Contract analysis

Section 1.1 — Definitions As used in this Agreement, the following terms shall have the meanings set forth below: "Acquisition Proposal" means any inquiry, proposal, or offer from any Person (other than Parent or Merger Sub or any of their respective Affiliates) relating to any (a) direct or indirect acquisition of assets of the Company or any of its Subsidiaries constituting twenty percent (20%) or more of the conso

Section 1.2 — Other Defined Terms The following terms are defined in the Sections of this Agreement indicated below:

Section 1.3 — Interpretation Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement: (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (b) Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed

Section 2.1 — The Merger Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, CRFH Acquisition Sub, Inc. shall be merged with and into Coral Reef Hospitality Group, Inc. (the "Merger"), the separate corporate existence of Merger Sub shall thereupon cease, and the Company shall be the surviving corporation of the Merger (the "Surviving Corpor

Section 2.2 — Closing The closing of the Merger (the "Closing") shall take place at 10:00 a.m. Eastern Time on the third (3rd) Business Day following the satisfaction or waiver (to the extent permissible under applicable Law) of all of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditio

Section 2.3 — Effective Time On the Closing Date, the Parties shall cause a Certificate of Merger to be duly executed, acknowledged, and filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL, substantially in the form attached hereto as Exhibit A. The Merger shall become effective at the time of the filing of the Certificate of Merger with the Secretary of State of the

Section 2.4 — Effects of the Merger The Merger shall have the effects set forth in Section 259 of the DGCL and the other applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, (a) all of the property, rights, privileges, powers, and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and (b) all debts, liabilities,

Section 2.5 — Certificate of Incorporation of the Surviving Corporation At the Effective Time, the certificate of incorporation of the Surviving Corporation shall be amended and restated in its entirety to read as set forth in the certificate of incorporation of Merger Sub as in effect immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be "Coral Reef Hospitality Group, In

Section 2.6 — Bylaws of the Surviving Corporation At the Effective Time, the bylaws of the Surviving Corporation shall be amended and restated in their entirety to read as the bylaws of Merger Sub as in effect immediately prior to the Effective Time, except that all references to the name of Merger Sub shall be replaced with references to "Coral Reef Hospitality Group, Inc.," until thereafter further amended in accor

Section 2.7 — Directors and Officers of the Surviving Corporation (a) The directors of Merger Sub immediately prior to the Effective Time shall become the initial directors of the Surviving Corporation at the Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until his or her successor shall have been duly elected or appointed and qualified,

ARTICLE III MERGER CONSIDERATION; CONVERSION OF SHARES; EXCHANGE PROCEDURES

Section 3.1 — Effect on Capital Stock At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, or any holder of shares of Company Common Stock or shares of common stock of Merger Sub: (a) Company Common Stock. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares)

Section 3.2 — Paying Agent (a) Prior to the Effective Time, Parent shall designate a bank or trust company that is reasonably acceptable to the Company to act as paying agent in connection with the Merger (the "Paying Agent"). At or immediately prior to the Effective Time, Parent shall deposit, or cause to be deposited, with the Paying Agent cash in immediately available funds in an amount sufficient to pay the aggre

Section 3.3 — Exchange Procedures (a) As promptly as practicable after the Effective Time (and in any event within five (5) Business Days thereafter), Parent shall cause the Paying Agent to mail or otherwise deliver to each holder of record of shares of Company Common Stock as of immediately prior to the Effective Time (other than holders of Cancelled Shares and holders of Dissenting Shares): (i) a letter of transmit

Section 3.4 — Lost Certificates If any Certificate shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen, or destroyed and, if required by the Surviving Corporation or the Paying Agent, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation or the Paying Agent may direct, as indemnity ag

Section 3.5 — Escrow Withholding At the Closing, the aggregate Escrow Amount of $1,500,000 (representing 5.0% of the Aggregate Equity Value of $30,000,000) shall be withheld from the aggregate Merger Consideration otherwise payable to the holders of Company Common Stock and shall be deposited by Parent (or the Paying Agent on Parent's behalf) with Commonwealth Trust Company, as Escrow Agent, pursuant to the Escrow Ag

Section 3.6 — Withholding Rights Each of Parent, Merger Sub, the Surviving Corporation, and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of shares of Company Common Stock pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code, or any provision of applicable state,

Section 3.7 — Dissenting Shares (a) Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by a holder who has not voted in favor of the adoption of this Agreement (or consented thereto in writing) and who has properly demanded and perfected appraisal rights with respect to such shares in accordance with

Section 3.8 — Termination of Exchange Fund Any portion of the Exchange Fund (including any interest or other income earned thereon) that remains undistributed to holders of shares of Company Common Stock one hundred eighty (180) days after the Effective Time shall be delivered to the Surviving Corporation upon demand, and any holder of shares of Company Common Stock who has not theretofore complied with the exchange

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as (a) set forth in the Company Disclosure Schedule delivered by the Company to Parent and Merger Sub concurrently with the execution and delivery of this Agreement (it being understood that any information set forth in one section or subsection of the Company Disclosure Schedule shall be deemed to apply to and qualify any other section or subsection of

Section 4.1 — Organization, Good Standing, and Qualification The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company's registered agent in the State of Delaware is Prestige Corporate Services LLC, 850 New Burton Road, Suite 201, Dover, DE 19904. The Company's employer identification number is 59-3847621. The Company has all requisite cor

Section 4.2 — Subsidiaries (a) Section 4.2 of the Company Disclosure Schedule sets forth a true and complete list of each Subsidiary of the Company, together with (i) the jurisdiction of incorporation or organization of each such Subsidiary, (ii) the authorized and outstanding capital stock or other equity interests of each such Subsidiary, and (iii) the percentage of outstanding capital stock or other equity interes

Section 4.3 — Capitalization (a) The authorized capital stock of the Company consists of 25,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share. As of the date hereof, (i) 6,315,789 shares of Company Common Stock are issued and outstanding, all of which ar