KIROMIC BIOPHARMA, INC. MEMBERSHIPINTERESTPURCHASEAGREEMENT
MEMBERSHIPINTERESTPURCHASEAGREEMENT,datedasofJune14,2021(the
'Agreement'), among KIROMIC BIOPHARMA, INC., a Delaware corporation (the 'Buyer'), IN SILICOSOLUTIONS,LLC,alimitedliabilitycompanyorganizedunderthelawsoftheCommonwealthofVirginia(the'Company')andMichaelRyan(the'Seller').
RECITALS
AGREEMENT
NOW,THEREFORE,inconsiderationoftheforegoingpremisesandtherespectiverepresentationsandwarranties,covenantsandagreementscontainedherein,thepartiesheretoagreeasfollows:
ARTICLE IDEFINITIONS
| 1.1 | CertainDefinitions. |
'Action'meansanyclaim,action,suit,inquiry,hearing,proceedingorotherinvestigation.
'Affiliate' means, with respect to a Person, any other Person that, directly or indirectly,through one or more intermediaries, Controls, is Controlled by or is under common Control with,such Person. For purposes of this definition, 'Control' (including the terms 'Controlled by' and'undercommonControlwith')meanspossessionofthepowertodirectorcausethedirectionofthe management or policies of a Person, whether through the ownership of stock, membershipinterestsorotherequityinterests,astrusteeorexecutor,byContractorotherwise.
'Benefit Plan' means any 'employee benefit plan' as defined in ERISA Section 3(3),including any (a) nonqualified deferred compensation or retirement plan or arrangement which isan Employee Pension Benefit Plan (as defined in ERISA Section 3(2)), (b) qualified definedcontribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c)qualified defined benefit retirement plan or arrangement which is an Employee Pension BenefitPlan (including any Multiemployer Plan (as defined in ERISA Section 3(37)), (d) EmployeeWelfareBenefitPlan(asdefinedinERISASection3(1))ormaterialfringebenefitplanorprogram,or (e) stock purchase, stock option, severance pay, employment, change-in-control, vacation pay,companyaward,salarycontinuation,sickleave,excessbenefit,bonusorotherincentive
1
compensation, life insurance, or other employee benefit plan, contract, program, policy or otherarrangement,whetherornotsubjecttoERISA,underwhichanypresentorformeremployeeoftheCompany has any present or future right to benefits sponsored or maintained by the Company oranyERISAAffiliate.
'Business Day' means a day other than a Saturday, Sunday or other day on which bankslocatedin theStateofTexasareauthorizedorrequiredbyLawtoclose.
'Closing' means closing of the transactions contemplated by this Membership InterestPurchaseAgreement.
'ClosingWorkingCapital'meansthedifference,asoftheClosingDate,between(a)thesum of the cash, accounts receivable, inventory, capitalized work in process and other prepaidexpenses of the Company, as reflected on the Closing Date Balance Sheet, less (b) the accountspayable, customer deposits, sales taxes payable, and other current liabilities of the Company asreflectedontheClosingDateBalanceSheet,ineachcase,determinedinaccordancewithOCBOA.
'Code'meanstheInternalRevenueCodeof1986,asamended.
'Contract'meansanywrittenagreement,contract,commitment,arrangementorunderstanding.
'ERISA' means the Employee Retirement Income Security Act of 1974, as amended.'ERISAAffiliate'meansanyPersonwhois,oratanytimewas,amemberofa'controlled
groupofcorporations'withinthemeaningofSection414(b)or(c)oftheCodeand,forthepurposeof Section 302 of ERISA and/or Section 412, 4971, 4977, 4980D, 4980E and/or each 'applicablesection'underSection414(f)(2)oftheCode,withinthemeaningofSection412(n)(6)oftheCodethat includes, or at any time included, the Company or any Affiliate thereof, or any predecessor ofanyoftheforegoing.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.'GAAP'meansUnitedStatesgenerallyacceptedaccountingprinciples.
'GovernmentalEntity'meansanyentityorbodyexercisingexecutive,legislative,judicial, regulatory or administrative functions of or pertaining to United States federal, state orlocal government or foreign, international, multinational or other government, including anydepartment, commission, board, agency, bureau, official or other regulatory, administrative orjudicialauthoritythereof.
'IndependentAccountingFirm'meansanynationallyrecognizedindependentregistered public accounting firm which has not represented the Company or the Seller or any oftheirAffiliatesforthepastfiveyearsaswillbeagreedbytheCompanyandtheBuyerinwriting.
'IRS'meanstheInternalRevenueService.
'KnowledgeoftheSeller'oranysimilarphrasemeanstheactualknowledgeoftheSellerineachcasewithoutobligationofinquiry.
'Law'meansanystatute,law,ordinance,rule,regulationofanyGovernmentalEntity.
2
'Liability'meansallindebtedness,obligationsandotherliabilitiesandcontingenciesofaPerson, whether absolute, accrued, contingent, fixed or otherwise, or whether due or to becomedue.
'Lien' means, with respect to any property or asset, any mortgage, lien, pledge, charge,securityinterest,hypothecationorotherencumbranceinrespectofsuchpropertyorasset.
'Material Adverse Effect' means any material adverse effect on the assets, properties,condition(financialorotherwise),operationsoftheCompanyanditsSubsidiariestakenasawhole.
'OCBOA' means Other Comprehensive Basis of Accounting, which for the Company istax-basedaccountingonacashbasis.
'Order'meansanyaward,injunction,judgment,decree,order,ruling,subpoenaorverdictorotherdecisionissued,promulgatedorenteredbyorwithanyGovernmentalEntityofcompetentjurisdiction.
'Permit'meansanyauthorization,approval,consent,certificate,license,permitorfranchiseoforfromanyGovernmentalEntityofcompetentjurisdictionorpursuanttoanyLaw.
'PermittedLiens'means(a)LiensforcurrentrealorpersonalpropertyTaxesthatarenotyet due and payable or that may hereafter be paid without material penalty or that are beingcontested in good faith, (b) statutory Liens of landlords and workers', carriers' and mechanics' orotherlikeLiensincurredintheordinarycourseofbusinessorthatarebeingcontestedingoodfaith,
(c) Liens and encroachments which do not materially interfere with the present or proposed use ofthe properties or assets they affect, (d) Liens that will be released prior to or as of the Closing, (e)Liens arising under this Agreement, (f) Liens created by or through the Buyer, and (g) Liens setforthonSection1.1oftheDisclosureSchedule.
'Person' means an individual, a corporation, a partnership, a limited liability company, atrust, an unincorporated association, a Governmental Entity or any agency, instrumentality orpoliticalsubdivisionofaGovernmentalEntity,oranyotherentityorbody.
'Preliminary Working Capital' means the difference, as of the date of the PreliminaryBalance Sheet, between (a) the sum of the cash, accounts receivable, inventory, capitalized workin process and other prepaid expenses of the Company, as reflected on the Preliminary BalanceSheet, less (b) the accounts payable, customer deposits, sales taxes payable, and other currentliabilities of the Company as reflected on the Preliminary Balance Sheet, in each case, determinedinaccordancewith OCBOA.
'Representatives' means, with respect to any Person, the respective directors, officers,employees,counsel,accountantsandotherrepresentativesofsuchPerson.
'Subsidiary' means, with respect to any Person, any corporation, partnership, jointventure or other legal entity of which such Person (either alone or through or together with anyotherSubsidiary),owns,directlyorindirectly,morethan50%ofthestockorotherequityinterests,theholdersofwhicharegenerallyentitledtovotefortheelectionoftheboardofdirectorsorothergoverningbodyofanon-corporatePerson.
'Taxes'meansallfederal,state,localandforeignincome,profits,franchise,grossreceipts,environmental,customsduty,capitalstock,severance,stamp,payroll,sales,transfer,
3
employment,unemployment,disability,use,property,withholding,excise,production,valueadded,occupancyandothertaxes,dutiesorassessmentsofanynaturewhatsoever.
'Taxing Authority' means any Governmental Entity having or purporting to exercisejurisdictionwithrespecttoanyTax.
'Tax Returns' means any return, declaration, report, claim for refund, or informationreturn or statement relating to Taxes, including any schedule or attachment thereto, and includinganyamendmentthereof.
'TransactionProposal'meansanyunsolicitedwrittenbonafideproposalmadebyathirdpartyrelatingto(i)anydirectorindirectacquisitionorpurchaseofallorsubstantiallyallassetsoftheCompany,(ii)anydirectorindirectacquisitionorpurchaseofamajorityofthecombinedvotingpower of the Interests of the Company, (iii) any merger, consolidation, business combination,recapitalization,liquidation,dissolutionorsimilartransactioninvolvingtheCompanyinwhichtheother party thereto or its stockholders will own 51% or more of the combined voting power of theparent entity resulting from any such transaction, or (iv) any other transaction that is inconsistentwiththeintentandpurposeofthisAgreement.
'Transfer Taxes' means sales, use, transfer, recording, documentary, stamp, registrationandstocktransferTaxesandanysimilarTaxes.
'$'meansUnitedStatesdollars.
(b)For purposes of this Agreement, except as otherwise expressly provided herein orunless the context otherwise requires: (i) the meaning assigned to each term defined herein will be equallyapplicable to both the singular and the plural forms of such term and vice versa, and words denoting anygender will include all genders as the context requires; (ii) where a word or phrase is defined herein, eachof its other grammatical forms will have a corresponding meaning; (iii) the terms 'hereof', 'herein','hereunder', 'hereby' and 'herewith' and words of similar import will, unless otherwise stated, beconstrued to refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv)when a reference is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule withoutreference to a document, such reference is to an Article, Section, paragraph, Exhibit or Schedule to thisAgreement; (v) a reference to a subsection without further reference to a Section is a reference to suchsubsection as contained in the same Section in which the reference appears, and this rule will also apply toparagraphs and other subdivisions; (vi) the word 'include', 'includes' or 'including' when used in thisAgreement will be deemed to include the words 'without limitation', unless otherwise specified; (vii) areference to any party to this Agreement or any other agreement or document will include such party'spredecessors,successorsandpermittedassigns;(viii)areferencetoanyLawmeanssuchLawasamended,modified, codified, replaced or reenacted as of the date hereof, and all rules and regulations promulgatedthereunder as of the date hereof; and (ix) all accounting terms used and not defined herein have therespectivemeaningsgiventothemunderGAAP.
ARTICLEII
PURCHASEANDSALEOFTHE INTERESTS
Upon the terms and subject to the conditions set forth in this Agreement, at the Closing Seller willsell,transferanddeliver,andtheBuyerwillpurchasefromSeller,alloftheInterestssetforthoppositesuch
4
Seller's name on Schedule A under the heading 'Number of Interests' for a purchase price per Interest(each interest being equal to 1% of the Company) of Five Hundred Forty Dollars and No Cents ($540.00)(the 'Per-Interest Payment'), for an aggregate purchase price for all of the Interests of Five HundredForty Thousand Dollars and No Cents ($540,000.00) (collectively, the 'Aggregate Purchase Price'),which shall be payable in full through (i) the delivery to the Seller of a number of shares of the Buyer'scommonstockthatisequaltoFourHundredThousandDollarsandNoCents($400,000.00)dividedbythevolume weighted average price of the Buyer's common stock (the 'Applicable Price Per Share') on theNasdaqCapitalMarket,duringthesixty(60)tradingdaysimmediatelypriortothedatehereto(the'BuyerShares'); and (ii) the delivery to the employees of the Company of a number of Buyer's Restricted StockUnits (the 'Buyer Units') under the Buyer's 2021 Omnibus Equity Incentive Plan (the 'Buyer EquityIncentivePlan')thatisequaltoOneHundredFortyThousandDollarsandNoCents($140,000.00)(basedontheApplicablePricePerShare),tobeallocatedtotheCompany'semployeesuponorpromptlyfollowingthe Closing. The Buyer Shares shall be restricted but may become freely tradeable under Rule 144 of theSecurities Act of 1933, as amended after a six-month holding period (the 'Holding Period'). The amountofBuyerUnitstobeallocatedtotheCompany'semployeesshallbedeterminedbySeller.
5
resolution, with the understanding that such firm shall resolve all disputed items within 20 days after suchdisputed items are referred to it.If the Buyer and the Seller are unable to agree on the choice of anIndependent Accounting Firm, they shall select an Independent Accounting Firm by lot (after excludingtheir respective regular outside accounting firms).Seller, on the one hand, and the Buyer, on the otherhand, shall bear one-half of the costs of such accounting firm.The decision of the accounting firm withrespecttoalldisputedmattersrelatingtotheClosingWorkingCapitalshallbedeemedfinalandconclusiveand shall be binding upon the Seller and the Buyer. In addition, if the Seller does not object to the ClosingWorking Capital within the 15-day period referred to above, the Closing Working Capital, as reflected ontheClosingDateBalanceSheetassoprepared,shallbedeemedfinalandconclusiveandbindingupontheSellerandtheBuyer.
TheconsummationoftheAcquisition(the'Closing')willtakeplacebythereciprocaldeliveryofclosing documents by electronic mail, regular mail, fax or any other means mutually agreed upon by theParties on a date that is no later than two Business Days immediately following the day on which the lastof the conditions to closing contained in Article VII (other than any conditions that by their nature are tobesatisfiedattheClosing)issatisfiedorwaivedinaccordancewiththisAgreementoratsuchotherlocationoronsuchotherdateastheBuyerandtheCompanymaymutuallydetermine(thedateonwhichtheClosingactuallyoccursisreferredtoasthe'ClosingDate').
6
ARTICLEIII
REPRESENTATIONSANDWARRANTIESOFTHESELLER
Seller represents and warrants to the Buyer that each statement contained in this Article III is trueand correct as of the date hereof, except as set forth in the Schedules accompanying this Agreement(collectively, the 'Disclosure Schedule').The Disclosure Schedule has been arranged for purposes ofconvenience only, in sections corresponding to the Sections of this Article III and Article IV. Each sectionof the Disclosure Schedule will be deemed to incorporate by reference all information disclosed in anyothersectionoftheDisclosureSchedule.
Seller has the requisite legal capacity, to execute and deliver this Agreement, to perform itsobligations hereunder and to consummate the Acquisition and the other transactions contemplated hereby.This Agreement has been duly executed and delivered by the Seller and, assuming the due authorization,execution and delivery by each other party hereto, constitutes a legal, valid and binding obligation of suchSeller, enforceable against such Seller in accordance with its terms, except as limited by (a) bankruptcy,insolvency,reorganization,moratorium,fraudulentconveyanceorothersimilarLawsrelatingtocreditors'rights generally and (b) general principles of equity, whether such enforceability is considered in aproceedinginequityoratLaw.
7
Except as set forth in Schedule 3.4 of the Disclosure Schedule, such Seller does not have anyLiability to pay any fees or commissions to any broker, finder or agent with respect to this Agreement, theAcquisitionorthetransactionscontemplatedbythisAgreement.
Seller (A) understands that the Buyer Shares and Buyer Units have not been, and will not be,registered under the Securities Act of 1933, as amended, or under any state securities laws, and are beingoffered and sold in reliance upon federal and state exemptions for transactions not involving any publicoffering, (B) is acquiring the Buyer Shares and Buyer Units solely for his, her or its own account forinvestment purposes, and not with a view to the distribution thereof, (C) is a sophisticated investor withknowledgeandexperienceinbusinessandfinancialmatters,(D)hasreceivedcertaininformationconcerning the Buyer and has had the opportunity to obtain additional information as desired in order toevaluate the merits and the risks inherent in holding the Buyer Units, (E) is able to bear the economic riskand lack of liquidity inherent in holding the Buyer Units, and (F) is an Accredited Investor as defined inRule501ofRegulationDpromulgatedundertheSecuritiesActof1933,asamended.
ARTICLEIV
REPRESENTATIONSANDWARRANTIESCONCERNINGTHECOMPANY
Seller represents and warrants to the Buyer that each statement contained in this Article IV is trueand correct as of the date hereof, except as set forth in the Disclosure Schedule. Any representation orwarrantyconcerningtheCompanyshallbedeemedtobearepresentationconcerningtheCompanyanditsSubsidiaries,ifany,asawholeunlessthecontextspecificallyrequiresotherwise.
8
tocreditors'rightsgenerallyand(b)generalprinciplesofequity,whethersuchenforceabilityisconsideredinaproceedinginequityoratLaw.
Section 4.2 of the Disclosure Schedule sets forth for each Subsidiary of the Company (i) its nameandjurisdictionofincorporationorformation,(ii)thenumberofsharesofauthorizedcapitalstockorequityinterests of each class of its capital stock or equity interests, (iii) the number of issued and outstandingsharesofeachclassofitscapitalstockorequityinterests,thenamesoftheholdersthereof,andthenumberof shares or equity interests held by each such holder, and (iv) the number of shares of its capital stock orequityinterestsheldintreasury.Alloftheissuedandoutstandingsharesofcapitalstockorequityinterestsof each Subsidiary have been duly authorized and are validly issued, fully paid, and nonassessable.TheCompany and its Subsidiaries holds of record and owns beneficially all of the outstanding shares or equityinterests of each Subsidiary, free and clear of any restrictions on transfer (other than restrictions under thefederalandstatesecuritieslaws),Taxes,Liens,options,warrants,purchaserights,contracts,commitments,equities,claims,anddemands.Therearenooutstandingorauthorizedoptions,warrants,preemptiverights,purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitmentsthatcouldrequiretheCompanyoranyofitsSubsidiariestosell,transfer,orotherwisedisposeofanycapitalstock or equity interests of any Subsidiary or that could require any Subsidiary to issue, sell, or otherwisecause to become outstanding any of its own capital stock.There are no outstanding stock appreciation,phantom stock, profit participation, or similar rights with respect to any Subsidiary.There are no votingtrusts,proxies,orotheragreementsorunderstandingswithrespecttothevotingofanycapitalstockofanySubsidiary.Except as set forth in Section 4.2 of the Disclosure Schedule, neither the Company nor any ofits Subsidiaries controls directly or indirectly or has any direct or indirect equity participation in anycorporation,partnership,trust,orotherbusinessassociationwhichisnotaSubsidiaryoftheCompany.
9
having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the righttovote)onanymattersonwhichanyoftheCompany's membersmayvote.
Section 4.5 of the Disclosure Schedule contains true and complete copies of (i) the unauditedconsolidated balance sheet of the Company as of December 31, 2020 and 2019 and the related unauditedstatements of income, members' equity and cash flows for the two years ended December 31, 2020 andDecember 31, 2019 (the 'Annual Financial Statements') and (ii) the unaudited balance sheet of theCompany as of March 31, 2021 and the related statements of income, members' equity and cash flows forthethree-monthperiodendedMarch31,2021(the'InterimFinancialStatements'and,togetherwiththeAnnual Financial Statements, the 'Financial Statements'). The Financial Statements have been preparedin accordance with OCBOA applied on a consistent basis throughout the periods involved (except as maybe indicated in the notes thereto) and, on that basis, fairly present, in all material respects, the financialcondition,resultsofoperationsandcashflowsoftheCompanyasoftheindicateddatesandfortheindicatedperiods (subject, in the case of the Interim Financial Statements, to normal year-end adjustments and theabsenceofnotes).
10
The Company does not have any Liability, except for (i) Liabilities set forth on the InterimFinancial Statements (rather than in any notes thereto) and (ii) Liabilities which have arisen since the dateof the Interim Financial Statements in the ordinary course of business (none of which results from, arisesout of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort,infringement,orviolationoflaw).
11
TheCompanydoesnotownsanyrealproperty.
Section 4.10(b) of the Disclosure Schedule contains a list of all leases and subleases (collectively,the 'Real Property Leases') under which the Company is either lessor or lessee (the 'Real Property').The Seller have heretofor made available to the Buyer true and complete copies of each Real PropertyLease.To the Knowledge of the Seller, (i) all Real Property Leases are valid and binding Contracts of theCompany and are in full force and effect (except for those that have terminated or will terminate by theirown terms), and (ii) neither the the Company nor any other party thereto, is in violation or breach of ordefault (or with notice or lapse of time, or both, would be in violation or breach of or default) under theterms of any such Contract, in each case, except where such default would not reasonably be expected tohave,individuallyorintheaggregate,aMaterialAdverseEffect.
SincethedateoftheInterimFinancialStatements,noeventhasoccurredthathashad,individuallyor in the aggregate, a Material Adverse Effect.Without limiting the generality of the foregoing, since thatdate,exceptassetforthinSection4.12oftheDisclosureSchedule:
12
intangible;
Company;
13
totheCompanyinanamountorwithavalueinexcessof$20,000inany12-monthperiod(whichperiodmayextendpasttheClosing).
ExceptassetforthinSection4.14oftheDisclosureSchedule,thereisnoActionpendingor,totheKnowledge of the Seller, threatened against the Company that (a) challenges or seeks to enjoin, alter ormaterially delay the Acquisition or (b) would reasonably be expected to have, individually or in theaggregate,aMaterialAdverseEffect.
Section4.16oftheDisclosureSchedulesetsforthalistofallwrittenemploymentagreementsthatobligatetheCompanytopayanannualsalaryof$50,000ormoreandtowhichtheCompanyisaparty.TotheKnowledgeoftheSeller,therearenopendinglabordisputes,workstoppages,requestsforrepresentation, pickets, work slow-downs due to labor disagreements or any actions or arbitrations thatinvolve the labor or employment relations of the Company.The Company is not a party to any collectivebargainingagreement.
14
Except (i) as set forth in Section 4.17 of the Disclosure Schedule or (ii) for any matter that wouldnot reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) theCompanyisincompliancewithallapplicableLawsrelatingtoprotectionoftheenvironment('EnvironmentalLaws'),(b)theCompanypossessesandisincompliancewithallPermitsrequiredunderany Environmental Law for the conduct of its operations and (c) there are no Actions pending against theCompany alleging a violation of any Environmental Law.No property currently or formerly owned oroperated by the Company or has been contaminated with any Hazardous Substance in a manner that couldreasonablybeexpectedtorequireremediationorotheractionpursuanttoanyEnvironmentalLaw.NeitheranySeller,northeCompanyhasreceivedanywrittennotice,demand,letter,claimorrequestforinformation alleging that the Company or any Seller is in violation of or liable under any EnvironmentalLaw. For purposes of this Agreement, 'Hazardous Substance' means any substance that is: (i) listed,classified, regulated or defined pursuant to any Environmental Law or (ii) any petroleum product or by-product,asbestos-containingmaterial,polychlorinatedbiphenylsorradioactivematerial.
Section 4.18 of the Disclosure Schedule sets forth a list of each insurance policy that covers theCompany or its businesses, properties, assets, directors, officers or employees (the 'Policies'). SuchPoliciesareinfullforceandeffectinallmaterialrespectsandtheCompanyisnotinviolationorbreachofor default under any of its obligations under any such Policy, except where such default would notreasonablybeexpectedtohave,individuallyorintheaggregate,aMaterialAdverseEffect.
ExceptassetforthinSchedule4.19oftheDisclosureSchedule,whichsuchfeesshallbepaidpriorto or at Closing with cash of the Company, and except as set forth in the last sentence of this Section 4.19,theCompanyhasnoLiabilitytopayanyfeesorcommissionstoanybroker,finderoragentwithrespecttothisAgreement,theAcquisitionorthetransactionscontemplatedbythisAgreement.
Except as set forth in Seciton 4.20 of the Disclosure Schedule, no Seller, nor any Affiliate of aSeller,hasbeeninvolvedinanybusinessarrangementorrelationshipwiththeCompanywithinthepast12months,andnoSeller,noranyAffiliateofaSeller,ownsanyasset,tangibleorintangible,whichisusedintheBusiness.
TherepresentationsandwarrantiescontainedinthisArticleIVdonotcontainanyuntruestatementofamaterialfactoromittostateanymaterialfactnecessaryinordertomakethestatementsandinformationcontainedinthisArticleIVnotmisleading.
ARTICLEV
REPRESENTATIONSANDWARRANTIESOFTHEBUYER
The Buyer represents and warrants to Seller that each statement contained in this Article V is trueandcorrectasofthedatehereof.
15
TheBuyerisacorporation,dulyorganized,validlyexistingandingoodstandingunderthelawsofthestateofDelaware.
TheBuyerhastherequisitepowerandauthoritytoexecuteanddeliverthisAgreement,toperformitsobligationshereunderandtoconsummatethetransactionscontemplatedhereby.Theexecution,deliveryand performance by the Buyer of this Agreement, and the consummation of the transactions contemplatedhereby, have been duly authorized by all necessary action, and no other action on the part of the Buyer isnecessary to authorize this Agreement or to consummate the transactions contemplated hereby (other thancompliancewiththefilingandnoticerequirementssetforthinSection5.3(b)(i)).ThisAgreementhasbeenduly executed and delivered by the Buyer and, assuming the due authorization, execution and delivery byeach of the other parties hereto, constitutes a legal, valid and binding obligation of the Buyer enforceableagainsttheBuyerinaccordancewithitsterms,exceptaslimitedby(a)bankruptcy,insolvency,reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors' rightsgenerallyand(b)generalprinciplesofequity,whethersuchenforceabilityisconsideredinaproceedinginequityoratLaw.
16
ARTICLE VICOVENANTS
TheCompanywillusecommerciallyreasonableeffortstoobtainanyrequiredthird-partyconsentsto the Acquisition and the other transactions contemplated by this Agreement in writing from eachconsentingPerson.
During the period commencing on the date hereof and ending at the earlier of the Closing and thetermination of this Agreement in accordance with Article VIII, the Company, except (i) as set forth onSchedule 6.2, (ii) as otherwise contemplated by this Agreement, (iii) as required by applicable Law or (iv)with the prior written consent of the Buyer (which consent will not be unreasonably withheld or delayed),will use commercially reasonable efforts to carry on its business in a manner consistent with past practiceandnottakeanyactionorenterintoanytransactionthatwouldresultinthefollowing:
TheCompanywillpermittheBuyeranditsRepresentativestohavereasonableaccessatallreasonabletimes,andinamannersoasnottointerferewiththenormalbusinessoperationsoftheCompany,
17
tothepremises,properties,personnel,books,records(includingTaxrecords),ContractsanddocumentsoforpertainingtotheCompany.
As of the Closing, the Seller will cause to be delivered to the Buyer duly signed resignations,effective immediately upon the Closing, of his position as a manager (and, if requested by the Buyer inwriting at least ten Business Days prior to the Closing, of any officer of his position as an officer) of theCompany.
OnorpriortotheClosing,theCompanyandSellerwilltransfer,orcausetobedistributedallcashandcashequivalentsoftheCompanyto,amongotherthings,payanyfeesowedbyCompanytobrokersoradvisors (including termination fees under any advisory agreement) and any indebtedness for borrowedmoney.AnyremainingcashmaybedistributedtoSellerpriortoClosing.
The Seller and the Company will give prompt written notice to the Buyer of any event that wouldreasonablybeexpectedtogiveriseto,individuallyorintheaggregate,aMaterialAdverseEffectorwouldreasonably be expected to cause a breach of any of its respective representations, warranties, covenants orother agreements contained herein.The Buyer will give prompt written notice to the Seller and theCompany of any event that could reasonably be expected to cause a breach of any of its representations,warranties,covenantsorotheragreementscontainedhereinorcouldreasonablybeexpectedto,individuallyor in the aggregate, prevent or materially delay the consummation of the Acquisition and the othertransactions contemplated by this Agreement.The delivery of any notice pursuant to this Section 6.6 willnot limit, expand or otherwise affect the remedies available hereunder (if any) to the party receiving suchnotice.
18
SubjecttothetermsandconditionsofthisAgreement,Seller,theCompanyandtheBuyerwilltakeall such reasonable and lawful action as may be necessary or appropriate in order to effectuate theAcquisitioninaccordancewiththisAgreementaspromptlyaspracticable.
Foraperiodoffive(5)yearsfromandaftertheClosing(the'NoncompetitionPeriod'),theSellershall not own, operate, manage, or provide services to any business (a 'Competitive Business') that isengaged in the development of immunotherapries (the 'Business'), in any geographic area in which theBusiness is conducted by Buyer, or in which the Buyer plans to conduct the Business, as of the ClosingDate; provided, however, that ownership of less than 1% of the outstanding stock of any publicly-tradedcorporation shall be deemed to engage solely by reason thereof in any of its businesses.During theNoncompetition Period, the Seller shall not induce or attempt to induce any customer, or supplier of theBuyeroranyaffiliateoftheBuyertoterminateitsrelationshipwiththeBuyeroranyAffiliateoftheBuyerortoenterintoanybusinessrelationshiptoprovideorpurchasethesameorsubstantiallythesameservicesas are provided to or purchased from the Business which might harm the Buyer or any Affiliate of theBuyer.DuringtheNoncompetitionPeriod,theSellershallnot,onbehalfofanyentityotherthantheBuyeror an Affiliate of the Buyer, hire or retain, or attempt to hire or retain, in any capacity any Person who is,or was at any time during the preceding twelve (12) months, an employee or officer of the Buyer or anAffiliate of the Buyer (unless Buyer or its Affiliate, as the case may be, has terminated the employment ofsuch Person without cause).If the final judgment of a court of competent jurisdiction declares that anytermorprovisionofthisSection6.9isinvalidorunenforceable,thepartiesagreethatthecourtmakingthedetermination of invalidity or unenforceability shall have the power to reduce the scope, duration, or areaofthetermorprovision,todeletespecificwordsorphrases,ortoreplaceanyinvalidorunenforceabletermor provision with a term or provision that is valid and enforceable and that comes closest to expressing theintention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as somodifiedaftertheexpirationofthetimewithinwhichthejudgmentmaybeappealed.
TheSellershallcooperatewiththeBuyerandtheBuyer'sindependentcertifiedpublicaccountingfirm in order to enable the Buyer to create audited financial statements prepared in accordance with theGAAP for the two full fiscal years ending December 31, 2020, by making available the Seller' records astheyaremaintainedintheordinarycourseofbusinessandansweringreasonablequestions.
ARTICLEVII
CONDITIONSTOOBLIGATIONSTOCLOSE
The obligation of the Buyer to consummate the Acquisition is subject to the satisfaction or waiverbytheBuyerofthefollowingconditions:
19
'Material Adverse Effect' set forth therein) does not have, and would not reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect.The Buyer will have received a certificatesignedby theSellertosucheffect.
20
The obligation of the Seller to consummate the Acquisition is subject to the satisfaction or waiverbytheSellerofthefollowingconditions:
Agreement.
21
ARTICLE VIIITERMINATION;AMENDMENT;WAIVER
ThisAgreementmaybeterminatedasfollows(thedateofsuchtermination,the'Termination
Date'):
Closing;
IntheeventofterminationofthisAgreementbyeitherSellerortheBuyerasprovidedinSection 8.1, this Agreement will forthwith become void and have no effect, without any Liability (otherthan with respect to any suit for breach of this Agreement) on the part of the Buyer, the Company or theSeller (or any member, stockholder agent, consultant or Representative of any such party); provided, thatthe provisions of Sections 10.1, 10.6, 10.7, 10.8, 10.11, 10.13, 10.14 and this Section 8.2 will survive anyterminationhereofpursuanttoSection8.1.
This Agreement may be amended by the Parties hereto, by action taken or authorized by, in thecaseoftheBuyer,bytheBuyer'sBoardofDirectors,inthecaseoftheCompany,byitsrespectivemanager,and in the case of the Seller, by the Seller.This Agreement may not be amended except by an instrumentinwritingsignedonbehalfoftheBuyer,theCompanyandtheSeller.
At any time prior to the Closing, the Buyer may (a) extend the time for the performance of any ofthe covenants, obligations or other acts of the Seller and the Company or (b) waive any inaccuracy of anyrepresentations or warranties or compliance with any of the agreements, covenants or conditions of theSeller or any conditions to its own obligations.Any agreement on the part of the Buyer to any suchextension or waiver will be valid only if such waiver is set forth in an instrument in writing signed on itsbehalfbyitsdulyauthorizedofficer.AtanytimepriortotheClosing,theSellerandtheCompany,may
| (a) | extendthetimefortheperformanceofanyofthecovenants,obligationsorotheractsoftheBuyeror |
22
ARTICLE IXINDEMNIFICATION
9.1Survival.
The representations and warranties made herein and in any certificate delivered in connectionherewith shall survive for a period of twenty four (24) months following the Closing Date, at which timethey shall expire; provided, however, that (i) the representations and warranties set forth in Sections3.1(Organization; Authority and Enforceability), 3.3 (The Interests), 3.4 (Brokers Fees), 4.1 (Organization,Qualification,LimitedLiabilityCompanyPower;AuthorityandEnforeceability),4.3(Capitalization),and
4.19(Broker'sFees)ofthisAgreementshallsurviveindefinitelyand(ii)therepresentationsandwarrantiesin Section 4.6 (Taxes) of this Agreement shall survive until the expiration of the applicable statue oflimitations.The representations and warranties identified in subsection (i) and (ii) of the immediatelypreceding sentence are referred to herein as the 'Fundamental Representations.'If written notice of aclaimhasbeengivenpriortotheexpirationoftheapplicablerepresentationsandwarranties,thennotwithstanding any statement herein to the contrary, the relevant representations and warranties shallsurvive as to such claim, until such claim is finally resolved.Unless a specified period is set forth in thisAgreement (in which event such specified period will control), all agreements and covenants contained inthisAgreementwillsurvivetheClosingandremainineffectindefinitely.
From and after the Closing, Seller agrees to indemnify, defend and save Buyer and its Affiliates,stockholders, officers, directors, employees, agents and representatives (each, a 'Buyer IndemnifiedParty' and collectively, the 'Buyer Indemnified Parties') harmless from and against any and allliabilities, deficiencies, demands, claims, Actions, assessments, losses, costs, expenses, interest, fines,penaltiesanddamages(includingfeesandexpensesofattorneysandaccountantsandcostsofinvestigation)(individuallyandcollectively,the'Losses')suffered,sustainedorincurredbyanyBuyerIndemnifiedPartyarising out of or otherwise by virtue of: (a) any breach of any of the representations or warranties of SellerortheCompanycontainedinArticleIIIorIVofthisAgreement;(b)thefailureofSellertoperformanyofhis covenants or obligations contained in this Agreement; (c) any indebtedness of the Company forborrowed money existing as of immediately prior to the Closing, (d) any Liabilities arising out of theownership of the Interests or the use or operation of the business of the Company prior to the Closing(except to the extent accrued on the Closing Date Balance Sheet) or (e) any other business or operations(otherthanoftheCompany)ownedinwholeorinpartbytheSeller.
From and after the Closing, Buyer agrees to indemnify, defend and save Seller and to the extentapplicable,suchSeller'sAffiliates,members,managers,officers,directors,employees,agentsandrepresentatives(each,a'SellerIndemnifiedParty'andcollectivelythe'SellerIndemnifiedParties')
23
harmlessfromandagainstanyandallLossessustainedorincurredbyanySellerIndemnifiedPartyarisingout of or otherwise by virtue of: (a) any breach of any of the representations and warranties of Buyercontained in Article V of this Agreement; (b) the failure of Buyer to perform any of its covenants orobligations contained in this Agreement; (c) any Liabilities arising out of the ownership of the Interests orthe use or operation of the business of the Company following the Closing; or (d) any other business oroperationsownedinwholeorinpartbytheBuyer.
24
A failure by an Indemnified Party to provide notice as provided in Section 9.4 will not affect therightsorobligationsofanyPersonexceptandonlytotheextentthat,asaresultofsuchfailure,anyPersonentitled to receive such notice was damaged as a result of such failure to give timely notice.Nothingcontained in this Section 9.4 shall be deemed to extend the period for which Seller' representations andwarrantieswillsurviveClosingassetforthinSection9.1above
25
of this Agreement, the term 'Finally Determined' shall mean with respect to any indemnification claimmade,andtheliabilityforandamountofLossestherefor,whenthepartiestosuchclaimhavesodeterminedby mutual agreement or, if disputed, when a final, non-appealable judgment has been issued by a courthavingproperjurisdiction.
Payments of all amounts owing by an Indemnifying Party under this Article IX shall be madepromptly upon the determination in accordance with this Article IX that an indemnification obligation isowingbytheIndemnifyingPartytotheIndemnifiedParty.
Seller hereby agrees that he will not make any claim for indemnification against the Company byreason of the fact that he was a manager, officer, employee, or agent of the Company or was serving at therequest of any such entity as a partner, trustee, manager, director, officer, employee, or agent of anotherentity (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement,losses, expenses, or otherwise and whether such claim is pursuant to any statute, charter document, bylaw,agreement,orotherwise)withrespecttoanyaction,suit,proceeding,complaint,claim,ordemandbroughtby the Buyer against such Seller (whether such action, suit, proceeding, complaint, claim, or demand ispursuanttothisAgreement,applicablelaw,orotherwise).
ARTICLE XMISCELLANEOUS
NeithertheBuyerontheonehand,northeSellerortheCompanyontheother,willissueanypressreleaseormakeanypublicannouncementrelatingtothisAgreement,theAcquisitionortheothertransactionscontemplatedbythisAgreementwithoutthepriorwrittenapprovaloftheotherparty;provided,however,thattheBuyermaymakeregulatoryfilingsreferringtothisAgreementorattachingacopyhereofasmayberequiredbyapplicblelaw.
ThisAgreementwillnotconferanyrightsorremediesuponanyPersonotherthanthepartiesheretoandtheirrespectivesuccessorsandpermittedassigns.
ThisAgreement(includingtheExhibitsandtheScheduleshereto)constitutestheentireagreementamong the parties hereto and supersedes any prior understandings, agreements or representations by oramongthepartieshereto,writtenororal,totheextenttheyrelatedinanywaytothesubjectmatterhereof.
ThisAgreementwillbebindinguponandinuretothebenefitofthepartiesnamedhereinandtheirrespective successors and permitted assigns.No party hereto may assign either this Agreement or any ofitsrights,interestsorobligationshereunderwithoutthepriorwrittenapproval,inthecaseofassignmentbytheBuyer,bytheSeller,and,inthecaseofassignmentbytheSellerortheCompany,theBuyer.
26
The parties have participated jointly in the negotiation and drafting of this Agreement, and, in theevent an ambiguity or question of intent or interpretation arises, this Agreement will be construed as ifdrafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring anypartybyvirtueoftheauthorshipofanyoftheprovisionsofthisAgreement.
All notices, requests and other communications hereunder must be in writing and will be deemedtohavebeendulygivenonlyifdeliveredpersonallyagainstwrittenreceiptorbyfacsimiletransmissionormailed (by registered or certified mail, postage prepaid, return receipt requested) or delivered by reputableovernight courier, fee prepaid, to the parties hereto at the addresses of the parties as specified on thesignaturepageshereto.Anypartymaychangetheaddresstowhichnotices,requests,demands,claimsandother communications hereunder are to be delivered by giving the other parties notice in the manner setforthherein.
This Agreement will be governed by, and construed in accordance with, the Laws of the State ofDelaware,withoutgivingeffecttoanychoiceofLaworconflictofLawprovisionorrulethatwouldcausetheapplicationoftheLawsofanyjurisdictionotherthantheStateofDelaware.
EACH OF THE PARTIES HERETO CONSENTS TO THE JURISDICTION OF ANY STATEORFEDERALCOURTLOCATEDWITHINTHESTATEOFTEXASANDIRREVOCABLYAGREESTHATALLACTIONSORPROCEEDINGSRELATINGTOTHISAGREEMENT,THEACQUISITIONORTHEOTHERTRANSACTIONSCONTEMPLATEDBYTHISAGREEMENTMAYBELITIGATED IN SUCH COURTS.EACH OF THE PARTIES HERETO ACCEPTS FOR ITSELF ANDINCONNECTIONWITHITSRESPECTIVEPROPERTIES,GENERALLYANDUNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS ANDWAIVESANYDEFENSEOFFORUMNONCONVENIENS,ANDIRREVOCABLYAGREESTOBEBOUNDBYANYFINALANDNONAPPEALABLEJUDGMENTRENDEREDTHEREBYINCONNECTIONWITHTHISAGREEMENT,THEACQUISITIONORTHEOTHERTRANSACTIONSCONTEMPLATEDBYTHISAGREEMENT.EACHOFTHEPARTIESHERETOFURTHERIRREVOCABLYCONSENTSTOTHESERVICEOFPROCESSOUTOFANYOFTHEAFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OFCOPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCHPARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOMEEFFECTIVE 15 CALENDAR DAYS AFTER SUCH MAILING.NOTHING HEREIN WILL IN ANYWAY BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCHLEGALPROCESS,SUMMONS,NOTICESANDDOCUMENTSINANYOTHERMANNERPERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRINGACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OTHER PARTY HERETO IN SUCH OTHERJURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLELAW.
27
ThedescriptiveheadingscontainedinthisAgreementareincludedforconvenienceofreferenceonlyandwillnotaffectinanywaythemeaningorinterpretationofthisAgreement.
| 10.10 | Severability. |
IfanyprovisionofthisAgreementisheldtobeillegal,invalidorunenforceableunderanypresentorfutureLaw(a)suchprovisionwillbefullyseverable,(b)thisAgreementwillbeconstruedandenforcedas if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remainingprovisions of this Agreement will remain in full force and effect and will not be affected by the illegal,invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid orunenforceable provision, there will be added automatically as a part of this Agreement a legal, valid andenforceable provision as similar in terms of such illegal, invalid or unenforceable provision as may bepossible.
| 10.11 | Expenses. |
Except as otherwise provided in this Agreement, whether or not the Acquisition is consummated,all Expenses incurred in connection with this Agreement and the transactions contemplated hereby will bepaidbythepartyincurringsuchExpenses.AsusedinthisAgreement,'Expenses'meanstheout-of-pocketfees and expenses of the financial advisor, counsel and accountants incurred in connection with thisAgreementandthetransactionscontemplatedhereby.
| 10.12 | IncorporationofExhibitsandSchedules. |
The Exhibits and Schedules identified in this Agreement are incorporated herein by reference andmadeaparthereof.
| 10.13 | LimitedRecourse. |
Notwithstanding anything in this Agreement to thecontrary, the obligations and Liabilities of theparties hereunder will be without recourse to any stockholder or member of such party or any of suchstockholder's or member's Affiliates (other than such party), or any of their respective Representatives oragents(ineachcase,intheircapacityassuch).
| 10.14 | SpecificPerformance. |
ThepartiesheretoagreethatirreparabledamagewouldoccurintheeventthatanyprovisionofthisAgreement was not performed in accordance with the terms hereof and that the parties will be entitled tospecificperformanceofthetermshereofinadditiontoanyotherremedyatLaworequity.
28
| 10.15 | Counterparts. |
This Agreement may be executed in one or more counterparts, and by the different parties heretoin separate counterparts, each of which when executed will be deemed to be an original but all of whichtaken together will constitute one and the same instrument.Delivery of an executed counterpart of asignature page to this Agreement by facsimile will be effective as delivery of a manually executedcounterpartofthisAgreement.
[REMAINDEROFPAGEINTENTIONALLYLEFTBLANK]
29
INWITNESSWHEREOF,thepartiesheretohavecausedthisAgreementtobedulyexecutedasofthedatefirstabovewritten.
BUYER:
KIROMICBIOPHARMA,INC.
By: /s/ Maurizio Chiriva-Internati
Name: Maurizio Chiriva-Internati
Title:ChiefExecutiveOfficer
Address: 7707 Fannin St, Suite 140, Houston, TX 77054Attention:MaurizioChirivaInternati,CEO
With a copy (which shall not constitute notice) to:BEVILACQUAPLLC
1050 Connecticut Avenue, N.W.Suite500
Washington,DC20036
Attn: Louis A. Bevilacqua, Esq.Fax:202-869-0889
COMPANY:
INSILICOSOLUTIONS,LLC
By: /s/ Michael Ryan
Name: Michael RyanTitle:President
Address:8280WillowOaks,CorporateDrive,Suite600,Fairfax,Virginia22031
Attention:MichaelRyan,President
Withacopy(whichshallnotconstitutenotice)to:
Gross, Romanick, Dean & DeSimone, PCc/oChristopherDeSimone,Esq
3975 University Drive, Suite 410Fairfax,VA22030
Email:cdesimone@grddlaw.com
SELLER:
/s/ Michael Ryan
Name: Michael Ryan
Address: 2615 Columbia Pike, Bsmt 215 Arlington, VA 22204
Fax No. N/A
Attention: Michael Ryan
SCHEDULEA
ListofSeller
NameofSeller | Number ofInterests | PercentOwnership | Number of BuyerShares to BeReceived | Numberof BuyerUnitstobeReceived |
MichaelRyan | 1,000 | 100% | 100% | Tobesplit |
amongSeller | ||||
andthe | ||||
employeesof | ||||
theCompany | ||||
asindicatedby | ||||
Seller. | ||||
Totals | 1,000 | 100% | $400,000 | $140,000 |
Attachments
- Original document
- Permalink
Disclaimer
Kiromic Biopharma Inc. published this content on 17 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2021 17:41:08 UTC.
