defenses or counterclaims;
and (c) subject to a reserve for bad debts shown on the Reference Balance Sheet or, with respect to Accounts Receivable arising after
the date of the Reference Balance Sheet, on the accounting records of the Company, and, for avoidance of doubt, Company has not agreed
to accept a discount on the payment of any such Accounts Receivable.

 

(b) The
accounts payable reflected on the Reference Balance Sheet and arising after the date thereof have arisen from bona fide transactions
entered into by the Company in the Ordinary Course of Business. Company has not written-off or reversed any accounts payable or liability
reserves in a manner inconsistent with prior practice.

 

    	 	26	 

     

    

 

Section
3.24 Inventory. The Inventory of the Company is
in good and marketable condition, fit for the purpose for which it was procured or manufactured, and consists of a quality and quantity
usable and salable in the Ordinary Course of Business. The Inventory on the Reference Balance Sheet and the Inventory arising after the
Reference Balance Sheet Date and reflected on the books and records of the Company are stated thereon in accordance with GAAP, on a lower
of cost or market basis, consistently applied. Reserves for markdowns, shortage, salvage, lower of cost or market, obsolete, excess,
damaged or otherwise unsalable and unusable Inventory have been reflected on the Reference Balance Sheet in accordance with GAAP. The
Company is not in possession of any Inventory not owned by the Company.

 

Section
3.25 PPP Loan. Neither Seller nor the Company,
nor any respective Affiliates thereof, has incurred any Funded Indebtedness pursuant to the Paycheck Protection Program under the CARES
Act.

 

Section
3.26 Environmental Matters. The Company is, and
since the Lookback Date has been, in compliance in all material respects with all applicable Environmental Laws, and has obtained, and
is (and has been since the Lookback Date) in material compliance with, all Permits required under applicable Environmental Laws in connection
with the operation of its properties, assets and business as currently operated.

 

Section
3.27 No Omissions of Material Fact. None of the
representations and warranties in Article 3 of this Agreement, taking into account the Schedules attached hereto, contain any
untrue statement of a material fact or omit a material fact necessary to make each statement contained herein or therein, in light of
the circumstances in which they were made, not misleading.

 

Section
3.28 Brokers and Finders. Neither the Seller nor the Company has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement.

 

Section
3.29 Exclusivity of Representations and Warranties.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN Article 3 AND/OR IN TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY, THE SELLER AND THE COMPANY EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE,
EXPRESS OR IMPLIED, INCLUDING AS TO THE CONDITION, VALUE OR QUALITY OF THE COMPANY’S BUSINESS OR ITS ASSETS, AND EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN Article 3 AND/OR IN TRANSACTION DOCUMENTS TO WHICH
IT IS A PARTY, THE SELLER AND THE COMPANY SPECIFICALLY DISCLAIM ANY AND ALL REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING AS TO
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THEIR ASSETS, ANY PART THEREOF, THE WORKMANSHIP
THEREOF, AND THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING SHALL NOT LIMIT
OR OTHERWISE AFFECT BUYER’S RIGHTS AND REMEDIES IN THE EVENT OF FRAUD.

 

    	 	27	 

     

    

 

Article
4

REPRESENTATIONS
AND WARRANTIES OF THE BUYER

 

The
Buyer hereby represents and warrants to the Seller that:

 

Section
4.1 Organization and Qualification. The Buyer
is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. The Buyer is qualified to
do business and is in good standing as a foreign entity in each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except in such jurisdictions where the failure to be so duly qualified or licensed and in
good standing would not prevent, delay or impair the Buyer’s ability to consummate the transactions contemplated by this Agreement.
The Buyer has all requisite power and authority to own (or, as applicable, lease) and operate its properties and assets and to carry
on its business as it is currently conducted, except where the failure to have such power or authority would not prevent, delay or impair
the Buyer’s ability to consummate the transactions contemplated by this Agreement.

 

Section
4.2 Authority; Due Execution. The Buyer has all
requisite power and authority to enter into this Agreement and each of the other Transaction Documents to which the Buyer is a party,
to perform the Buyer’s obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.
This Agreement and each of the other Transaction Documents to which the Buyer is a party has been duly executed and delivered by the
Buyer and constitutes the valid, binding and enforceable obligation of the Buyer, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

 

Section
4.3 Noncontravention.

 

(a)
No notices to, filings with, or authorizations, consents
or approvals of any Person or Governmental Entity (“Buyer Governmental Notices”) are required by or with respect to
Buyer in connection with the execution and delivery Buyer of this Agreement and the Transaction Documents to which it is or will be a
party and the consummation by Buyer of the transactions contemplated hereby and thereby.

 

(b)
The execution, delivery or performance by the Buyer
of this Agreement or any other Transaction Document to which the Buyer is a party, and the consummation by the Buyer of the transactions
contemplated hereby or thereby, do not and will not, directly or indirectly (with or without notice or lapse of time), require (i) conflict
with or result in any breach of any provision of any the Buyer’s Governing Documents, (ii) result in or give rise to any right
of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which the Buyer is a party or by which any of its properties
or assets may be bound, or (iii) violate any Governmental Order or Law by which the Buyer or any of its properties or assets is bound,
except in the case of clauses (ii) and (iii) above, for violations which would not reasonably be expected to prevent, delay or impair
the ability of the Buyer to consummate the transactions contemplated by this Agreement or the other Transaction Documents.

 

    	 	28	 

     

    

 

Section
4.4 Litigation. There is no Proceeding pending or, to the knowledge of the Buyer, threatened in writing or under investigation
against the Buyer before any Governmental Entity and the Buyer is not subject to any Governmental Order that is, in each case, reasonably
likely, either individually or in the aggregate, to prevent, delay or impair the ability of the Buyer to consummate the transactions
contemplated by this Agreement or the other Transaction Documents.

 

Section
4.5 Compliance with Laws. The Buyer is not in violation of any Law that would prevent, delay or impair the Buyer’s ability
to consummate the transactions contemplated by this Agreement or any of the other Transaction Documents.

 

Section
4.6 Financing. The Buyer has access to an adequate
amount of capital to fulfill its duties and obligations to make all payments due by it as of the Closing, and as and when due after the
Closing. In no event will the availability or receipt of any financing or funds by Buyer, or any Affiliate of Buyer, or any other financing
or other transaction be a condition to any of Buyer’s obligations under this Agreement.

 

Section
4.7 Solvency. Assuming the representations and
warranties of the Seller contained in Article 3 are true in all material respects, and after giving effect to the transactions
contemplated hereby, the Buyer and its Subsidiaries will be Solvent.

 

Section
4.8 Brokers and Finders. Except as listed on Schedule 4.8, the Buyer has not employed any broker or finder or incurred any liability
for any brokerage fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement.

 

Section
4.9 Exclusivity of Representations and Warranties.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN Article 4 AND/OR IN TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY, BUYER EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AND SELLER AND THE COMPANY HEREBY DISCLAIM ANY
RIGHT TO RELY ON ANY REPRESENTATION OR WARRANTY OTHER THAN THE REPRESENTATIONS AND WARRANTIES CONTAINED IN Article 4 AND/OR
IN THE TRANSACTION DOCUMENTS TO WHICH BUYER IS A PARTY. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING SHALL NOT LIMIT OR OTHERWISE AFFECT
SELLER’S RIGHTS AND REMEDIES IN THE EVENT OF FRAUD.

 

    	 	29	 

     

    

 

Article
5 

CERTAIN
COVENANTS AND AGREEMENTS OF THE PARTIES

 

Section
5.1 Conduct of the Business Prior to the Closing
Date. From the date of this Agreement until the Closing Date, except (i) as otherwise provided in this Agreement, (ii) consented
to in writing by the Buyer (which consent will not be unreasonably withheld, conditioned or delayed), (iii) as required by any applicable
Law or Governmental Order (including COVID-19 Measures), or (iv) set forth on Schedule 5.1, Seller shall, and shall cause the
Company to, conduct the Business of the Company in the Ordinary Course of Business, and Seller shall, and shall cause the Company to,
use its commercially reasonable efforts to maintain existing business relationships with suppliers, customers, employees and others having
material business relationships with the Company. Without limiting the generality of the foregoing, except (i) as otherwise provided
in this Agreement, (ii) consented in writing by the Buyer (which consent will not be unreasonably withheld, conditioned or delayed),
(iii) required by any applicable Law or Governmental Order (including COVID-19 Measures), the Company shall not, and the Seller shall
not cause or permit the Company to:

 

(a)
amend or restate the Governing Documents of the Company;

 

(b)
adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company;

 

(c)
issue, sell, transfer, pledge, dispose of or encumber
any Interests or other equity securities, or securities convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any equity interests or Interests or other equity securities;

 

(d)
(i) split, combine, subdivide or reclassify its Interests;
(ii) declare, set aside or pay any dividend or other distribution payable in stock, equity interests or property with respect to its
Interests, or (iii) declare, set aside or pay any dividend or other distribution payable in cash with respect to its Interests, except
for any distribution to Seller ;

 

(e)
redeem, purchase or otherwise acquire directly or indirectly
any of the Interests or other equity interests;

 

(f)
make or commit to make any capital expenditure or capital
additions or improvements in an amount in excess of $25,000, individually, or $50,000, in the aggregate;

 

(g)
(i) make any change in the compensation or benefits
payable to any of its current or former directors, officers, employees or other individual service providers, other than as required
by Law, (ii) hire any new employees or engage any new independent contractors (iii) enter into or amend any Contracts of employment or
any consulting, bonus, severance, retention, change in control, retirement or similar agreement, (iv) enter into or adopt any new, or
increase benefits under or renew, any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement
(or similar arrangement), or any collective bargaining agreement or (v) take any action to cause to accelerate the payment, funding,
right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement);

 

(h)
acquire (by merger, consolidation, acquisition of stock
or assets or otherwise) or invest in any equity interest in or a material portion of the assets of, or by any other manner acquire any
business or any Person or division thereof;

 

    	 	30	 

     

    

 

(i)
sell, lease, encumber (including by the grant of any
option thereon) or otherwise dispose of any material assets or property except pursuant to existing contracts or commitments or with
respect to the sale of products or services of the Company in the Ordinary Course of Business;

 

(j)
(i) incur or assume any Funded Indebtedness, except
to the extent that such Funded Indebtedness is paid off in full and discharged prior to, or in connection with, the Closing; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any
other Person, in each case, solely to the extent that such assumption, guarantee, endorsement, liability or responsibility is not terminated,
removed or discharged prior to, or in connection with, the Closing; (iii) pledge or otherwise encumber any Interests or other equity
interests or assets of the Company but only if such pledge or encumbrance is not removed prior to, or in connection with, the Closing;
or (iv) mortgage or pledge any of its tangible or intangible assets or properties, other than as relates to a Permitted Encumbrance;

 

(k)
settle, pay, discharge or satisfy any claims, suits,
liabilities or obligations (including settlement of Proceedings) (i) involving the payment of, or an agreement to pay over time, in cash,
notes or other property, in the aggregate, an amount exceeding $25,000, individually, or $50,000, in the aggregate, (ii) which after
the Closing Date will require the Company to satisfy any obligation or (iii) which imposes any equitable or injunctive relief;

 

(l)
change any method of accounting or accounting practice
used by it except any change required by reason of a concurrent change in GAAP;

 

(m)
(i) make, change or revoke any Tax election or Tax accounting
method, (ii) elect to adopt any method of Tax accounting, (iii) enter into any closing agreement, settlement, or compromise of any material
claim or assessment (including any audit), in each case in respect of Taxes, (iv) file any amended Tax Return, or (v) consent to any
extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company;

 

(n)
(i) enter into any new line of business, or incur or
commit to incur any capital expenditures or Liabilities in connection therewith or (ii) abandon or discontinue any existing material
lines of business;

 

(o)
form a Subsidiary;

 

(p)
make any loans, advances or capital contributions to,
or guarantees for the benefit of, or investments in, any other Person or cancel or forgive any debts owed to or claims held by it;

 

(q)
transfer, assign, lease, sell, license, abandon or otherwise
dispose of any asset, except for inventory or obsolete assets in the Ordinary Course of Business;

 

(r)
(i) enter into any Contract that if entered into prior
to the date hereof would be a Material Contract or (ii) amend, modify, renew, terminate or waive any material right under any Material
Contract;

 

    	 	31	 

     

    

 

(s)
delay, postpone or cancel the payment of any accounts
payable or any other Liability, agree or negotiate with any party to extend the payment date of any accounts payable or accelerate the
collection of any accounts or notes receivable or otherwise change any of its practices with respect to payables, receivables or cash
management;

 

(t)
undertake any action or fail to take any action that
does or could, individually or in the aggregate, reasonably be expected to result in the loss, lapse, expiration, or abandonment of any
Company Intellectual Property; or

 

(u)
agree or commit in writing to do any of the foregoing.

 

Except
as expressly set forth herein, nothing in this Section 5.1 provides Buyer, directly or indirectly, the right to control or direct
the Company’s operations in the Ordinary Course of Business prior to the Closing. Prior to the Closing, the Seller and the Company
shall exercise, subject to the terms and conditions of this Agreement (including this Section 5.1), complete control and supervision
over the business, assets and operations of the Company.

 

Section
5.2 Expenses and Fees. Except as otherwise provided in this Agreement, all costs and expenses incurred by the Buyer in connection
with this Agreement and the transactions contemplated by this Agreement will be paid by the Buyer, and all costs and expenses incurred
by the Seller or the Company in connection with this Agreement and the transactions contemplated by this Agreement will be paid by the
Seller.

 

Section
5.3 Access to Information. Upon reasonable notice, and except as may otherwise be required by applicable Laws, the Seller shall,
and shall cause the Company to, afford the Buyer’s officers, employees, counsel, accountants and other authorized representatives
reasonable access, during normal business hours throughout the period prior to the Closing, to the Company’s properties, books,
contracts and records and, during such period, the Seller shall, and shall cause the Company to, furnish promptly to the Buyer all information
concerning the Company’s business, properties, results of operations and personnel as may reasonably be requested. Such access
to information will be provided and conducted under the supervision of the Seller’s personnel and in such manner as not to interfere
with the normal operations of the Company. All requests by the Buyer for access pursuant to this Section 5.3 must be submitted or
directed exclusively to Craig Sheehan, or such other individuals as the Company may designate in writing from time to time. Notwithstanding
anything to the contrary in this Agreement, neither the Seller nor the Company will be required to disclose any information to the Buyer
if such disclosure would: (i) would reasonably be likely to result in a Material Adverse Effect due to the competitive harm caused to
the Company and its business, if the transactions contemplated by this Agreement are not consummated, (ii) contravene any applicable
Law or (iii) jeopardize any attorney-client or other privilege based upon the advice of the Seller’s counsel; provided that the
Seller shall use its reasonable commercial efforts, if so permitted by applicable Law, to promptly communicate to the other party the
substance of any such communication, whether by redacting parts of such material communication or otherwise, so that such communication
would not cause such competitive harm to the Seller or its Affiliates, violate applicable Law or cause the loss of the attorney-client
privilege with respect thereto. Prior to the Closing, without the prior consent of the Seller (not to be unreasonably withheld, conditioned
or delayed), the Buyer shall not contact any suppliers to, or customers of, the Company. The Buyer shall, and shall cause its Representatives
to, abide by the terms of the Confidentiality Agreement with respect to any access to information provided pursuant to this Section
5.3.

 

    	 	32	 

     

    

 

Section
5.4 Confidentiality.

 

(a)
From and after the Closing until the date that is five
(5) years after the Closing Date, the Seller shall, and shall cause its Affiliates and Representatives to, keep confidential any and
all Confidential Information, except that the obligations of confidentiality with respect to any non-public information relating to the
Company that constitutes a trade secret will continue for so long as such information is a trade secret. Notwithstanding anything to
the contrary in this Section 5.4(a), the Seller may disclose Confidential Information to the Seller’s Affiliates and
Representatives so long as the Seller has informed such Affiliate or Representative, as the case may be, of the confidential nature of
such information and such Affiliate or Representative, as the case may be, agrees to keep such information confidential in accordance
with the terms of this Section 5.4(a) or is otherwise bound by confidentiality obligations consistent with those set forth
in this Section 5.4(a). The Seller will be liable for any breach of this Section 5.4(a) by any of its Affiliates
and Representatives to whom the Seller discloses Confidential Information. Notwithstanding anything to the contrary in this Section 5.4(a),
the foregoing restrictions shall not apply to disclosure of Confidential Information to the extent such disclosure is required by any
applicable Law or deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process (collectively,
“Legal Process”); provided that, in the event that the Seller or any of its Affiliates or Representatives is
required by any applicable Law or Legal Process to disclose any Confidential Information, the Seller shall, (i) to the extent permissible
by such applicable Law or Legal Process, provide the Buyer with prompt written notice of such requirement, (ii) disclose only that information
that the Seller determines (with the advice of counsel) is required by such applicable Law or Legal Process to be disclosed and (iii)
use commercially reasonable efforts to preserve the confidentiality of such non-public information, including by, at the Buyer’s
request, reasonably cooperating with the Buyer to obtain an appropriate protective order or other reliable assurance that confidential
treatment will be accorded such non-public information (at the Buyer’s sole cost and expense). Notwithstanding the foregoing, Confidential
Information for the purpose of this Section 5.4(a) does not include information that (A) is or becomes available to the public
after the Closing other than as a result of a disclosure by the Seller or its Affiliates or Representatives in breach of this Section
5.4(a), (B) becomes available to the Seller or its Affiliates or Representatives after the Closing from a source other than the Buyer
or its Affiliates or Representatives if the source of such information is not known by the Seller or its Affiliates or Representatives
to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Buyer
or its Affiliates with respect to such information (it being acknowledged, for the avoidance of doubt, that any information that is in
Seller’s possession as a result of or relating to Seller’s prior ownership of the Company and the Business shall not qualify
for this clause (B)) or (C) is independently developed by the Seller or its Affiliates (other than the Company) without breach of this
Section 5.4(a) or use of non-public information related to the Company. Notwithstanding anything to the contrary in this Section
5.4(a), the use or disclosure of non-public information relating to the Company by the Seller or any of its Affiliates or Representatives
which is reasonably necessary to perform such Person’s obligations or enforce such Person’s rights or remedies, in each case,
under this Agreement or any of the other Transaction Documents will not constitute a breach of this Section 5.4(a).

 

    	 	33	 

     

    

 

(b)
From and after the Closing until the date that is five
(5) years after the Closing Date, the Buyer shall, and shall cause its Affiliates and Representatives to, keep confidential any and all
non-public information relating to the Seller and its Affiliates (other than the Company), including any information that was furnished
to the Buyer or any of its Affiliates or Representatives by the Seller or any of its Affiliates in connection with the transactions contemplated
by this Agreement, except that the obligations of confidentiality with respect to any non-public information relating to the Seller and
its Affiliates (other than the Company) that constitutes a trade secret will continue for so long as such information is a trade secret.
Notwithstanding anything to the contrary in this Section 5.4(b), the Buyer may disclose such non-public information relating
to the Seller and the Seller’s Affiliates to the Buyer’s Affiliates and Representatives so long as the Buyer has informed
such Affiliate or Representative, as the case may be, of the confidential nature of such information and such Affiliate or Representative,
as the case may be, agrees to keep such information confidential in accordance with the terms of this Section 5.4(b) or is
otherwise bound by confidentiality obligations consistent with those set forth in this Section 5.4(b). The Buyer shall be
liable for any breach of this Section 5.4(b) by any of its Affiliates and Representatives to whom the Buyer discloses non-public
information relating to the Seller or its Affiliates. Notwithstanding anything to the contrary in this Section 5.4(b), the
foregoing restrictions shall not apply to disclosure of such non-public information relating to Seller or its Affiliates to the extent
such disclosure is required by any applicable Law or Legal Process. In the event that the Buyer or any of its Affiliates or Representatives
is required by any applicable Law or Legal Process to disclose any such non-public information regarding Seller or its Affiliates, the
Buyer shall, (i) to the extent permissible by such applicable Law or Legal Process, provide the Seller with prompt written notice of
such requirement, (ii) disclose only that information that the Buyer determines (with the advice of counsel) is required by such applicable
Law or Legal Process to be disclosed and (iii) use commercially reasonable efforts to preserve the confidentiality of such non-public
information, including by, at the Seller’s request, reasonably cooperating with the Seller to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded such non-public information (at the Seller’s sole
cost and expense). Notwithstanding the foregoing, such non-public information does not include information that (A) is or becomes available
to the public after the Closing other than as a result of a disclosure by the Buyer or its Affiliates or Representatives in breach of
this Section 5.4(b), (B) was in the possession of, or becomes available to, the Buyer or its Affiliates or Representatives
from a source other than the Seller or its Affiliates or Representatives if the source of such information is not known by the Buyer
or its Affiliates or Representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation
of confidentiality to, the Seller or its Affiliates with respect to such information or (C) is independently developed by the Buyer or
its Affiliates without breach of this Section 5.4(b) or use of non-public information related to the Seller or its Affiliates.
Notwithstanding anything to the contrary in this Section 5.4(b), the use or disclosure of non-public information relating
to the Company by the Seller or any of its Affiliates or Representatives which is reasonably necessary to perform such Person’s
obligations or enforce such Person’s rights or remedies, in each case, under this Agreement or any of the other Transaction Documents
will not constitute a breach of this Section 5.4(b).

 

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(c)
The Parties acknowledge that any breach of this Section 5.4
may constitute irreparable harm, and that the non-breaching Party will be entitled to seek specific performance or injunctive relief
to enforce this Section 5.4 in addition to whatever remedies such Party may otherwise be entitled to at law or in equity,
without the necessity of posting bond or any other security.

 

(d)
Notwithstanding anything therein to the contrary, the
Confidentiality Agreement shall automatically terminate and be of no further force or effect upon the Closing.

 

Section
5.5 Public Announcements. Neither the Buyer nor the Seller, nor any of their respective Affiliates or Representatives, may issue
any press release or make any public announcement with respect to this Agreement or the transactions contemplated hereby without the
prior written consent of the other Party. Notwithstanding the foregoing, any such press release or public announcement may be made if
required by applicable Law or a securities exchange rule; however, the Party required to make such press release or public announcement
shall, to the extent reasonably practicable, confer with the other Party concerning the timing and content of such press release or public
announcement before the same is made. For the avoidance of doubt, Seller acknowledges and agrees that Buyer will be required to issue
a press release with regard to the this Agreement and the transactions contemplated hereby in accordance with applicable Law and securities
exchange rule.

 

Section
5.6 Tax Matters. The following provisions (which take precedence over any other provision of this Agreement in the event of a
conflict) govern the allocation of responsibility among the Buyer and the Seller for certain Tax matters following the Closing Date:

 

(a)
Tax Returns.

 

(i)
The Seller, at its sole cost and expense, shall prepare
or cause to be prepared all Tax Returns of the Company for all taxable periods ending on or before the Closing Date (“Pre-Closing
Tax Period”) that are required to be filed by the Company after the Closing Date (taking into account valid extensions) (“Pre-Closing
Returns”). Such Pre-Closing Returns shall be prepared in a manner consistent with prior practice of the Company, except as
otherwise required by Law. At least thirty (30) days prior to the due date of any Pre-Closing Return (taking into account valid extensions),
the Seller shall provide the Buyer with a substantially final draft of such Pre-Closing Return together with a copy of associated tax
workpapers. No later than fifteen (15) days after the receipt of such Pre-Closing Return, the Buyer shall notify the Seller of any objections
that the Buyer may have to any items set forth in any such draft Pre-Closing Return, and the Buyer and the Seller shall negotiate in
good faith and use reasonable efforts to resolve any such objection. If the Buyer and the Seller are unable to reach agreement at least
ten (10) days prior to the due date of such Pre-Closing Return, the matter shall be submitted to and determined by the Independent Accountant,
whose decision shall be final and binding on the Parties, and for the purpose of such determination, Section 1.2(d) shall
apply mutatis mutandis. If the Independent Accountant does not resolve the matter at least three (3) days prior to the due date
of such Pre-Closing Return, the Tax Return shall be filed in the manner as the Buyer deems appropriate, subject to amendment to reflect
the decision of the Independent Accountant and rights and obligations of the Parties will be adjusted accordingly. No later than three
(3) days prior to the due date of any Pre-Closing Return, Seller shall pay to Buyer all Taxes shown as due and payable on such Pre-Closing
Returns, except to the extent such Taxes were included in Transaction Expenses or as liabilities in determination of the Closing Net
Working Capital, and Buyer shall cause all such Pre-Closing Returns to be timely filed in accordance with this Section 5.6(a)(i).

 

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(ii)
The Buyer, at its sole cost and expense, shall prepare
and timely file or cause to be prepared and timely filed all Straddle Period Tax Returns of the Company. Such Straddle Period Returns
shall be prepared in a manner consistent with prior practice of the Company, except as otherwise required by Law. At least thirty (30)
days prior to the due date of any Straddle Period Tax Return (taking into account valid extensions), the Buyer shall provide the Seller
with a substantially final draft of such Straddle Period Tax Return and a copy of associated tax workpapers with an allocation of the
Seller’s portion of the Straddle Period Taxes due with respect to such Tax Returns. No later than fifteen (15) days after the receipt
of such Straddle Period Tax Return, the Seller shall notify the Buyer of any objections that the Seller may have to any items set forth
in any such draft Straddle Period Tax Return, and the Buyer and the Seller shall negotiate in good faith and use reasonable efforts to
resolve any such objection. If the Buyer and the Seller are unable to reach agreement at least ten (10) days prior to the due date of
such Straddle Period Tax Return, the matter shall be submitted to and determined by the Independent Accountant, whose decision shall
be final and binding on the Parties, and for the purpose of such determination, Section 1.2(d) shall apply mutatis mutandis.
If the Independent Accountant does not resolve the matter at least three (3) days prior to the due date of such Straddle Period Tax Return,
the Tax Return shall be filed in the manner as the Buyer deems appropriate, subject to amendment to reflect the decision of the Independent
Accountant and rights and obligations of the Parties will be adjusted accordingly. No later than three (3) days prior to the due date
of any Tax Return described in this Section 5.6(a)(ii), Seller shall pay to Buyer Seller’s share of Taxes shown as due on
the Straddle Period Tax Returns (as determined in accordance with Section 5.6(d)) except to the extent Seller’s share of
such Taxes were included in Transaction Expenses or as liabilities in determination of the Closing Net Working Capital.

 

(iii)
For the avoidance of doubt, this Section 5.6(a)
shall not apply to any Tax Return of Seller or any of its Affiliates (other than the Company).

 

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(b)
The Buyer and the Seller shall provide each other with
such cooperation and information (including access to books and records and copies of relevant Tax Returns or portions thereof, together
with accompanying schedules) relating to the Company as any other Party may reasonably request in connection with (i) preparing, filing
and execution of any Tax Return, amended Tax Return or other Tax filing or claim for refund of Taxes, (ii) determining any Tax liability
or right to refund of Taxes, (iii) conducting or defending any Proceeding or assessment in respect of Taxes, or (iv) effectuating the
terms of this Agreement. Notwithstanding the foregoing, no Party shall be unreasonably required to prepare any document, or determine
any information, not then in its possession in response to a request under this Section 5.6(b). The Seller and the Buyer shall
retain all Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Company
for any taxable period beginning before the Closing Date until the later of (i) the expiration of the applicable statute of limitations,
inclusive of extensions or waivers, or (ii) six (6) years after the Closing Date and to abide by all record retention agreements entered
into with any taxing authority. Prior to transferring, destroying or discarding any Tax Returns, schedules and work papers, records and
other documents in its possession relating to Tax matters of the Company for any taxable period beginning before the Closing Date, the
Seller or the Buyer (as the case may be) shall provide the other Party with reasonable written notice and offer the other Party the opportunity
to take possession of such materials.

 

(c)
The Buyer on the one hand, and the Seller on the other
hand, shall each be liable for, and shall pay when due, one-half (1/2) of any transfer, documentary, sales, use, registration, stamp,
value-added or other similar Taxes and fees (including any penalties and interest thereon) payable by reason of the transactions contemplated
under this Agreement (“Transfer Taxes”), and the party required to do so by applicable Law shall file all necessary
returns, reports or other filings with respect to all such Taxes. The Buyer and the Seller shall cooperate to minimize or avoid any Transfer
Taxes that might be imposed to the extent permitted by applicable Law.

 

(d)
For purposes of this Agreement, in the case of any Taxes
(other than Transfer Taxes addressed in Section 5.6(c)) that are imposed on a periodic basis and are payable for a Straddle
Period, the portion of such Tax which relates to the portion of such taxable period ending on the Closing Date shall (A) in the case
of any Taxes other than the Taxes based upon or related to income, receipts, profits, payroll or specific transactions, be deemed to
be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the
taxable period ending on the Closing Date and the denominator of which is the number of days in the entire taxable period, and (B) in
the case of any Tax based upon or related to income, receipts, profits, payroll or specific transactions, be deemed equal to the amount
which would be payable if the relevant taxable period ended on the Closing Date (based on an interim closing of the books as of the close
of business on the Closing Date). The foregoing Taxes not allocable to the portion of the Straddle Period ending on the Closing Date
shall be allocated to the portion of such Straddle Period beginning after the Closing Date.

 

(e)
The Buyer on the one hand, and the Seller on the other
hand, shall, at the Closing, reimburse the other party with respect to the California Annual LLC Fee and the California Annual LLC Tax
paid by such other party in respect of the Straddle Period to the extent such fee and tax is allocable to the portion of such Straddle
Period that is reflective of the first party’s ownership, as determined in accordance with Section 5.6(d).

 

    	 	37	 

     

    

 

(f)
Unless otherwise required under applicable Law, the
Buyer shall not cause or permit the Company to take any of the following actions, in each case if such action could increase the amount
of Taxes of the Seller, without the prior written consent of the Seller (not to be unreasonably withheld, conditioned, or delayed): (i)
file an amended Tax Return relating to a Pre-Closing Tax Period or a Straddle Period, (ii) extend or waive, or cause to be extended or
waived, or permit the Company or extend or waive, any statute of limitations or other period for the assessment of any Tax or deficiency
related to a Pre-Closing Tax Period or a Straddle Period, (iii) make or change any Tax election or accounting method that has retroactive
effect to any Pre-Closing Tax Period or, in the case of a Straddle Period, the portion of the period up to and including the Closing
Date, or (iv) initiate, enter into, or participate in any voluntary disclosure agreement with any Governmental Entity with respect to
Taxes for a Pre-Closing Tax Period or, in the case of a Straddle Period, the portion of period up to and including the Closing Date.

 

(g)
The Seller and the Buyer agree that for all income Tax
purposes, the sale of the Interests pursuant to the consummation of the transactions contemplated under this Agreement shall be treated
as a sale of the assets of the Company by the Seller to the Buyer and as a purchase of such assets by the Buyer from the Seller. The
Purchase Price as finally determined pursuant to Section 1.2(d) together with the liabilities of the Company and all other
amounts required to be treated as consideration for income Tax purposes (the “Tax Purchase Price”) shall be allocated
among the assets of the Company consistent with Section 1060 of the Code and the Treasury Regulations thereunder and the methodology
set forth on Schedule 5.6(g) (the “Allocation Methodology”). No later than sixty (60) days after the determination
of the final Purchase Price pursuant to Section 1.2(d), the Buyer shall provide Seller with the allocation (the “Allocation
Schedule”) of the Tax Purchase Price among the assets of the Company consistent with Section 1060 of the Code and the Treasury
Regulations thereunder and the Allocation Methodology. Seller shall notify Buyer in writing of any objections to the Allocation Schedule
within thirty (30) days after Seller receives the Allocation Schedule. If Seller does not notify Buyer in writing of any objections to
the Allocation Schedule, within that thirty (30) day period, the Allocation Schedule shall be construed as final. If Seller notifies
Buyer in writing of an objection to the Allocation Schedule by the end of the thirty (30) day period, and Buyer and Seller are unable
to resolve their differences within twenty (20) days thereafter (“Dispute Resolution Period”), then the disputed items
on the Allocation Schedule shall be submitted to the Independent Accountants within five (5) days after the end of the Dispute Resolution
Period for resolution with the costs paid fifty percent (50%) by Seller and fifty percent (50%) by Buyer, and the Independent Accountants
shall be instructed to deliver the Allocation Schedule finalized in a manner consistent with the Allocation Methodology as soon as possible.
The Parties shall make appropriate adjustments to the Allocation Schedule to reflect changes in the Purchase Price in a manner consistent
with the Allocation Methodology. The Parties agree for all Tax reporting purposes to report the transactions in accordance with the agreements
herein and the Allocation Schedule, as adjusted pursuant to the preceding sentence, and to not take any position during the course of
any Proceeding with respect to Taxes inconsistent with the agreements as to Tax treatment herein or with such schedule unless required
by a determination of the applicable Governmental Entity that is final or unless otherwise required by applicable Law.

 

    	 	38	 

     

    

 

(h)
Notwithstanding anything to the contrary in this Agreement,
this ‎Section 5.6(h) shall control any audits, inquiries, claims, assessments, proceedings or similar events with respect
to Taxes of the Company for any Pre-Closing Tax Period or Straddle Period (“Tax Matter”). The Buyer shall promptly
notify the Seller, in writing, upon receipt by the Buyer or any of its Affiliates of any notice of any Tax Matter received from any Governmental
Entity with respect to Taxes of the Company for which the Seller may be required to indemnify the Buyer Indemnified Parties pursuant
to this Agreement, provided, however, that the failure to provide such notice shall not affect the Buyer Indemnified Parties’
right to indemnification, except to the extent that the Seller’s defense of such Tax Matter is actually prejudiced by such failure.
Seller may assume the defense of any such Tax Matter (other than a Tax Matter related to a Straddle Period) by providing Buyer written
notice within ten (10) days after Seller’s receipt of notification of such Tax Matter from Buyer. If the Seller assumes such defense,
the Seller shall have the authority, with respect to any Tax Matter, to represent the interests of the Company before the relevant Governmental
Entity and the Seller shall have the right to control the defense, compromise or other resolution of any such Tax Matter subject to the
limitations contained herein, including responding to inquiries, and contesting, defending against and resolving any assessment for additional
Taxes or notice of Tax deficiency or other adjustment of Taxes of, or relating to, such Tax Matter. Buyer shall have the right (but not
the duty) to participate in the defense of such Tax Matter and to employ counsel, solely at its own expense, separate from the counsel
employed by the Seller. Seller shall not enter into any settlement of or otherwise compromise any such Tax Matter without the prior written
consent of the Buyer, which consent shall not be unreasonably conditioned, withheld or delayed. Seller shall keep the Buyer reasonably
informed with respect to the status of any such Tax Matter, and shall, in good faith, allow the Buyer to consult with it regarding the
conduct of or positions taken in any such Tax Matter. Buyer shall assume the defense of any Tax Matter relating to a Pre-Closing Tax
Period for which Seller fails to provide notice regarding its desire to assume the defense of such Tax Matter, which defense shall be
conducted in Buyer’s sole discretion and at Seller’s sole cost and expense. Buyer shall assume the defense of any Tax Matter
for a Straddle Period and shall have the authority, with respect to any Tax Matter, to represent the interests of the Company before
the relevant Governmental Entity and the Buyer shall have the right to control the defense, compromise or other resolution of any such
Tax Matter subject to the limitations contained herein, including responding to inquiries, and contesting, defending against and resolving
any assessment for additional Taxes or notice of Tax deficiency or other adjustment of Taxes of, or relating to, such Tax Matter. Seller
shall have the right (but not the duty) to participate in the defense of such Tax Matter and to employ counsel, solely at its own expense,
separate from the counsel employed by the Buyer. Seller shall not enter into any settlement of otherwise compromise any such Tax Matter
without the prior written consent of the Seller, which consent shall not be unreasonably conditioned, withheld or delayed to extent it
increases the Tax liability of Seller or any of its Affiliates or would result in an indemnification obligation owing by Seller under
this Agreement. Buyer shall keep the Seller reasonably informed with respect to the status of any such Tax Matter, and shall, in good
faith, allow the Seller to consult with it regarding the conduct of or positions taken in any such Tax Matter.

 

    	 	39	 

     

    

 

(i)
Buyer shall pay or cause to be paid to the Seller any
Tax refunds or credits attributable to any taxable period ending on or before the Closing Date or attributable to the portion of a Straddle
Period ending on and including the Closing Date pursuant to Section 5.6(d) received by or credited to the Buyer, the Company,
or their Affiliates, net of any out-of-pocket costs attributable to receipt of such refund or credit of Taxes, including Taxes payable
with respect to such refund, within five (5) days after the receipt of such refund or the use of such credit. At the Seller’s request
and at Seller’s sole cost and expense, Buyer shall cause the Company and its Affiliates to reasonably cooperate with the Seller
in obtaining such refunds or credits of Taxes, including through the filing of amended Tax Returns or refund claims; provided,
however, that Buyer, the Company and their Affiliates shall not be required to cooperate in accordance with the foregoing to the
extent that obtaining such refund or credits of Taxes will cause Buyer, the Company or their Affiliates to suffer material adverse consequences
as a result of such action. In the event any Tax refund or credit of Taxes is subsequently disallowed or determined to be an amount less
than the amount taken into account to make a payment pursuant to this Section 5.6(i), by a Governmental Entity, the Seller shall
promptly return such excess to the Buyer along with any applicable interest and penalties.

 

Section
5.7 Notice of Certain Events; Schedules Update.

 

(a)
From the date hereof until the Closing, the Seller shall
promptly notify the Buyer in writing of:

 

(i)
any fact, circumstance, event or action the existence,
occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect or (B) has resulted in, or would reasonably be expected to result in, the failure of any of the conditions set forth in Section 6.1
or Section 6.2 to be satisfied;

 

(ii)
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 the Transaction Documents;
and

 

(iii)
any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by the Transaction Documents.

 

For
the avoidance of doubt, the Buyer’s receipt of information pursuant to this Section 5.7(a) shall not operate as a waiver
or otherwise affect any representation, warranty or agreement given or made by the Seller or the Company in this Agreement and shall
not be deemed to amend or supplement the Schedules.

 

    	 	40	 

     

    

 

(b)
From the date hereof until the Closing, the Buyer shall
promptly notify the Seller in writing of:

 

(i)
any fact, circumstance, event or action the existence,
occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a material adverse
effect on the ability of the Buyer to consummate the transactions contemplated by this Agreement in accordance with the terms hereof,
or (B) has resulted in, or would reasonably be expected to result in, the failure of any of the conditions set forth in Section 6.1
or Section 6.3 to be satisfied;

(ii)
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 the Transaction Documents;
and

 

(iii)
any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by the Transaction Documents.

 

For
the avoidance of doubt, the Seller’s receipt of information pursuant to this Section 5.7(b) shall not operate as a
waiver or otherwise affect any representation, warranty or agreement given or made by the Buyer in this Agreement.

 

(c)
No later than five (5) Business Days prior to the Closing
Date, the Seller may, by notice given in accordance with this Agreement, deliver to the Buyer a written supplement to the Schedules (the
“Schedules Update”) in respect of matters that have arisen after the date of this Agreement, which if existing as
of the date of this Agreement, would have been permitted to have been set forth in the Schedules. The Schedules Update will not be deemed
to have cured any inaccuracy in or breach of any representation or warranty contained in this Agreement, including for purposes of the
termination rights set forth in this Agreement. Notwithstanding the foregoing, if the Seller provides a Schedule Update and Buyer (i)
affirmatively notifies Seller in writing that Buyer does not intend to terminate this Agreement as a result of such Schedule Update or
(ii) fails to notify Seller in writing within five (5) Business Days following the receipt of such Schedule Update that Buyer is either
terminating the Agreement or that Buyer is investigating in good faith whether such Schedule Update would result in Buyer having a termination
right, then the Buyer will be deemed to have irrevocably waived any right to terminate this Agreement with respect to such Schedule Update.

 

Section
5.8 Company Records.

 

(a)
In order to facilitate the resolution of any claims
made against or incurred by Seller prior to the Closing, or for any other reasonable purpose (other than for the purpose of making any
claims against Buyer or its Affiliates), for a period of seven (7) years after the Closing, Buyer shall:

 

(i)
retain the Company Records (including personnel files)
relating to periods prior to the Closing or with respect to any Action to which Seller is a party in a manner reasonably consistent with
the prior practices of Seller;

 

(ii)
upon reasonable notice, promptly afford the Seller’s
Representatives reasonable access (including the right to make, at Seller’s expense, photocopies), during normal business hours,
to such Company Records; and

 

    	 	41	 

     

    

 

(iii)
upon reasonable notice, promptly furnish, without expense
(other than reimbursement of actual out-of-pocket expenses) to Seller, such employees of the Company as may be reasonably necessary in
connection with the purpose set forth above.

 

(b)
In order to facilitate the resolution of any claims
made by or against or incurred by Buyer after the Closing, or for any other reasonable purpose (including for the purpose of preparing
audited financial statements in accordance with applicable Law and rules of securities exchange), for a period of seven (7) years following
the Closing, Seller shall:

 

(i)
retain the books and records (including personnel files)
of the Seller and its Affiliates that relate to the Business and its operations for periods prior to the Closing;

 

(ii)
upon reasonable notice, promptly afford the Buyer’s
Representatives reasonable access (including the right to make, at the Buyer’s expense, photocopies), during normal business hours,
to such books and records; and

 

(iii)
upon reasonable notice, promptly furnish, without expense
(other than reimbursement of actual out-of-pocket expenses) to Buyer, such employees of the Seller and its Affiliates as may be reasonably
necessary in connection with the purpose set forth above.

 

(c)
Neither Buyer nor Seller shall be obligated to provide
the other party with access to any books or records (including personnel files) pursuant to this Section 5.8 where such access
would violate any applicable Law; provided that in such case, the parties shall cooperate in good faith to implement alternate
arrangements in order to allow the provision of such information to the fullest extent permitted under applicable Law and reasonably
practicable under the circumstances.

 

(d)
If Buyer or Seller shall desire to dispose of any of
such books or records prior to the expiration of such seven (7) year period, Buyer or Seller, as applicable, shall, prior to such disposition,
give the other a reasonable opportunity, at the notified party’s expense, to segregate and remove such books and records as the
notified party may select.

 

Section
5.9 Company Required Financial Statements. 

 

(a)
The Company acknowledges that Buyer, within seventy-one
(71) days of the Closing Date, will be required under applicable Law to provide the Company Required Financial Statements.

 

(b)
On the date hereof, the Company has entered into the
KPMG Engagement Letter. From the date hereof until the completion of the preparation of the Company Required Financial Statements and
the delivery to the Buyer thereof, the Seller shall reasonably cooperate (and shall cause its Affiliates (including, before the Closing,
the Company) and their respective Representatives to reasonably cooperate) with the Buyer and with KPMG in order to complete the preparation
of the Company Required Financial Statements, including reasonably assisting with the preparation of the pro forma financial statements
reflecting the transactions contemplated by this Agreement as required by the published rules and regulations of the Securities Exchange
Commission.

 

    	 	42	 

     

    

 

(c)
The Buyer shall reimburse the Seller for any reasonable,
actual and documented out-of-pocket third-party costs and expenses incurred by the Seller or the Company in connection with the preparation
of the Company Required Financial Statements (including those costs and expenses incurred by the Seller or the Company in connection
with the negotiation and execution of the KPMG Engagement Letter and the engagement of KPMG pursuant thereto), up to a maximum aggregate
amount equal to $125,000.

 

(d)
Without limiting any other provisions of this Agreement,
prior to the Closing, the Seller and the Company shall use their respective commercially reasonable efforts to coordinate with Buyer
and to provide the internal resources required to establish: (a) a system of “internal controls over financial reporting”
(as defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act) sufficient to provide reasonable assurances: (i) that transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP; (ii) that transactions are executed
only in accordance with the authorization of management; and (iii) regarding prevention or timely detection of the unauthorized acquisition,
use or disposition of the properties or assets of the Company, and (b) a system of “disclosure controls and procedures” (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) sufficient to ensure that all material information concerning the Company
is made known on a timely basis to the individuals responsible for the preparation of the Company’s financial statements. Prior
to the Closing, the Seller and the Company shall reasonably cooperate with Buyer with respect to integration planning in respect of accounting
and financial reporting functions. Notwithstanding anything to the contrary herein, nothing in this Section 5.9(d) shall
require the Company to incur any out of pocket expenses (other than nominal expenses) in connection with its efforts hereunder.

 

Section
5.10 Governmental and Non-Governmental Consents; Other Actions. 

 

(a)
Each Party shall, as promptly as possible, use its reasonable
best efforts to (i) obtain, or cause to be obtained, all Governmental Consents that may be or become necessary for its execution and
delivery of this Agreement and the performance of its obligations pursuant to this Agreement, and (ii) use reasonable best efforts to
cause to be taken, on a timely basis, all other actions necessary or appropriate for the purpose of consummating and effectuating the
transactions contemplated by this Agreement. Each Party shall cooperate fully with the other Party and its Affiliates in promptly seeking
to obtain all such Governmental Consents. The Parties shall not willfully take any action that will have the effect of delaying, impairing
or impeding the receipt of any such required Governmental Consents.

 

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(b)
All analyses, appearances, meetings, discussions, presentations,
memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Entity or the staff
or regulators of any Governmental Entity, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt,
not including any interactions between the Seller or the Company with Governmental Entities in the Ordinary Course of Business, any disclosure
which is not permitted by Law or any disclosure containing confidential information) shall be disclosed to the other Party hereunder
in advance of any filing, submission or attendance, it being the intent that the Parties will consult and cooperate with one another,
and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations,
memoranda, briefs, filings, arguments and proposals. Each Party shall give notice to the other Party with respect to any meeting, discussion,
appearance or contact with any Governmental Entity or the staff or regulators of any Governmental Entity, with such notice being sufficient
to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

 

(c)
The Parties shall use commercially reasonable efforts
to give all notices to, and obtain all consents from, all third parties that are described in Schedule 3.5(a). Notwithstanding
anything to the contrary in this Agreement, the Seller shall not be obligated to pay any consideration therefor to any third party from
whom consent or approval is requested. The Seller shall not have any liability whatsoever to the Buyer arising out of or relating to
the failure to obtain any Non-Governmental Consent or give any such notice or because of the termination of any Contract as a result
thereof.

 

Section
5.11 Intercompany Accounts. The Seller and the
Company shall settle, discharge, offset, pay, repay, terminate or extinguish, or cause to be settled, discharged, offset, paid, repaid,
terminated or extinguished, in full prior to the Closing all obligations or amounts due, payable or outstanding, including but not limited
to intercompany payables or receivables, between the Seller or any of its Affiliates (excluding the Company), on the one hand, and the
Company on the other hand.

 

Section
5.12 R&W Insurance Policy. 

 

(a)
The Parties shall take all commercially reasonable actions
necessary to obtain and bind the R&W Insurance Policy as of the Closing. The Buyer shall not amend, terminate or modify the subrogation
provisions of the R&W Insurance Policy in any manner that would reasonably be expected to actually prejudice the Seller or any of
its Affiliates without the Seller’s prior written consent. The Seller shall be responsible for paying $250,000 of the fees, expenses,
taxes and premiums relating to such R&W Insurance Policy.

 

(b)
The Buyer acknowledges and agrees that recovery under
the R&W Insurance Policy (in accordance with the terms and conditions thereof) constitutes the Buyer’s and its Affiliates’
sole recourse for any breach of any representation or warranty of the Seller contained in this Agreement or in any other Transaction
Document to which the Seller and/or the Company is a party; provided that nothing in the foregoing shall limit or otherwise affect
Buyer’s rights and remedies in the event of Fraud.

 

    	 	44	 

     

    

 

Section
5.13 No Solicitation of Other Bids.

 

(a)
Until the earlier of the Closing or the termination
of this Agreement pursuant to Section 7.1, Seller shall not, and shall cause the Company not to, and shall not authorize
or permit any of their respective Affiliates or Representatives to, (a) negotiate or enter into any transaction involving an Acquisition
Proposal, (b) facilitate, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an Acquisition
Proposal, or (c) furnish or cause to be furnished, to any other Person, any information concerning the business, operations, properties
or assets of the Company in connection with an Acquisition Proposal. Seller shall, and shall cause the Company to, immediately cease
and cause to be terminated, and shall cause each of their respective Affiliates and Representatives to immediately cease and cause to
be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to,
an Acquisition Proposal. For purposes hereof, “Acquisition Proposal” means any inquiry, proposal or offer from any
Person (other than Buyer or any of its Affiliates) concerning (A) a merger, consolidation, liquidation, recapitalization, share exchange
or other business combination transaction involving the Company; (B) the issuance or acquisition of equity interests of the Company;
or (C) the sale, lease, exchange or other disposition of any significant portion of the Company’s properties or assets.

 

(b)
In addition to the other obligations under this Section 5.13,
Seller shall promptly (and in any event within three (3) Business Days after receipt thereof by Seller or the Company or any of their
respective Affiliates or Representatives) advise Buyer orally and in writing of any Acquisition Proposal, any request for information
with respect to any Acquisition Proposal, or any inquiry with respect to or which could reasonably be expected to result in an Acquisition
Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry, and the identity of the Person making the
same.

 

Section
5.14 Non-Competition; Non-Solicitation. 

 

(a)
For a period of five (5) years commencing on the Closing
Date (the “Restricted Period”), neither Seller nor any of its Affiliates (but excluding, for the avoidance of doubt,
any Sponsor Affiliates) (each, a “Restricted Person”) shall, directly or indirectly through any Person or by contractual
arrangement, (i) engage in or assist others in the Restricted Business anywhere in the world (the “Territory”) or
(ii) acquire, own, manage, operate, join, control, or participate in the ownership, management, operation or control of, consult with
or perform services for, lend money or capital to, invest capital in, or be connected in any manner with, including as a partner or through
stock ownership in, any business or Person that engages in the Restricted Business in the Territory; provided that, notwithstanding
the foregoing, Restricted Persons may acquire, own and operate another Person that engages in the Restricted Business so long as (x)
such Restricted Business does not materially overlap or compete with the Business, (y) such Restricted Business is not a material component
of the business of such acquired Person, taken as a whole and (z) following the acquisition, the acquiring Restricted Person does not
launch or expand the Restricted Business to be a material component of the business of such acquired Person. The Parties acknowledge
and agree that, (a) for the purpose of subclauses (x) and (y) of the foregoing proviso, (A) Restricted Business conducted by an acquired
Person will be deemed to materially overlap and compete with the Business if twenty percent (20%) or more of the revenue generated by
such Restricted Business on a trailing twelve-month basis (measured as of immediately prior to the date of the acquisition by the Restricted
Person of such acquired Person) is generated from business activities that constitute the Business, (B) the Restricted Business will
be deemed to be a material component of the business of such acquired Person if twenty percent (20%) or more of the revenue generated
by such Person on a trailing twelve-month basis (measured as of immediately prior to the date of the acquisition by the Restricted Person
of such acquired Person) is generated from business activities that constitute Restricted Business, and (2) for the purpose of subclause
(z) of the foregoing proviso, the Restricted Business will be deemed to be a material component of the business of such acquired Person
if twenty percent (20%) or more of the revenue generated by such Person on a twelve-month rolling average basis is generated from business
activities that constitute Restricted Business.

 

    	 	45	 

     

    

 

(b)
During the Restricted Period, each Restricted Person
shall not, directly or indirectly through any Person or by contractual arrangement, (a) induce or attempt to induce any employee, officer,
director or manager of Buyer or the Company to leave the employ of Buyer or the Company or (b) solicit to hire or hire any Person who
is or was an employee, officer, manager or director of Buyer or the Company until one year after such individual’s employment or
other relationship with Buyer or the Company has been terminated; provided, that nothing in this Section 5.14 prevents
Seller or any of its Affiliates from hiring any employee or former employee of Buyer or the Company who requests such employment in response
to a general solicitation that is not directed specifically to any such individual.

 

(c)
During the Restricted Period, each Restricted Person
shall not, directly or indirectly through any Person or by contractual arrangement, induce or attempt to induce any customer, broker,
supplier, vendor, licensee, consultant or other material business relation of the Company to cease doing business with Buyer or the Company.

 

(d)
The Parties recognize that the performance of the obligations
under this Section 5.14 by the Restricted Persons is special, unique and extraordinary in character. Each Restricted Person
acknowledges that a breach or threatened breach of this Section 5.14 would give rise to irreparable harm to Buyer, for which
monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by any Restricted
Person of any such obligations, in addition to any and all other rights and remedies that may be available to it in respect of such breach,
(i) Buyer shall be entitled to obtain damages for any breach of this Section 5.14 and (ii) without having to demonstrate
(1) the inadequacy of money damages, (2) the likelihood of success on the merits, (3) damages, (4) irreparable harm, or (5) that the
harm from not issuing the injunction outweighs the harm from issuing the injunction, and (to the extent permitted by applicable Law)
without posting a bond or other security, Buyer shall be entitled to (A) enforce the specific performance of each provision of this Section 5.14
by the Restricted Persons or (B) enjoin the Restricted Persons from violating the terms of this Section 5.14, including
through entry of a preliminary injunction or a permanent injunction by a court of competent jurisdiction.

 

(e)
Each Restricted Person acknowledges that the restrictions
contained in this Section 5.14 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a
material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. If any covenant
contained in this Section 5.14 is adjudicated to exceed the time, geographic, product or service, or other limitations permitted
by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant will be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law.

 

(f) If
a Restricted Person violates any provision of this Section 5.14, then the Restricted Period shall be automatically
tolled to account for the period of violation (including until all appeals, if any, are resolved).

 

    	 	46	 

     

    

 

Section
5.15 Company Insurance Policies. Seller shall
keep the Company Insurance Policies, or suitable replacements therefor, in full force and effect through the close of business on the
Closing Date. For any claim that may be asserted against the Company after the Closing Date arising out of events, incidents, conduct
or circumstances that occurred and/or existed prior to the Closing Date (such claims, “Post-Closing Claims”), (i)
Seller shall ensure that the Company has access to coverage under the Specified Policies, in each case subject to the terms and conditions
thereof (it being understood, for purpose of clarity, that the Company shall not responsible for loss within any deductible or retention
under the Specified Policies). After the Closing Date, the Company may seek coverage for any Pre-Closing Claim from the applicable insurer
under any Specified Policy. Seller shall make commercial reasonable efforts to cooperate with the Company in connection with the tendering
of such claims; provided, however, that (i) the Company shall reimburse Seller for all of its out-of-pocket costs and expenses in connection
with such cooperation; and (ii) the Company shall notify Seller of all such coverage claims made. Seller shall not release, commute,
buy-back, or otherwise eliminate the coverage available under any Specified Policy without first providing written notice to the Company
within five years post close.

 

Section
5.16 General Release. 

 

(a)
Seller, on behalf of itself and its Affiliates which
it controls, and their respective successors and assigns (collectively, the “Seller Releasors”), hereby knowingly
and voluntarily releases and forever discharges, effective as of the Closing Date, Buyer and the Company, and each of their respective
past, present and/or future Affiliates and Representatives (collectively, the “Buyer Released Parties”), from any
and all Proceedings, claims, suits, controversies, causes of action, cross-claims, counter claims, demands, debts, compensatory damages,
liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature
whatsoever in law and in equity, whether known or unknown, liquidated or contingent, which the Seller or any other Seller Releasor ever
had, now have or may have relating to, arising out of or in any way connected with the dealings of the Company, on the one hand, and
the Seller and the other Seller Releasors, on the other hand, or any circumstance, agreement, action, omission, event or matter occurring
or existing between the Company on the one hand and the Seller and the other Seller Releasors on the other hand, in each case, prior
to the Closing Date (collectively, the “Seller Released Claims”); provided, however, that the Seller
Released Claims shall not include any of the terms, conditions or other provisions or obligations under this Agreement or the Transaction
Documents, or any claims with respect to Fraud.

 

    	 	47	 

     

    

 

(b)
Buyer, on behalf of itself and its Affiliates which
it controls (including the Company from and after the Closing) , and their respective successors and assigns (collectively, the “Buyer
Releasors”), hereby knowingly and voluntarily releases and forever discharges, effective as of the Closing Date, Seller, and
each of its past, present and/or future Affiliates and Representatives (collectively, the “Seller Released Parties”),
from any and all Proceedings, claims, suits, controversies, causes of action, cross-claims, counter claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities
of any nature whatsoever in law and in equity, whether known or unknown, liquidated or contingent, which the Buyer or any other Buyer
Releasor ever had, now have or may have relating to, arising out of or in any way connected with the dealings of the Company and/or the
Seller, on the one hand, and the Buyer and the other Buyer Releasors, on the other hand, or any circumstance, agreement, action, omission,
event or matter occurring or existing between the Company and/or the Seller on the one hand and the Buyer and the other Buyer Releasors
on the other hand, in each case, prior to the Closing Date (collectively, the “Buyer Released Claims”); provided,
however, that the Buyer Released Claims shall not include any of the terms, conditions or other provisions or obligations under
this Agreement or the Transaction Documents, or any claims with respect to Fraud.

 

(c)
Each of the Seller and the Buyer acknowledges that the
Laws of many states provide substantially the following:

 

“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

Each
of the Seller and the Buyer acknowledges that such provisions are designed to protect a party from waiving claims which he does not know
exist or may exist. Nonetheless, each of the Seller and the Buyer agrees that, effective as of the Closing Date, the Seller and the other
Seller Releasors and the Buyer and the other Buyer Releasors shall be deemed to waive any such provision.

 

(d)
Each of the Seller and the Buyer further agrees that
it shall not, and shall not permit any Affiliates which it controls to, (i) institute a lawsuit or other legal proceeding based upon,
arising out of, or relating to any of the Seller Released Claims or the Buyer Released Claims, as applicable, (ii) participate, assist,
or cooperate in any such proceeding, or (iii) encourage, assist and/or solicit any third party to institute any such proceeding.

 

Section
5.17 Cash . Prior to the Closing, the Company
may, at any time ,distribute to the Seller all or any portion of the Cash and Cash Equivalents held by the Company.

 

Section
5.18 Further Assurances. As a material obligation
of each Party to consummate the transactions contemplated by this Agreement, from time to time after the Closing, each Party shall at
its own expense (i) cooperate with the other Party, (ii) perform any further act and (iii) execute and deliver such documents or instruments
as may be reasonably requested by the other Parties in order to effectuate any transaction, act or agreement contemplated by this Agreement.

 

    	 	48	 

     

    

 

Article
6

CONDITIONS
PRECEDENT

 

Section
6.1 Conditions Precedent to Each Party’s Obligations
to Effect the Closing. The respective obligations of each Party to effect the Closing are subject to the satisfaction or waiver at
or prior to the Closing of each of the following conditions:

 

(a)
Governmental Consents; Governmental Notices.
The Seller shall have delivered the notices to the Governmental Entities and obtained the Governmental Consents listed on Schedule
3.5(b). The Buyer shall have obtained the Buyer Governmental Notices and obtained the Buyer Governmental Consents listed on Schedule
4.3(a). With respect to any Buyer Governmental Notices or Governmental Notices required under any antitrust or fair trade Law, any
and all waiting periods shall have expired or been terminated.

 

(b)
No Order. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any binding Governmental Order or Law which (i) is in effect
and (ii) has the effect of making the transactions contemplated hereby illegal or otherwise prohibiting consummation of the transactions
contemplated hereby.

 

(c)
No Governmental Restrictions. There shall not
be any pending Proceeding asserted by any Governmental Entity challenging or seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, the effect of which restraint or prohibition if obtained would cause the condition set forth
in Section 6.1(b) to not be satisfied.

 

Section
6.2 Conditions to Obligations of the Buyer. The
obligations of the Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written
waiver, at or prior to the Closing, of each of the following conditions:

 

(a)
Representations and Warranties. (i) The representations
and warranties of the Seller contained in Article 3 (other than the Fundamental Representations of the Seller and the Company),
in each case without giving effect to any Materiality Qualifiers contained therein, shall be true and correct in all respects as of the
date of this Agreement and as of the Closing Date with the same effect as though made at and as of such date (except those representations
and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified
date), in each case, except where the failure of such representations and warranties to be so true and correct would not result in a
Material Adverse Effect, and (ii) the Fundamental Representations of the Seller and the Company, in each case without giving effect to
any Materiality Qualifiers contained therein, shall be true and correct in all respects as of the date of this Agreement and as of the
Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters
only as of a specified date, which shall be true and correct in all respects as of that specified date).

 

    	 	49	 

     

    

 

(b)
Performance of Obligations. The Seller and the
Company shall have performed, in all material respects, all obligations required to be performed by them under this Agreement at or prior
to the Closing Date.

 

(c)
Absence of Certain Changes. No Material Adverse
Effect shall have occurred since the date of this Agreement.

 

(d)
Closing Deliveries. The Seller shall have delivered
to the Buyer at the Closing the certificates and other instruments and documents contemplated by Section 2.2(a).

 

(e)
Release of Guaranty, Termination of Security Interest
and Lender Consent. (i) The Company shall have been released as a guarantor under any instrument governing the terms of the Seller’s
debt instruments, (ii) all Encumbrances on the Interests and the assets of the Company (including Company Intellectual Property) securing
the indebtedness owed by the Seller under its debt instruments shall have been released and (iii) each of the lenders (or the lenders’
duly authorized agent) under Seller’s debt instruments shall have consented to the transactions contemplated by this Agreement,
in each case, pursuant to a release and termination and consent documents reasonably satisfactory to Buyer.

 

(f)
Effectiveness of Certain Contracts. The Contracts
listed in Schedule 6.2(f) shall not have been terminated and shall remain in full force and effect and enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.

 

(g)
R&W Insurance Policy. Buyer shall have obtained
and bound the R&W Insurance Policy substantially simultaneously with (or prior to) the Closing, which shall contain terms and conditions
reasonably acceptable to the Buyer.

 

(h)
Non-Governmental Consents. The Non-Governmental
Consents set forth on Schedule 6.2(h) shall have been obtained in form and substance reasonably satisfactory to Buyer.

 

Section
6.3 Conditions to Obligations of the Seller.
The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written
waiver, at or prior to the Closing, of each of the following conditions:

 

(a)
Representations and Warranties. (i) The representations
and warranties of the Buyer contained in Article 4 (other than Fundamental Representations of Buyer), in each case without giving
effect to any Materiality Qualifiers contained therein, shall be true and correct in all respects as of the date of this Agreement and
as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address
matters only as of a specified date, which shall be true and correct in all respects as of that specified date), in each case, except
where the failure of such representations and warranties to be so true and correct would not result in a material adverse effect on the
ability of Buyer to consummate the transactions contemplated by this Agreement in accordance with the terms hereof and (ii) the Fundamental
Representations of Buyer, in each case without giving effect to any Materiality Qualifiers contained therein, shall be true and correct
in all respects as of the date of this Agreement and as of the Closing Date with the same effect as though made at and as of such date
(except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all
respects as of that specified date).

 

    	 	50	 

     

    

 

(b)
Performance of Obligations. The Buyer shall have
performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date.

 

(c)
Closing Deliveries. The Buyer shall have delivered,
at the Closing, the certificates and other instruments and documents contemplated by Section 2.2(b).

 

Article
7

TERMINATION

 

Section
7.1 Termination. Anything contained in this Agreement
other than in this Section 7.1 to the contrary notwithstanding, this Agreement may be terminated in writing at any time prior
to the Closing Date: 

 

(a)
by the mutual written consent of the Seller and the
Buyer;

 

(b)
by the Seller or the Buyer, if the Closing shall not
have been consummated by November 18, 2021 (the “Closing Deadline”), except that that the right to terminate this
Agreement pursuant to this Section 7.1(b) shall not be available to any Party whose failure to perform any of its obligations
under this Agreement results in the failure of the Closing to be consummated by such date;

 

(c)
by the Buyer, if the Seller shall have breached or failed
to perform, in any material respect, any of its representations, warranties, covenants or other agreements contained in (i) this Agreement,
which breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 6.2(a) or Section
6.2(b), unless such failure is due to the failure of Buyer to perform or comply with any covenants, agreements or conditions hereof
to be performed or complied with by it prior to the Closing, and (B) is incapable of being cured by the Seller or is not cured by the
Seller within thirty (30) days or prior to the Closing Deadline, whichever is earlier, following receipt of written notice from the Buyer
of such breach or failure to perform;

 

(d)
by the Seller, if the Buyer shall have breached or failed
to perform in any material respect any of its representations, warranties, covenants or other agreements contained in (i) this Agreement,
which breach of failure to perform (A) would give rise to the failure of a condition set forth in Section 6.3(a) or Section
6.3(b), unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions
hereof to be performed or complied with it prior to the Closing, and (B) is incapable of being cured by the Buyer or is not cured by
the Buyer within thirty (30) days or prior to the Closing Deadline, whichever is earlier, following receipt of written notice from the
Company of such breach or failure to perform; or

 

    	 	51	 

     

    

 

(e)
by the Buyer or the Seller if any Governmental Entity
shall have enacted, issued, promulgated, enforced or entered any binding Governmental Order or Law that has become final and nonappealable
and has the effect of making the transactions contemplated hereby illegal or otherwise prohibiting consummation of the transactions contemplated
hereby, except that the right to terminate this Agreement pursuant to this Section 7.1(e) will not be available to any Party that
has failed to use its reasonable best efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such Governmental
Order or Law.

 

Section
7.2 Effect of Termination. In the event of termination
of this Agreement by either the Buyer or the Seller as provided in Section 7.1, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of any Party, other than the provisions of this Section 7.2, Section
5.2, Section 5.4 and Article 10, which provisions shall survive such termination, and except to the extent that such
termination results from the Willful Breach or Fraud by a Party of any of its representations, warranties, covenants or agreements set
forth in this Agreement, in which case such termination shall not relieve any Party of any Liability resulting from such breach of this
Agreement or Fraud.

 

Article
8

DEFINITIONS
AND INTERPRETATION

 

Section
8.1 Definitions. For purposes of this Agreement:

 

“Accounting
Principles” means GAAP on a basis consistent with the policies applied in the preparation of the Financial Statements.

 

“Accounts
Receivable” of a Person means (a) all billed and unbilled trade accounts receivable and other rights to payment from subscribers
of such Person and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing
amounts receivable in respect of goods shipped or products sold or services rendered to subscribers, (b) all other accounts or notes
receivable relating to such Person and the full benefit of all security for such accounts or notes and (c) any claim, remedy or other
right related to any of the foregoing.

 

“Acquisition
Proposal” has the meaning set forth in Section 5.13(a).

 

“Action”
or “Proceeding” means any action, claim, charge, complaint, demand, petition, suit, litigation, arbitration or other
proceeding (including any civil, criminal, administrative, investigative, enforcement, regulatory or appellate proceeding), hearing,
inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving any court or
other Governmental Entity or any arbitrator.

 

“Actual
Adjustment” means an amount, which may be a negative number, equal to (x) the Purchase Price as finally determined pursuant
to Section 1.2(d), minus (y) the Estimated Purchase Price.

 

    	 	52	 

     

    

 

“Affiliate”
means, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled
by, or is under common Control with, such first Person.

 

“Allocation
Methodology” has the meaning set forth in Section 5.6(f).

 

“Allocation
Schedule” has the meaning set forth in Section 5.6(f).

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Base
Purchase Price” has the meaning set forth in Section 1.2(a).

 

“Business”
means the business conducted by the Company at or prior to the Closing, directly or indirectly, including the research, development,
manufacturing, production, commercialization, processing, distribution, marketing, licensing and sale of (a) calcium dietary supplements
and (b) digestive health supplements.

 

“Business
Day” means any day other than a Saturday, a Sunday or a day on which commercial banking institutions in San Diego, California
or New York, New York are authorized or obligated by Law or executive order to be closed.

 

“Buyer”
has the meaning set forth in the Preamble.

 

“Buyer
Governmental Notices” has the meaning set forth in Section 4.3(a).

 

“Buyer
Indemnified Party” has he meaning set forth in Section 9.2.

 

“Buyer
Released Claims” has the meaning set forth in Section 5.16(b).

 

“Buyer
Released Parties” has the meaning set forth in Section 5.16(a).

 

“Buyer
Releasors” has the meaning set forth in Section 5.16(b).

 

“Cash
and Cash Equivalents” means, as of the Effective Time, cash and cash equivalents (including marketable securities, checks and
bank deposits) of the Company, provided that Cash and Cash Equivalents shall (a) exclude any Restricted Cash, (b) be increased
by the amounts of any checks, drafts and wires issued to the Company prior to such time but not yet cashed or deducted as of such time,
and be reduced by the amounts of any checks, drafts and wires issued by the Company but not yet cashed or deducted as of such time, in
each case calculated in accordance with GAAP and (c) exclude any amounts collected from customers in advance and represents a liability
to such customers as of such time.

 

“CARES
Act” means the Coronavirus Aid, Relief, and Economic Security Act of 2020 (Pub. L. 116-136 (2020)), as enacted March 27, 2020
and amended from time to time, including by the Paycheck Protection Plan Flexibility Act enacted June 5, 2020, and the Economic Aid to
Hard Hit Small Businesses, Nonprofits, and Venues Act enacted December 27, 2020.

 

    	 	53	 

     

    

 

“Closing”
has the meaning set forth in Section 2.1.

 

“Closing
Date” has the meaning set forth in Section 2.1.

 

“Closing
Date Cash and Cash Equivalents” means the Cash and Cash Equivalents as of immediately prior to the Closing.

 

“Closing
Date Funded Indebtedness” means the Funded Indebtedness as of immediately prior to the Closing.

 

“Closing
Deadline” has the meaning set forth in Section 7.1(b).

 

“Closing
Net Working Capital” has the meaning set forth in Section 1.2(a).

 

“Closing
Net Working Capital Deficiency” has the meaning set forth in Section 1.2(a).

 

“Closing
Net Working Capital Surplus” has the meaning set forth in Section 1.2(a).

 

“Code”
means the U.S. Internal Revenue Code of 1986, as amended.

 

“Company”
has the meaning set forth in the Background.

 

“Company
Insurance Policies” has the meaning set forth in Section 3.17.

 

“Company
Intellectual Property” means all Intellectual Property and Embodiments owned or purported to be owned by the Company, including
sole and joint ownership, or exclusively licensed or purported to be exclusively licensed to the Company.

 

“Company
Records” means the original minute and stock books, and other current and historical books and records of the Company.

 

“Company
Registrations” has the meaning set forth in Section 3.16(a)(i).

 

“Company
Required Financial Statements” means the audited and unaudited financial statements covering the Company and any predecessor
business thereof as the Buyer may determine to be required under SEC Laws, in accordance with the Buyer’s periodic reporting obligations
under the Securities Exchange Act of 1934, as amended.

 

“Confidentiality
Agreement” means the Confidentiality Agreement, dated as of December 14, 2020, by and between Buyer and the Seller.

 

“Confidential
Information” means any confidential or secret information that belongs or relates to Company or its business or to the business
of any of the customers, suppliers or other business relationships of the Company or its business. Without limiting the generality of
the foregoing, “Confidential Information” shall specifically include: all nonpublic information concerning the manner and
details of the Company’s operation, organization and management; business production methods and manufacturing processes; financial
information and/or documents and nonpublic policies, procedures and other printed, written or electronic material generated or used in
connection with the Company’s business; the Company’s business plans and strategies; the identities of and contact information
for the Company’s customers and the specific individual customer representatives with whom the Company works; the details of the
Company’s relationship with such customers and customer representatives; the identities and contact information for distributors,
contractors and vendors utilized in the Company’s business; the details of the Company’s relationships with such distributors,
contractors and vendors; the nature of fees and charges made to the Company’s customers; nonpublic forms, contracts and other documents
used in the Company’s business; all information concerning the Company’s directors, employees, agents and contractors, including
such persons’ compensation, benefits, skills, abilities, experience, knowledge and shortcomings, if any; the nature and content
of computer software used in the Company’s business, whether proprietary to the Company or used by the Company under license from
a third party; and all other nonpublic information concerning the Company’s concepts, prospects, customers, employees, agents,
contractors, earnings, products, services, equipment, systems, and/or prospective and executed contracts and other business arrangements.

 

    	 	54	 

     

    

 

“Contract”
means, with respect to any Person, any agreement, lease, contract, note, mortgage, indenture or other legally binding obligation, commitment
or arrangement, or other document or instrument, written or oral, to which or by which such Person is a party or otherwise subject or
bound or to which or by which any asset, property or right of such Person is subject or bound.

 

“Control”
(including the terms “controlled by” and “under common control with”), with respect to the relationship between
or among two (2) or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of voting securities, by Contract or otherwise, including the ownership,
directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs
of such Person.

 

“COVID-19
Event” means the outbreak and spread of SARS-CoV-2 (COVID-19) or any strains, mutations or variants thereof, or related or
associated epidemics, pandemics or disease outbreaks.

 

“COVID-19
Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing,
shut down, closure, sequester, safety or similar legal requirement, directive, guidelines or recommendations promulgated by any Governmental
Entity or quasi-governmental organization, including the Centers for Disease Control and Prevention, the World Health Organization and
the Occupational Safety and Health Administration, in each case, in connection with or in response to the COVID-19 Event.

 

“Current
Assets” means the assets of the Company that, in accordance with GAAP, constitute current assets of the Company (excluding
Cash and Cash Equivalents, all deferred Tax assets and any intercompany receivables, including any accounts receivable from the Seller
or its Affiliates).

 

“Current
Liabilities” means all accounts payable and other liabilities of the Company that, in accordance with GAAP, constitute current
liabilities of the Company (excluding any Funded Indebtedness, deferred Tax liabilities, and any intercompany payables, including any
accounts payable to the Seller or its Affiliates).

 

    	 	55	 

     

    

 

“Dispute
Resolution Period” has the meaning set forth in Section 5.6(f).

 

“Effective
Time” has the meaning set forth in Section 1.2(b).

 

“Embodiments”
means all tangible embodiments of Intellectual Property and inventions, works, discoveries, innovations, know-how, information (including
ideas, research and development, formulas, algorithms, compositions, processes and techniques, data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, business and marketing plans and proposals, graphics, illustrations, artwork,
documentation, and manuals), Systems, integrated circuits and integrated circuit masks, equipment, and all other forms of technology
and business materials, whether tangible or intangible, embodied in any form, whether or not protectable or protected by patent, copyright,
mask work right, trade secret law, or otherwise, and all documents and other materials recording any of the foregoing.

 

“Encumbrance”
means any charge, claim, pledge, lien (statutory or other), option, security interest, mortgage, right of first refusal, restriction
on use, voting, transfer, receipt of income or exercise of any other attribute of ownership, or other similar encumbrance.

 

“Environmental
Law” means any Law, Governmental Order or other requirement of Law (a) relating to the pollution (or cleanup thereof) or the
protection of natural resources, endangered or threatened species, human health or safety, or the environment and/or (b) concerning the
presence of, exposure to, or the management, manufacture, use, transport, treatment, storage, disposal, release or threatened release
of pollutants, contaminants, wastes, hazardous or toxic substances or materials, including all substances defined as Hazardous Substances,
Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.5, toxic
mold, asbestos and asbestos-containing materials, ignitable, reactive or corrosive substances, by-products, process intermediate products
or wastes, petroleum or petroleum fractions and products, lead-containing paint, urea-formaldehyde insulation, polychlorinated biphenyls,
radon, chemical liquids or solids, liquid or gaseous products, or any constituent of any such substance or waste, which is listed, classified
or regulated as hazardous or toxic under such Law, Governmental Order or other requirement of Law.

 

“ERISA”
has the meaning set forth in Section 3.14.

 

“Escrow
Account” has the meaning set forth in Section 1.2(c)(i)(B).

 

“Escrow
Agent” means U.S. Bank, National Association.

 

“Escrow
Agreement” has the meaning set forth in Section 1.2(c)(i)(B).

 

“Escrow
Amount” means an amount equal to Five Hundred Thousand Dollars ($500,000).

 

“Estimated
Closing Balance Sheet” has the meaning set forth in Section 1.2(b).

 

“Estimated
Closing Consideration Schedule” has the meaning set forth in Section 1.2(b).

 

“Estimated
Closing Net Working Capital” has the meaning set forth in Section 1.2(b).

 

    	 	56	 

     

    

 

“Estimated
Funded Indebtedness Amount” has the meaning set forth in Section 1.2(b).

 

“Estimated
Purchase Price” has the meaning set forth in Section 1.2(b).

 

“Estimated
Unpaid Transaction Expenses” has the meaning set forth in Section 1.2(b).

 

“Example
Net Working Capital Statement” has the meaning set forth in the definition of Net Working Capital.

 

“FDA
and Related Laws” means the applicable federal and state Laws related to the designing, formulating, composing, researching,
developing, manufacturing, processing, packing, packaging, labeling, holding, selling, distributing, promoting, advertising, importing,
or other business activity with respect to FDA-regulated products, including but not limited to the federal Food, Drug, and Cosmetic
Act (FDCA) and its implementing regulations, the Federal Trade Commission Act (FTC Act) and its implementing
regulations, and the National Bioengineered Food Disclosure Law and the Organic Food Production Act, and their implementing rules and
regulations.

 

“FDA
Permit” means any Permit issued by FDCA under FDA and Related Laws.

 

“Financial
Statements” has the meaning set forth in Section 3.6.

 

“Fraud”
of a Person means an intentional or reckless misrepresentation or omission by such Person made with knowledge of the falsity of such
misrepresentation and with the intention of deceiving that is relied on by the party to whom the misrepresentation is made.

 

“Fundamental
Representations” means (a) the representations and warranties of the Seller and the Company set forth in Section 3.1,
Section 3.2, Section 3.3, Section 3.5(a)(i), Section 3.12, Section 3.25 and Section 3.28 and
(b) the representations and warranties of Buyer set forth in Section 4.1, Section 4.2, Section 4.3(b)(i) and Section
4.8.

 

“Funded
Indebtedness” means, as of any time, without duplication, any of the following Liabilities of the Company (including the outstanding
principal amount of, accrued and unpaid interest on, and premiums, prepayment penalties, breakage costs and other third party fees and
charges with respect to, such items): (i) indebtedness for borrowed money, (ii) indebtedness evidenced by any note, bond, debenture or
other debt security, in each case, as of such time; (iii) indebtedness issued in substitution or exchange for borrowed money; (iv) payment
obligations with respect to the deferred purchase price of property, services, goods, assets or securities, but excluding any trade payables
and accrued expenses arising in the Ordinary Course of Business; (v) any letter of credit, performance bond or similar facility, in each
case, to the extent such letter of credit has been drawn upon; (vi) all payment obligations to pay rent or other amounts under any leases
required to be capitalized in accordance with GAAP, (vii) all interest rate swap, forward contract, foreign currency hedge or other hedging
or similar arrangements, (viii) payment obligations in the nature of direct or indirect guarantees, assumptions or endorsements of the
obligations of other Persons of the type referred to in clauses (i) through (vii) above and (ix) all indebtedness referred to in clauses
(i) through (viii) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to
be secured by) any Encumbrance on property owned by the Company. Notwithstanding the foregoing, “Funded Indebtedness” shall
not include Taxes, any amounts included as Transaction Expenses or current liabilities included in the Closing Net Working Capital.

 

    	 	57	 

     

    

 

“GAAP”
means generally accepted accounting principles in the U.S., consistently applied throughout the relevant periods of time.

 

“Governing
Documents” means, with respect to a Person, (i) its certificate of incorporation and bylaws or certificate of formation, shareholder
agreement, partnership agreement and operating agreement (or equivalent creation, formation, or organizational documents), and (ii) any
amendment or supplement to the foregoing.

 

“Governmental
Consents” means any consents, registrations, approvals, Permits or authorizations required to be obtained from any Governmental
Entity.

 

“Governmental
Entity” means any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision,
court, tribunal, administrative agency or commission or other governmental authority or instrumentality, or any quasi-governmental or
private body exercising any regulatory or governmental or quasi-governmental authority.

 

“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental
Entity or any arbitrator.

 

“Import
and Export Approvals” has the meaning set forth in Section 3.22(h).

 

“Inbound
IP Contracts” has the meaning set forth in Section 3.16(f).

 

“Indemnified
Party” has the meaning set forth in Section 9.1.

 

“Indemnifying
Party” has the meaning set forth in Section 9.1.

 

“Independent
Accountant” means a nationally or regionally recognized independent accounting firm that is mutually agreed to by the Seller
and the Buyer.

 

“Intellectual
Property” means all right, title, and interest in and to all intellectual property of every kind and nature however denominated,
throughout the world, including: (i) Patents, copyrights, mask work rights, confidential information, trade secrets, database rights,
and all other proprietary rights, (ii) trademarks, trade names, service marks, service names, brands, trade dress and logos, together
with the goodwill and activities associated therewith, (iii) domain names and social media accounts, (iv) rights of privacy and publicity,
and moral rights, and (v) any and all registrations, applications, recordings, licenses, common-law rights, statutory rights, administrative
rights, and contractual rights relating to any of the foregoing.

 

“Interests”
has the meaning set forth in the Background.

 

“Inventory”
means inventory, finished goods, raw materials, work in progress and packaging.

 

“IP
Contracts” has the meaning set forth in Section 3.16(f).

 

    	 	58	 

     

    

 

“IRS”
means the Internal Revenue Service.

 

“KPMG”
means KPMG US LLP.

 

“KPMG
Engagement Letter” means a document pursuant to which the Company engaged KPMG to audit the Company’s financial books
and records required for the preparation of the Company Required Financial Statements.

 

“Laws”
means any local, state, federal or international statute, law (including common law), ordinance, code, rule or regulation, as each may
be amended from time to time.

 

“Legal
Process” has the meaning set forth in Section 5.4(a).

 

“Liability”
means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether direct or
indirect, known or unknown, absolute or contingent, secured or unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of
such Person.

 

“Lookback
Date” has the meaning set forth in Section 3.9(a).

 

“Losses”
means any monetary loss, damage, injury, amount paid in settlement, judgment, award, fine, penalty, Tax, fees (including reasonable fees
and expenses of attorneys, accountants, financial advisors and other experts and other reasonable expenses of litigation), charge or
cost (including cost of investigation) or expense of any nature.

 

“Material
Adverse Effect” means any change, event, development, state of facts, effect, fact, or condition that is, or would reasonably
be expected to become, individually or in the aggregate, materially adverse to (i) the results of operations, financial condition, assets,
Liabilities or business of the Company or (ii) the ability of the Seller and the Company to consummate the transactions contemplated
by this Agreement in accordance with the terms hereof; except that “Material Adverse Effect” shall not include any change,
event, development, state of facts, effect, fact or condition arising out of or attributable to: (i) conditions generally affecting the
United States economy or credit, securities, currency, financial, banking or capital markets (including any disruption thereof and any
decline in the price of any security or any market index) in the United States, (ii) any national or international political or social
conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic
or consular offices or upon any military installation, equipment or personnel of the United States, (iii) any fire, flood, hurricane,
earthquake, tornado, windstorm, or other similar calamity or similar act of God, (iv) any global or national health concern, epidemic,
disease outbreak, pandemic (whether or not declared as such by any Governmental Entity and including the continuation or worsening of
the COVID-19 Event) or any COVID-19 Measures, (v) changes in GAAP, (vi) the announcement of the transactions contemplated by this Agreement
(including by reason of the identity or ownership of the Buyer or any communication by the Buyer or any of its Affiliates regarding their
respective plans or intentions with respect to the Company or its business, and including the impact thereof on relationships with customers,
suppliers, distributors, partners or employees or others having relationships with the Company), (vii) changes in any Law, Governmental
Order or other binding directive issued by any Governmental Entity or any action required to be taken under any Law, Governmental Order
or Contract by which the Seller or the Company (or any of their respective properties or assets) is bound, (viii) any change that is
generally applicable to the industries or markets in which the Company operates or (ix) any failure by the Company to meet any internal
or published projections, estimates, forecasts or revenue or earnings predictions (it being understood that the underlying causes of
such failures (subject to the other provisions of this definition) shall not be excluded by this clause (ix); provided that, with
respect to a matter described in any of the foregoing clauses (i) through (viii), to the extent that such matter has a disproportionate
effect on the Company, relative to other comparable entities operating in the industry in which the Company operates, such matter shall
not be excluded.

 

    	 	59	 

     

    

 

“Material
Contracts” has the meaning set forth in Section 3.11(a).

 

“Material
Customers” has the meaning set forth in Section 3.18(a).

 

“Material
Distributor” has the meaning set forth in Section 3.18(c).

 

“Material
Vendors” has the meaning set forth in Section 3.18(b).

 

“Materiality
Qualifier” means any qualifications in a representation or warranty in Article 3 or Article 4, referencing the
terms “material,” “materiality,” “Material Adverse Effect,” “in all material respects”
or words of similar import.

 

“Net
Working Capital” means Current Assets minus Current Liabilities, in each case determined in accordance with the Accounting
Principles. For illustrative purposes, an example calculation of Net Working Capital as of March 31, 2021 is attached hereto as Exhibit
A (the “Example Net Working Capital Statement”).

 

“Non-Governmental
Consent” means the consent of any third party that is not a Governmental Entity that is required to avoid or rectify (a) any
breach or violation of, or a default under, a Person’s Governing Documents, (b) any breach or violation of, or a default under,
the acceleration of any obligations under, the creation of a payment obligation under, or the creation of an Encumbrance on any assets
of a Person under any Contract to which such Person is a party or (c) any right to revoke, renegotiate, withdraw, suspend, cancel, terminate
or modify any Contract to which a Person is a party or by which such Person’s properties are bound.

 

“Non-Party
Affiliates” has the meaning set forth in Section 10.15.

 

“Ordinary
Course of Business” means the ordinary course of business of the Company consistent with past custom and practice.

 

“Outbound
IP Contracts” has the meaning set forth in Section 3.16(f).

 

“Overall
Cap” has the meaning set forth in Section 9.4(a).

 

“Party”
has the meaning set forth in the Preamble.

 

    	 	60	 

     

    

 

“Patents”
means all national (including the United States) and multinational statutory invention registrations, patents, patent registrations,
patent applications, provisional patent applications, industrial designs, industrial models, including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations, and all rights therein provided by multinational treaties or conventions and all
improvements to the inventions disclosed in each such registration, patent or application.

 

“Payroll
Tax Executive Order” means the Presidential Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19
Disaster, as issued on August 8, 2020 and including any administrative or other guidance published with respect thereto by any Governmental
Entity.

 

“Permits”
means any approvals, authorizations, certificates, filings, franchises, consents, licenses, notices and permits of or with all Governmental
Entities.

 

“Permitted
Encumbrances” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and other Encumbrances arising
or incurred in the Ordinary Course of Business for amounts that are not yet delinquent or are being contested in good faith, (b) Encumbrances
for Taxes, assessments or other governmental charges not yet due and payable as of the Closing Date or which are being contested in good
faith, (c) Encumbrances and restrictions on real property (including easements, covenants, conditions, rights of way and similar matters
affecting title to the real property and other title defects) that do not materially interfere with the Company’s present uses
or occupancy of such real property, (d) Encumbrances securing the obligations of the Company or any of its Affiliate under credit facilities
(but only if such Encumbrances under credit facilities are removed prior to, or in connection with, the Closing) and (e) Encumbrances
described on Schedule P-1.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust or unincorporated organization or a government or any
agency or political subdivision thereof, or any other entity.

 

“Pre-Closing
Returns” has the meaning set forth in Section 5.6(a).

 

“Pre-Closing
Tax Period” has the meaning set forth in Section 5.6(a).

 

“Pre-Closing
Taxes” includes any and all Taxes (a) of the Seller for any taxable period; (b) of the Company allocable to the Pre-Closing
Tax Period; (c) that are the Seller’s share of Transfer Taxes as set forth in Section 5.6(c); and (e) deferred pursuant
to the CARES Act, the Payroll Tax Executive Order, or any similar applicable federal, state or local Law.

 

“Proposed
Closing Balance Sheet”“ has the meaning set forth in Section 1.2(d)(i).

 

“Proposed
Closing Date Calculations” has the meaning set forth in Section 1.2(d)(i).

 

“Purchase
Price” has the meaning set forth in Section 1.2(a).

 

“Purchase
Price Dispute Notice” has the meaning set forth in Section 1.2(d)(ii).

 

    	 	61	 

     

    

 

“R&W
Insurance Policy” means the representation and warranty liability insurance policy to be issued to the Buyer (or its Affiliate)
as the named insured in respect of the transactions contemplated hereby.

 

“Reference
Balance Sheet” has the meaning set forth in Section 3.6.

 

“Reference
Balance Sheet Date” has the meaning set forth in Section 3.6.

 

“Representative”
means, with respect to a specified Person, the partners, principals, directors, officers, members, managers, employees, counsel, accountants
and other authorized Persons of such Person and its subsidiaries.

 

“Restricted
Business” means the business of research, development, production, manufacturing, commercialization, processing, distribution,
marketing, licensing and sale of dietary supplements and/or digestive health supplements finished products in the consumer health segment
under any brand, including the Business, either directly or indirectly; provided that Restricted Business shall exclude (i) contract
development and manufacturing of ingredients or finished products for others and (ii) manufacturing, marketing, licensing and sale of
products (including finished products) utilizing microbiome technology.

 

“Restricted
Cash” of means any Cash and Cash Equivalent to the extent not freely usable by the Company because it is subject to restrictions,
limitations or Taxes on use or distribution by Law, contract or otherwise, including (a) restrictions on dividends and repatriations
or any other form of restriction (including if subject to incremental costs, expenses, penalties, Taxes or other amounts to be incurred
in respect of any such distribution), (b) amounts held in escrow, in reserve pursuant to any letter of credit or otherwise as collateral
and (c) amounts that are deposited with a third party (other than a bank or similar financial institution).

 

“Restricted
Period” has the meaning set forth in Section 5.14(a).

 

“Restricted
Person” has the meaning set forth in Section 5.14(a).

 

“Schedule”
or “Schedules” means the schedule or schedules attached to this Agreement.

 

“Schedules
Update” has the meaning set forth in Section 5.7(c).

 

“Securities
Act” means the U.S. Securities Act of 1933, as amended.

 

“Security
Incident” has the meaning set forth in Section 3.16(g).

 

“Seller”
has the meaning set forth in the Preamble.

 

“Seller
Indemnified Party” has he meaning set forth in Section 9.3.

 

“Seller
Released Claims” has the meaning set forth in Section 5.16(a).

 

“Seller
Released Parties” has the meaning set forth in Section 5.16(b).

 

“Seller
Releasors” has the meaning set forth in Section 5.16(a).

 

    	 	62	 

     

    

 

“Seller’s
Knowledge,” or “Knowledge of Seller” means a fact, event, circumstance or occurrence actually known, upon
due inquiry, by any of Craig Sheehan, Matt Perry, Giuseppe Di Vincenzo, Mark Valentino and Peter Politowicz.

 

“Specified
Policies” means each of the Company Insurance Policies which are designated as “occurrence-based” or “occurrence-reported”
pursuant to the term of such policies.

 

“Software”
means computer software and databases, including object code, source code, firmware and embedded versions thereof and documentation related
thereto.

 

“Solvent”
means, with respect to a Person, that, as of any date of determination, (i) the Present Fair Salable Value of such Person’s assets
will, as of such date, exceed all of its liabilities, contingent or otherwise, as of such date, (ii) such Person will not have,
or have access to, as of such date, an unreasonably small amount of capital for the business in which it is engaged or is about to be
engaged and (iii) such Person will be able to pay its debts as they become absolute and mature, in the ordinary course of business, taking
into account the timing of and amounts of cash to be received by it and the timing of and amounts of cash to be payable on or in respect
of its indebtedness, in each case after giving effect to the transactions contemplated hereby. The term “Solvency”
shall have a correlative meaning. For purposes of the definition of “Solvent” (A) “debt” means liability
on a “claim”; and (B) “claim” means (x) any right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured or (y) the right
to an equitable remedy for a breach in performance if such breach gives rise to a right to payment, whether or not such equitable remedy
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured. “Present Fair Salable Value”, when used with respect to a Person, means the amount that may be realized
if the aggregate assets of such Person (including goodwill) are sold as an entirety with reasonable promptness in an arm’s length
transaction under present conditions for the sale of comparable business enterprises.

 

“Sponsor
Affiliates” means, collectively, (a) Thomas H. Lee Partners, L.P., (b) Frazier Healthcare Partners and (c) any Affiliates of
the Persons identified in clause (a) and (b) other than Seller and its Subsidiaries.

 

“Straddle
Period Tax Returns” means any Tax Return covering or relating to any Straddle Period.

 

“Straddle
Periods” means any taxable period that begins on or before the Closing Date and ends after the Closing Date.

 

“Subsidiary”
or “Subsidiaries” means, with respect to any specified Person, any Person with respect to which such specified Person,
directly or indirectly, owns or controls capital stock or other equity interests representing more than fifty percent (50%) of the general
voting power under ordinary circumstances of such Person, including any specified Person with the power to elect a majority of the board
of directors of such Person or with the power to direct the business and policies of such Person.

 

    	 	63	 

     

    

 

“System”
means all Software, hardware, networks, databases, electronics, platforms, servers, interfaces, applications, websites and related information
technology systems and services used or held for use by the Company, including any outsourced systems and services, that are owned or
used by the Company.

 

“Target
Working Capital” means One Million Seven Hundred Fifty Thousand Dollars ($1,750,000).

 

“Tax”
means all taxes, assessments, charges, duties, fees, levies or other governmental charges, including income, franchise, margin, capital
stock, real property, personal property, escheat, abandoned or unclaimed property, tangible, withholding, employment, payroll, social
security, land transfer, employer, employment, unemployment compensation, transfer, sales, use, service, license, excise, gross receipts,
value-added (ad valorem), add-on or alternative minimum, stamp, occupation, premium and all other taxes of any kind imposed by any Governmental
Entity, together with any and all penalties or interest imposed by any Governmental Entity, whether disputed or not, or in respect of
any failure to comply with any requirement regarding Tax Returns, including any such amounts imposed on any other Person (including under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law)), as a result of being a transferee,
successor, or member of an affiliated, consolidated, unitary or combined group, by contract, or otherwise.

 

“Tax
Matter” has the meaning set forth in Section 5.6(h).

 

“Tax
Purchase Price” has the meaning set forth in Section 5.6(f).

 

“Tax
Return” means any return, declaration, report, election, notice, statement, claim for refund or information return or statement
or document relating to Taxes and including any amendment, schedule or attachment thereto filed or required to be filed with any Governmental
Entity with respect to Taxes.

 

“Territory”
has the meaning set forth in Section 5.14(a).

 

“Transaction
Expenses” means, without duplication, the aggregate amount of (a) all fees, costs and expenses due and payable, incurred, paid
or accrued by the Seller or the Company or by or on behalf of the Seller or the Company, as a result of or related to or in connection
with the preparation, negotiation, execution, delivery and consummation of the transactions contemplated by this Agreement and the other
Transaction Documents, or the solicitation of other potential buyers of the Company or any of its Affiliates or consideration of other
strategic alternatives, including the fees and expenses of Duane Morris LLP, (b) all amounts (including the employer portion of any payroll,
social security, unemployment and similar Taxes payable with respect to such amounts) payable by the Company, whether immediately or
in the future, under any “change of control,” retention, termination, compensation, severance or other arrangements entered
into prior to the Closing as a result (in whole or in part) of the consummation of the transactions contemplated by this Agreement and/or
the other Transaction Documents, (c) $250,000 of the fees, expenses, taxes and premiums relating to the R&W Insurance Policy and
(d) any other fees, costs, expenses or payments resulting from the change of control of the Company or otherwise payable in connection
with receipt of any consent or approval in connection with the transactions contemplated by this Agreement and/or the other Transaction
Documents.

 

    	 	64	 

     

    

 

“Transaction
Invoices” has the meaning set forth in Section 2.2(a)(x).

 

“Transaction
Documents” means this Agreement, the Escrow Agreement, the Transition Services Agreement and the other agreements, certificates,
instruments and documents required to be delivered at the Closing.

 

“Transfer
Taxes” has the meaning set forth in Section 5.6(c).

 

“Transition
Services Agreement” means a Transition Services Agreement, in form and substance reasonably satisfactory to Buyer and Seller,
to be entered into at the Closing.

 

“Treasury
Regulations” means regulations promulgated by the U.S. Department of Treasury pursuant to the Code.

 

“Unpaid
Transaction Expenses” means the aggregate amount of all Transaction Expenses that remain unpaid as of immediately prior to
the Closing.

 

“U.S.”
or “United States” means the United States of America (including the states thereof and the District of Columbia),
and its “possessions”, including Puerto Rico, the United States Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

 

“Willful
Breach” means an intentional and willful material breach, or an intentional and willful material failure to perform, in each
case that is the consequence of an act or omission by a party with the actual knowledge that the taking of such act or failure to take
such act would cause a breach of this Agreement.

 

Where
any group or category of items or matters is defined collectively in the plural number, any item or matter within such definition may
be referred to using such defined term in the singular number, and vice versa.

 

Section
8.2 Interpretation. In this Agreement, except as otherwise expressly provided or as the context otherwise requires: (i) no Party,
nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing or enforcing the provisions hereof,
and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any Party, and
no presumption or burden of proof will arise favoring or disfavoring any Person by virtue of its authorship of any provision of this
Agreement; (ii) the words, “herein,” “hereto,” “hereunder,” “hereof” and words of similar
import refer to this Agreement as a whole, and not to any particular section, subsection paragraph, subparagraph or clause contained
in this Agreement; (iii) all references to Articles, Sections, Exhibits or Schedules are to Articles, Sections, Exhibits and Schedules
of this Agreement; (iv) a word importing the masculine gender includes the feminine and neuter, a word in the singular includes the plural,
a word importing a corporate entity includes an individual, and vice versa; (v) the words “writing”, “written”
and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (vi)
references to any “approval,” “authorization” or “consent” means written approval, authorization
or consent; (vii) the word “or” is disjunctive but not necessarily exclusive; (viii) the word “including” and
words of similar import, when following a general statement or term, is not to be construed as limiting the general statement or term
to any specific item or matter set forth or to similar items or matters, but rather as permitting the general statement or term to refer
also to all other items or matters that could reasonably fall within its broadest possible scope; (ix) references to a document or matter
being “made available to the Buyer” includes documents provided to Buyer at least five (5) Business Days prior to the Closing
Date; (x) references to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof; (xi) references to any Person include the successors and permitted assigns of that
Person; (xii) references to any statute includes all statutory instruments, rules and regulations made thereunder, all amendments to
or restatements of the foregoing in force from time to time, and every statute or regulation that supplements, supersedes or is a successor
to such statute, statutory instrument, rule or regulations; (xiii) references from or through any date mean, unless otherwise specified,
from and including or through and including, respectively; (xiv) the words “dollar”, “USD” or “$”
shall mean U.S. dollars; (xv) the section headings contained in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement; and (xvi) the word “day” means calendar day unless Business Day
is expressly specified. If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then
such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.

 

Article
9

MISCELLANEOUS

 

Section
9.1 Non-Survival . The representations, warranties
and covenants of the Seller and the Buyer contained in this Agreement shall terminate on the Closing Date, and only the covenants of
the Parties that by their terms survive the Closing Date shall so survive the Closing Date in accordance with their respective terms.

 

Section
9.2 Indemnity by Seller. From and after the Closing,
subject to this Article 9, Seller shall indemnify and hold harmless Buyer and its Affiliates, their respective Representatives,
and each of their respective successors and permitted assigns (collectively, the “Buyer Indemnified Parties”) from
and against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
(without duplication) that is or may be incurred or sustained by, or imposed upon, the Buyer Indemnified Parties, to the extent based
upon, resulting from, arising out of or by reason of:

 

(a)
any breach by Seller of, or the failure of Seller to
perform or cause to be performed, any of its covenants, obligations or agreements contained in this Agreement;

 

(b)
any breach by the Company of, or the failure of the
Company to perform or cause to be performed, any of its covenants, obligations or agreements contained in this Agreement that are required
to be performed by it at or prior to the Closing, if any;

 

(c)
any Funded Indebtedness of the Company to the extent
not actually paid at or prior to Closing and not included in the calculation of Closing Date Funded Indebtedness;

 

    	 	65	 

     

    

 

(d)
any Transaction Expenses to the extent not actually
paid at or prior to Closing and not included in the calculation of Unpaid Transaction Expenses;

 

(e)
any Fraud by Seller or the Company; and

 

(f)
any Pre-Closing Taxes, except to the extent such Taxes
were included in the Transaction Expenses or as liabilities in determination of the Closing Net Working Capital.

 

Section
9.3 Indemnity by Buyer. From and after the Closing,
subject to this Article 9, Buyer shall indemnify and hold harmless Seller and its Affiliates, their respective Representatives,
and each of their respective successors and permitted assigns (collectively, the “Seller Indemnified Parties”) from
and against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
(without duplication) that are or may be incurred or sustained by, or imposed upon, the Seller Indemnified Parties, to the extent based
upon, resulting from, arising out of or by reason of:

 

(a)
any breach or inaccuracy of representation or warranty
made by Buyer in this Agreement;

 

(b)
any breach by Buyer, or the failure of Buyer to perform
or cause to be performed, any of its covenants, obligations or agreements contained in this Agreement; and

 

(c)
any Fraud by Buyer.

 

Section
9.4 Limitations on Indemnification. 

 

(a)
Seller shall not have liability under this Agreement
in an aggregate amount greater than (i) the Base Purchase Price (ii) plus the Closing Net Working Capital Surplus, if any, or minus,
the Closing Net Working Capital Deficit, if any, as finally determined pursuant to Section 1.2(d) (the “Overall Cap”);
provided, however, that such limitation shall not apply to any claims based upon Fraud.

 

(b)
Buyer shall not have liability under this Agreement
in an aggregate amount greater than the Overall Cap; provided, however, that such limitation shall not apply
to any claims based upon Fraud.

 

Section
9.5 Other Provisions. 

 

(a)
For all purposes of this Article 9, “Losses”
shall be reduced by any amounts actually received by an Indemnified Party under any insurance policy (excluding the R&W Insurance
Policy) or Contract in connection with the facts giving rise to the right of indemnification.

 

(b)
Each Indemnified Party shall take all reasonable steps
required by applicable Law, including using its reasonable commercial efforts to obtain any proceeds available from an insurer or other
third party in respect of Losses that form the basis of an indemnification claim hereunder (including pursuant to the R&W Insurance
Policy, if applicable), to mitigate any of its Losses; provided, however, that no party shall be required to institute
any Proceedings. Each of the Parties hereto shall reasonably cooperate with the others with respect to resolving any claim or liability
with respect to which one party is obligated to indemnify the other party hereunder.

 

    	 	66	 

     

    

 

(c)
Any liability for indemnification hereunder shall be
determined without duplication of recovery by reason of the state of facts giving rise to such liability, or a breach of more than one
representation, warranty, covenant or agreement, as applicable.

 

(d)
For purposes of determining (i) whether a breach of
a representation or warranty exists for purposes of this Agreement and (ii) the amount of Losses arising from such a breach for which
an Indemnified Party is entitled to indemnification under this Agreement, each representation and warranty contained in this Agreement
shall be read without giving effect to any Materiality Qualifiers.

 

Section
9.6 [Reserved].

 

Section
9.7 Characterization of Indemnification Payments.
All payments made (or deemed to be made, in accordance with this Agreement) by any Indemnifying Person to an Indemnified Party with respect
to any claim pursuant to Section 9.2 or Section 9.3 shall be treated, to the fullest extent possible under applicable Law,
as adjustments to the Purchase Price for Tax purposes.

 

Section
9.8 Third Party Beneficiaries. The Buyer Indemnified
Parties and the Seller Indemnified Parties shall be third party beneficiaries of Article 9.

 

Section
9.9 Exclusive Remedy. Notwithstanding anything
to the contrary herein, except (a) as provided in Section 1.2(d) and Section 1.2(e), (b) in the case of Fraud, (c) the
right to specific performance in accordance with Section 10.14 in the event of a breach by any party of a covenant under this
Agreement, (d) the right to specific performance in accordance with Section 5.4(c) and (e) the right to specific performance in
accordance with Section 5.14(d) (subject to the other terms and conditions of Section 5.14), from and after the Closing,
the rights and remedies of Buyer, the Company and the Seller the Buyer Indemnified Parties and the Seller Indemnified Parties under this
Article 9 (including, with respect to the Buyer Indemnified Parties, claims against the R&W Insurance Policy) and Section
5.6(h) are exclusive and in lieu of any and all other rights and remedies which Buyer, the Company or the Seller, or any Buyer Indemnified
Party or any Seller Indemnified Party, may have under this Agreement or otherwise against each other with respect to this Agreement and
with respect to the transactions contemplated hereby.

 

    	 	67	 

     

    

 

Article
10

MISCELLANEOUS

 

Section
10.1 Independent Investigation by the Buyer. The Buyer acknowledges and agrees that it has conducted its own independent review
and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets, condition, operations and prospects
of the Company. In entering into this Agreement, the Buyer has relied solely upon its own investigation and analysis and the representations
and warranties of the Seller and the Company expressly set forth in Article 3 and in the other Transaction Document to which Seller
and/or the Company is a party, and the Buyer acknowledges that, other than as expressly set forth in Article 3 or in another Transaction
Document to which Seller and/or the Company is a party, none of the Seller or any of its Representatives or Affiliates makes or has made
any representation or warranty, either express or implied, (x) as to the accuracy or completeness of any of the information (whether
in any “data room”, offering memorandum, information memorandum or otherwise) provided or made available to the Buyer or
any of its Representatives or Affiliates prior to the execution of this Agreement, or (y) with respect to any projections, forecasts,
estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future
cash flows (or any component thereof) or future financial condition (or any component thereof) of the Company heretofore or hereafter
delivered to or made available to the Buyer or any of its Representatives, lenders or Affiliates. The Buyer agrees, to the fullest extent
permitted by Law, that the Seller and its Affiliates and their respective Representatives shall not have any liability or responsibility
whatsoever to the Buyer or any of its Affiliates (including the Company after the Closing) or any of their respective Representatives
on any basis (including in contract or tort, under federal or state securities laws or otherwise) based upon any information provided
or made available, or statements made (or any omissions therefrom), to the Buyer or any of its Affiliates or their respective Representatives,
except as and only to the extent expressly set forth in Article 3 or and in another Transaction Document to which Seller or the
Company is a party. Notwithstanding anything in this Section 10.1, nothing herein shall limit or otherwise affect Buyer’s
remedy in the event of Fraud.

 

Section
10.2 Exhibits and Schedules. All Exhibits and
Schedules are hereby incorporated into this Agreement and are hereby made a part hereof as if set out in full in this Agreement. Any
item disclosed in any Schedule referenced by a particular Section in this Agreement shall be deemed to have been disclosed with respect
to every other Section in this Agreement if the relevance of such disclosure to such other sections is reasonably apparent. The specification
of any dollar amount in the representations or warranties contained in this Agreement or the inclusion of any specific item in any Schedule
is not intended to imply that such amounts, or higher or lower amounts or the items so included or other items, are or are not material,
and no party shall use the fact of the setting of such amounts or the inclusion of any such item in any dispute or controversy as to
whether any obligation, items or matter not described herein or included in a Schedule is or is not material for purposes of this Agreement.
Any capitalized term used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning given to such term in this
Agreement.

 

Section
10.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in person, by e-mail (having obtained electronic delivery confirmation
thereof), or by registered or certified mail (postage prepaid, return receipt requested) to the other Party as follows:

 

(a)
If to the Seller, to:

 

Princeton
Pike Corporate Center

1200
Lenox Drive, Suite 100

Lawrenceville,
NJ 08648

Attention:
Russell Lindenfeldar

Email:
Russell.Lindenfeldar@adareps.com

 

    	 	68	 

     

    

 

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

 

Duane
Morris LLP

1940
Route 70 East, Suite 100

Cherry
Hill, NJ 08003-2171

Attention:
Peter D. Visalli, Esq.

Email:
pvisalli@duanemorris.com

 

(b)
If to the Buyer or the Company (after Closing), to:

 

Guardion
Health Sciences, Inc.

15150
Avenue of Science, Ste 200

San
Diego, California 92128

Attention:
Bret Scholtes, President and Chief Executive Officer

Email:
bscholtes@guardionhealth.com

 

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

 

Sheppard,
Mullin, Richter & Hampton LLP

333
S. Hope Street, 43rd Floor

Los
Angeles, CA 90071

Attention:
David Sunkin

Email:
dsunkin@sheppardmullin.com

 

Such
names and addresses may be changed by written notice to each Person listed above.

 

Section
10.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction).

 

    	 	69	 

     

    

 

Section
10.5 Submission to Jurisdiction. EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY (i) AGREES THAT ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY ANY PARTY OR ITS SUCCESSORS OR ASSIGNS AGAINST
ANY OTHER PARTY SHALL BE BROUGHT AND DETERMINED IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE, NEW CASTLE COUNTY. IF JURISDICTION
IS NOT THEN AVAILABLE IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE, NEW CASTLE COUNTY, THEN ANY SUCH LEGAL ACTION OR PROCEEDING
MAY BE BROUGHT IN ANY FEDERAL COURT SITTING IN WILMINGTON, DELAWARE OR ANY OTHER DELAWARE STATE COURT, AND EACH OF THE PARTIES HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS FOR ITSELF AND WITH RESPECT TO ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, WITH REGARD TO ANY SUCH ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH OF THE PARTIES AGREES NOT TO COMMENCE ANY ACTION, SUIT OR PROCEEDING RELATING THERETO EXCEPT IN THE COURTS DESCRIBED ABOVE
IN DELAWARE, OTHER THAN ACTIONS IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE ANY JUDGMENT, DECREE OR AWARD RENDERED BY ANY SUCH
COURT IN DELAWARE AS DESCRIBED HEREIN. EACH OF THE PARTIES FURTHER AGREES THAT NOTICE AS PROVIDED HEREIN SHALL CONSTITUTE SUFFICIENT
SERVICE OF PROCESS AND THE PARTIES FURTHER WAIVE ANY ARGUMENT THAT SUCH SERVICE IS INSUFFICIENT. EACH OF THE PARTIES HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION OR AS A DEFENSE, COUNTERCLAIM OR OTHERWISE, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, (A) ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF THE COURTS IN DELAWARE AS DESCRIBED HEREIN FOR ANY REASON, (B) THAT IT OR ITS PROPERTY IS EXEMPT OR IMMUNE FROM
JURISDICTION OF ANY SUCH COURT OR FROM ANY LEGAL PROCESS COMMENCED IN SUCH COURTS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE) AND (C) THAT (I) THE SUIT, ACTION OR PROCEEDING
IN ANY SUCH COURT IS BROUGHT IN AN INCONVENIENT FORUM, (II) THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER OR (III) THIS AGREEMENT,
OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS.

 

Section
10.6 Waiver of Jury Trial. EACH PARTY HEREBY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL
ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section
10.6.

 

Section
10.7 Entire Agreement. This Agreement, including the Exhibits and Schedules hereto and the documents referred to herein (including
the Transaction Documents), embody the entire agreement and understanding of the Parties in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof.

 

Section
10.8 Amendment and Modification. This Agreement
may be amended or modified only by written agreement of the Parties.

 

    	 	70	 

     

    

 

Section
10.9 Waiver. Any failure of the Seller or the Company to comply with any of its obligations or agreements herein contained may
be waived only in writing by the Buyer. Any failure of the Buyer to comply with any of its obligations or agreements herein contained
may be waived only in writing by the Seller. No failure or delay by any Party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

Section
10.10 Binding Effect; Benefits. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective
successors and assigns. Except as expressly provided in this Agreement (including in Section 1.2(e), Section 9.8 and Section
10.14), nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their respective
successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section
10.11 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective
and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable
under applicable Law, all other provisions of this Agreement shall remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby or by the other Transaction Documents is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable
Law, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner in order that the transactions contemplated hereby or by the other Transaction Documents are consummated
as originally contemplated to the greatest extent possible.

 

Section
10.12 Assignability. No Party may assign, delegate, or otherwise transfer, including by operation of law, any of its rights or
obligations under this Agreement without the prior written consent of each other Party hereto; provided that Buyer shall be permitted
to assign its rights and obligations hereunder to any of its Affiliates without the prior written consent of the other Parties, provided
that no such assignment shall relieve Buyer of its obligations hereunder. Any purported assignment, delegation or other transfer in violation
of this Section 10.12 shall be null and void ab initio.

 

Section
10.13 Counterparts. The Parties may execute this Agreement in multiple counterparts (including counterparts by email, facsimile,
portable document format (pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (including DocuSign)), each
of which is deemed an original, and all of which, collectively, constitute only one agreement. The signatures of all of the Parties need
not appear on the same counterpart, and delivery of an executed counterpart signature page by facsimile, email or other means of electronic
transmission is as effective as executing and delivering this Agreement in the presence of the other Parties. This Agreement is effective
upon delivery of one executed counterpart from each Party to the other Party. In proving this Agreement, a Party must produce or account
for only the executed counterpart of the Party to be charged.

 

    	 	71	 

     

    

 

Section
10.14 Remedies. The Parties agree that immediate and irreparable harm and damage would occur for which monetary damages alone
would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that in the event of such breach or non-performance or threatened
breach or threatened non-performance, no Party shall interfere with, delay, obstruct, or prevent the non-breaching Party from taking,
or require such Party to take, any steps prior to taking action to seek an interim and interlocutory equitable remedy (including an injunction
or order for specific performance) on notice or ex parte to enforce its rights or to preserve the status quo or prevent irreparable harm
and each Party covenants and agrees not to contest, object to, or otherwise oppose an application for equitable relief by the other Party
in such circumstances, and waives any and all immunities from any equitable relief to which it may be entitled. Any such relief or remedy
shall not be exclusive, but shall be in addition to all other available legal or equitable remedies. Each Party agrees that the provisions
of this Section 10.14 are fair and reasonable in the commercial circumstances of this Agreement, and that neither Party would
have entered into this Agreement but for each Party’s agreement with the provisions of this Section 10.14.

 

Section
10.15 Non-Recourse. All claims or causes of action
(whether in contract or in tort, in law or in equity) that may be based upon, arise out of or relate to this Agreement or the other Transaction
Documents, or the negotiation, execution or performance of this Agreement or the other Transaction Documents (including any representation
or warranty made in or in connection with this Agreement or the other Transaction Documents or as an inducement to enter into this Agreement
or the other Transaction Documents), may be made against (1) the Buyer, on the one hand and (2) the Seller and the Company, on the other.
No Representative or any other Person, including any of their respective (or any of the Company’s) past, present or future directors,
officers, employees, incorporators, members, partners, stockholders, Affiliates (other than the Company in the case of the Buyer after
the Closing), agents, attorneys or representatives (all such Persons, collectively “Non-Party Affiliates”) shall have
any liability (whether in contract or in tort, in law or in equity, or based upon any theory that seeks to impose liability of an entity
party against its owners or affiliates) for any obligations or liabilities arising under, in connection with or related to this Agreement
or such other Transaction Document (as the case may be) or for any claim based on, in respect of, or by reason of this Agreement or such
other Transaction Document (as the case may be) or the negotiation or execution hereof or thereof; and each Party waives and releases
all such liabilities, claims and obligations against any such Non-Party Affiliates. Non-Party Affiliates are expressly intended as third
party beneficiaries of this provision of this Agreement.

 

Section
10.16 Waiver of Conflicts. Recognizing that Duane
Morris LLP has acted as legal counsel to the Seller and its Affiliates (including the Company) prior to the Closing, and that Duane Morris
LLP intends to act as legal counsel to the Seller and its Affiliates (which will no longer include the Company) after the Closing, each
of the Buyer and the Company hereby waives, on its own behalf and agrees to cause its Affiliates to waive, any conflicts that may arise
in connection with Duane Morris LLP representing the Seller and/or its Affiliates after the Closing as such representation may relate
to the Buyer, the Company or the transactions contemplated hereby or by the other Transaction Documents. In addition, all communications
involving attorney-client confidences between the Seller, its Affiliates or the Company and Duane Morris LLP in the course of the negotiation,
documentation and consummation of the transactions contemplated hereby or by the other Transaction Documents shall be deemed to be attorney-client
confidences that belong solely to the Seller and its Affiliates (and not the Company). Accordingly, the Buyer and its Affiliates (including
the Company after the Closing) shall not, without the Seller’s consent, have access to any such communications, or to the files
of Duane Morris LLP relating to its engagement. Without limiting the generality of the foregoing, upon and after the Closing, (i) the
Seller and its Affiliates (and not the Company) shall be the sole holders of the attorney-client privilege with respect to such engagement,
and the Company shall not be a holder thereof, (ii) to the extent that files of Duane Morris LLP in respect of such engagement constitute
property of the client, only the Seller and its Affiliates (and not the Company) shall hold such property rights and (iii) Duane Morris
LLP shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to Buyer or any of its Affiliates
(including the Company after the Closing) by reason of any attorney-client relationship between Duane Morris LLP and the Seller or any
of its Affiliates (including the Company prior to the Closing) or otherwise.

 

[Remainder
of Page Intentionally Left Blank; Signatures Follow on Next Page]

 

    	 	72	 

     

    

 

IN
WITNESS WHEREOF, the undersigned Parties have duly executed and delivered this Agreement as of the date first above written.

 

	 	GUARDION
    HEALTH SCIENCES, INC., as the Buyer
	 	 	 
	 	By:	/s/
    Bret Scholtes
	 	Name:	Bret
    Scholtes
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	ADARE PHARMACEUTICALS, INC.,
	 	as the Seller
	 	 	 
	 	By:	/s/
    Mark Valentino
	 	Name:	Mark
    Valentino
	 	Title:	President
	 	 	 
	 	ACTIV NUTRITIONAL, LLC
	 	as the Company
	 	 	                             
	 	By:	/s/
    Mark Valentino
	 	Name:	Mark
    Valentino
	 	Title:	Chief
    Financial Officer

 

[Signature
Page – Equity Purchase Agreement]

 

    	 

     

    

 

Exhibit
A

 

Example
Net Working Capital Statement

 

Attached.

 

REDACTED

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