DISCLOSURE SCHEDULES

DISCLOSURE SCHEDULES
TO THE
STOCK PURCHASE AGREEMENT
Dated as of August 20, 2024
By and Among
SOLSTICE BIOMEDICAL, INC. (the "Buyer")
MERIDIAN SURGICAL TECHNOLOGIES, INC. (the "Company")
THE SELLERS LISTED ON EXHIBIT A TO THE STOCK PURCHASE AGREEMENT
and
DR. MARCUS ELLSWORTH (as the Sellers' Representative)
Prepared by:
Whitmore Crane & Pfeiffer LLP Counsel to the Company and the Sellers One Liberty Place 1650 Market Street, Suite 3600 Philadelphia, PA 19103
Reviewed by:
Calderwood & Harkness LLP Counsel to the Buyer 590 Lexington Avenue, 35th Floor New York, NY 10022
CONFIDENTIAL — SUBJECT TO THE CONFIDENTIALITY PROVISIONS OF THE STOCK PURCHASE AGREEMENT
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INTRODUCTORY NOTES AND GENERAL DISCLAIMERS
These Disclosure Schedules (the "Schedules") are delivered pursuant to, and form an integral part of, the Stock Purchase Agreement, dated as of August 20, 2024 (the "Agreement"), by and among Solstice Biomedical, Inc., a Delaware corporation (the "Buyer"), Meridian Surgical Technologies, Inc., a Delaware corporation (the "Company"), the Sellers listed on Exhibit A to the Agreement (collectively, the "Sellers"), and Dr. Marcus Ellsworth, in his capacity as the Sellers' Representative. These Schedules should be read in their entirety in conjunction with the Agreement.
Capitalized terms used but not otherwise defined in these Schedules shall have the meanings ascribed to such terms in the Agreement. Unless the context otherwise requires, references to "Sections" are references to the corresponding sections of the Agreement, and references to "Schedules" are references to these Disclosure Schedules.
The following general disclaimers and qualifications apply to each and every Schedule set forth herein:
1.  No Admission of Materiality. The inclusion of any item, matter, or information in these Schedules does not constitute an admission by the Company, the Sellers, or the Sellers' Representative that such item, matter, or information is material, has had or would reasonably be expected to have a Material Adverse Effect, or is otherwise required to be disclosed under the Agreement. Certain items and matters are disclosed herein solely for informational purposes, in order to provide the Buyer with a more complete understanding of the business and affairs of the Company. No disclosure made herein shall be construed as an admission or indication that such disclosed matter does or may give rise to any claim, liability, obligation, or right of the Buyer under the Agreement or otherwise.
2.  Cross-References and Deemed Disclosures. The section and subsection headings in these Schedules correspond to the section and subsection numbers of the representations and warranties in Article III of the Agreement. The disclosure of any item, matter, or information under a particular Schedule shall be deemed to be disclosed under each other Schedule to the extent the relevance of such disclosure to such other Schedule is reasonably apparent on the face of such disclosure, regardless of whether a specific cross-reference is made. It shall not be necessary to repeat an item of disclosure under each Schedule to which it may be relevant; rather, disclosure under one Schedule shall qualify each other representation and warranty set forth in the Agreement to the extent that the applicability of such disclosure to such other representation and warranty is reasonably apparent.
3.  Qualified by the Agreement. The information set forth in these Schedules is qualified in its entirety by the specific language of the representations and warranties set forth in the Agreement. Nothing in these Schedules is intended to, nor shall it be construed to, broaden the scope of any representation or warranty contained in the Agreement, or to create any representation or warranty not expressly set forth in the Agreement. In the event of any inconsistency between the statements in these Schedules and the statements in the Agreement, the Agreement shall control.
4.  No Independent Representations or Warranties. Nothing in these Schedules constitutes a representation or warranty of the Company, the Sellers, or the Sellers' Representative, except as and to the extent expressly set forth in the Agreement. These Schedules are not intended to, and shall not be construed to, constitute an independent source of obligations or liabilities on the part of the Company, the Sellers, or the Sellers' Representative.
5.  Documents and Summaries. Where these Schedules make reference to specific documents, agreements, instruments, or other written materials, such references are to documents that have been made available to the Buyer and its representatives in the electronic data room maintained by Whitmore Crane & Pfeiffer LLP on Crestline Solutions (the "Data Room"). All summaries or descriptions of such documents contained in these Schedules are qualified in their entirety by the actual terms of such documents, and the Buyer is referred to such documents for complete and accurate information regarding the matters described therein. In the event of any inconsistency between a summary or description contained in these Schedules and the terms of the underlying document, the terms of the underlying document shall control.
6.  Headings. The headings contained in these Schedules are for reference purposes only and shall not affect in any way the meaning or interpretation of these Schedules.
7.  Currency; Estimates. All dollar amounts set forth herein are expressed in United States dollars. Where amounts are described as "approximately" or "estimated," such amounts are based on the best information available to the Company and the Sellers as of the date hereof and are subject to adjustment in the ordinary course.
SCHEDULE 3.1
Organization and Good Standing
The following information is disclosed with respect to the representations and warranties set forth in Section 3.1 of the Agreement:
The Company:
Meridian Surgical Technologies, Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.
•  State of Incorporation: Delaware
•  Delaware File Number: 5819734
•  Federal Employer Identification Number (EIN): 84-3192057
•  Date of Incorporation: November 8, 2017
•  Registered Agent in Delaware: Pemberton Industries, 251 Little Falls Drive, Wilmington, DE 19808
Principal Offices and Facilities:
•  Corporate Headquarters: 780 Keystone Boulevard, Suite 200, King of Prussia, PA 19406
•  Manufacturing Facility: 45 Forge Creek Road, Exton, PA 19341
Good Standing and Foreign Qualification:
The Company is in good standing in the State of Delaware. A certificate of good standing from the Delaware Secretary of State, dated August 12, 2024, has been obtained and made available in the Data Room (reference: 1.01.001).
The Company is qualified to do business as a foreign corporation and is in good standing in the Commonwealth of Pennsylvania. A certificate of good standing from the Pennsylvania Department of State, dated August 14, 2024, has been obtained and made available in the Data Room (reference: 1.01.002).
The Company is not qualified to do business in any other state or foreign jurisdiction. Based on the Company's operations and activities, the Company does not believe that qualification in any other jurisdiction is required under applicable law.
Exceptions:
No exceptions to the representations and warranties set forth in Section 3.1 of the Agreement are disclosed.
SCHEDULE 3.2
Authorization; Enforceability
The following information is disclosed with respect to the representations and warranties set forth in Section 3.2 of the Agreement:
Exceptions:
No exceptions to the representations and warranties set forth in Section 3.2 of the Agreement are disclosed.
Informational Disclosures:
For informational purposes, the Company notes the following:
1.  Board Approval. Resolutions approving the transactions contemplated by the Agreement, including the execution and delivery of the Agreement and the consummation of the transactions contemplated thereby, were duly adopted by unanimous written consent of the Board of Directors of the Company, dated August 18, 2024. Copies of such resolutions have been made available in the Data Room (reference: 1.01.003).
2.  Stockholder Approval. Written consents of stockholders holding at least 65% of the outstanding shares of common stock of the Company were obtained on August 20, 2024. The following stockholders executed written consents:
•  Dr. Marcus Ellsworth — 2,845,900 shares (38.2%)
•  Pennfield Growth Partners, LP — 2,235,000 shares (30.0%)
•  Arch Hill Ventures Fund II, LLC — 1,490,000 shares (20.0%)
The foregoing stockholders collectively hold approximately 88.2% of the outstanding shares of common stock of the Company, exceeding the requisite stockholder approval threshold set forth in the Company's certificate of incorporation and bylaws and under the Delaware General Corporation Law. Copies of the stockholder written consents have been made available in the Data Room (reference: 1.01.004).
3.  No Anti-Takeover Devices. The Company has not adopted any shareholder rights plan, "poison pill," or similar anti-takeover device or measure. The Company's certificate of incorporation and bylaws do not contain any supermajority voting requirement or other provision that would impede, delay, or prevent the consummation of the transactions contemplated by the Agreement, other than the stockholder approval described above, which has been obtained.
SCHEDULE 3.3
Capitalization
The following information is disclosed with respect to the representations and warranties set forth in Section 3.3 of the Agreement:
Schedule 3.3(a) — Authorized and Outstanding Capital Stock
Authorized Capital Stock:
•  10,000,000 shares of common stock, par value $0.01 per share
•  No preferred stock is authorized
Outstanding Capital Stock:
•  7,450,000 shares of common stock are issued and outstanding as of the date hereof
•  No preferred stock is issued or outstanding
•  No shares of common stock or any other class of capital stock are held in treasury by the Company
All outstanding shares of common stock have been duly authorized, validly issued, and are fully paid and non-assessable. No outstanding shares of common stock were issued in violation of any preemptive rights, rights of first refusal, or similar rights.
Schedule 3.3(b) — Stockholders and Holdings
The following table sets forth each record holder of the Company's outstanding common stock, together with the number of shares held and the approximate percentage of the total outstanding shares represented thereby:
A detailed listing of each individual management and employee stockholder, including names, share amounts, and dates of issuance, is set forth on Sub-Schedule 3.3(b)-1, which is incorporated herein by reference and has been made available in the Data Room (reference: 1.02.001).
Schedule 3.3(c) — Options and Other Equity Awards
Meridian 2019 Equity Incentive Plan:
The Company adopted the Meridian 2019 Equity Incentive Plan (the "Plan") by action of the Board of Directors and approval of the stockholders, effective January 15, 2019. A copy of the Plan, as amended, has been made available in the Data Room (reference: 1.02.002).
•  Shares Reserved for Issuance: 550,000 shares of common stock are reserved for issuance under the Plan.
•  Options Outstanding: As of the date hereof, stock options to purchase an aggregate of 550,000 shares of common stock are outstanding under the Plan.
•  Vesting Status: All 550,000 outstanding stock options are fully vested and exercisable as of the date hereof.
•  Weighted-Average Exercise Price: $4.80 per share.
•  Shares Available for Future Grants: Zero (0) shares remain available for future grant under the Plan.
A detailed listing of each individual option holder, including the name of the holder, the grant date, the number of options granted, the exercise price per share, the vesting schedule, and the expiration date of each grant, is set forth on Sub-Schedule 3.3(c)-1, which is incorporated herein by reference and has been made available in the Data Room (reference: 1.02.003).
Pursuant to Section 2.3 of the Agreement, all outstanding options under the Plan shall be cancelled at Closing in exchange for the consideration set forth therein.
No Other Equity Awards:
Other than the stock options described above, there are no outstanding options, warrants, convertible or exchangeable securities, stock appreciation rights, phantom equity awards, profits interests, restricted stock units, restricted stock awards, or other equity-linked instruments or rights of any kind that are convertible into, exercisable for, or otherwise relate to the capital stock or equity interests of the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem, or otherwise acquire any of its capital stock.
No Agreements to Issue Equity:
The Company is not party to any agreement, understanding, commitment, or arrangement (whether written or oral) to issue, sell, or grant any additional shares of capital stock, options, warrants, or other equity interests of the Company, and no Person has any right to demand or require the Company to issue any of the foregoing.
Schedule 3.3(d) — Voting Agreements and Transfer Restrictions
The following agreements contain provisions relating to the voting, transfer, or other disposition of the Company's capital stock:
1.  Stockholders' Agreement, dated as of September 15, 2020, by and among the Company, Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, Arch Hill Ventures Fund II, LLC, and Catherine Pryor (the "Stockholders' Agreement"). The Stockholders' Agreement provides for, among other things:
•  Board composition rights (including the right of each of Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, and Arch Hill Ventures Fund II, LLC to designate one member of the Board of Directors);
•  Drag-along rights in favor of stockholders holding a majority of the outstanding shares;
•  Tag-along rights in favor of minority stockholders;
•  Registration rights (demand and piggyback);
•  Rights of first refusal on proposed transfers of shares; and
•  Customary information rights.
The Stockholders' Agreement will terminate automatically in accordance with Section 9.1 thereof upon the consummation of the transactions contemplated by the Agreement. A copy of the Stockholders' Agreement has been made available in the Data Room (reference: 1.01.005).
2.  Investor Rights Agreement, dated as of September 15, 2020, by and among the Company, Pennfield Growth Partners, LP, and Arch Hill Ventures Fund II, LLC. The Investor Rights Agreement is substantially co-terminus with the Stockholders' Agreement and will terminate upon consummation of the transactions contemplated by the Agreement. A copy of the Investor Rights Agreement has been made available in the Data Room (reference: 1.01.006).
3.  Board Observer Rights. Arch Hill Ventures Fund II, LLC holds board observer rights pursuant to Section 3.4 of the Stockholders' Agreement. Such observer rights are currently exercised by Samuel Nakamura, Managing Director of Arch Hill Ventures Fund II, LLC. These observer rights will terminate upon termination of the Stockholders' Agreement at Closing.
No other voting agreements, voting trusts, proxies, stockholder agreements, registration rights agreements, lock-up agreements, or similar arrangements relating to the capital stock of the Company exist or are in effect.
SCHEDULE 3.4
Subsidiaries
The following information is disclosed with respect to the representations and warranties set forth in Section 3.4 of the Agreement:
The Company has no subsidiaries. The Company does not own, directly or indirectly, any equity interest, membership interest, partnership interest, joint venture interest, or other ownership interest in any other Person, whether domestic or foreign.
The Company is not a party to any joint venture, strategic alliance, or partnership arrangement pursuant to which the Company has agreed to contribute capital, share profits or losses, or otherwise hold an interest in any other business entity or enterprise.
SCHEDULE 3.5
No Conflicts; Consents
The following information is disclosed with respect to the representations and warranties set forth in Section 3.5 of the Agreement:
Schedule 3.5(a) — Consents Required
The execution and delivery of the Agreement and the consummation of the transactions contemplated thereby require the consent, notice, or other action described below under certain contracts to which the Company is a party:
1.  Titanium Precision Components, Inc. ("TPC")
The Exclusive Supply Agreement, dated as of March 15, 2022 (the "TPC Supply Agreement"), between the Company and Titanium Precision Components, Inc., 215 Industrial Park Drive, Lancaster, PA 17601, contains a change-of-control provision in Section 12.3 thereof. Section 12.3 of the TPC Supply Agreement requires the prior written consent of TPC to any direct or indirect change in control of the Company (defined therein as any transaction or series of related transactions resulting in a change in the beneficial ownership of more than 50% of the outstanding voting securities of the Company).
The Company requested, and TPC granted, its prior written consent to the change of control contemplated by the transactions under the Agreement. Such consent was delivered by letter from TPC, dated August 5, 2024, a copy of which has been made available in the Data Room (reference: 5.01.014). The consent is unconditional and requires no further action by the Company.
2.  OrthoLink Distribution, LLC
The Distribution Agreement, dated as of January 1, 2023 (the "OrthoLink Agreement"), between the Company and OrthoLink Distribution, LLC, 9400 Snowden River Parkway, Suite 300, Columbia, MD 21045, contains a change-of-control notification provision in Section 15.2 thereof. Section 15.2 of the OrthoLink Agreement requires the Company to provide not less than thirty (30) days' prior written notice to OrthoLink of any change of control of the Company.
Written notice of the change of control contemplated by the transactions under the Agreement was provided to OrthoLink by letter dated August 12, 2024, a copy of which has been made available in the Data Room (reference: 5.01.019). The OrthoLink Agreement does not require the consent of OrthoLink to the change of control; only prior written notice is required.
3.  Ironclad Commercial Lending, LLC
The Revolving Credit Agreement, dated as of June 1, 2021 (the "Credit Agreement"), between the Company and Ironclad Commercial Lending, LLC, 600 Travis Street, Suite 2200, Houston, TX 77002, contains a change-of-control event of default provision in Section 7.01(h) thereof. Under Section 7.01(h) of the Credit Agreement, any change of control of the Company (as defined therein) constitutes an event of default, which, upon the occurrence thereof and the expiration of any applicable cure period, would permit the lender to accelerate all outstanding obligations under the Credit Agreement.
The outstanding balance under the Credit Agreement is approximately $7,341,822.16 as of the date hereof. The facility will be paid off in full and terminated at or prior to the Closing in accordance with Section 6.2(e) of the Agreement, thereby mooting the change-of-control event of default provision.
Schedule 3.5(b) — No Governmental Filings Required
Hart-Scott-Rodino Act. Based on the applicable size-of-person and size-of-transaction tests under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder, the parties have determined that no pre-merger notification filing under the HSR Act is required in connection with the transactions contemplated by the Agreement. Specifically, the applicable size-of-person test is not satisfied because neither the Company nor the Buyer meets the thresholds requiring a filing under the current HSR Act regulations.
Other Governmental Filings. No other governmental filings, registrations, authorizations, permits, consents, or approvals are required to be obtained or made by the Company, the Sellers, or the Sellers' Representative in connection with the execution and delivery of the Agreement or the consummation of the transactions contemplated thereby, other than such filings as may be required under applicable federal and state securities laws in connection with the transfer of shares (which filings, if any, will be made at or promptly following Closing).
SCHEDULE 3.6
Financial Statements
The following information is disclosed with respect to the representations and warranties set forth in Section 3.6 of the Agreement:
Audited Financial Statements:
The audited financial statements of the Company for the fiscal years ended December 31, 2021, December 31, 2022, and December 31, 2023 (including, in each case, a balance sheet, statement of operations, statement of stockholders' equity, and statement of cash flows, together with the notes thereto), have been prepared by the Company and audited by Dunfield & Associates, P.C. (independent certified public accountants; 1500 John F. Kennedy Boulevard, Suite 800, Philadelphia, PA 19102; Howard Dunfield, CPA, Managing Partner), in accordance with United States generally accepted accounting principles ("GAAP"), applied on a consistent basis throughout the periods indicated.
Copies of the audited financial statements, together with the independent auditor's reports thereon, have been made available to the Buyer in the Data Room, as follows:
•  FY2021 Audited Financial Statements — Data Room reference: 2.01.001 and 2.01.002
•  FY2022 Audited Financial Statements — Data Room reference: 2.01.003 and 2.01.004
•  FY2023 Audited Financial Statements — Data Room reference: 2.01.005 and 2.01.006
The independent auditor's reports for each of the fiscal years ended December 31, 2021, December 31, 2022, and December 31, 2023 contain unqualified opinions with no going concern qualifications or explanatory paragraphs.
Unaudited Interim Financial Statements:
The unaudited interim financial statements of the Company for the six-month period ended June 30, 2024 (including a balance sheet and statement of operations), have been prepared by the Company's management in accordance with GAAP, subject to (i) normal year-end adjustments (none of which, individually or in the aggregate, are expected to be material) and (ii) the absence of footnotes. Copies of the unaudited interim financial statements have been made available to the Buyer in the Data Room (reference: 2.01.007).
Key Financial Metrics (Informational):
For informational purposes, the following selected financial data is provided:
•  FY2023 Revenue: approximately $87,000,000
•  FY2023 EBITDA (as calculated in accordance with the methodology set forth in the Agreement): approximately $14,200,000
Exceptions:
No exceptions to the representations and warranties set forth in Section 3.6 of the Agreement are disclosed, except that, as noted above, the unaudited interim financial statements for the six-month period ended June 30, 2024 are subject to normal year-end adjustments and do not include footnotes. Such adjustments are not expected to be material, individually or in the aggregate.
SCHEDULE 3.7
Absence of Certain Changes
The following information is disclosed with respect to the representations and warranties set forth in Section 3.7 of the Agreement:
Since December 31, 2023 (the date of the most recent audited balance sheet), except as set forth below or as expressly contemplated by the Agreement, the Company has conducted its business in the ordinary course of business consistent with past practice, and no Material Adverse Effect has occurred. No exceptions to the representations and warranties set forth in Section 3.7 of the Agreement are disclosed, except for the following:
1.  Capital Expenditures. In the ordinary course of business, the Company has made capital expenditures for manufacturing equipment and facility improvements at its manufacturing facility located at 45 Forge Creek Road, Exton, PA 19341. Aggregate capital expenditures incurred year-to-date through the date hereof are approximately $1,200,000. These capital expenditures were incurred in the ordinary course of the Company's business and are consistent with the Company's historical capital expenditure patterns, and primarily relate to the purchase and installation of upgraded CNC machining equipment and clean room enhancements.
2.  New Employment Offer Letters. The Company entered into two new employment offer letters for engineering staff members in the ordinary course of business. The aggregate annual base salary commitments under such offer letters are approximately $320,000. Both positions are for mechanical engineers supporting the ArthroNav development program, and the compensation terms are consistent with market rates for comparable positions in the Philadelphia metropolitan area.
3.  Increased R&D Spending — ArthroNav Platform. The Company has increased its research and development spending in connection with the development of the ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0). This increased spending is associated with (i) the preparation for and completion of a pre-submission (Q-Sub) meeting with the U.S. Food and Drug Administration held in March 2024, (ii) continued engineering and software development activities in preparation for the anticipated 510(k) submission targeted for Q2 2025, and (iii) the procurement of prototype components and test fixtures. The incremental R&D spending is reflected in the unaudited interim financial statements for the six-month period ended June 30, 2024 referenced in Schedule 3.6.
SCHEDULE 3.8
Tax Matters
The following information is disclosed with respect to the representations and warranties set forth in Section 3.8 of the Agreement:
Schedule 3.8(a) — Tax Returns and Payments
The Company has timely filed (or will timely file, taking into account any applicable extensions of time for filing) all required federal, state, and local Tax Returns. The Company currently files income Tax Returns in the following jurisdictions:
•  Federal: United States federal income tax returns (Form 1120) filed with the Internal Revenue Service
•  State — Pennsylvania: Pennsylvania Corporate Net Income Tax returns (RCT-101) filed with the Pennsylvania Department of Revenue
•  State — New Jersey: New Jersey Corporation Business Tax returns (CBT-100) filed with the New Jersey Division of Taxation. The Company files in New Jersey based on its historical sales activity in that jurisdiction, although the Company does not maintain any physical presence in New Jersey.
•  Local — City of Philadelphia: City of Philadelphia Business Income and Receipts Tax (BIRT) returns filed with the Philadelphia Department of Revenue. The Company files BIRT returns due to certain sales activity in the City of Philadelphia.
All Taxes due and owing (whether or not shown on any Tax Return) have been timely paid in full, or have been adequately reserved for in the financial statements of the Company delivered pursuant to Section 3.6 of the Agreement and Schedule 3.6.
The Company has not received written notice of any proposed Tax assessment or deficiency from any Taxing authority. There are no Liens for Taxes on any assets of the Company, other than statutory Liens for current Taxes not yet due and payable.
Schedule 3.8(b) — Tax Audits and Disputes
There are no pending audits, examinations, investigations, or other administrative or judicial proceedings by any Taxing authority with respect to any Taxes or Tax Returns of the Company. To the Knowledge of the Company, no such audit, examination, investigation, or proceeding is threatened.
No outstanding waivers or extensions of any applicable statute of limitations with respect to Taxes of the Company have been granted or requested. The Company has not entered into any closing agreement or similar arrangement with any Taxing authority.
Schedule 3.8(c) — Net Operating Losses
The Company has generated and utilized net operating losses ("NOLs") as follows:
•  Federal NOLs: The Company utilized approximately $4,300,000 in federal net operating loss carryforwards through the fiscal year ended December 31, 2023. As of December 31, 2023, the Company has remaining federal NOLs of approximately $1,100,000 available for use in future periods.
•  Limitation under Section 382 of the Internal Revenue Code: The ownership change contemplated by the transactions under the Agreement is expected to constitute an "ownership change" within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). As a result, the utilization of the Company's pre-change NOLs (and certain other pre-change tax attributes) in post-change periods will be subject to an annual limitation under Section 382 of the Code. The specific amount of such annual limitation has not yet been calculated and will depend on, among other things, the value of the Company's equity immediately before the ownership change and the applicable long-term tax-exempt rate.
•  State NOLs — Pennsylvania: As of December 31, 2023, the Company has remaining Pennsylvania NOLs of approximately $800,000. The utilization of these NOLs is subject to the Pennsylvania NOL deduction limitation, which currently limits the deduction for NOL carryforwards to the greater of (i) $5,000,000 or (ii) 40% of Pennsylvania taxable income in the applicable year.
•  State NOLs — New Jersey: The Company's New Jersey NOL position has been reviewed and is not material.
Schedule 3.8(d) — Section 338(h)(10) Election
The Buyer and the Sellers intend, pursuant to Section 6.7 of the Agreement, to make a joint election under Section 338(h)(10) of the Code (and corresponding elections under applicable state and local Tax laws where available) to treat the purchase of the Company's stock pursuant to the Agreement as a deemed asset acquisition for United States federal income tax purposes (and for applicable state and local income tax purposes). The allocation of the deemed purchase price among the Company's assets for Tax purposes will be determined in accordance with Section 6.7 of the Agreement and Section 338 of the Code and the Treasury Regulations promulgated thereunder.
No tax indemnity agreements, tax sharing agreements, tax allocation agreements, or similar arrangements exist to which the Company is a party or by which the Company is bound, other than customary tax provisions contained in commercial agreements entered into in the ordinary course of business (the primary purpose of which is not the allocation or sharing of Taxes).
Schedule 3.8(e) — Withholding
The Company has complied in all material respects with all applicable Tax withholding and remittance obligations, including obligations with respect to federal, state, and local income Tax withholding, Social Security and Medicare Taxes (FICA), federal and state unemployment Taxes (FUTA and SUTA), and any other applicable withholding requirements. All amounts required to be withheld from payments to employees, independent contractors, and other payees have been timely withheld and remitted to the appropriate Taxing authorities.
SCHEDULE 3.9
Real Property
The following information is disclosed with respect to the representations and warranties set forth in Section 3.9 of the Agreement:
Schedule 3.9(a) — Owned Real Property
The Company does not own any real property, and has never owned any real property. The Company has no agreements or options to purchase or otherwise acquire any real property.
Schedule 3.9(b) — Leased Real Property
The Company leases the following real property:
Complete copies of both leases (including all amendments, addenda, and side letters, if any) have been made available to the Buyer in the Data Room:
•  780 Keystone Boulevard Lease — Data Room reference: 4.01.001
•  45 Forge Creek Road Lease — Data Room reference: 4.01.002
Lease Status and Compliance:
With respect to each of the foregoing leases: (i) the applicable lease is in full force and effect and constitutes a valid and binding obligation of the Company and, to the Knowledge of the Company, the applicable landlord; (ii) the Company is not in default or breach of any provision of the applicable lease, and no event has occurred which, with the giving of notice or the passage of time (or both), would constitute such a default or breach; (iii) to the Knowledge of the Company, the applicable landlord is not in default or breach of any provision of the applicable lease; and (iv) the Company has not assigned, subleased, or otherwise transferred its interest in the applicable lease or any portion of the leased premises to any third party.
Change-of-Control Provisions:
Neither the lease for 780 Keystone Boulevard nor the lease for 45 Forge Creek Road contains any change-of-control consent, notification, or approval requirement, or any provision that would permit the landlord to terminate the lease or exercise any other remedy as a result of the transactions contemplated by the Agreement.
SCHEDULE 3.10
Intellectual Property
The following information is disclosed with respect to the representations and warranties set forth in Section 3.10 of the Agreement:
Schedule 3.10(a) — Issued Patents
The Company is the sole and exclusive owner of record of the following issued patents, all of which are currently in force and have been duly maintained (with all maintenance and annuity fees timely paid):
United States Patents:
European Patents (via European Patent Office):
All of the foregoing patents are owned solely by the Company, free and clear of all Liens (other than Permitted Liens). All named inventors have assigned their rights in the inventions claimed therein to the Company pursuant to written invention assignment agreements.
Schedule 3.10(b) — Pending Patent Applications
The Company is the sole applicant and assignee of record with respect to the following pending patent applications:
Schedule 3.10(c) — Registered Trademarks
The Company is the sole and exclusive owner of record of the following registered trademarks:
All of the foregoing trademark registrations are in full force and effect, and all required maintenance filings, affidavits of use, and renewal applications have been timely filed. The Company is not aware of any third-party use of any confusingly similar mark in connection with surgical or medical device products.
The Company also maintains common law trademark rights in the names "MERIDIAN SURGICAL TECHNOLOGIES" and "MERIDIAN" in connection with surgical instruments and medical devices.
Schedule 3.10(d) — Trade Secrets
The Company maintains as trade secrets certain proprietary algorithms for real-time cartilage thickness mapping, which constitute the core technology for the ArthroNav Software Module for Real-Time Cartilage Mapping. These trade secrets are maintained pursuant to the Company's Confidential Information and Invention Assignment Policy (the "CIIA Policy"), a copy of which has been made available in the Data Room (reference: 7.01.002).
The Company has taken commercially reasonable steps to protect the confidentiality of its trade secrets, including the following:
•  All employees and independent contractors with access to trade secret information are required to execute a Confidentiality and Invention Assignment Agreement prior to gaining access to proprietary information. As of the date hereof, all current employees and contractors with such access have executed such agreements.
•  Access to trade secret information is restricted on a need-to-know basis, with role-based access controls implemented in the Company's information systems.
•  Trade secret materials are stored on encrypted, access-controlled servers maintained at the Company's headquarters.
•  Visitors to the Company's facilities are required to execute non-disclosure agreements prior to gaining access to areas where proprietary information is located.
Schedule 3.10(e) — IP Licenses (Inbound)
The Company is the licensee under the following inbound intellectual property license:
License Agreement, dated as of July 1, 2020 (the "Polytechnic License"), between Polytechnic Innovations, Ltd. (Innovation Centre, 12 Banbury Road, Oxford, OX2 6NN, United Kingdom) ("Polytechnic"), as licensor, and the Company, as licensee.
•  Licensed IP: Background intellectual property relating to robotic surgical navigation technology, including certain patent rights and related know-how developed at the University of Oxford and licensed to Polytechnic.
•  Grant: Non-exclusive (with respect to certain background patents) and exclusive (with respect to certain field-of-use applications in arthroscopic surgery) license to make, have made, use, sell, offer for sale, and import products incorporating the licensed technology.
•  Royalty: 2.5% of net sales of ArthroNav products (as defined in the Polytechnic License), payable quarterly in arrears.
•  Term: Co-extensive with the life of the licensed patents (the latest-expiring of which is currently expected to expire in 2038).
•  Territory: Worldwide.
•  Change-of-Control: The Polytechnic License does not contain any change-of-control consent, notification, or approval requirement.
•  Termination: The Polytechnic License may be terminated by Polytechnic upon a material breach by the Company that remains uncured for sixty (60) days following written notice thereof.
•  Data Room reference: 5.01.008
The Company is current on all royalty payments under the Polytechnic License and is not in breach or default of any provision thereof.
Schedule 3.10(f) — IP Licenses (Outbound)
The Company has not granted any outbound license, sublicense, or other right to any third party with respect to any of the Company's intellectual property, other than implied licenses arising in connection with the sale of the Company's products in the ordinary course of business.
Schedule 3.10(g) — IP Disputes
See Schedule 3.13 (Litigation) for a description of the pending patent infringement action styled Hartwell Orthopedic Solutions, Inc. v. Meridian Surgical Technologies, Inc., Civil Action No. 2:23-cv-04817, in the United States District Court for the Eastern District of Pennsylvania. Other than such pending action, there are no pending or, to the Knowledge of the Company, threatened claims, actions, suits, or proceedings relating to the Company's intellectual property, and the Company has not received any written demand or cease-and-desist letter from any third party alleging infringement, misappropriation, or other violation of any intellectual property right (other than in connection with the Hartwell action).
SCHEDULE 3.11
Material Contracts
The following information is disclosed with respect to the representations and warranties set forth in Section 3.11 of the Agreement. Set forth below is a list of all Material Contracts (as defined in Section 3.11 of the Agreement) to which the Company is a party or by which it is bound as of the date hereof:
1. Exclusive Supply Agreement
•  Date: March 15, 2022
•  Parties: The Company and Titanium Precision Components, Inc. ("TPC"), 215 Industrial Park Drive, Lancaster, PA 17601
•  Subject Matter: Exclusive supply of titanium instrument housings and related precision-machined titanium components for the Company's arthroscopic blade and shaver products
•  Term: Five (5) years, expiring March 14, 2027, with an option to renew for successive one-year terms upon mutual agreement
•  Minimum Annual Purchase Commitment: $3,200,000
•  Pricing: Fixed pricing for the first two contract years, subject to annual adjustment based on a formula tied to the Producer Price Index for titanium mill shapes, with a cap on annual increases of 5%
•  Change-of-Control Provision: Section 12.3 requires prior written consent of TPC to any change of control of the Company. Consent was obtained via letter from TPC dated August 5, 2024.
•  Data Room reference: 5.01.014
2. Distribution Agreement
•  Date: January 1, 2023
•  Parties: The Company and OrthoLink Distribution, LLC, 9400 Snowden River Parkway, Suite 300, Columbia, MD 21045
•  Subject Matter: Distribution of the Company's PrecisionBlade product line in the United States
•  Term: Three (3) years, expiring December 31, 2025, with automatic one-year renewals unless either party provides 90 days' prior written notice of non-renewal
•  Exclusivity: OrthoLink has exclusive distribution rights for the eastern United States (defined as all states east of the Mississippi River)
•  Minimum Purchase Requirements: None; however, OrthoLink has agreed to use commercially reasonable efforts to promote and sell PrecisionBlade products in its territory
•  Change-of-Control Provision: Section 15.2 requires the Company to provide 30 days' prior written notice to OrthoLink of any change of control. Notice was provided via letter dated August 12, 2024. No consent required.
•  Data Room reference: 5.01.019
3. License Agreement (Polytechnic Innovations)
•  Date: July 1, 2020
•  Parties: Polytechnic Innovations, Ltd. (Innovation Centre, 12 Banbury Road, Oxford, OX2 6NN, United Kingdom) and the Company
•  Subject Matter: License of background intellectual property relating to robotic surgical navigation technology for use in the Company's ArthroNav platform
•  Term: Co-extensive with the life of the licensed patents
•  Royalty: 2.5% of net sales of ArthroNav products, payable quarterly in arrears
•  Change-of-Control Provision: None
•  Additional details: See Schedule 3.10(e)
•  Data Room reference: 5.01.008
4. Revolving Credit Agreement
•  Date: June 1, 2021
•  Parties: The Company and Ironclad Commercial Lending, LLC, 600 Travis Street, Suite 2200, Houston, TX 77002
•  Subject Matter: $12,000,000 revolving credit facility secured by substantially all assets of the Company
•  Outstanding Balance: Approximately $7,341,822.16 as of the date hereof
•  Interest Rate: Variable rate based on the Secured Overnight Financing Rate (SOFR) plus 325 basis points, with a floor of 4.50%
•  Maturity: June 1, 2026
•  Financial Covenants: Minimum fixed charge coverage ratio of 1.25x; maximum leverage ratio of 3.0x; minimum liquidity of $2,000,000
•  Change-of-Control Provision: Section 7.01(h) provides that any change of control of the Company constitutes an event of default
•  Status: The facility will be paid off in full and terminated at or prior to Closing in accordance with Section 6.2(e) of the Agreement. A payoff letter will be obtained from Ironclad on or prior to the Closing Date.
•  Data Room reference: 5.01.020
5. Office Lease — 780 Keystone Boulevard
•  Landlord: Keystone Boulevard Associates, LP
•  Details: As described in Schedule 3.9(b)
•  Data Room reference: 4.01.001
6. Manufacturing Facility Lease — 45 Forge Creek Road
•  Landlord: Forge Creek Industrial, LLC
•  Details: As described in Schedule 3.9(b)
•  Data Room reference: 4.01.002
7. Stockholders' Agreement
•  Date: September 15, 2020
•  Parties: The Company, Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, Arch Hill Ventures Fund II, LLC, and Catherine Pryor
•  Details: As described in Schedule 3.3(d)
•  Status: Terminates automatically upon consummation of the transactions contemplated by the Agreement
•  Data Room reference: 1.01.005
8. Employment Agreements / Offer Letters with Key Management
Employment and compensation arrangements with the Company's key management personnel, as described in Schedule 3.15(b). Copies of all employment agreements and offer letters for key management have been made available in the Data Room (references: 7.01.004 through 7.01.008). New employment agreements for certain key employees to become effective at Closing are described in Schedule 3.15(b).
9. Confidentiality and Invention Assignment Agreements
The Company's standard form Confidentiality and Invention Assignment Agreement, which has been executed by all employees and independent contractors with access to the Company's proprietary information and trade secrets. A copy of the standard form agreement has been made available in the Data Room (reference: 7.01.001).
10. ISO 13485:2016 Certification Agreement
•  Certification Body: Pinnacle Conformity Assessment Services, LLC
•  Certificate Number: PCA-2022-04819
•  Scope: Design, development, manufacture, and distribution of single-use arthroscopic blades and powered shaver systems for arthroscopic surgery
•  Valid Through: April 2025
•  Recertification Audit: Scheduled for Q1 2025
•  Data Room reference: 6.01.011
The Company is not in default or breach of any Material Contract listed above, and no event has occurred which, with the giving of notice or the passage of time (or both), would constitute a default or breach thereunder (except for the change-of-control provisions described in Schedule 3.5(a), which have been addressed as described therein). To the Knowledge of the Company, no other party to any Material Contract is in default or breach thereof.
SCHEDULE 3.12
Regulatory and Compliance Matters
The following information is disclosed with respect to the representations and warranties set forth in Section 3.12 of the Agreement:
Schedule 3.12(a) — FDA Clearances and Approvals
All of the Company's currently commercially marketed products hold valid and current premarket clearances from the U.S. Food and Drug Administration ("FDA") under Section 510(k) of the Federal Food, Drug, and Cosmetic Act. The Company's commercially marketed product lines consist of single-use arthroscopic blades and powered shaver systems for use in arthroscopic surgical procedures.
A complete list of all 510(k) clearances held by the Company, including the 510(k) clearance number, product description, cleared indication(s) for use, clearance date, and predicate device(s) identified, has been made available in the Data Room (references: 6.01.001 through 6.01.009).
As of the date hereof:
•  No FDA warning letters are pending or outstanding with respect to the Company or any of its products.
•  The Company is not subject to any consent decree, corporate integrity agreement, deferred prosecution agreement, or similar enforcement action by the FDA or any other governmental authority.
•  There are no unresolved Form 483 observations or other inspectional findings with respect to the Company or its manufacturing facility.
•  All establishment registrations and device listings required under 21 C.F.R. Part 807 are current.
Schedule 3.12(b) — FDA Inspections
The Company's manufacturing facility at 45 Forge Creek Road, Exton, PA 19341 was most recently inspected by the FDA in September 2023. The inspection was a routine good manufacturing practice (GMP) / Quality System Regulation (QSR) inspection conducted under 21 C.F.R. Part 820. No Form 483 observations were issued during or as a result of the September 2023 inspection.
A summary of the Company's FDA inspection history, including inspection dates, types of inspections, and any Form 483 observations issued and their resolution, has been made available in the Data Room (reference: 6.01.010).
Schedule 3.12(c) — ISO Certification
The Company's manufacturing facility at 45 Forge Creek Road, Exton, PA 19341 holds ISO 13485:2016 certification for the design, development, manufacture, and distribution of single-use arthroscopic blades and powered shaver systems for arthroscopic surgery.
•  Certification Body: Pinnacle Conformity Assessment Services, LLC
•  Certificate Number: PCA-2022-04819
•  Initial Certification Date: April 2022
•  Current Certificate Valid Through: April 2025
•  Recertification Audit: Scheduled for Q1 2025
The Company's most recent surveillance audit was conducted by Pinnacle Conformity Assessment Services, LLC in April 2024. No major nonconformities were identified during the surveillance audit. One minor nonconformity relating to the timeliness of certain supplier audit records was identified and has been corrected.
Schedule 3.12(d) — ArthroNav Platform Regulatory Status
The ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0) (the "ArthroNav System") is currently in the development stage and has not been submitted to the FDA for 510(k) clearance or any other form of premarket review or approval. The ArthroNav System is not commercially marketed or distributed and may not be commercially marketed or distributed in the United States until FDA clearance or approval has been obtained.
The following milestones relating to the regulatory pathway for the ArthroNav System have been achieved or are planned:
•  Pre-Submission (Q-Sub) Meeting: The Company completed a pre-submission meeting with the FDA's Center for Devices and Radiological Health (CDRH), Office of Surgical and Infection Control Devices, in March 2024. The purpose of the Q-Sub meeting was to obtain FDA feedback on the proposed regulatory pathway, the proposed predicate device, the proposed clinical and non-clinical testing strategy, and other key aspects of the anticipated 510(k) submission. Minutes of the Q-Sub meeting have been made available in the Data Room (reference: 6.01.012).
•  Predicate Device: The Company has identified the Marlowe Asset Management Robotic Surgical Assist System (510(k) No. K203847, cleared June 2021) as the primary predicate device for the ArthroNav System.
•  Anticipated 510(k) Submission: The Company currently targets the submission of its 510(k) premarket notification for the ArthroNav System (Generation 1.0) in Q2 2025, subject to the successful completion of verification and validation testing, biocompatibility testing, software validation, and other pre-submission activities.
No assurance can be given that 510(k) clearance for the ArthroNav System will be obtained, or as to the timing of any such clearance. The FDA may require additional information, testing, clinical data, or other submissions before acting on any 510(k) notification filed by the Company. The FDA may also determine that the ArthroNav System requires a more rigorous premarket review pathway, such as a De Novo classification request or a premarket approval (PMA) application.
Schedule 3.12(e) — Recalls, Corrections, and Removals
No product recalls, corrections, or removals (whether voluntary or mandatory, and whether initiated by the Company, the FDA, or any other regulatory authority) have been initiated with respect to any product manufactured, distributed, or sold by the Company at any time during the past five (5) years.
No Medical Device Reports ("MDRs") filed by the Company with the FDA under 21 C.F.R. Part 803 during the past three (3) years remain unresolved. All MDRs filed by the Company (if any) during such period have been filed in accordance with applicable FDA regulations and have been closed or resolved without further FDA action.
The Company has not received any written communication from the FDA or any other regulatory authority requesting or directing any product recall, correction, or removal, or indicating that any such action is being considered.
Schedule 3.12(f) — Other Regulatory Matters
No additional exceptions to the representations and warranties set forth in Section 3.12 of the Agreement are disclosed.
The Company is in compliance in all material respects with all other applicable federal, state, and local laws, regulations, and requirements relating to the manufacture, distribution, labeling, marketing, and sale of medical devices, including the applicable provisions of the Federal Food, Drug, and Cosmetic Act, the regulations promulgated by the FDA thereunder, and all applicable state laws and regulations governing the sale and distribution of medical devices.
SCHEDULE 3.13
Litigation
The following information is disclosed with respect to the representations and warranties set forth in Section 3.13 of the Agreement:
Pending Matters.  1. *Hartwell Orthopedic Solutions, Inc. v. Meridian Surgical Technologies, Inc.*
•  Court: United States District Court for the Eastern District of Pennsylvania
•  Civil Action No.: 2:23-cv-04817
•  Judge: The Honorable Patricia A. McBride
•  Date Filed: September 15, 2023
•  Plaintiff: Hartwell Orthopedic Solutions, Inc. ("Hartwell"), 850 North Michigan Avenue, Suite 1400, Chicago, IL 60611
•  Defendant: Meridian Surgical Technologies, Inc.
Nature of Claims: Hartwell has asserted claims for patent infringement of United States Patent No. 10,891,224 (the "'224 Patent"), entitled "Powered Shaver Blade Assembly with Enhanced Cutting Geometry for Arthroscopic Surgery," which was issued to Hartwell on January 12, 2021. Hartwell alleges that certain of the Company's powered shaver blade products (specifically, the PrecisionBlade PS-400 and PS-600 models) infringe one or more claims of the '224 Patent. Hartwell seeks injunctive relief, compensatory damages (including lost profits and/or a reasonable royalty), enhanced damages for alleged willful infringement, attorneys' fees, costs, and pre-judgment and post-judgment interest.
Company's Position: The Company denies all allegations of infringement and has filed an answer asserting affirmative defenses of non-infringement, invalidity, and prosecution history estoppel. The Company has also asserted counterclaims seeking a declaratory judgment of non-infringement and invalidity of the asserted claims of the '224 Patent.
On June 14, 2024, the Company filed a motion for summary judgment of non-infringement, supported by expert declarations and claim construction analysis. The motion remains pending before the Court.
Procedural Status:
•  Claim construction hearing (Markman hearing): Held February 9, 2024. The Court's claim construction order was issued on March 22, 2024.
•  Fact discovery: Substantially complete. The parties have exchanged interrogatory responses, document productions, and deposition transcripts of fact witnesses.
•  Expert discovery: Expert reports are due on October 15, 2024 (opening) and December 2, 2024 (rebuttal).
•  Motion for summary judgment: Filed by the Company on June 14, 2024; fully briefed; awaiting decision by the Court.
•  Trial date: Not yet set. The Court has indicated that a trial date will be scheduled following resolution of pending dispositive motions.
Outside Litigation Counsel: The Company is represented in this matter by Braddock & Lyle LLP, 1600 Arch Street, Suite 2000, Philadelphia, PA 19103. The lead counsel is Deborah Lyle, Partner.
Estimated Damages Exposure: Based on the analysis performed by the Company's litigation counsel, the estimated potential damages exposure in the event of an adverse judgment on liability (and assuming damages as calculated by Hartwell's damages expert) is in the range of $2,500,000 to $5,000,000. This estimate is based on Hartwell's claim for a reasonable royalty on the Company's sales of the accused products during the alleged period of infringement. The Company believes that it has meritorious defenses and that the motion for summary judgment of non-infringement has a reasonable likelihood of success. However, no assurance can be given as to the outcome of the litigation.
Indemnification: This matter is subject to specific indemnification by the Sellers pursuant to Section 8.2(a)(iv) of the Agreement.
Data Room References: The complaint, answer and counterclaims, claim construction briefing, the Court's claim construction order, the Company's motion for summary judgment and supporting materials, and other key pleadings and documents in this matter have been made available in the Data Room (references: 8.01.001 through 8.01.015).
Threatened Matters.  None. The Company has not received any written or oral threat of litigation, arbitration, or administrative proceeding from any Person (other than in connection with the Hartwell action described above) that remains unresolved as of the date hereof.
Orders, Judgments, and Decrees
There are no outstanding orders, judgments, injunctions, decrees, stipulations, rulings, or awards of any court, arbitrator, or governmental authority to which the Company is a party or by which the Company or any of its assets or properties is bound.
SCHEDULE 3.14
Environmental Matters
The following information is disclosed with respect to the representations and warranties set forth in Section 3.14 of the Agreement:
Schedule 3.14(a) — Compliance
The Company is in compliance in all material respects with all applicable Environmental Laws (as defined in the Agreement), including all federal, state, and local statutes, regulations, ordinances, and orders relating to pollution, protection of the environment, and human health and safety as it relates to exposure to Hazardous Materials. The Company has obtained and maintains all environmental permits, licenses, and authorizations required for the conduct of its business and operations as currently conducted.
Schedule 3.14(b) — Environmental Reports
The following environmental report has been prepared in connection with the Company's operations:
Phase I Environmental Site Assessment — 45 Forge Creek Road, Exton, PA 19341
•  Prepared by: Greenfield Environmental Consulting, LLC, 300 Conshohocken State Road, Suite 120, West Conshohocken, PA 19428
•  Report Date: June 15, 2024
•  Scope: The Phase I ESA was conducted in accordance with ASTM Standard E1527-21 (Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process) and included a review of historical records, regulatory databases, aerial photographs, topographic maps, fire insurance maps, and other relevant sources, as well as a site reconnaissance and interviews with knowledgeable persons.
•  Conclusion: No Recognized Environmental Conditions ("RECs"), Controlled RECs ("CRECs"), or Historical RECs ("HRECs") were identified at the subject property.
•  Data Room reference: 9.01.001
No Phase I Environmental Site Assessment was conducted for the Company's corporate headquarters at 780 Keystone Boulevard, Suite 200, King of Prussia, PA 19406, as the Company's operations at that location are limited to administrative and office functions and do not involve the use, storage, or handling of Hazardous Materials.
Schedule 3.14(c) — Historical Matters
One historical spill incident has occurred at the Company's Exton manufacturing facility:
•  Date of Incident: April 2019
•  Description: A de minimis spill of cutting fluid (approximately 15 gallons of synthetic water-soluble metalworking fluid) occurred at the manufacturing facility at 45 Forge Creek Road, Exton, PA 19341, during a routine equipment maintenance procedure. The spill was contained within the facility and did not reach any storm drain, surface water, or subsurface environment.
•  Reporting: The spill was promptly reported to the Pennsylvania Department of Environmental Protection ("DEP") in accordance with applicable reporting requirements.
•  Remediation: The spill was fully cleaned up and remediated in accordance with applicable DEP guidance. The remediation was completed within 48 hours of the incident.
•  Closure: The DEP issued a closure letter dated November 12, 2019, confirming satisfactory remediation and closure of the matter. No further action was required or recommended by the DEP.
•  Data Room reference: A copy of the DEP closure letter has been made available in the Data Room (reference: 9.01.002).
Schedule 3.14(d) — Environmental Permits
All required environmental permits held by the Company are current and in good standing. These include a minor source air quality permit for the Exton manufacturing facility and a wastewater discharge permit for non-contact cooling water. There are no pending applications for new environmental permits or renewals with approaching expiration dates that have not been timely submitted.
Schedule 3.14(