Contract analysis

Section 1.1 — Definitions As used in this Agreement, the following terms shall have the meanings set forth below: "Accounting Methodology" means the accounting principles, policies, methodologies, practices, estimation techniques, assumptions, and procedures set forth on Schedule 2.5, applied consistently with the manner in which such principles, policies, methodologies, practices, estimation techniques, assumptions,

Section 1.2 — Rules of Construction (a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement, (iv) the terms "Article," "Section," "Schedule,

ARTICLE II — PURCHASE AND SALE; CONSIDERATION

Section 2.1 — Purchase and Sale of Shares Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, each Seller shall sell, transfer, assign, convey, and deliver to Buyer, and Buyer shall purchase, acquire, and accept from each Seller, all of the Shares owned by such Seller as set forth on Schedule 4.3, free and clear of all Liens (other than restrictions arising under applicable feder

Section 2.2 — Cancellation of Company Options (a) At the Closing, each Company Option that is outstanding and unexercised immediately prior to the Closing shall, by virtue of the transactions contemplated by this Agreement and without any further action on the part of any holder thereof, be cancelled and shall cease to represent the right to purchase any shares of Company Common Stock. In consideration of such cancel

Section 2.3 — Aggregate Base Purchase Price (a) The aggregate purchase price for all of the Shares and all of the Company Options is Two Hundred Twenty Million Dollars ($220,000,000) (the "Aggregate Base Purchase Price"), inclusive of the aggregate Option Cancellation Consideration. The Aggregate Base Purchase Price is subject to adjustment as provided in Section 2.5, Section 2.6, and Section 2.7 hereof. All consider

Section 2.4 — Sellers' Transaction Expenses (a) No later than two (2) Business Days prior to the Closing Date, the Sellers' Representative shall deliver (or cause the Company to deliver) to Buyer a certificate (the "Transaction Expense Certificate") setting forth the aggregate amount of all unpaid Sellers' Transaction Expenses as of the Closing, together with (i) an itemized list of each such expense, including the n

Section 2.5 — Estimated Closing Statement; Estimated Net Working Capital Adjustment (a) No later than three (3) Business Days prior to the Closing Date, the Sellers' Representative shall prepare and deliver (or cause to be prepared and delivered) to Buyer a statement (the "Estimated Closing Statement") setting forth the Sellers' Representative's good faith estimate of the Net Working Capital of the Company as of the

Section 2.6 — Closing Cash Consideration; Closing Statement (a) The "Closing Cash Consideration" payable to the Sellers at the Closing shall be calculated as follows: Aggregate Base Purchase Price: $220,000,000.00 Minus Indemnity Escrow Amount: Minus Ironclad Payoff Amount (per payoff letter dated October 28, 2024): ($7,341,822.16) Minus Sellers' Transaction Expenses: ($4,825,000.00) Plus Estimated NWC Adjustment: $6

Section 2.7 — Post-Closing Net Working Capital Adjustment (a) Preparation of Final Closing Statement. Within ninety (90) days after the Closing Date (i.e., no later than January 29, 2025), Buyer shall prepare and deliver to the Sellers' Representative a statement (the "Final Closing Statement") setting forth Buyer's determination of the Net Working Capital of the Company as of the close of business on the day immedia

Section 2.8 — Earnout Consideration (a) Milestone 1. If, on or before December 31, 2026, the FDA grants 510(k) clearance of the ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0 configuration) (such clearance, "Milestone 1"), then Buyer shall pay to the Sellers' Representative, for distribution to the Sellers in accordance with their respective Pro Rata Shares, an amount in cash equal to Twenty Million Do

Section 2.9 — Escrow Arrangements (a) Indemnity Escrow. At the Closing, the Indemnity Escrow Amount ( of the Aggregate Base Purchase Price) shall be withheld from the Closing Cash Consideration otherwise payable to the Sellers and shall be deposited by Buyer with the Escrow Agent by wire transfer of immediately available funds to Escrow Account Number KES-2024-IND-09183 at First Continental Trust Co., N.A., pursuant

Section 2.10 — Withholding Buyer, the Company, the Escrow Agent, and each of their respective agents shall be entitled to deduct and withhold from any amounts otherwise payable under this Agreement such amounts as are required to be deducted or withheld under the Code, the Treasury Regulations, or any provision of applicable state, local, or foreign Tax Law. To the extent that amounts are so deducted or withheld and

Section 3.1 — Closing Date and Location Subject to the terms and conditions of this Agreement, the closing of the Transaction (the "Closing") shall take place on the date that is three (3) Business Days after the satisfaction or waiver of all of the conditions set forth in Article IX (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such

Section 3.2 — Deliveries at Closing (a) Deliveries by Sellers and the Company. At the Closing, the Sellers and the Company shall deliver (or cause to be delivered) to Buyer each of the following: (i) stock certificates (or, in the case of any Shares held in book-entry form, such evidence of book-entry transfer as Buyer may reasonably request) representing all 7,450,000 Shares, together with duly executed stock powers