STOCK PURCHASE AGREEMENT
Dated as of August 20, 2024
among
SOLSTICE BIOMEDICAL, INC.
a Delaware corporation
("Buyer")
MERIDIAN SURGICAL TECHNOLOGIES, INC.
a Delaware corporation
(the "Company")
THE SELLERS LISTED ON THE SIGNATURE PAGES HERETO
(each, a "Seller" and collectively, the "Sellers")
and
DR. MARCUS ELLSWORTH
solely in his capacity as the Sellers' Representative
RECITALS
WHEREAS, the Company is a Delaware corporation engaged in the design, development, manufacture, and commercialization of minimally invasive surgical instruments for orthopedic procedures, with its principal executive offices located at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406, and its manufacturing facilities located at 45 Forge Creek Road, Exton, Pennsylvania 19341;
WHEREAS, the Sellers collectively own all of the issued and outstanding shares of common stock of the Company, consisting of 7,450,000 shares of common stock, par value $0.001 per share (the "Shares"), out of an aggregate of 10,000,000 authorized shares of common stock, and the Company has no shares of preferred stock authorized or outstanding;
WHEREAS, certain holders of options to purchase shares of common stock of the Company granted under the Meridian Surgical Technologies, Inc. 2019 Equity Incentive Plan (the "Company Option Plan") hold vested and unexercised options to purchase an aggregate of 550,000 shares of common stock at a weighted-average exercise price of $4.80 per share (each, a "Company Option" and collectively, the "Company Options"), and no other options, warrants, convertible securities, or other rights to acquire shares of capital stock of the Company are issued or outstanding;
WHEREAS, the Sellers desire to sell, transfer, and deliver to Buyer, and Buyer desires to purchase and acquire from the Sellers, all of the Shares, and the Company Options shall be cancelled in exchange for the Option Cancellation Consideration (as defined herein), in each case on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Buyer is a wholly owned subsidiary of Solstice Biomedical Devices Ltd., a private limited company organized under the laws of Ireland (Companies Registration Office Number 648217) ("Parent"), with its registered office at Solstice House, 14 Fitzwilliam Place, Dublin 2, D02 YF82, Ireland, and Buyer was formed for the purpose of consummating the transactions contemplated by this Agreement;
WHEREAS, the Board of Directors of the Company has unanimously approved this Agreement and the transactions contemplated hereby and has recommended that the Sellers approve the same, and each Seller has approved this Agreement and the transactions contemplated hereby;
WHEREAS, the parties hereto desire to make a joint election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, and the applicable Treasury Regulations thereunder, with respect to the purchase and sale of the Shares contemplated hereby; and
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants, representations, warranties, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
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, and procedures were applied in preparing the Financial Statements.
"Action" means any claim, action, suit, inquiry, audit, proceeding, arbitration, mediation, investigation, or other similar dispute, whether civil, criminal, administrative, or otherwise, in each case by or before any Governmental Authority or arbitral tribunal.
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Aggregate Base Purchase Price" means Two Hundred Twenty Million Dollars ($220,000,000).
"Agreement" means this Stock Purchase Agreement, as it may be amended, supplemented, or otherwise modified from time to time in accordance with Section 13.6.
"Anti-Corruption Laws" means the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, and any other applicable Laws relating to bribery, corruption, or similar offenses.
"ArthroNav Platform" means the ArthroNav Robotic-Assisted Arthroscopy System and all related software modules, algorithms, hardware components, and documentation under development by the Company, including the Generation 1.0 configuration (robotic-assisted arthroscopic navigation system) and the Generation 2.0 configuration (software module for real-time cartilage thickness mapping), together with all improvements, modifications, enhancements, and derivative works thereof.
"Basket Amount" means of the Aggregate Base Purchase Price.
"Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York or Wilmington, Delaware are authorized or required by Law to be closed.
"Buyer" means Solstice Biomedical, Inc., a Delaware corporation, Delaware File Number 7203841, Employer Identification Number 93-4017625, with its registered office at 1200 Innovation Drive, Suite 400, Wilmington, Delaware 19801.
"Buyer Indemnified Parties" has the meaning set forth in Section 11.1(a).
"Closing" has the meaning set forth in Section 3.1.
"Closing Cash Consideration" has the meaning set forth in Section 2.6.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Statement" has the meaning set forth in Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.
"Company" means Meridian Surgical Technologies, Inc., a Delaware corporation, Delaware File Number 5819734, Employer Identification Number 84-3192057, with its principal executive offices at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406.
"Company Common Stock" means the common stock, par value $0.001 per share, of the Company.
"Company Option" means each outstanding and unexercised option to purchase shares of Company Common Stock granted under the Company Option Plan.
"Company Option Plan" means the Meridian Surgical Technologies, Inc. 2019 Equity Incentive Plan, as amended from time to time.
"Confidential Information" means all non-public, confidential, or proprietary information of the Company, including trade secrets, know-how, inventions, processes, techniques, algorithms, software programs, customer lists, financial information, business plans, and other information that derives independent economic value from not being generally known to or readily ascertainable by other Persons.
"Contract" means any legally binding written or oral agreement, contract, subcontract, lease, sublease, license, sublicense, instrument, note, bond, mortgage, indenture, arrangement, understanding, commitment, or other obligation.
"D&O Tail Policy" has the meaning set forth in Section 8.3(a).
"De Minimis Threshold" means
"Disclosure Schedules" means the disclosure schedules delivered by the Sellers to Buyer concurrently with the execution and delivery of this Agreement, as the same may be amended, supplemented, or modified in accordance with the terms of this Agreement.
"Earnout Consideration" has the meaning set forth in Section 2.8.
"Earnout Escrow Reserve" means to be deposited at the Closing with the Escrow Agent in a separate escrow sub-account in accordance with Section 2.8(f).
"Earnout Expiration Date" means June 30, 2027.
"Earnout Period" means the period commencing on the Closing Date and ending on the Earnout Expiration Date.
"Employment Agreements" means, collectively, the employment agreements to be entered into at the Closing between the Company (or Buyer) and each of Dr. Marcus Ellsworth, Catherine Pryor, and Dr. Raj Subramanian, substantially in the forms attached as Exhibit B, Exhibit C, and Exhibit D, respectively.
"Environmental Laws" means all applicable Laws relating to pollution, contamination, protection of the environment, or human health and safety (to the extent relating to exposure to Hazardous Materials), including the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and any state or local counterparts thereof, each as amended.
"Escrow Agent" means Keystone Escrow Services, Inc., a Delaware corporation, or any successor escrow agent appointed in accordance with the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement to be entered into at the Closing among Buyer, the Sellers' Representative, and the Escrow Agent, substantially in the form attached as Exhibit A.
"Estimated Closing Net Working Capital" has the meaning set forth in Section 2.5.
"Estimated Closing Statement" has the meaning set forth in Section 2.5.
"Estimated NWC Adjustment" has the meaning set forth in Section 2.5.
"FDA" means the United States Food and Drug Administration, or any successor agency thereto.
"Final Closing Net Working Capital" has the meaning set forth in Section 2.7.
"Financial Statements" means, collectively, (a) the audited consolidated balance sheets of the Company as of December 31, 2021, December 31, 2022, and December 31, 2023, and the related audited consolidated statements of income, stockholders' equity, and cash flows for the fiscal years then ended, together with the notes thereto and the report of Dunfield & Associates, P.C. thereon, and (b) the unaudited consolidated balance sheet of the Company as of the most recent month-end preceding the date of this Agreement and the related unaudited consolidated statements of income for the period then ended.
"FIRPTA Certificate" means a certificate of non-foreign status in accordance with Section 1445 of the Code and Treasury Regulations Section 1.1445-2(b), substantially in the form attached as Exhibit G.
"Fraud" means actual and intentional common law fraud under the laws of the State of Delaware with respect to the making of the representations and warranties contained in this Agreement, and does not include constructive fraud, negligent misrepresentation, or any form of fraud based on recklessness or negligence.
"Fundamental Representations" has the meaning set forth in Section 10.1.
"GAAP" means United States generally accepted accounting principles, as in effect from time to time, applied on a consistent basis.
"Governmental Authority" means any federal, state, local, municipal, foreign, international, supranational, or other government, governmental department, commission, board, bureau, court, agency, instrumentality, or political subdivision thereof, or any self-regulatory organization, quasi-governmental authority, or authority exercising any regulatory, taxing, importing, or other governmental or quasi-governmental function.
"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination, or award entered by or with any Governmental Authority.
"Hazardous Materials" means any substance, material, waste, pollutant, or contaminant listed, defined, designated, or classified as hazardous, toxic, radioactive, or dangerous, or otherwise regulated, under any Environmental Law, including petroleum and any derivative or by-product thereof, asbestos and asbestos-containing materials, polychlorinated biphenyls, and per- and polyfluoroalkyl substances.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnification Cap" means of the Aggregate Base Purchase Price.
"Indemnified Party" means a Buyer Indemnified Party or a Seller Indemnified Party, as the context may require.
"Indemnifying Party" means the party from which indemnification is sought under Article XI.
"Indemnity Escrow Amount" means of the Aggregate Base Purchase Price.
"Independent Accounting Referee" means Hargrove Bennett LLP, 1735 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, Attention: Margaret Chen, CPA, Partner, or, if Hargrove Bennett LLP is unable or unwilling to serve in such capacity, such other nationally recognized independent public accounting firm mutually agreed upon in writing by Buyer and the Sellers' Representative.
"Intellectual Property" means all intellectual property and proprietary rights, whether registered or unregistered, including (a) patents and patent applications, (b) trademarks, service marks, trade names, trade dress, domain names, and related goodwill, (c) copyrights and copyrightable works, (d) trade secrets and confidential information, and (e) all registrations, applications, renewals, extensions, continuations, continuations-in-part, divisions, re-examinations, and reissues relating to any of the foregoing.
"Ironclad Facility" means that certain Revolving Credit and Security Agreement, dated as of June 15, 2021 (as amended by that certain First Amendment to Revolving Credit and Security Agreement, dated as of March 1, 2023), by and between the Company and Ironclad Commercial Lending, LLC, as lender, providing for a $12,000,000 revolving credit facility.
"Ironclad Payoff Amount" means the aggregate amount required to pay in full, satisfy, and discharge all outstanding obligations of the Company under the Ironclad Facility, including all principal, accrued and unpaid interest, prepayment premiums (if any), fees, expenses, and other amounts, such that upon payment thereof all commitments under the Ironclad Facility shall be terminated and all Liens securing such obligations shall be released. As of October 28, 2024, the Ironclad Payoff Amount is Seven Million Three Hundred Forty-One Thousand Eight Hundred Twenty-Two Dollars and Sixteen Cents ($7,341,822.16), as set forth in the payoff letter from Ironclad Commercial Lending, LLC delivered in connection with the Closing.
"Knowledge of the Company" or "Company's Knowledge" means the actual knowledge, after reasonable inquiry, of each of the following individuals: Dr. Marcus Ellsworth (Chief Executive Officer), Catherine Pryor (Vice President of Operations), David Hensley (Vice President of Finance), Dr. Raj Subramanian (Vice President of Research & Development), and Linda Fontaine (Director of Regulatory Affairs). For purposes of this definition, "reasonable inquiry" means the inquiry that a reasonably prudent individual in a comparable position would have undertaken in the ordinary course of such Person's responsibilities.
"Law" means any federal, state, local, municipal, foreign, international, supranational, or other law, statute, constitution, principle of common law, treaty, convention, resolution, ordinance, code, rule, regulation, edict, directive, ruling, proclamation, decree, order, or requirement issued, enacted, adopted, promulgated, implemented, or otherwise put into effect by or under the authority of any Governmental Authority.
"Lien" means any mortgage, pledge, security interest, encumbrance, charge, lien (statutory or otherwise), adverse claim, restriction, option, right of first refusal, easement, servitude, right of way, covenant, condition, or restriction of any kind, whether imposed by Law, Contract, or otherwise.
"Losses" means any and all damages, losses, liabilities, obligations, costs, expenses, deficiencies, interest, awards, judgments, penalties, fines, assessments, and amounts paid in settlement, including reasonable and documented out-of-pocket attorneys' fees and expenses of investigation and defense of any of the foregoing; provided, however, that "Losses" shall not include punitive damages, consequential damages, or lost profits, except to the extent actually awarded to a third party in connection with a Third-Party Claim.
"Material Adverse Effect" means any event, occurrence, fact, condition, change, development, or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Company, taken as a whole, or (b) the ability of the Sellers or the Company to consummate the transactions contemplated by this Agreement; provided, however, that none of the following, individually or in the aggregate, shall be deemed to constitute, or shall be taken into account in determining whether there has been, a Material Adverse Effect: (i) changes in general economic, financial, credit, or capital market conditions; (ii) changes in conditions generally affecting the medical device industry or the orthopedic surgical instrument sector; (iii) changes in GAAP or applicable accounting standards or in the interpretation thereof after the date hereof; (iv) changes in applicable Law or the interpretation or enforcement thereof after the date hereof; (v) the outbreak, escalation, or worsening of hostilities, war, acts of terrorism, or any natural or man-made disaster, epidemic, pandemic, or public health emergency; (vi) any failure by the Company to meet any internal or external projection, forecast, estimate, or prediction of revenue, earnings, or other financial performance for any period (provided that the underlying causes thereof shall not be excluded); (vii) any effect resulting from the announcement, pendency, or consummation of the transactions contemplated by this Agreement, including the impact on relationships with customers, suppliers, distributors, employees, or Governmental Authorities; or (viii) any action taken or omitted to be taken by the Company at the written of Buyer or expressly required by this Agreement; except, in the case of clauses (i) through (v), to the extent that such changes, developments, or conditions disproportionately and adversely affect the Company relative to other companies operating in the medical device industry or the orthopedic surgical instrument sector.
"Maximum Aggregate Consideration" means Two Hundred Fifty-Five Million Dollars ($255,000,000), comprised of (a) the Aggregate Base Purchase Price of $220,000,000 plus (b) the maximum Earnout Consideration of $35,000,000.
"Milestone 1" has the meaning set forth in Section 2.8(a).
"Milestone 1 Earnout Payment" has the meaning set forth in Section 2.8(a).
"Milestone 2" has the meaning set forth in Section 2.8(b).
"Milestone 2 Earnout Payment" has the meaning set forth in Section 2.8(b).
"Net Working Capital" means, as of the applicable date of determination, the amount equal to (a) the aggregate amount of the current assets of the Company (excluding cash and cash equivalents, deferred Tax assets, and the items set forth on Schedule 2.5 as excluded current assets) minus (b) the aggregate amount of the current liabilities of the Company (excluding the current portion of any Indebtedness, deferred Tax liabilities, Sellers' Transaction Expenses, and the items set forth on Schedule 2.5 as excluded current liabilities), in each case calculated in accordance with the Accounting Methodology.
"Non-Competition and Non-Solicitation Agreement" means a Non-Competition and Non-Solicitation Agreement substantially in the form attached as Exhibit E, to be executed at the Closing by each of Dr. Marcus Ellsworth, Catherine Pryor, and Dr. Raj Subramanian.
"Option Cancellation Consideration" means, with respect to each Company Option, an amount in cash (without interest) equal to the excess, if any, of (a) the Per Share Price over (b) the per share exercise price of such Company Option, subject to all applicable Tax withholding obligations.
"Parent" means Solstice Biomedical Devices Ltd., a private limited company organized under the laws of Ireland, Companies Registration Office Number 648217, with its registered office at Solstice House, 14 Fitzwilliam Place, Dublin 2, D02 YF82, Ireland.
"Per Share Price" means Twenty-Seven Dollars and Fifty Cents ($27.50) per share, calculated as the quotient obtained by dividing (a) the Aggregate Base Purchase Price ($220,000,000) by (b) 8,000,000 (the sum of (i) 7,450,000 outstanding Shares and (ii) 550,000 Company Options).
"Permitted Liens" means (a) Liens for current Taxes not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in the Financial Statements; (b) mechanics', carriers', workers', repairers', and similar Liens arising or incurred in the ordinary course of business and securing obligations that are not overdue for more than sixty (60) days; (c) zoning, building, and other similar restrictions that do not materially interfere with the use or occupancy of the affected property; (d) Liens arising under workers' compensation, unemployment insurance, social security, retirement, and similar legislation; (e) purchase money Liens and Liens securing rental payments under capital lease arrangements disclosed on Schedule 5.17; and (f) other imperfections or irregularities of title or Liens that do not, individually or in the aggregate, materially detract from the value of, or materially impair the use of, the property subject thereto.
"Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, trust, unincorporated organization, or other entity, or any Governmental Authority.
"Pre-Closing Tax Period" means any taxable period ending on or before the Closing Date and the portion of any Straddle Period through and including the Closing Date.
"Pre-Closing Taxes" means all Taxes of the Company for any Pre-Closing Tax Period, and the Company's share of any Taxes relating to a Straddle Period, determined in accordance with Section 8.5.
"Pro Rata Share" means, with respect to each Seller, the percentage obtained by dividing (a) the aggregate consideration payable to such Seller under this Agreement (including such Seller's share of the Aggregate Base Purchase Price and any Earnout Consideration) by (b) the Aggregate Base Purchase Price, as set forth on Schedule 4.3.
"RWI Policy" means that certain representations and warranties insurance policy issued by Ridgeline Mutual Insurance Company under Policy Number RMI-RWI-2024-08172, as bound and effective as of the Closing Date, providing aggregate coverage of $40,000,000 with a retention of $4,400,000.
"Retention" means Four Million Four Hundred Thousand Dollars ($4,400,000), equal to two percent (2.0%) of the Aggregate Base Purchase Price, with fifty percent (50%) thereof ($2,200,000) allocated to Buyer and fifty percent (50%) thereof ($2,200,000) allocated to the Sellers' indemnification obligations under this Agreement.
"Seller Indemnified Parties" has the meaning set forth in Section 11.2.
"Sellers' Representative" means Dr. Marcus Ellsworth, in his capacity as the representative of the Sellers appointed pursuant to Article XII, or any successor thereto appointed in accordance with Section 12.4.
"Sellers' Representative Payment Account" means the bank account designated in writing by the Sellers' Representative for receipt of the Closing Cash Consideration and other amounts payable to the Sellers hereunder.
"Sellers' Transaction Expenses" means, without duplication, all fees, costs, and expenses incurred by or on behalf of the Company or the Sellers in connection with the negotiation, preparation, execution, and delivery of this Agreement and the consummation of the transactions contemplated hereby, including (a) all legal fees and expenses of Whitmore Crane & Pfeiffer LLP, (b) all financial advisory fees and expenses of Pennfield Growth Partners, LP, (c) all accounting consent, comfort, and advisory fees of Dunfield & Associates, P.C., (d) all fees, costs, and expenses of any other advisors, consultants, or service providers engaged by the Company or the Sellers in connection with the Transaction, and (e) all change-of-control, transaction, or similar bonuses or payments payable by the Company to any employee or other service provider solely as a result of the consummation of the Transaction (together with the employer portion of any payroll Taxes related thereto), in each case to the extent unpaid as of the Closing.
"Shares" has the meaning set forth in the Recitals.
"Straddle Period" means any taxable period of the Company that includes, but does not end on, the Closing Date.
"Target Net Working Capital" means Eleven Million Five Hundred Thousand Dollars ($11,500,000).
"Tax" or "Taxes" means all federal, state, local, and foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other taxes of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any other Person.
"Tax Return" means any return, declaration, report, claim for refund, information return, statement, or other document filed or required to be filed with a Governmental Authority relating to Taxes, including any schedule or attachment thereto and any amendment thereof.
"Third-Party Claim" has the meaning set forth in Section 11.4(a).
"Transaction" means the purchase and sale of the Shares and the cancellation of the Company Options contemplated by this Agreement, together with all other transactions contemplated by this Agreement and the other Transaction Documents.
"Transaction Documents" means this Agreement, the Escrow Agreement, the Employment Agreements, the Non-Competition and Non-Solicitation Agreements, the Option Cancellation Agreements, the FIRPTA Certificates, and all other agreements, instruments, certificates, and documents delivered or to be delivered pursuant to or in connection with this Agreement.
"Treasury Regulations" means the temporary and final regulations promulgated by the United States Department of the Treasury under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
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," and "Exhibit" refer to the specified Article, Section, Schedule, or Exhibit of or to this Agreement unless otherwise specified, (v) the word "including" means "including, without limitation," and (vi) the word "or" is disjunctive but not exclusive.
(b) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting the statute or regulation referenced.
(c) The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.
(d) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. When computing any period of time under this Agreement, the day of the act, event, or default from which the period begins to run shall not be included, and the last day of the period shall be included.
(e) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP, applied consistently with the manner in which the Financial Statements were prepared, unless otherwise specified.
(f) 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.
(g) All references to "dollars" or "$" shall mean the lawful money of the United States of America.
(h) The Disclosure Schedules and Exhibits attached hereto are an integral part of this Agreement and are incorporated herein by reference.
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 federal and state securities laws). At the Closing, each Seller shall deliver to Buyer (a) the stock certificate(s) representing all of the Shares held by such Seller, together with duly executed stock powers, or (b) in the case of any Shares held in book-entry form, such evidence of transfer as Buyer may reasonably request, in each case sufficient to transfer to Buyer good and valid title to such Shares. The Shares to be transferred at the Closing are as follows:
The individual identities and share amounts of each management and employee stockholder comprising the "Other Management and Employee Stockholders" category are set forth on Schedule 4.3.
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 cancellation, each holder of a Company Option shall be entitled to receive from the Company (or Buyer on behalf of the Company) the Option Cancellation Consideration in respect of such Company Option.
(b) As of the date hereof, there are 550,000 Company Options outstanding and unexercised under the Company Option Plan, all of which are fully vested. The weighted-average per share exercise price of all outstanding Company Options is $4.80. Accordingly, the Option Cancellation Consideration per Company Option is equal to $27.50 (the Per Share Price) minus $4.80 (the weighted-average exercise price), which equals $22.70 per Company Option (net of exercise price). The aggregate Option Cancellation Consideration payable to all holders of Company Options is 550,000 multiplied by $22.70, equaling Twelve Million Four Hundred Eighty-Five Thousand Dollars ($12,485,000).
(c) As a condition to the receipt of the Option Cancellation Consideration, each holder of a Company Option shall execute and deliver, prior to or at the Closing, an Option Cancellation Agreement substantially in the form attached as Exhibit F, pursuant to which such holder shall (i) acknowledge the cancellation of such holder's Company Options, (ii) release any and all claims related to such Company Options and the Company Option Plan, and (iii) acknowledge and agree to the appointment of the Sellers' Representative.
(d) All Option Cancellation Consideration payable pursuant to this Section 2.2 shall be subject to all applicable Tax withholding obligations, and the Company (or Buyer, as applicable) shall be entitled to deduct and withhold from the Option Cancellation Consideration payable to any holder of Company Options such amounts as are required to be deducted or withheld under applicable Tax Law. Amounts so deducted and withheld shall be treated for all purposes of this Agreement as having been paid to the applicable holder of Company Options.
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 consideration payable under this Agreement shall be payable in cash in United States dollars; no stock or other non-cash consideration shall be payable in connection with the Transaction.
(b) The aggregate consideration available for distribution to the holders of Shares (i.e., the common stockholders) is equal to the Aggregate Base Purchase Price ($220,000,000) minus the aggregate Option Cancellation Consideration ($12,485,000), which equals Two Hundred Seven Million Five Hundred Fifteen Thousand Dollars ($207,515,000). On a per-share basis, prior to any escrow holdback, working capital adjustment, transaction expense deduction, or Ironclad payoff deduction, the implied consideration per share of Company Common Stock is approximately $27.8545 (calculated as $207,515,000 divided by 7,450,000 shares); provided, however, that for purposes of computing the Option Cancellation Consideration and the allocation of the Aggregate Base Purchase Price, the Per Share Price of $27.50 shall be used.
(c) The allocation of the Indemnity Escrow holdback, the NWC adjustment, transaction expense deductions, and the Ironclad payoff among the Sellers shall be made on a pro rata basis in proportion to each Seller's Pro Rata Share, as set forth on Schedule 4.3 and as further detailed in the Closing Statement delivered in accordance with Section 2.6.
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 name, amount, and wire transfer instructions for each payee, and (ii) a certification that such amounts represent all Sellers' Transaction Expenses that are unpaid as of the Closing.
(b) The Sellers' Transaction Expenses are estimated to be Four Million Eight Hundred Twenty-Five Thousand Dollars ($4,825,000), consisting of the following:
(c) At the Closing, Buyer shall pay (or cause the Company to pay) the Sellers' Transaction Expenses on behalf of the Sellers and the Company by wire transfer of immediately available funds to the respective payees in accordance with the wire transfer instructions set forth in the Transaction Expense Certificate. The aggregate amount of the Sellers' Transaction Expenses so paid shall reduce, on a dollar-for-dollar basis, the Closing Cash Consideration otherwise payable to the Sellers.
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 close of business on the day immediately preceding the Closing Date (the "Estimated Closing Net Working Capital"), prepared in accordance with the Accounting Methodology set forth on Schedule 2.5. The Estimated Closing Statement shall include reasonable supporting detail, including a line-item calculation of the Estimated Closing Net Working Capital.
(b) The Target Net Working Capital is Eleven Million Five Hundred Thousand Dollars ($11,500,000). The "Estimated NWC Adjustment" shall be an amount, which may be positive or negative, equal to the Estimated Closing Net Working Capital minus the Target Net Working Capital. If the Estimated NWC Adjustment is a positive number, such amount shall be added to the Closing Cash Consideration payable to the Sellers at the Closing. If the Estimated NWC Adjustment is a negative number, the absolute value of such amount shall be subtracted from the Closing Cash Consideration payable to the Sellers at the Closing.
(c) Based on the Sellers' Representative's preliminary calculations, the Estimated Closing Net Working Capital is $12,175,000, yielding an Estimated NWC Adjustment of positive $675,000 ($12,175,000 minus $11,500,000).
(d) Buyer shall have the right to review the Estimated Closing Statement and the calculations set forth therein and to discuss the same with the Sellers' Representative prior to the Closing; provided, however, that any disagreement between Buyer and the Sellers' Representative regarding the Estimated Closing Statement shall not delay the Closing and shall instead be resolved through the post-closing adjustment mechanism set forth in Section 2.7.
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: $675,000.00
**Estimated Closing Cash Consideration: ** **]
(b) The Closing Cash Consideration shall be payable at the Closing by wire transfer of immediately available funds to the Sellers' Representative Payment Account, for distribution by the Sellers' Representative to the Sellers in accordance with their respective Pro Rata Shares as set forth on Schedule 4.3.
(c) The Earnout Escrow Reserve ( ) shall be funded separately by Buyer at the Closing by wire transfer of immediately available funds to the Escrow Agent in accordance with Section 2.8(f) and shall not be deducted from the Closing Cash Consideration payable to the Sellers.
(d) At or prior to the Closing, the Sellers' Representative shall deliver (or cause to be delivered) to Buyer a closing statement (the "Closing Statement") setting forth the per-share and per-option allocation of the Closing Cash Consideration, the Indemnity Escrow holdback, the NWC adjustment, the Sellers' Transaction Expense deductions, and the Ironclad payoff among all Sellers and Company Option holders on a pro rata basis in proportion to their respective Pro Rata Shares, together with wire transfer instructions for the Sellers' Representative Payment Account.
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 immediately preceding the Closing Date (the "Final Closing Net Working Capital"), prepared in accordance with the Accounting Methodology set forth on Schedule 2.5. The Final Closing Statement shall include reasonable supporting detail, including a line-item calculation of the Final Closing Net Working Capital. Following the Closing, Buyer shall provide the Sellers' Representative and its accountants and advisors with reasonable access to the books, records, work papers, and personnel of the Company to the extent reasonably required in connection with the Sellers' Representative's review of the Final Closing Statement.
(b) Review Period. The Sellers' Representative shall have thirty (30) days after receipt of the Final Closing Statement (the "Review Period") to review the Final Closing Statement. If the Sellers' Representative disagrees with Buyer's calculation of the Final Closing Net Working Capital, the Sellers' Representative shall, on or before the last day of the Review Period, deliver to Buyer a written notice of objection (the "Objection Notice") specifying in reasonable detail each item or amount that the Sellers' Representative disputes and the Sellers' Representative's determination of each such disputed item or amount, together with reasonable supporting documentation. Any items or amounts on the Final Closing Statement that are not specifically disputed in the Objection Notice shall be deemed accepted by the Sellers' Representative and shall be final and binding.
(c) Resolution of Disputes. If the Sellers' Representative delivers an Objection Notice in accordance with Section 2.7(b), Buyer and the Sellers' Representative shall attempt in good faith to resolve all disputed items within fifteen (15) days after delivery of the Objection Notice. If Buyer and the Sellers' Representative are unable to resolve all disputed items within such fifteen (15)-day period, then either Buyer or the Sellers' Representative may refer the remaining disputed items (and only such remaining disputed items) to the Independent Accounting Referee for final and binding resolution. The Independent Accounting Referee shall be instructed to render its written determination of the disputed items within thirty (30) days after referral, applying the Accounting Methodology and the terms of this Agreement, and such determination shall be final and binding upon the parties for all purposes and shall not be subject to appeal or review. In resolving any disputed item, the Independent Accounting Referee may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The fees and expenses of the Independent Accounting Referee shall be allocated between Buyer, on the one hand, and the Sellers, on the other hand, based upon the percentage of the total amount in dispute that is ultimately resolved in favor of each such party (e.g., if the Sellers' Representative prevails on 60% of the disputed amount, Buyer shall bear 60% of such fees and expenses and the Sellers shall bear 40% of such fees and expenses).
(d) True-Up Payment. The Final Closing Net Working Capital, as finally determined in accordance with this Section 2.7, shall be compared to the Estimated Closing Net Working Capital. If the Final Closing Net Working Capital exceeds the Estimated Closing Net Working Capital, Buyer shall pay to the Sellers' Representative, for distribution to the Sellers in accordance with their respective Pro Rata Shares, the amount of such excess, by wire transfer of immediately available funds, within five (5) Business Days after the date on which the Final Closing Net Working Capital is finally determined. If the Estimated Closing Net Working Capital exceeds the Final Closing Net Working Capital, the Sellers' Representative shall pay (or cause the Sellers to pay) to Buyer the amount of such excess, by wire transfer of immediately available funds, within five (5) Business Days after the date on which the Final Closing Net Working Capital is finally determined. Any payments made pursuant to this Section 2.7(d) shall be treated as an adjustment to the Aggregate Base Purchase Price for all Tax purposes.
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 Dollars ($20,000,000) (the "Milestone 1 Earnout Payment") within thirty (30) days after the date on which the FDA issues a clearance letter or order with respect to Milestone 1. For the avoidance of doubt, the FDA's issuance of a 510(k) clearance letter or order (as reflected on the FDA's 510(k) database or equivalent official record) shall constitute achievement of Milestone 1, regardless of any conditions or restrictions that may accompany such clearance that are customary for devices of a similar nature.
(b) Milestone 2. If, on or before June 30, 2027, the FDA grants 510(k) clearance of the ArthroNav Software Module for Real-Time Cartilage Mapping (Generation 2.0 upgrade) (such clearance, "Milestone 2"), 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 Fifteen Million Dollars ($15,000,000) (the "Milestone 2 Earnout Payment") within thirty (30) days after the date on which the FDA issues a clearance letter or order with respect to Milestone 2. Milestone 2 may be achieved regardless of whether Milestone 1 has been achieved.
(c) Maximum Earnout. The aggregate amount of the Earnout Consideration payable under this Section 2.8 shall not exceed Thirty-Five Million Dollars ($35,000,000), consisting of the Milestone 1 Earnout Payment ($20,000,000) and the Milestone 2 Earnout Payment ($15,000,000). Together with the Aggregate Base Purchase Price, the Maximum Aggregate Consideration payable under this Agreement is Two Hundred Fifty-Five Million Dollars ($255,000,000).
(d) Earnout Period. The Earnout Period shall commence on the Closing Date and shall end on June 30, 2027 (the "Earnout Expiration Date"). No Earnout Consideration shall be payable with respect to any milestone that has not been achieved on or before the Earnout Expiration Date.
(e) Buyer Covenants During the Earnout Period. During the Earnout Period, Buyer covenants and agrees as follows:
(i) Commercially Reasonable Efforts. Buyer shall use to pursue the preparation, filing, and prosecution of the 510(k) submissions for the ArthroNav Platform with the FDA, including responding to FDA requests for additional information in a timely manner and conducting such verification and validation testing as may be required to support such submissions.
(ii) R&D Budget. Buyer shall maintain a dedicated research and development budget of no less than per year for the ArthroNav Platform during the Earnout Period. For purposes of this covenant, the annual R&D budget shall include all direct personnel costs, contract research organization fees, materials and supplies, testing and validation expenses, regulatory submission fees, and capital expenditures directly attributable to the ArthroNav Platform. Buyer shall provide the Sellers' Representative with reasonable documentation of such expenditures upon request, not more frequently than once per calendar quarter.
(iii) Key Personnel. Buyer shall not reassign, terminate, or materially reduce the responsibilities of Dr. Raj Subramanian with respect to the ArthroNav Platform during the Earnout Period without the prior written consent of the Sellers' Representative, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that nothing herein shall prevent Buyer from terminating Dr. Subramanian's employment for Cause (as defined in his Employment Agreement) or as a result of his voluntary resignation, death, or Disability (as defined in his Employment Agreement).
(iv) discontinuation. Buyer shall not discontinue or abandon the ArthroNav program during the Earnout Period without providing at least days' prior written notice to the Sellers' Representative, together with a written explanation in reasonable detail of the business, technical, regulatory, or other reasons for such decision. In the event of any such discontinuation or abandonment, the Sellers' Representative shall have thirty (30) days following receipt of such notice to
(v) Quarterly Reports. Buyer shall provide the Sellers' Representative with written quarterly reports on the status of the ArthroNav development program and the status of all regulatory submissions and communications with the FDA relating thereto, within thirty (30) days after the end of each fiscal quarter during the Earnout Period. Such reports shall include, at a minimum, (A) a summary of development activities conducted during the quarter, (B) an updated timeline for submission and expected clearance, (C) a summary of any material FDA correspondence, and (D) a summary of R&D expenditures for the quarter.
(f) Earnout Escrow Reserve. At the Closing, Buyer shall deposit (the "Earnout Escrow Reserve") into a separate escrow sub-account at Keystone Escrow Services, Inc. (Escrow Account Number KES-2024-EO-09184 at First Continental Trust Co., N.A.) pursuant to the Escrow Agreement to secure Buyer's obligations to make the Earnout Consideration payments under this Section 2.8. The Earnout Escrow Reserve shall be released as follows: (i) upon Buyer's payment of the applicable Milestone Earnout Payment, the Earnout Escrow Reserve (or the applicable portion thereof) shall be released to Buyer; (ii) upon the achievement of both Milestone 1 and Milestone 2 and the payment of all Earnout Consideration, the entire remaining balance of the Earnout Escrow Reserve shall be released to Buyer; and (iii) upon the Earnout Expiration Date, to the extent that one or both milestones have not been achieved, the portion of the Earnout Escrow Reserve allocable to the unachieved milestone(s) shall be released to Buyer. In the event that Buyer fails to make a timely Milestone Earnout Payment when due hereunder, the Sellers' Representative may deliver a joint written instruction to the Escrow Agent directing the release of funds from the Earnout Escrow Reserve to the Sellers' Representative in an amount equal to the unpaid Milestone Earnout Payment (or such lesser amount as remains in the Earnout Escrow Reserve).
(g) Dispute Resolution. In the event of any disagreement between Buyer and the Sellers' Representative as to whether a particular earnout milestone has been achieved, the parties shall first attempt in good faith to resolve such dispute through direct negotiation for a period of thirty (30) days after written notice of such dispute. If the parties are unable to resolve such dispute within such thirty (30)-day period, either party may submit such dispute to binding expert determination by an independent regulatory consultant with at least fifteen (15) years of experience in FDA regulation of medical devices, mutually selected by Buyer and the Sellers' Representative within fifteen (15) days after the expiration of such negotiation period. If Buyer and the Sellers' Representative are unable to agree upon such regulatory consultant within such fifteen (15)-day period, either party may request the American Arbitration Association to appoint such regulatory consultant. The regulatory consultant's determination shall be final, binding, and non-appealable. The fees and expenses of the regulatory consultant shall be borne by the non-prevailing party.
(h) No Obligation to Achieve. Nothing in this Section 2.8 shall be construed to guarantee or otherwise require that any earnout milestone will be achieved. Buyer's sole obligation with respect to the Earnout Consideration is to comply with the covenants set forth in Section 2.8(e), and any failure to achieve a milestone shall not, in and of itself, constitute a breach of this Agreement.
(i) Tax Treatment of Earnout. All Earnout Consideration payments made pursuant to this Section 2.8 shall be treated as additional purchase price for the Shares for all Tax purposes, and neither Buyer nor the Sellers shall take any position inconsistent with such treatment on any Tax Return or in any Tax proceeding, unless otherwise required by a final determination of a Governmental Authority.
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 to and in accordance with the terms of the Escrow Agreement. The Indemnity Escrow Amount shall serve as the primary source of recovery for any indemnification claims of the Buyer Indemnified Parties under Article XI, subject to the terms and conditions set forth in Article XI and the Escrow Agreement.
(b) Release Schedule. The Indemnity Escrow Amount shall be released by the Escrow Agent as follows:
(i) First Release. On , the Escrow Agent shall release to the Sellers' Representative, for distribution to the Sellers in accordance with their respective Pro Rata Shares, an amount equal to of the Indemnity Escrow Amount then remaining in the escrow account , less the aggregate amount of any funds reserved for pending and unresolved indemnification claims for which a proper claim notice has been delivered pursuant to Section 11.4 and that remain unresolved as of such date.
(ii) Second Release. On , the Escrow Agent shall release to the Sellers' Representative, for distribution to the Sellers in accordance with their respective Pro Rata Shares, all remaining funds in the escrow account, less the aggregate amount of any funds reserved for pending and unresolved indemnification claims for which a proper claim notice has been delivered pursuant to Section 11.4 and that remain unresolved as of such date. Any amounts reserved for pending and unresolved claims shall continue to be held in escrow until the final resolution of such claims, at which point such amounts shall be disbursed in accordance with the Escrow Agreement.
(c) Investment of Escrow Funds. The Escrow Agent shall invest and reinvest the funds held in the escrow account(s) in United States Treasury money market instruments or such other investments as Buyer and the Sellers' Representative may jointly direct in writing.
(d) Interest Allocation. All interest, dividends, and other income earned on the Indemnity Escrow Amount shall be allocated , and shall be distributed to the applicable party at the time of each escrow release pursuant to Section 2.9(b). Any interest allocated to the Sellers shall be further allocated among the Sellers in accordance with their respective Pro Rata Shares. All interest and other income earned on the escrow funds shall be reported for Tax purposes as income of the party entitled to receive such interest under this Section 2.9(d).
(e) Escrow Agreement. The detailed terms and conditions governing the establishment, maintenance, investment, disbursement, and termination of the escrow accounts, and the duties and responsibilities of the Escrow Agent, shall be set forth in the Escrow Agreement substantially in the form attached as Exhibit A.
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 remitted to the appropriate Governmental Authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person in respect of which such deduction or withholding was made. Buyer shall use commercially reasonable efforts to provide the Sellers' Representative with advance notice of any intended withholding (other than withholding required with respect to the Option Cancellation Consideration) and shall cooperate in good faith with the Sellers' Representative to minimize or eliminate any such withholding to the extent permitted by applicable Law.
ARTICLE III — CLOSING
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 conditions at the Closing), at the offices of Calderwood & Harkness LLP, 590 Lexington Avenue, 35th Floor, New York, New York 10022, or remotely by means of the electronic exchange of signature pages and other closing deliverables, or at such other place, time, and date as Buyer and the Sellers' Representative may mutually agree in writing. The date on which the Closing actually occurs is referred to herein as the "Closing Date." The Closing Date is October 31, 2024. The Closing shall be deemed to have occurred and to be effective as of 10:00 a.m. Eastern Time on the Closing Date.
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 or other instruments of transfer, in each case sufficient to transfer to Buyer good and valid title to such Shares, free and clear of all Liens (other than restrictions arising under applicable securities laws);
(ii) duly executed Option Cancellation Agreements from each holder of Company Options, covering all 550,000 outstanding and unexercised Company Options, substantially in the form attached as Exhibit F;
(iii) a duly executed counterpart of the Escrow Agreement, executed by the Sellers' Representative;
(iv) an officer's closing certificate (bring-down certificate), dated as of the Closing Date, signed by each of Dr. Marcus Ellsworth, in his capacity as Chief Executive Officer of the Company, and David Hensley, in his capacity as Vice President of Finance of the Company, certifying as to the matters set forth in Section 9.2(a) and Section 9.2(b), substantially in the form attached as Exhibit I;
(v) a Secretary's Certificate of the Company, dated as of the Closing Date, certifying as to (A) the adoption of resolutions of the Board of Directors of the Company authorizing the execution, delivery, and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, (B) the incumbency and specimen signatures of the officers of the Company executing this Agreement and the other Transaction Documents, (C) a true and correct copy of the Certificate of Incorporation of the Company, as amended, certified by the Secretary of State of the State of Delaware as of a recent date, and (D) a true and correct copy of the Bylaws of the Company, as amended, substantially in the form attached as Exhibit J;
(vi) a duly executed FIRPTA Certificate (certificate of non-foreign status under Section 1445 of the Code and Treasury Regulations Section 1.1445-2(b)) from each Seller (or from the Sellers' Representative on behalf of all Sellers), in a form re