Form DEFA14A CYNERGISTEK, INC

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 23, 2022

Date of Report (Date of earliest event reported)  

CYNERGISTEK, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

11940 Jollyville Road, Suite 300-N

Austin, Texas  78759

(Address of principal executive offices)

(512) 402-8550

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01Entry into a Material Definitive Agreement. 

Agreement and Plan of Merger

On May 23, 2022, CynergisTek, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Clearwater Compliance LLC, a Tennessee limited liability company (the “Parent”), and Clearwater Compliance Acquisition Company I, a Delaware corporation and a wholly owned subsidiary of the Parent (the “Merger Sub”). The Merger Agreement provides, subject to its terms and conditions, for the acquisition of the Company by the Parent at a price of $1.25 per share of the Company’s common stock, par value $0.001 (each, a “Share”), in cash, without interest and subject to deduction for any required withholding tax (the “Merger Consideration”), through the merger of the Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of the Parent. The Parent is a portfolio company of funds affiliated with Altaris Capital Partners, LLC (“Altaris”). The Company’s Board of Directors (the “Board”) has unanimously approved the Merger and the Merger Agreement and recommended that stockholders approve and adopt the Merger Agreement and approve the Merger, and the Company has agreed to hold a meeting of its stockholders to submit the Merger Agreement and the Merger to its stockholders for their consideration.  

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”):

·each Share that is issued and outstanding immediately prior to the Effective Time (other than Shares owned by any subsidiary of the Company, the Merger Sub, the Parent or any other subsidiary of the Parent immediately prior to the Effective Time (all of which will be canceled) and Shares held by any holder who is entitled to, and who has perfected, appraisal rights under Delaware law) will be automatically converted into the right to receive the Merger Consideration; 

·each then-outstanding and unexercised Company stock option shall vest in full and automatically be canceled and converted into the right to receive the excess, if any, of the Merger Consideration over the exercise price per share of such stock option; provided that, in the event that the exercise price of any such stock option is equal to or greater than the Merger Consideration, such stock option will be canceled, without any consideration being payable in respect thereof and have no further force or effect; and 

·each Company restricted stock unit that is then outstanding and unvested shall vest in full and automatically be canceled and converted into the right to receive the Merger Consideration. 

Also, at or prior to the Effective Time, any outstanding but unexercised warrants to purchase Shares shall be cancelled and, in certain circumstances, payment therefor will be paid to such warrant holders in accordance with the terms of their respective warrants.

Completion of the Merger is subject to customary closing conditions, including (i) approval of the Merger Agreement by the Company’s stockholders, and (ii) the absence of governmental injunctions or other legal restraints prohibiting the Merger. In addition, the obligation of each party to consummate the Merger is conditioned upon, among other things, the accuracy of the representations and warranties of the other party (subject to certain materiality exceptions), and material compliance by the other party with its covenants under the Merger Agreement. The Parent’s obligations under the Merger Agreement are not subject to any financing condition.

Concurrently with the execution of the Merger Agreement, an affiliate of Altaris entered into an equity commitment letter, pursuant to which, upon the terms and subject to the conditions set forth therein, such affiliate committed to invest in the Parent, directly or indirectly, the cash amount set forth therein for the purpose of funding the aggregate purchase price due at the Effective Time. The Company is a third-party beneficiary with respect to certain enforcement rights under the equity commitment letter.

Mac McMillan, Chief Executive Officer of the Company, and Paul Anthony, Chief Financial Officer of the Company, have entered into a voting agreement (the “Voting Agreement”) pursuant to which they have agreed, among other things, to vote their Shares in favor of the Merger Agreement and the Merger.

The Merger Agreement contains customary representations and warranties from both the Company, on the one hand, and the Parent and the Merger Sub, on the other hand. It also contains customary covenants, including covenants providing for each of the Company and the Parent to use its reasonable best efforts to cause the Merger to be consummated, and covenants requiring the Company, among other things, (i) to use commercially reasonable efforts to conduct its business in the ordinary course during the interim period between the execution of the Merger Agreement and the Effective Time, and (ii) not to engage in specified types of transactions during such period.

During the period (the “Go-Shop Period”) beginning on May 23, 2022 and continuing until 11:59 p.m., Eastern time on (a) June 21, 2022 (30 days) (the “No-Shop Period Start Date”) or (b) June 26, 2022 (35 days) (the “Excluded Party No-Shop Period Start Date”) with respect to an Excluded Party (as defined below), the Company and its affiliates and their respective representatives have the right to: (i) solicit any proposal or inquiry that constitutes, could constitute or could reasonably be expected to lead to, an Acquisition Proposal (as defined in the Merger Agreement); (ii) subject to the entry into an Acceptable Confidentiality Agreement (as defined in the Merger Agreement), furnish to any third person and its representatives any information (including non-public information) relating to the Company, its subsidiaries or any of its affiliates or afford to any such third person (and such representatives) access to the business, properties, assets, books, records or to any personnel of the Company and its subsidiaries; and (iii) continue, enter into, maintain, participate or engage in discussions or negotiations with any third person (and its representatives) with respect to any proposal or inquiry that constitutes, could constitute or could reasonably be expected to lead to, an Acquisition Proposal. 

“Excluded Party” means a third party from whom the Company received an Acquisition Proposal prior to the No-Shop Period Start Date and which Acquisition Proposal the Board determines (prior to the No-Shop Period Start Date) in good faith, after consultation with its outside legal counsel and its financial advisors, constitutes or is reasonably likely to result in a Superior Proposal (as defined in the Merger Agreement). 

Beginning on the No-Shop Period Start Date (or with respect to an Excluded Party, the Excluded Party No-Shop Period Start Date) until the earlier of the Effective Time of the Merger or termination of the Merger Agreement in accordance with its terms, the Company will be subject to customary “no-shop” restrictions on its ability to solicit, initiate, encourage and facilitate any Acquisition Proposal, participate in discussions and negotiations with third parties regarding any Acquisition Proposal and provide nonpublic information to such third parties, provided that if the Company receives an unsolicited Acquisition Proposal that did not result from a material breach of the no-shop restrictions, the Company may furnish information and provide access to such third party and participate in discussions or negotiations with such third party, subject to certain restrictions set forth in the Merger Agreement.

The Merger Agreement provides for certain termination rights for both the Company and Parent, as well as the payment of termination fees in certain cases. The Merger Agreement provides that Parent will be required to pay the Company a termination fee of $710,000 upon termination of the Merger Agreement under certain circumstances. The Company will be required to pay Parent a fee of $470,000 upon termination of the Merger Agreement under certain circumstances, including the termination by the Company to accept a Superior Proposal. However, the Company’s termination fee in such instance would be $710,000 if the Superior Proposal was with respect to the entry into a definitive acquisition agreement with (i) a third party prior to the No-Shop Period Start Date, or (ii) an Excluded Party prior to the Excluded Party No-Shop Period Start Date. 

If the Merger is consummated, the Shares will be delisted from the NYSE American and deregistered under the Securities Exchange Act of 1934.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference. The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement, a copy of which is filed as Exhibit 9.1 hereto and is incorporated herein by reference.

The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, the Parent, the Merger Sub or their respective subsidiaries and affiliates. The Merger Agreement contains representations and warranties by the Company, on the one hand, and the Parent and the Merger Sub, on the other hand, made solely for the benefit of the other. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in negotiating the terms of the Merger Agreement, including information in confidential disclosure schedules delivered in connection with the signing of the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk between the Company, on the one hand, and the Parent and the Merger Sub, on the other hand, rather than establishing matters as facts. Accordingly, the representations and warranties in the Merger Agreement should not be relied on by any persons as characterizations of the actual state of facts about the Company, the Parent, the Merger Sub or their respective subsidiaries or affiliates at the time they were made or otherwise. In addition, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

On May 23, 2022, the Board adopted an Amendment (the “Bylaw Amendment”) to the Company’s By-Laws (the “Bylaws”). The Bylaw Amendment, which was effective upon adoption by the Board, designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware as the exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the Delaware General Corporation Law or the Company’s certificate of incorporation, as amended, or the Bylaws (as they may be amended from time to time), or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine.

The foregoing description of the Bylaw Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaw Amendment, which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

Item 7.01.Regulation FD Disclosure. 

On May 23, 2022, the Company issued a press release announcing its entry into the Merger Agreement. A copy of that press release is furnished as Exhibit 99.1 hereto.

The information in this Item 7.01 and in Exhibit 99.1 attached hereto is furnished pursuant to the rules and regulations of the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01.Other Events. 

Also on May 23, 2022, the Company distributed an Employee FAQ communication to its employees, which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01Financial Statements and Exhibits. 

(d) Exhibits.  See the Exhibit Index attached to this Current Report on Form 8-K, which is incorporated herein by reference

* Schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and the Company agrees to furnish supplementally a copy of any omitted schedule to the staff of the SEC upon request

Cautionary Note Regarding Forward-Looking Statements

Statements in this filing regarding the proposed transaction between the Parent and the Company, the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about future expectations, plans, and prospects for the Company, including statements containing the words “believes,” “will,” “anticipates,” “plans,” “expects,” and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the risk that the proposed Merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business and the price of its common stock; the failure to satisfy all of the closing conditions of the proposed Merger, including the approval of the Merger Agreement by the Company’s stockholders; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the effect of the announcement or pendency of the proposed Merger on the Company’s business, operating results, and relationships with customers, suppliers, competitors and others; risks that the proposed Merger may disrupt the Company’s current plans and business operations; potential difficulties retaining employees as a result of the proposed Merger; risks related to the diverting of management’s attention from the Company’s ongoing business operations; the outcome of any legal proceedings that may be instituted against the Company related to the Merger Agreement or the proposed Merger; risks relating to product development and commercialization, limited demand for the Company’s products and services, limited number of customers, risks associated with competition, uncertainties associated with regulatory agency approvals, competitive pricing pressures, downturns in the economy, acquisition-related risks; and other factors discussed in the Company’s most recent quarterly and annual reports filed with the SEC. In addition, the forward-looking statements included in this filing represent the Company’s views as of the date of this document. While the Company anticipates that subsequent events and developments will cause the Company’s views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s views as of any later date.

Additional Information and Where to Find It

In connection with the proposed Merger, the Company will file a proxy statement and other relevant documents with the Securities and Exchange Commission (the “SEC”). The proposed Merger and the Merger Agreement described above will be submitted to the Company’s stockholders for their consideration at a special meeting of the stockholders. In connection therewith, the Company intends to file relevant materials with the SEC, including a definitive proxy statement on Schedule 14A, which will be mailed or otherwise disseminated to the Company’s stockholders when it becomes available.  The Company may also file other relevant documents with the SEC regarding the proposed Merger.  STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN

THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.

Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by the Company, once such documents are filed with the SEC, through the web site maintained by the SEC at www.sec.gov.

Participants in the Solicitation

The Company and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed Merger. A list of the names of such directors and executive officers and information concerning such participants’ ownership of the Company’s common stock is set forth in the Company’s definitive proxy statement on Schedule 14A for the 2021 annual meeting of stockholders, filed with the SEC on August 26, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such proxy statement, and by the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022 (as amended on Form 10-K/A, filed with the SEC on April 29, 2022). Additional information about the direct or indirect interests, by security holdings or otherwise, of those participants will be included in the definitive proxy statement and other documents filed with the SEC regarding the proposed Merger, if and when they become available.  Free copies of these materials may be obtained as described in the preceding paragraph.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AGREEMENT AND PLAN OF MERGER

by and among

CYNERGISTEK, INC.,

CLEARWATER COMPLIANCE LLC

and

CLEARWATER COMPLIANCE ACQUISITION COMPANY I

Dated as of May 23, 2022

TABLE OF CONTENTS

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Exhibit AForm of Certificate of Incorporation of the Surviving Corporation
 

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), is made and entered into as of this 23^rd day of May, 2022, by and among Clearwater Compliance LLC, a Tennessee limited liability company (the “Parent”), Clearwater Compliance Acquisition Company I, a Delaware corporation and a wholly owned subsidiary of the Parent (“Merger Sub”), and CynergisTek, Inc., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, the Company Board has as of the date hereof unanimously (i) determined that this Agreement and the Merger are in the best interests of the Company; (ii) adopted this Agreement; (iii) approved the Merger; (iv) directed that this Agreement be submitted to the Company’s stockholders for approval; and (v) resolved to recommend approval of this Agreement by the Company’s stockholders;

WHEREAS, the board of managers of the Parent and the board of directors of Merger Sub have adopted, approved and declared it advisable for the Parent and Merger Sub, as applicable, to enter into this Agreement and to consummate the Merger and the other transactions contemplated by this Agreement, upon the terms and subject to the conditions set forth herein; and

WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, the Parent has delivered the Equity Commitment Letter, pursuant to which the Investor has committed, subject to the terms and conditions thereof, to invest in the Parent, directly or indirectly, the cash amount set forth therein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the Parent, Merger Sub and the Company, intending to be legally bound, hereby agree as follows:

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Company, with the Company continuing as the surviving corporation of such merger, at the Effective Time.

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with the certificate of incorporation and bylaws of the Surviving Corporation and until their successors are duly elected and qualified.

(a)Capital Stock of Merger Sub.  Each share of the common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation. 

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(ii)Notwithstanding anything to the contrary in this Agreement, any holder of Uncertificated Shares shall not be required to deliver a Certificate or an executed letter of transmittal to the Paying Agent to receive the Merger Consideration that such holder is entitled to receive pursuant to this Article I.  In lieu thereof, each holder of record of one or more Uncertificated Shares shall upon receipt by the Paying Agent of an “agent’s message” in customary form with respect to any Uncertificated Share (or such other evidence, if any, of transfer as the Paying Agent may reasonably request) be promptly paid the Merger Consideration pursuant to, and in accordance with, the terms of this Agreement in respect of such Uncertificated Share, and such Uncertificated Share shall forthwith be cancelled. 

(c)Interest; Transfers; Rights Following the Effective Time.  No interest will be paid or accrued on the cash payable upon the surrender of such Certificates or Uncertificated Shares. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent of payment that (i) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and (ii) the Person requesting such payment shall have paid any transfer and other similar Taxes required by reason of the payment of the Merger Consideration to a  

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Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Parent that such Tax either has been paid or is not required to be paid. Payment of the Merger Consideration with respect to Uncertificated Shares shall only be made to the Person in whose name such Uncertificated Shares are registered. Until surrendered as contemplated by this Section 1.7, each Certificate and all Uncertificated Shares (other than Certificates or Uncertificated Shares representing Dissenting Shares) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration as contemplated by Section 1.6(c), without any interest thereon.

(f)No Liability.  To the extent permitted by applicable Law, none of the Parent, Merger Sub, the Company, the Surviving Corporation or the Paying Agent shall be liable to any holder of shares of Company Common Stock for any amount required to be delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. 

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cancelled and converted into the right to receive from the Surviving Corporation an amount of cash (without any interest thereon) equal to the product of (i) the total number of shares of Company Common Stock then underlying such Company Stock Option multiplied by (ii) the excess, if any, of the Merger Consideration over the exercise price per share of such Company Stock Option.  In the event that the exercise price of any Company Stock Option is equal to or greater than the Merger Consideration, such Company Stock Option shall be cancelled, without any consideration being payable in respect thereof, and have no further force or effect.

(e)To the extent that the Anthony Warrant and the Horton Warrant are unexercised at the Effective Time, the Company shall take such actions prior to or at the Effective Time as are needed to (i) with respect to the Anthony Warrant, cancel the Anthony Warrant without any consideration, or (ii) with respect to the Horton Warrant, cancel the Horton Warrant in exchange for the payment to the holder of the Horton Warrant of the amount in respect of such cancellation as set forth in the Horton Warrant.   

(f)No later than ten days after the date hereof, the Company shall pass resolutions and take such other actions as are necessary to provide for the treatment of the Company Stock Options, the Company RSUs and Warrants as contemplated by this Section 1.8, and shall promptly thereafter provide evidence thereof to the Parent that is reasonably satisfactory to the Parent. 

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(c)The Company shall give the Parent: (i) prompt notice of any written demand for appraisal received by the Company prior to the Effective Time pursuant to Section 262 of the DGCL, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to Section 262 of the DGCL that relates to such demand; and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to any such demand, notice or instrument.  The Company shall not settle or pay or make any payment or settlement offer prior to the Effective Time with respect to any such demand, notice or instrument or agree to do any of the foregoing unless the Parent shall have given its written consent to such settlement, payment or settlement or payment offer. 

The Company represents and warrants to the Parent and Merger Sub that the statements contained in this Article II are true and correct, except (a) as disclosed in the Company SEC Reports filed with or furnished to the SEC since January 1, 2021, and prior to the fifth Business

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Day prior to the date of this Agreement and publicly available prior to the fifth Business Day prior to the date of this Agreement (but excluding any predictive, cautionary or forward looking disclosures contained under the captions “Risk Factors”, “Forward Looking Statements” or any similar predictive, cautionary or forward looking sections) or (b) as set forth in the Company Disclosure Schedule, subject to Section 9.12.

(b)The Company has made available to the Parent complete and accurate (i) copies of all Company Stock Plans and details regarding the number of shares of Company Common Stock reserved for future issuance under such Company Stock Plan, (ii) forms of stock option agreements evidencing Company Stock Options, (iii) forms of agreements evidencing Company RSUs, (iv) agreements evidencing the Warrants, and (v) forms of agreements evidencing any other equity or equity-linked award or compensation arrangement. Section 2.2(b)(i) of the Company Disclosure Schedule sets forth, for each Company Stock Option, each Company RSU and each Warrant, (A) the name of the holder thereof, (B) the date  

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of grant thereof, (C) the number of shares of Company Common Stock issuable upon exercise thereof, and (D) the exercise price of such Company Stock Option, Company RSU or Warrant.  

(d)All outstanding shares of Company Common Stock are, and all shares of Company Common Stock subject to issuance as specified in Section 2.2(b) above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company’s certificate of incorporation or bylaws or any agreement to which the Company is a party or is otherwise bound. 

(e)There are no obligations, contingent or otherwise, of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire, or to register, any shares of Company Common Stock or the capital stock of the Company or any of its Subsidiaries. 

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the Company (x) have been duly authorized and validly issued and are fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right and (y) except as set forth in Section 2.3(a)(ii) of the Company Disclosure Schedule, are owned, directly or indirectly, by the Company free and clear of all Liens.

(b)Each Subsidiary of the Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted, and is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the character of its properties owned, operated or leased or the nature of its activities makes such qualification necessary, except for such failures to be so organized, qualified or in good standing, individually or in the aggregate, that have not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company has made available to the Parent true, correct and complete copies of the certificate of incorporation and bylaws of each Subsidiary of the Company (and all amendments thereto) as currently in effect, and no Subsidiary of the Company is in default in the performance, observation or fulfillment of its obligations under such documents, except for such defaults that, in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. 

(c)The Company does not own or control, directly or indirectly, any capital stock of any Person that is not a Subsidiary of the Company. 

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Merger.  There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote.

(b)Each of the consolidated financial statements (including, in each case, any related notes and schedules) contained or to be contained in the Company SEC Reports at the time filed (i) complied or will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) were or will be prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim financial statements, as permitted by the SEC on Form 10-Q under the Exchange Act), and (iii) fairly presented or will fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the dates indicated and the consolidated results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal and recurring year-end audit adjustments which were not or are not expected to be material. 

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Exchange Act applicable to the Proxy Statement. Notwithstanding the foregoing provisions of this Section 2.5(c), no representation or warranty is made by the Company with respect to information or statements made or incorporated by reference in the Proxy Statement based upon information supplied by the Parent, Merger Sub or any of their respective Representatives expressly for use or incorporation by reference therein.

(d)The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act.  Each required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by any certifications required to be filed or submitted by the Company’s principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, any such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act. 

(e)The Company maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act.  Such disclosure controls and procedures are designed to provide reasonable assurance that all information concerning the Company that could have a material effect on the financial statements is made known on a timely basis to the individuals responsible for the preparation of the Company’s filings with the SEC and other public disclosure documents. The Company is in compliance in all material respects with the applicable listing and other rules and regulations of NYSE American. The Company has established and maintained a system of internal control over financial reporting (as defined in Rule 13a-15 under the Exchange Act). Such internal controls are designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP. The Company’s principal executive officer and its principal financial officer have disclosed, based on the most recent evaluation of internal control over financial reporting prior to the date of this Agreement, to the Company’s auditors and the audit committee of the Company Board (and made available to the Parent a summary of the significant aspects of such disclosure, if any) (i) all known significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information, and (ii) any known fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.  Any material change in internal control over financial reporting and any significant deficiency or material weakness in the design or operation of internal control over financial reporting required to be disclosed in any Company SEC Report or in any form, report or document filed by the Company with the SEC has been so disclosed and each significant deficiency and material weakness previously so disclosed has been remediated in all material respects. 

(f)The Company is not subject to any “Off-Balance Sheet Arrangement” (as defined in Item 303(a) of Regulation S-K under the Securities Act) other than as described in the Company’s most recent Form 10-Q or Form 10-K filed prior to the date hereof. 

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acceleration thereof) made available to the Parent prior to the date of this Agreement, (c) for liabilities incurred in the Ordinary Course of Business since the date of the Company Balance Sheet, and (d) for fees and expenses incurred in connection with the entry into this Agreement and the consummation of the Merger, the Company and its Subsidiaries do not have any liabilities of any nature required to be reflected or disclosed on a consolidated balance sheet of the Company (including the notes thereto) prepared in accordance with GAAP that were not adequately reflected or reserved against on the Company Balance Sheet.

(a)Since the date of the Company Balance Sheet, there has not been a Company Material Adverse Effect. 

(a)The Company and each of its Subsidiaries have timely filed all material Tax Returns that the Company and each of its Subsidiaries were required to file, and, except as set forth in Section 2.8 of the Company Disclosure Schedule, all such Tax Returns were correct and complete in all material respects.  The Company and each of its Subsidiaries have paid (or caused to be paid) on a timely basis all Taxes due and payable by the Company and/or its Subsidiaries. 

(b)As of the date of this Agreement, no examination or audit of any Tax Return, or other Action in respect of any Tax, of the Company or any of its Subsidiaries by any Governmental Entity is currently in progress or has been proposed or threatened in writing or, to the Knowledge of the Company, orally, nor has any material adjustment with respect to any Tax Return or material claim for any additional Tax been received from a Governmental Entity by the Company or any of its Subsidiaries that is still in progress. There are no Liens for Taxes on any of the assets or properties of the Company or any of its Subsidiaries, other than Liens for Taxes that are being contested in good faith through appropriate proceedings and for which the most recent financial statements contained in the Company SEC Reports reflect an adequate reserve in accordance with GAAP. 

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(c)The Company and its Subsidiaries have complied in all material respects with applicable Laws for the withholding of Taxes and have timely withheld and paid over to the appropriate Governmental Entity all amounts of material Taxes required to be withheld and paid over. 

(d)There is no outstanding waiver or extension of any applicable statute of limitations for the assessment or collection of Taxes from the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is presently contesting any material Tax liability of the Company or its Subsidiaries before any Governmental Entity. 

(e)Neither the Company nor any of its Subsidiaries has any material liability for any Taxes of any Person (other than the Company and its Subsidiaries) (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of Tax law in any jurisdiction) or as a transferee or successor, or (ii) pursuant to any Tax sharing or Tax indemnification agreement or other similar agreement (other than pursuant to commercial agreements or arrangements entered into in the Ordinary Course of Business that are not primarily related to Taxes). 

(f)No closing agreements, private letter rulings or similar agreements or rulings have been entered into or issued by any Governmental Entity responsible for Taxes within the last five years with respect to the Company or any of its Subsidiaries, and no such agreements or rulings have been applied for by the Company or any of its Subsidiaries that are currently pending. 

(g)Neither the Company nor any of its Subsidiaries has entered into any “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b). 

(h)Neither the Company nor any of its Subsidiaries constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (or any similar provision of state, local or non-U.S. law) in the two years prior to the date hereof. 

(i)No claim has been made in writing by a Governmental Entity in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. 

(j)The Company will not be required to include any material item of income in, or to exclude any material item of deductions from, taxable income from any taxable period (or portion thereof) ending after the Closing as a result of any (i) change in the method of accounting, (ii) closing agreement, as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign law), (iii) installment sale or open transaction disposition made on or before the Closing Date, or (iv) prepaid amount or deferred revenue received on or before the Closing Date. 

(k)Each of the Company and its Subsidiaries has been treated as a corporation for U.S. federal income tax purposes since its respective formation. 

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(a)The Company and its Subsidiaries do not own, and have never owned, any real property. 

(c)The Company and each of its Subsidiaries have obtained all appropriate certificates of occupancy, licenses, easements and rights of way, including proofs of dedication, required to operate the Leased Real Property in the manner in which the Leased Real Property is currently being used and operated, other than any such instruments that are normally obtained by the lessor of property, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.  The Company and each of its Subsidiaries have all material Permits necessary to operate the Leased Real Property as currently operated; and no such Permits will be required as a result of the transactions contemplated hereby to be issued after the date hereof in order to permit the Company and its Subsidiaries, following the Closing, to continue to operate the Leased Real Property in the same manner as currently operated, other than any such instruments that are normally obtained by the lessor of the property and any such Permits that are ministerial in nature and are normally issued in due course upon application therefor without further action by the applicant. 

(d)To the Company’s Knowledge, the buildings, structures, fixtures, building mechanical systems (including electrical, heating and air conditioning systems), and other improvements in, on or within the Leased Real Property, are in good operating condition and repair, subject to reasonable wear and tear and continued repair and replacement in accordance with reasonable and customary business practice, and there are no deferred maintenance, repairs or unrepaired defects in the structural components comprising such buildings and building mechanical systems located thereon or therein which could materially impair the use of such buildings in connection with the operation of the business as conducted during the last 12 months, except, in each case, as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. 

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(e)Neither the Company nor any of its Subsidiaries has received notice of, and there is not any pending, or to the Company’s Knowledge, threatened or contemplated, condemnation Action affecting in any material respect the Leased Real Property or any part thereof, or any sale or other disposition of the Leased Real Property or any part thereof in lieu of condemnation.  The Leased Real Property has not suffered any material damage by fire or other casualty which has not heretofore been completely repaired and restored.   

(a)Section 2.10(a) of the Company Disclosure Schedule sets forth a true, correct and complete list of (i) the current owner of, (ii) the jurisdiction of application/registration for and (iii) the application or registration number for, each item of registered Company Intellectual Property owned or purported to be owned by the Company or its Subsidiaries (“Registered IP”). All Registered IP for patents, trademarks, service marks and copyrights is subsisting and has not expired or been cancelled, and, to the Knowledge of the Company, all Registered IP is valid and enforceable in all material respects. The Company or a Subsidiary has filed all documents and paid all material taxes, fees, and other financial obligations required to renew and maintain in force and effect in all material respects all such Registered IP until Closing. Section 2.10(a) of the Company Disclosure Schedule also sets forth a true, correct and complete list of the following included in the Company Intellectual Property: internet domain names and social media accounts and material, unregistered trademarks and brand names. 

(b)Section 2.10(b)(i) of the Company Disclosure Schedule sets forth a true correct and complete list as of the date of this Agreement of all IP Licenses under which a Person has granted rights under Company Intellectual Property to the Company or any of its Subsidiaries.  Section 2.10(b)(ii) of the Company Disclosure Schedule sets forth a true, correct and complete list as of the date of this Agreement of all IP Licenses under which the Company or any of its Subsidiaries has granted rights under Company Intellectual Property to any other Person. 

(c)Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries (i) exclusively own all right, title and interest in and to all Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries and (ii) hold a valid and enforceable license or sublicense to use all Intellectual Property licensed or sublicensed or purported to be licensed or sublicensed by the Company or any of its Subsidiaries. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries own, or hold a valid and enforceable written license or other right to use, all Intellectual Property used in or held for use in the conduct of the Company’s business as currently conducted, and the consummation of the transactions contemplated hereby will not conflict with, alter or impair any such rights or require the payment of any additional fees or amounts. 

(d)The conduct of the business of the Company and its Subsidiaries, as currently conducted and as conducted in the past five years, does not (and did not) infringe, violate or constitute a misappropriation of any Intellectual Property of any third party, except for  

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such infringements, violations and misappropriations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. There are no claims with respect to the Company Intellectual Property pending as of the date of this Agreement and, between January 1, 2017 and the date of this Agreement, neither the Company nor any of its Subsidiaries has received any written or, to the Knowledge of the Company, oral, claim or notice from any Person (i) alleging any such infringement, violation or misappropriation or (ii) advising that such Person is challenging or threatening to challenge the ownership, use, validity or enforceability of any Company Intellectual Property, except, in each case in clauses (i) and (ii), for any such infringement, violation, misappropriation or challenge that, individually or in the aggregate, would not be material to the Company and its Subsidiaries taken as a whole.

(e)The Company and its Subsidiaries have implemented commercially reasonable measures to maintain the confidentiality of their trade secrets and other Company Intellectual Property of a nature that the Company intends or is required under applicable Law to keep confidential, including all source code for Proprietary Software. All Personnel who are or were involved in the creation or development of any Company Intellectual Property that is owned or purported to be owned by the Company or any of its Subsidiaries have signed a valid, enforceable agreement containing an assignment of the applicable Intellectual Property to the Company or a Subsidiary of the Company and reasonable confidentiality provisions protecting such Company Intellectual Property which has not been breached by any such Person in any material respect. No such Person has retained any ownership rights with respect to such created or developed Company Intellectual Property, including any ownership or other right, license, claim or interest whatsoever in or with respect thereto.  To the Company’s Knowledge, the Company and its Subsidiaries are not making unauthorized use of any confidential information or trade secrets of any Person, including without limitation any former employer of any past or present employee of the Company or a Subsidiary. 

(f)To the Company’s Knowledge, no third party is infringing, violating or misappropriating any material Company Intellectual Property (and no third party has done so in the past five years), including any material trade secrets, confidential Intellectual Property or Proprietary Software. 

(g)The Company and its Subsidiaries own, or have sufficient license to use, all material computer software or other information technology tools, including source code, operating systems, APIs, data, databases, files, documentation and other materials related thereto, that is used in or necessary for the conduct of the Company’s and its Subsidiaries’ business as currently conducted (“Computer Software”), and the consummation of the transactions contemplated hereby will not conflict with, alter or impair any such rights or require the payment of any additional material fees or amounts. The Company and its Subsidiaries are in compliance in all material respects with all provisions of any license or other agreement pursuant to which the Company or any of its Subsidiaries has the right to use any Computer Software. Section 2.10(h) of the Company Disclosure Schedule sets forth a list of all material Computer Software (excluding Off-the-Shelf Software with license or user fees less than $50,000), including any material Proprietary Software, and identifies any such Computer Software that is owned by the Company or its Subsidiaries rather than licensed from a third party.  No portion of any Computer Software used in or with Proprietary Software is subject to a license under any  

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version of the GNU/General Public License (GPL) or other open source software license that requires public disclosure of the source code of any Proprietary Software or that places restrictions or obligations on the reuse, redistribution, licensing or disclosure of Proprietary Software used with or incorporating such Computer Software.  The Company and its Subsidiaries have not granted, directly or indirectly, any current or contingent rights, licenses or interests in or to any source code of any material Proprietary Software (except to service providers in a manner solely for the benefit of Company and subject to appropriate nondisclosure obligations and use restrictions).  The Company and its Subsidiaries have not disclosed or made available the source code for any part of the Proprietary Software to any Person, including through any escrow arrangement.  The Company has made available to the Parent true and complete copies of all Company Material Contracts under which the Company or any of its Subsidiaries has the right to use Computer Software (other than Off-the-Shelf Software).

(h)The Company and its Subsidiaries have taken reasonable efforts to protect the confidentiality, integrity and security of their respective software, databases, networks, internet sites and other Company Systems and all Protected Information and other information stored or contained therein or transmitted thereby from any unauthorized use, access, acquisition, interruption or modification by third parties (“Unauthorized Use”), and comply in all material respects with their own policies, industry standard practices and any Laws with regard to such Company Systems and the transmission and storage of such information.  The Company and its Subsidiaries have not experienced in the past five years any Unauthorized Use of such information or any Company Systems, or any infection of Company Systems by viruses or other harmful code, which caused a material disruption of the business of the Company or its Subsidiaries or required notification to any Person under applicable Laws. 

(i)In the last five years, there have been no failures, breakdowns, continued substandard performance or other adverse events affecting any Company Systems that have caused or could reasonably be expected to result in any substantial disruption of or interruption in or to the use of Company Systems and/or the conduct of the business of the Company or its Subsidiaries.  The Company has implemented, and made access available to the Parent to, commercially reasonable security, disaster recovery and business continuity plans, procedures and facilities consistent with industry best practices.  The Company and its Subsidiaries act in compliance in all material respects with such plans and procedures and have taken reasonable efforts to test such plans and procedures on a periodic basis, and such plans and procedures have been proven effective upon such testing in all material respects. 

(a)Section 2.11 of the Company Disclosure Schedule sets forth, as of the date of this Agreement, a list of, and the Company has made available to the Parent a true, correct and complete copy of, each Company Material Contract (as amended prior to the date of this Agreement) to which the Company or any of its Subsidiaries is a party as of the date of this Agreement or by which any of them or any of their respective properties, rights or assets are bound. 

(b)Each Company Material Contract is in full force and effect except to the extent it has previously expired in accordance with its terms or where the failure to be in full  

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force and effect, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.  Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any other party to any Company Material Contract is in violation of or in default under (nor does there exist any condition which, upon the passage of time or the giving of notice or both, would cause such a violation of or default under) any Company Material Contract, except for violations or defaults that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.

(c)Since January 1, 2017, neither the Company nor any of its Subsidiaries has entered into any transaction that would be subject to disclosure pursuant to Item 404 of Regulation S-K that has not been disclosed in the Company SEC Reports. 

(d)With respect to each Government Contract to which the Company or any of its Subsidiaries is a party or by which any of them or their respective properties, rights or assets are bound, the Company and any applicable Subsidiaries have complied with the terms and conditions of such Government Contract, including all clauses, provisions and requirements incorporated expressly therein, by reference or by operation of any laws or regulations, except for any failure to comply that, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. 

(e)Neither the Company nor any of the Company’s Subsidiaries is a party to any commitment or agreement obligating the Company to file a registration statement under the Securities Act, which filing has not yet been made. 

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injunction or decree relating to any violation or alleged or suspected violation of any Environmental Laws or release or alleged or suspected release of Hazardous Substances; (vi) there has been no release of Hazardous Substances or violation of Environmental Laws at, on, under or from any real property currently or formerly owned, leased or used by the Company or any of its Subsidiaries; (vii) there are no underground storage tanks, septic tanks, sumps, pits, ponds, impoundments, lagoons, landfills, waste piles, or disposal areas, or the presence of any Hazardous Substances  in violation of Environmental Laws or requiring notification, investigation or any other type of response under Environmental Laws at any real property currently or formerly owned, leased or used by the Company or any of its Subsidiaries; and (viii) neither the Company nor its Subsidiaries are currently conducting or required by any Environmental Law to conduct any investigation or remediation of any Hazardous Substances.

(b)With respect to each Company Employee Plan in effect on the date of this Agreement, the Company has made available to the Parent a complete and accurate copy of (i) such Company Employee Plan, including amendments thereto, (ii) the most recent annual report (Form 5500) filed with the IRS, if any, (iii) each trust agreement, group annuity contract and summary plan description, if any, relating to such Company Employee Plan, (iv) the most recent actuarial report, financial statement or valuation report for such Company Employee Plan, if applicable, (v) a current IRS opinion or favorable determination letter, if applicable, and (vi) all material correspondence to or from any Governmental Entity relating to any audit or investigation of such Company Employee Plan in the six-year period prior to the date hereof. 

(c)Each Company Employee Plan is being administered in accordance with ERISA, the Code and all other applicable Laws and the regulations thereunder and in accordance with its terms, except for failures to so administer such Company Employee Plan as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. 

(d)With respect to the Company Employee Plans, there are no benefit obligations for which contributions have not been made or properly accrued to the extent required by GAAP, except for failures to make such contributions or accruals for contributions as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. 

(e)All the Company Employee Plans that are intended to be qualified under Section 401(a) of the Code have received determination letters from the IRS to the effect that such Company Employee Plans are qualified and the plans and trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, or are based on prototype or volume submitter documents that have received such letters, and no such determination letter has been revoked and revocation has not been threatened, and no act or omission has occurred that would adversely affect its qualification except, in each case, as would  

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not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(f)Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, other than routine claims for benefits, there are no Actions, governmental audits or investigations that are pending or, to the Company’s Knowledge, threatened against or involving any Company Employee Plan or asserting any rights to or claims for benefits under any Company Employee Plan. 

(g)None of the Company, any of the Company’s Subsidiaries or any of their respective ERISA Affiliates maintains, contributes to or is obligated to contribute to (or has during the past six years maintained or contributed to or been obligated to contribute to), or could reasonably be expected to have any liability with respect to, (i) a Company Employee Plan that is (or was) subject to Section 412 of the Code or Title IV of ERISA, (ii) a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (iii) a “multiple employer plan” (within the meaning of Section 413(c) of the Code), (iv) a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA), or (v) a “voluntary employees’ beneficiary association” within the meaning of Section 509(c)(9) of the Code. During the immediately preceding six years, no liability under Section 302 or Title IV of ERISA has been incurred by the Company, any of the Company’s Subsidiaries or any of their respective ERISA Affiliates or their respective predecessors that has not been satisfied in full. 

(h)Except as set forth in Section 2.14(h) of the Company Disclosure Schedule or as contemplated by Section 1.8 of this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event): (i) entitle any current or former employee, officer, director or individual independent contractor of the Company or any of the Company’s Subsidiaries to any payment or benefit (or result in the funding of any such payment or benefit) under any Company Employee Plan; (ii) increase the amount of any compensation, equity award or other benefits otherwise payable by the Company or any of the Company’s Subsidiaries under any Company Employee Plan; (iii) result in the acceleration of the time of payment, funding or vesting of any compensation, equity award or other benefits under any Company Employee Plan; (iv) result in any “excess parachute payment” (within the meaning of Section 280G of the Code) becoming due to any current or former employee, officer, director or individual independent contractor of the Company or any of the Company’s Subsidiaries; or (v) limit or restrict the right of the Company or any of the Company’s Subsidiaries to merge, amend or terminate any Company Employee Plan in accordance with its terms and applicable Law. 

(i)Except as set forth in Section 2.14(i) of the Company Disclosure Schedule, neither the Company nor any of the Company’s Subsidiaries is a party to, or is otherwise obligated under, any plan, policy, agreement or arrangement that provides for the gross-up or reimbursement of Taxes imposed under Section 409A or 4999 of the Code (or any corresponding provisions of state or local law relating to Tax). 

(j)Except as set forth in Section 2.14(j) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any written (i) agreement with any stockholders, director, executive officer or other key employee of the Company or any  

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of its Subsidiaries (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Company or any of its Subsidiaries of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such director, executive officer or key employee; or (ii) agreement or plan binding the Company or any of its Subsidiaries, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan or severance benefit plan, any of the benefits of which shall be increased, or the vesting of the benefits of which shall be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which shall be calculated on the basis of any of the transactions contemplated by this Agreement.

(k)None of the Company Employee Plans promises or provides medical or other welfare benefits to any Person beyond their retirement or other termination of service, except as required by Section 4980B of the Code (and at the sole cost of such Person). 

(l)No Company Employee Plan is maintained pursuant to the laws of a country other than the United States or is applicable to employees outside the United States. 

(a)The Company and each of its Subsidiaries is, and in the five-year period prior to the date hereof, has been, in compliance with, and is not in violation of, any applicable statute, law or regulation with respect to the conduct of its business or the ownership or operation of its properties or assets, except for failures to comply or violations that, individually or in the aggregate, have not been and would not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole. 

(b)In the five-year period prior to the date hereof, none of the Company, any of its Subsidiaries, or, to the Knowledge of the Company, any of their respective directors, officers, employees, agents or distributors, has in each case (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payment or offered anything of value to foreign government officials or employees or to foreign political parties or campaigns, (iii) made any other unlawful payment, or (iv) violated any applicable money laundering or antiterrorism law or regulation, nor have any of them otherwise taken any action which would cause the Company or any of its Subsidiaries to be in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977. 

(c)In the five-year period prior to the date hereof, the Company and its Subsidiaries have been in compliance with the Arms Export Control Act (22 U.S.C. 2778), the International Traffic in Arms Regulations (ITAR) (22 C.F.R. 120 et seq.), the Export Administration Regulations (15 C.F.R. 730 et seq.) and associated executive orders, the laws implemented by the Office of Foreign Assets Controls, United States Department of the Treasury and all other applicable export control or asset control laws, including those administered by the U.S. Department of Commerce, the U.S. Department of State, and the U.S. Department of the Treasury. 

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(b)Except as would not be material to the Company and its Subsidiaries, taken as a whole, neither the Company nor any of its Subsidiaries is a party to any corporate integrity agreements, monitoring agreements, deferred prosecution agreements, or similar agreements with or imposed by any Governmental Entity and, to the Company’s Knowledge, no such action is pending as of the date of this Agreement. 

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Knowledge, threatened, before the National Labor Relations Board or any comparable Governmental Entity.

(b)Except as set forth in Section 2.17(b) of the Company Disclosure Schedule, there has not been during the previous three years, and there is currently no, material charge or complaint against the Company or any of its Subsidiaries or any of their respective officers, directors, managers or employees pending or, to the Company’s Knowledge, threatened, before the United States Department of Labor, the Office of Federal Contract Compliance Programs, any state department of labor, the Equal Employment Opportunity Commission or any comparable federal, state, local or foreign human/civil rights organization or other Governmental Entity, relating to the employment or termination of employment of any employee of the Company or any of its Subsidiaries. 

(c)The Company and its Subsidiaries have discharged their respective obligations in all material respects, and have complied in all material respects with all Laws, with respect to hours, classification, employment-related Taxes, immigration, equal employment opportunity, sexual harassment, affirmative action, legal qualification of employment status, plant closings or mass layoffs, occupational safety and health, worker’s compensation, salary, wages, commissions, bonuses, overtime pay, holiday pay, sick pay, vacation pay and all other material benefits for their employees, officers, current or former directors, contractors and other representatives.  In the three-year period prior to the date hereof, there has been no “mass layoff” or “plant closing” as defined by WARN related to the Company and its Subsidiaries, and none of the Company and its Subsidiaries have incurred any material liability under WARN nor have they taken any action that could reasonably be expected to result in any material liability under WARN as a result of the transactions contemplated by this Agreement. No employee layoff, facility closure or shutdown reduction-in-force, furlough, temporary layoff, material work schedule change or reduction in hours, or reduction in salary or wages, or other workforce changes affecting employees of the Company or any of its Subsidiaries is currently contemplated, planned or announced, as a result of COVID-19 or any COVID-19 Measures. The Company and its Subsidiaries have not otherwise experienced any material employment-related liability with respect to COVID-19. 

(d)To the Company’s Knowledge, no employee of the Company or any of its Subsidiaries with a base annual salary of $75,000 or more intends to terminate employment with the Company or any of its Subsidiaries prior to or within one year following the Closing or has taken any action within the six-month period prior to the date hereof which was calculated to dissuade any employees, officers, current or former directors, contractors, representatives or agents of the Company or any of its Subsidiaries from continuing their employment following the Closing. 

(e)All independent contractors that are working for or have worked for the Company or its Subsidiaries, in the five-year period prior to the date hereof, have been properly classified as independent contractors in compliance with all applicable Laws, other than as would not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole. 

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(b)The assets of the Company and its Subsidiaries as of the date hereof represent all of the material assets necessary to conduct the business of the Company and its Subsidiaries as presently conducted and as substantially conducted during the last 12 months and represent all of the material assets used or intended for use in the conduct of the business of the Company and its Subsidiaries. 

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Subsidiaries is in default in any material respect, whether as to payment of premiums or otherwise, under any provisions of such Policies, and since January 1, 2017, no policy limits of insurance policies have been exhausted or eroded or reduced and policies providing substantially similar insurance coverage have been in effect continuously.  Neither the Company nor any of its Subsidiaries has failed to give any notice or present any material claims under any applicable insurance policy in a timely fashion.  The Company and its Subsidiaries, and their respective assets and properties, are insured in amounts no less than as required by applicable Law and any material contract or agreement to which the Company or any of its Subsidiaries is a party.  The material assets of the Company and its Subsidiaries are insured to full replacement cost value.  There are no material Actions by the Company or any of its Subsidiaries under any Policy as to which the Company or any of its Subsidiaries has received notice indicating that coverage has been denied, questioned or disputed by the underwriter(s) of any Policy, and neither the Company nor any of its Subsidiaries has received written, or, to the Company’s Knowledge, oral, notice from or on behalf of any insurance carrier issuing any Policy (a) that there shall hereafter be a termination or cancellation or non-renewal of any Policy or (b) any material cost increase on any Policy.  Neither the Company nor any of its Subsidiaries has any open claims with any insolvent carriers.

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(a)The Company and its Subsidiaries maintain privacy and security policies (“Privacy Policies”) in accordance with applicable Law that describe their collection, use, storage, retention, disclosure, transfer, disposal or other processing of sensitive data, including any Personal Information, personally identifiable information, individually identifiable health information, protected health information, payment card information, Social Security Numbers and other information protected by applicable Law (collectively, “Protected Information”).  The Company and its Subsidiaries comply, and for the five years prior to the Closing Date have complied, in all material respects with applicable Privacy Policies, use restrictions, agreements, Information Privacy and Security Laws, and other Laws pertaining to Protected Information in all material respects.  The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby (including any transfer of Protected Information in connection with such transaction), will not impair in any material respect any right in, or cause the Company or any of its Subsidiaries to be in violation or default in any material respect under any policy, agreement or Law (including any Privacy Policies or Information Privacy and Security Laws) applicable to, any private, personal or proprietary information (including Protected Information) acquired by the Company or any of its Subsidiaries or used by the Company or any of its Subsidiaries in the conduct of their business in substantially the manner and to the extent presently conducted or contemplated. Section 2.25(a) of the Company Disclosure Schedule identifies any Contracts under which Protected Information of the Company or its Subsidiaries is hosted or processed on the systems or networks of third parties, including cloud computing arrangements.  All processing, storing and transmitting of payment card data by or for the Company and its Subsidiaries is compliant in all material respects with the Payment Card Industry Data Security Standard. None of the Company or its Subsidiaries or their respective Affiliates or any of their respective employees, officers, directors or managers, has used or disclosed Protected Information in the past five years so as to trigger a notification or reporting requirement under applicable Law. 

(c)Except as set forth in Section 2.25(c) of the Company Disclosure Schedule: neither the Company nor any of its Subsidiaries have received any written or, to the Company’s Knowledge, oral, complaint from any Person or Governmental Entity regarding the Company or any of its Subsidiaries or any of their respective Personnel’s uses or disclosures of, or security practices or security incidents regarding, Personal Information. 

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(d)The Company and its Subsidiaries have trained their respective Personnel on compliance with Information Privacy and Security Laws and has implemented written policies to comply with Information Privacy and Security Laws.  The Company and its Subsidiaries have implemented commercially reasonable physical, technical, organizational and administrative security safeguards, consistent with industry best practices, to protect the security, confidentiality and integrity of all Protected Information collected by or on behalf of the Company or such Subsidiaries from and against unauthorized access, use, misuse, modification, and/or disclosure.  The Company and its Subsidiaries have conducted or undergone commercially reasonable privacy and data security audits (including independent third-party audits) at reasonable and appropriate intervals consistent with industry best practices and have resolved any privacy or data security issues identified in such audits. 

(e)When acting as a Business Associate of a Covered Entity or as a Subcontractor of a Business Associate (such terms as defined by HIPAA), the Company and its Subsidiaries have in effect agreements with each such Covered Entity and Business Associate that satisfy in all material respects all of the requirements of HIPAA (“BA Agreements”).  The Company and its Subsidiaries have in effect with each entity acting as a Business Associate or Subcontractor (as defined in HIPAA) of the Company or its Subsidiaries, as applicable, an agreement that satisfies in all material respects all of the requirements of HIPAA (“Vendor BA Agreements”).  The Company and its Subsidiaries are, and have for the five years prior to the Closing Date been, in material compliance with (i) all contracts, agreements and understandings in effect between the Company or such Subsidiaries and their respective customers, including BA Agreements, that apply to or restrict the use, disclosure or security of Personal Information; and (ii) all contracts, agreements and understandings between the Company or its Subsidiaries, on the one hand, and vendors or other business partners, on the other hand, that apply to or restrict the use, disclosure or security of Personal Information, including Vendor BA Agreements (such contracts or other arrangements referenced in clauses (i) and (ii) collectively referred to as “Privacy Agreements”).  The Company and its Subsidiaries have the right pursuant to the Privacy Agreements and their respective policies to use and disclose Protected Information for the purpose such information is and has been used and disclosed. 

(g)Except as set forth in Section 2.25(g) of the Company Disclosure Schedule: with respect to the collection, storage, use and sharing of data from third party sources (including open source data), the Company and its Subsidiaries are in compliance in all material respects with all applicable Laws, licenses, and terms of service or use, and have not received any written, or to the Company’s Knowledge, oral, notice of any material claims, investigations, or alleged material violations of Laws, licenses, or terms of service or use.   

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(h)The Company and its Subsidiaries have contractually obligated all third-party service providers, hosts, or other processors (collectively, “Providers”) of Protected Information of the Company or its Subsidiaries (including that collected via their products and services) to (i) comply in all material respects with applicable Information Privacy and Security Laws and applicable Privacy Policies with respect to such Protected Information, and (ii) take commercially reasonable steps, consistent with Company’s best practices and applicable Information Privacy and Security Laws, to protect and secure Protected Information from unauthorized disclosure or use other than for the purposes specified in the agreement with Company or its Subsidiaries. Company and its Subsidiaries have taken commercially reasonable measures, consistent with industry best practices, to ensure that all such third-party Providers have complied in all material respects with their contractual obligations. 

(i)none of the Parent, Merger Sub or any of their respective Subsidiaries (or any other Person) makes, or has made, any representation or warranty relating to the Parent, Merger Sub, their respective Subsidiaries or any of their businesses, operations or otherwise in connection with this Agreement or the Merger; 

(ii)no Person has been authorized by the Parent, Merger Sub or any of their respective Subsidiaries, or any of their respective Affiliates or Representatives, to make any representation or warranty relating to the Parent, Merger Sub and their respective Subsidiaries or any of their businesses or operations or otherwise in connection with this Agreement or the Merger, and if made, such representation or warranty must not be relied upon by the Company, its Subsidiaries, or any of their respective Affiliates or Representatives as having been authorized by the Parent, Merger Sub and their respective Subsidiaries, or any of their respective Affiliates or Representatives (or any other Person); and 

(iii)the representations and warranties made by the Parent and Merger Sub in this Agreement are in lieu of and are exclusive of all other representations and warranties, including any express or implied or as to merchantability or fitness for a particular purpose, and the Company hereby disclaims any other or implied representations or warranties, notwithstanding the delivery or disclosure to the Company, its Subsidiaries, or any of their respective Affiliates or Representatives of any documentation or other information (including any financial information, supplemental data or financial projections or other forward-looking statements). 

(b)No Reliance. The Company, on behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations and warranties expressly set forth in Article III and the representations and warranties of the Investor under the Equity Commitment Letter, it is not acting (including, as applicable, by entering into this Agreement or consummating the Merger) in reliance on: 

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(i)any representation or warranty, express or implied; 

(ii)any estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information provided or addressed to the Company, its Subsidiaries, or any of their respective Affiliates or Representatives; or 

(iii)the accuracy or completeness of any other representation, warranty, estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information. 

The Parent and Merger Sub, jointly and severally, represent and warrant to the Company that the statements contained in this Article III are true and correct.

(a)The Parent is a limited liability company validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite limited liability company power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted, and is duly qualified to do business and, where applicable as a legal concept, is in good standing as a foreign limited liability company in each jurisdiction in which the character of the properties it owns, operates or leases or the nature of its activities makes such qualification legally required, except for such failures to be so existing, qualified or in good standing, individually or in the aggregate, that would not reasonably be expected to have a Parent Material Adverse Effect.  The Parent has delivered or made available to the Company complete and correct copies of the certificate of formation of the Parent as amended through the date of this Agreement. 

(b)Merger Sub is a corporation validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted, and is duly qualified to do business and, where applicable as a legal concept, is in good standing as a foreign corporation in each jurisdiction in which the character of the properties it owns, operates or leases or the nature of its activities makes such qualification legally required, except for such failures to be so existing, qualified or in good standing, individually or in the aggregate, that would not reasonably be expected to have a Parent Material Adverse Effect.  The Parent has delivered or made available to the Company complete and correct copies of the certificate of incorporation, bylaws, or similar organizational documents as amended through the date of this Agreement, of Merger Sub. 

(a)Each of the Parent and Merger Sub has all requisite entity power and authority to enter into this Agreement and, subject to the approval of this Agreement by the Parent as the sole stockholder of Merger Sub, to consummate the transactions contemplated  

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hereby.  The execution and delivery of, and the consummation of the transactions contemplated by, this Agreement by the Parent and Merger Sub have been duly authorized by all necessary entity action on the part of each of the Parent and Merger Sub, subject to the approval of this Agreement by the Parent as the sole stockholder of Merger Sub.  This Agreement has been duly executed and delivered by each of the Parent and Merger Sub and, assuming the due authorization, execution and delivery of this Agreement by the Company, constitutes the valid and binding obligation of each of the Parent and Merger Sub, enforceable against each of them in accordance with its terms, subject to the Bankruptcy and Equity Exception.

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(d)No vote of the holders of any class or series of the Parent’s membership interests or other securities is necessary for the consummation by the Parent of the transactions contemplated by this Agreement. 

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(a)No Other Representations and Warranties. Each of the Parent and Merger Sub, on behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations and warranties expressly set forth in Article II: 

(i)neither the Company nor any of its Subsidiaries (or any other Person) makes, or has made, any representation or warranty relating to the Company, its Subsidiaries or any of their businesses, operations or otherwise in connection with this Agreement or the Merger; 

(ii)no Person has been authorized by the Company or any of its Subsidiaries, or any of their respective Affiliates or Representatives, to make any representation or warranty relating to the Company and its Subsidiaries or any of their businesses or operations or otherwise in connection with this Agreement or the Merger, and if made, such representation or warranty must not be relied upon by the Parent, Merger Sub or any of their respective Affiliates or Representatives as having been authorized by the Company and its Subsidiaries, or any of their respective Affiliates or Representatives (or any other Person); and 

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(iii)the representations and warranties made by the Company in this Agreement are in lieu of and are exclusive of all other representations and warranties, including any express or implied or as to merchantability or fitness for a particular purpose, and the Parent and Merger Sub hereby disclaim any other or implied representations or warranties, notwithstanding the delivery or disclosure to the Parent, Merger Sub or any of their respective Affiliates or Representatives of any documentation or other information (including any financial information, supplemental data or financial projections or other forward-looking statements). 

(b)No Reliance. Each of the Parent and Merger Sub, on behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations and warranties expressly set forth in Article II, it is not acting (including, as applicable, by entering into this Agreement or consummating the Merger) in reliance on: 

(i)any representation or warranty, express or implied; 

(ii)any estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information provided or addressed to the Parent, Merger Sub or any of their respective Affiliates or Representatives, including any materials or information made available in the electronic data room hosted by or on behalf of the Company in connection with the Merger, in connection with presentations by the Company’s management or in any other forum or setting; or 

(iii)the accuracy or completeness of any other representation, warranty, estimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information. 

(a)(i) declare, set aside, make or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the  

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Company to its parent), (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other of its securities or any rights, warrants or options to acquire any such shares or other securities, except, in the case of this clause (iii), for the acquisition of shares of Company Common Stock (A) from holders of Company Stock Options (which are outstanding as of the date of this Agreement) in full or partial payment of the exercise price and in accordance with the terms thereof as they exist on the date of this Agreement, (B) from holders of Company Stock Options or Company RSUs (in each case which are outstanding as of the date of this Agreement) in full or partial payment of any applicable Taxes payable by such holder upon exercise or settlement thereof, as applicable, to the extent required under the terms thereof as they exist on the date of this Agreement or (C) from former employees, directors and consultants as required by agreements existing as of the date of this Agreement providing for the repurchase of shares at their original issuance price or forfeiture of shares for no consideration in accordance with the terms thereof as they exist on the date of this Agreement, in each case, under this clause (C) in connection with any termination of services to the Company or any of its Subsidiaries;

(c)amend the Company’s or any of its Subsidiaries’ certificate of incorporation, bylaws or other comparable charter or organizational documents; 

(d)acquire, or cause any acquisition of, any assets, rights or properties, including by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or make any capital expenditures or other expenditures with respect to property, plant or equipment, in any such case in respect of any of the foregoing, except for purchases of assets in an aggregate amount not to exceed $20,000; 

(e)sell, lease, license (or sublicense), pledge, mortgage or otherwise dispose of or subject to any Lien any properties, rights or assets of the Company or of any of its Subsidiaries other than sales of inventory and dispositions of obsolete equipment, in each case in the Ordinary Course of Business, and sales of other assets in an aggregate amount not to exceed $10,000; 

(f)(i) adopt any stockholder rights plan, (ii) adopt a plan of complete or partial liquidation, dissolution, recapitalization, restructuring or other reorganization or (iii) merge or consolidate with any Person; 

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(h)make any material changes in accounting methods, principles or practices, except insofar as may be required by a change in GAAP; 

(i)except as required by applicable Law or in order to comply with any Company Employee Plan in existence on the date hereof, (i) adopt, enter into, terminate or amend in a manner adverse to the Company or any of its Subsidiaries any employment, consulting, severance, retention, change in control, termination or similar agreement or arrangement with any of its directors, officers, employees or individual independent contractors, except (to the extent done in the Ordinary Course of Business) (A) entry into at-will offer letters with newly hired employees, which letters do not provide for any severance or change in control benefits (other than participation in the Company’s severance practices set forth in Section 4.1(i)(i) of the Company Disclosure Schedule as in effect on the date hereof (the “Company Severance Practices”) or (B) entry into customary separation agreements providing for a release by the applicable former employee and (if applicable) severance benefits consistent with the Company Severance Practices, (ii) hire any new employees or individual independent contractors, except (to the extent hired in the Ordinary Course Of Business) (A) non-executive employees, (B) individual independent contractors, and (C) employees with individual salaries or wages of less than $175,000 per year, (iii) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Employee Plan, except for amendments to Company Employee Plans that are welfare plans in the Ordinary Course of Business that do not (and will not after the Closing) increase in any material respect the cost to the Company or any of its Subsidiaries of maintaining such Company Employee Plans and that apply to substantially all Company Employees, (iv) increase the compensation, benefits, severance or termination pay of (or accelerate payment or vesting of), or pay or award any bonus or other incentive compensation to, any director, officer, employee or individual independent contractor (except for  

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(A) payment of bonuses consistent with arrangements existing as of the date hereof disclosed in Section 4.1(i)(ii) of the Company Disclosure Schedule, (B) customary salary increases in amounts in the Ordinary Course of Business in connection with promotions made in the Ordinary Course of Business of employees with individual salaries or wages of less than $175,000 per year, (C) bonus opportunities in amounts in the Ordinary Course of Business that are granted in the Ordinary Course of Business, in each case, to new hires permitted under clause (ii) above (excluding any change of control or similar transaction related bonuses), and (D) in the case of individual independent contractors, for rate increases in the Ordinary Course of Business), (v) grant any stock options, restricted stock units, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or (vi) terminate the employment of any employee or individual independent contractor whose total annual compensation exceeds $175,000, other than for cause;

(k)knowingly relinquish, abandon or permit to lapse any of its rights in any material registered Intellectual Property; 

(l)except as permitted by and in accordance with Section 5.12, settle any Action, other than the settlement of any Action (but not a criminal Action) (i) for an amount not in excess of the amount reserved with respect to such matter in the Company Balance Sheet included in the Company SEC Reports filed prior to the date hereof or (ii) that requires payments by the Company (net of insurance proceeds received) in an amount not to exceed, individually or in the aggregate, $25,000, and in each case that does not involve any admission of wrongdoing or injunctive or other equitable relief; 

(m)make, revoke or change any material Tax election, adopt or change any accounting method for Tax purposes that has a material effect on Taxes, extend the statute of limitations (or file any extension request) relating to material Taxes with any Governmental Entity, amend any material Tax Return, or settle or compromise any material Tax liability;  

(n)fail to maintain in full force and effect in all material respects each insurance policy set forth in Section 2.22 of the Company Disclosure Schedule, or fail to report any material claims or potential material claims to its insurance carriers in accordance with the terms of such policies; or 

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(o)authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions. 

(a)Go-Shop Period.  Notwithstanding anything to the contrary set forth in this Agreement, during the period (the “Go-Shop Period”) beginning on the date of this Agreement and continuing until 11:59 p.m. Eastern time on the 30^th day after the date hereof (the “Initial No-Shop Period Start Date”), or continuing until 11:59 p.m. Eastern time on the 35^th day after the date hereof with respect to an Excluded Party (the “Excluded Party No-Shop Period Start Date”, and, together with the Initial No-Shop Period Start Date, the “No-Shop Period Start Date”), the Company and its Affiliates and their respective Representatives shall have the right to:  (i) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, could constitute or could reasonably be expected to lead to, an Acquisition Proposal; (ii) subject to the entry into, and solely in accordance with, an Acceptable Confidentiality Agreement, furnish to any Third Person (and its Representatives subject to the terms and obligations of such Acceptable Confidentiality Agreement applicable to such Third Person) any non-public information relating to the Company, its Subsidiaries or any of its Affiliates or afford to any such Third Person (and such Representatives) access to the business, properties, assets, books, records or other non-public information, or to any Personnel, of the Company and its Subsidiaries, in any such case with the intent to induce the making, submission or announcement of, an Acquisition Proposal or any inquiries or the making of any proposal that could reasonably be expected to lead to an Acquisition Proposal, provided, however, that (A) the Company will promptly (and in any event within 24 hours) provide to the Parent, or provide the Parent access to, any such non-public information concerning the Company and its Subsidiaries that is provided to any such Third Person or its Representatives that was not previously provided to the Parent or its Representatives and (B) each of the Company, its Subsidiaries and its Affiliates shall not provide (and shall not permit any of their respective Representatives to provide) any competitively sensitive non-public information to any Third Person who is or whose Affiliates are currently a competitor of the Company, its Subsidiaries or any of its Affiliates in connection with the actions permitted by this Section 5.1(a), except in accordance with customary “clean room” or other similar procedures; and (iii) participate or engage in discussions or negotiations with any Third  

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Person (and its Representatives) with respect to any proposal or inquiry that constitutes, could constitute or could reasonably be expected to lead to, an Acquisition Proposal, and cooperate with, assist or participate in, or facilitate in any way, such proposals or inquiries or any effort or attempt to make any proposal or inquiry that constitutes, could constitute or could reasonably be expected to lead to, an Acquisition Proposal, including by granting any waiver, amendment or release under any “standstill provision” or similar obligation of any Third Person with respect to the Company and its Subsidiaries to allow such Third Person to submit or amend an Acquisition Proposal to the Company Board (or any committee thereof).

(b)No Solicitation or Negotiation.  Subject to the terms of this Section 5.1, from the No-Shop Period Start Date until the earlier to occur of the termination of this Agreement pursuant to Article VII and the Effective Time, the Company will, and will cause its Subsidiaries and its and their respective officers and directors to, and will instruct and cause each of its other Representatives to, cease and cause to be terminated any discussions or negotiations with any Person and its Representatives that would be prohibited by this Section 5.1(b), request the prompt return or destruction of all non-public information concerning the Company and its Subsidiaries theretofore furnished to any such Third Person (and such Third Person’s Representatives) with whom a confidentiality agreement with respect to an Acquisition Proposal was entered into at any time within the six-month period immediately preceding the No-Shop Period Start Date and will (A) cease providing any further information with respect to the Company and its Subsidiaries or any Acquisition Proposal to any such Third Person or its Representatives; and (B) terminate all access granted to any such Third Person and its Representatives to any physical or electronic data room (or any other diligence access). Subject to the terms of Section 5.1(c), from the No-Shop Period Start Date until the earlier to occur of the termination of this Agreement pursuant to Article VII and the Effective Time, the Company and its Subsidiaries will not instruct, authorize or knowingly permit any of their officers and directors or any of their other Representatives to, directly or indirectly, (i) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; (ii) furnish to any Third Person (other than to the Parent, Merger Sub or any designees of the Parent or Merger Sub, or any of their respective Representatives) any non-public information relating to the Company, its Subsidiaries or Affiliates or afford to any Third Person access to the business, properties, assets, books, records or other non-public information, or to any Personnel, of the Company, its Subsidiaries or Affiliates (other than to the Parent, Merger Sub or any designees of the Parent or Merger Sub, or any of their respective Representatives), in any such case with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an Acquisition Proposal or any inquiries or the making of any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal; (iii) participate or engage in discussions, communications or negotiations with any Third Person with respect to an Acquisition Proposal (other than informing such Third Persons of the provisions contained in this Section 5.1); (iv) approve, endorse or recommend any proposal that constitutes or could reasonably be expected to lead to, an Acquisition Proposal; or (v) enter into any letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement or other Contract relating to an Acquisition Proposal, other than an Acceptable Confidentiality Agreement (any such letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement or other Contract relating to an Acquisition Proposal (other than an Acceptable Confidentiality Agreement), an  

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“Alternative Acquisition Agreement”).  From the No-Shop Period Start Date until the earlier to occur of the termination of this Agreement pursuant to Article VII and the Effective Time, the Company will be required to enforce, and will not be permitted to waive, terminate or modify, any provision of any standstill or confidentiality agreement that prohibits or purports to prohibit a proposal being made to the Company Board (or any committee thereof) (unless the Company Board has determined in good faith, after consultation with its outside counsel, that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable Law).

(d)No Change in Company Board Recommendation or Entry into an Alternative Acquisition Agreement. Except as provided in Section 5.1(e), at no time after the date hereof (or, in the case of clause (i)(C) immediately below, after the No-Shop Period Start Date) may the Company Board (or a committee thereof): 

(i)(A) withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the Company Board Recommendation, in each case, in a manner adverse to the Parent in any material respect (it being understood that it shall be considered a modification adverse to the Parent that is material if (1) any Acquisition Proposal structured as a tender or exchange offer is commenced and the Company Board fails to publicly recommend against acceptance of such tender or exchange offer by the stockholders of the Company within ten Business Days of commencement thereof pursuant to Rule 14d-2 of the Exchange Act or (2) any Acquisition Proposal is publicly  

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announced (other than by the commencement of a tender or exchange offer) and the Company Board fails to issue a public press release within ten Business Days of such public announcement providing that the Company Board reaffirms the Company Board Recommendation); (B) adopt, approve, endorse, recommend or otherwise declare advisable (or propose to adopt, approve, endorse, recommend or otherwise declare advisable) an Acquisition Proposal; (C) fail to publicly reaffirm the Company Board Recommendation within ten Business Days after the Parent so requests in writing (it being understood that the Company will have no obligation to make such reaffirmation on more than three separate occasions); (D) take or fail to take any formal action or make or fail to make any recommendation or public statement in connection with a tender or exchange offer, other than a recommendation against such offer; or (E) fail to include the Company Board Recommendation in the Proxy Statement (any action described in clauses (A) through (E), a “Company Board Recommendation Change”); provided, however, that, for the avoidance of doubt, none of (1) a “stop, look and listen” communication by the Company Board (or a committee thereof) to the stockholders of the Company pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication), (2) the factually accurate public disclosure by the Company of the receipt of an Acquisition Proposal, (3) the determination by the Company Board (or a committee thereof) that an Acquisition Proposal constitutes a Superior Proposal, or (4) the delivery by the Company to the Parent of any notice contemplated by Section 5.1(e) will constitute a Company Board Recommendation Change; or

(ii)cause or permit the Company or any of its Subsidiaries to enter into an Alternative Acquisition Agreement. 

(e)Company Board Recommendation Change; Entry into Alternative Acquisition Agreement.  Notwithstanding anything to the contrary set forth in this Agreement, at any time prior to obtaining the Company Stockholder Approval: 

(i)the Company Board (or a committee thereof) may effect a Company Board Recommendation Change in response to any positive material event or development or material change in circumstances that in any such case is material to the Company and its Subsidiaries taken as a whole that was (A) not known to, or reasonably foreseeable by, the Company Board on the date hereof and that becomes known to the Company Board prior to the receipt of the Company Stockholder Approval; and (B) does not relate to (x) any Acquisition Proposal or any matter relating thereto or consequence thereof, or (y) the mere fact, in and of itself, that the Company meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics for any period ending on or after the date hereof, or changes after the date hereof in the market price or trading volume of the Company Common Stock or the credit rating of the Company (it being understood that the underlying cause of any of the foregoing in this clause (y) may be considered and taken into account) (each such event, an “Intervening Event”), if the Company Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to do so would be inconsistent with its fiduciary duties pursuant to applicable Law and if and only if: 

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that the Company Board (or a committee thereof) intends to effect a Company Board Recommendation Change pursuant to this Section 5.1(e)(i), which notice will specify the basis for such Company Board Recommendation Change, including a description of the Intervening Event in reasonable detail;

(b)prior to effecting such Company Board Recommendation Change, during the Event Notice Period, (A) the Company and its Representatives must have negotiated with the Parent and its Representatives and/or the Investor in good faith (to the extent that the Parent desires to so negotiate) to allow the Parent and/or the Investor to offer such adjustments to the terms and conditions of this Agreement and/or the Equity Commitment Letter to obviate the need to effect a Company Board Recommendation Change in response to such Intervening Event; and (B) the Company Board shall have taken into account any adjustments to the terms and conditions of this Agreement and/or the Equity Commitment Letter proposed by the Parent and/or the Investor and other information provided by the Parent and/or the Investor in respect to the notice described in clause (a) of this Section 5.1(e)(i), in each case, that are offered in writing by the Parent and/or the Investor by no later than 11:59 p.m., Eastern time, on the last day of the Event Notice Period; and 

(ii)if the Company has received a bona fide Acquisition Proposal, whether during the Go-Shop Period or after the No-Shop Period Start Date, that the Company Board (or a committee thereof) has concluded in good faith (after consultation with its financial advisor and outside legal counsel) is a Superior Proposal, then the Company Board may (A) effect a Company Board Recommendation Change with respect to such Superior Proposal; or (B) authorize the Company to terminate this Agreement pursuant to Section 7.1(h) to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal substantially concurrently with the termination of this Agreement; provided, however, that the Company Board (or a committee thereof) shall not take any action described in the foregoing clauses (A) or (B) unless: 

(a)the Company Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to do so would be inconsistent with its fiduciary duties pursuant to applicable Law; 

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(b)the Company and its Subsidiaries and their respective Representatives have complied in all material respects with their obligations pursuant to this Section 5.1 with respect to such Acquisition Proposal; 

(c)(i) the Company has provided prior written notice to the Parent at least five Business Days in advance (the “Notice Period”) to the effect that the Company Board (or a committee thereof) has (A) received a bona fide Acquisition Proposal that has not been withdrawn; (B) concluded in good faith that such Acquisition Proposal constitutes a Superior Proposal; and (C) resolved to effect a Company Board Recommendation Change or to terminate this Agreement pursuant to this Section 5.1(e)(ii) absent any revision to the terms and conditions of this Agreement, which notice will specify the basis for such Company Board Recommendation Change or termination, including the identity of the Person or “group” of Persons making such Acquisition Proposal, the material terms thereof and copies of all relevant documents relating to such Acquisition Proposal; and (ii) prior to effecting such Company Board Recommendation Change or termination, the Company and its Representatives, during the Notice Period, must have (1) negotiated with the Parent and its Representatives and/or the Investor in good faith (to the extent that the Parent desires to so negotiate) to make such adjustments to the terms and conditions of this Agreement and/or the Equity Commitment Letter so that such Acquisition Proposal would cease to constitute a Superior Proposal; and (2) permitted the Parent and its Representatives to make a presentation to the Company Board regarding, and taken into account any adjustments to the terms and conditions of, this Agreement and/or the Equity Commitment Letter proposed by the Parent and/or the Investor and other information provided by the Parent and/or the Investor during the Notice Period, in each case, that are offered in writing by the Parent and/or the Investor by no later than 11:59 p.m., Eastern time, on the last day of the Notice Period; provided, however, that in the event of any material revisions to such Acquisition Proposal (it being understood that any change to the material financial terms of such proposal shall be deemed a material revision (a “Material Revision”)), the Company will be required to deliver a new written notice to the Parent and to comply with the requirements of this Section 5.1(e)(ii)(c) (other than the requirement of a presentation as contemplated by clause (ii)(2) above) with respect to such new written notice (it being understood that the Notice Period in respect of such new written notice will be three Business Days);  

(d)following such Notice Period, including any subsequent Notice Period with respect to a Material Revision as provided in the foregoing clause (c), the Company Board (or a committee thereof) (after consultation with its financial advisor and outside legal counsel and taking into account the Parent’s and/or the Investor’s proposed revisions (if any) to the terms and conditions of this Agreement and/or the Equity Commitment Letter) shall have determined that the Acquisition Proposal continues to be a Superior Proposal, and in the case of a Company Board Recommendation Change, that the failure to effect such Company Board Recommendation Change would be inconsistent with its fiduciary duties pursuant to applicable Law; and  

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(e)in the event of any termination of this Agreement in order to cause or permit the Company or any of its Subsidiaries to enter into an Alternative Acquisition Agreement with respect to such Acquisition Proposal, the Company will have validly terminated this Agreement in accordance with Section 7.1(h), including paying the Company Termination Fee in accordance with Section 7.3(b)(iii). 

(f)Notice. From the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VII and the Effective Time, the Company will promptly (and, in any event, within one Business Day) notify the Parent if any inquiries, offers or proposals that constitute or would reasonably be expected to lead to an Acquisition Proposal are received by, any non-public information is requested from, or any discussions or negotiations are sought to be initiated or continued with, the Company, any of its Subsidiaries or any of their respective Representatives.  Such notice must include (i) the identity of the Third Person or “group” of Persons making such inquiries, offers or proposals (unless, in each case, such disclosure is prohibited pursuant to the terms of any confidentiality agreement with such Third Person or “group” of Persons that is in effect on the date of this Agreement); and (ii) a summary of the material terms and conditions of such inquiries, offers or proposals.  Thereafter, the Company must keep the Parent reasonably informed, on a prompt basis, of the status (and supplementally provide the terms) of any such inquiries, offers or proposals (including any amendments thereto) and the status of any such discussions or negotiations. 

(g)Certain Disclosures. Nothing in this Agreement will prohibit the Company or the Company Board (or a committee thereof) from (i) taking and disclosing to the stockholders of the Company a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or complying with Rule 14d-9 promulgated under the Exchange Act, including a “stop, look and listen” communication by the Company Board (or a committee thereof) to the stockholders of the Company pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication); (ii) complying with Item 1012(a) of Regulation M-A promulgated under the Exchange Act; (iii) informing any Person of the existence of the provisions contained in this Section 5.1; or (iv) making any disclosure to the stockholders of the Company (including regarding the business, financial condition or results of operations of the Company and its Subsidiaries) that the Company Board (or a committee thereof) has determined to make in good faith in order to comply with applicable Law, regulation or stock exchange rule or listing agreement, it being understood that any such statement or disclosure made by the Company Board (or a committee thereof) pursuant to this Section 5.1(g) must be subject to the terms and conditions of this Agreement and will not limit or otherwise affect the obligations of the Company or the Company Board (or any committee thereof) and the rights of the Parent under this Section 5.1, it being understood that nothing in the foregoing will be deemed to permit the Company or the Company Board (or a committee thereof) to effect a Company Board Recommendation Change other than in accordance with Section 5.1(e).  In addition, it is understood and agreed that, for purposes of this Agreement, a factually accurate required public statement by the Company or the Company Board (or a committee thereof) that solely describes the Company’s receipt of an Acquisition Proposal, the identity of the Person making such Acquisition Proposal, the material terms of such Acquisition Proposal and the operation of this Agreement with respect thereto will not be deemed to be (A) a withholding, withdrawal, amendment or modification, or proposal by the Company Board (or a committee thereof) to withhold, withdraw, amend or modify, the Company Board Recommendation; (B) an adoption,  

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approval or recommendation with respect to such Acquisition Proposal; or (C) a Company Board Recommendation Change.

(h)Breach by Representatives. The Company agrees that any material breach of this Section 5.1 by any of its Representatives will be deemed to be a breach of this Agreement by the Company. 

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under the Exchange Act, as promptly as reasonably practicable following such 10^th calendar day), the Company, acting through the Company Board, shall duly call, give notice of, convene and hold the Company Meeting for the purpose of obtaining the Company Stockholder Approval and, if applicable, the advisory vote required by Rule 14a-21(c) under the Exchange Act in connection therewith; provided, however, that the Company Board shall be permitted to adjourn, delay or postpone the Company Meeting in accordance with applicable Law (but not beyond the Termination Date) (i) if the Company Board has determined in good faith after consultation with outside counsel that the failure to so adjourn, delay or postpone the Company Meeting would be reasonably likely to be inconsistent with its fiduciary duties under applicable Law, (ii) to the extent necessary to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Company Board has determined in good faith after consultation with outside counsel is reasonably likely to be necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by the Company’s stockholders prior to the Company Meeting or (iii) if there are insufficient shares of Company Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Company Meeting.  Except to the extent that the Company Board shall have effected a Company Board Recommendation Change in accordance with Section 5.1(e), the Company, through the Company Board, shall (A) recommend to its stockholders that they approve this Agreement and the Merger (the “Company Board Recommendation”) and (B) include such recommendation in the Proxy Statement.

(c)Approval by Sole Stockholder of Merger Sub. Immediately following the execution and delivery of this Agreement, the Parent, as sole stockholder of Merger Sub, shall adopt this Agreement and approve the Merger, in accordance with the DGCL. 

(b)During the Pre-Closing Period, notwithstanding anything in the Confidentiality Agreement to the contrary, the Company shall (and shall cause each of its Subsidiaries to) afford to the Parent and the Parent’s Representatives, reasonable access, upon reasonable notice, during normal business hours and in a manner that does not unreasonably disrupt or interfere with business operations, to all of its employees (subject to this Section 5.4(b)), properties, books, contracts and records as the Parent shall reasonably request, and, during such period, the Company shall (and shall cause each of its Subsidiaries to) furnish promptly to the Parent (i) a copy of each report, schedule, registration statement and other  

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document filed or received by it during such period pursuant to the requirements of federal or state securities Laws and (ii) all other information concerning its employees (subject to this Section 5.4(b)), business, properties and assets as the Parent may reasonably request; provided, however, that the Company shall not be required to permit any inspection or other access, or to disclose any information, (A) to the extent related to an Acquisition Proposal (except as otherwise required by the terms of this Agreement), or (B) that in the reasonable judgment of the Company (after consultation with outside legal counsel) would: (1) violate any legal requirement or contract (including confidentiality provisions thereof), or (2) jeopardize protections afforded the Company under the attorney-client privilege or the attorney work product doctrine (so long as in connection with this clause (B) the Company has used commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure, to the extent permitted by applicable Law and practicable under the circumstances); provided that any communications by the Parent or its Representatives with employees of the Company or its Subsidiaries (including with respect to employment terms) shall not require any notice if such communications are with any of the persons set forth on Section 5.4(b) of the Company Disclosure Schedule (or any other employees authorized by the Chief Executive Officer or the Chief Financial Officer of the Company).  Any such information shall be subject to the Confidentiality Agreement.  Notwithstanding anything in the Confidentiality Agreement to the contrary, during the Pre-Closing Period, neither the Parent nor Merger Sub shall (and each shall cause its Affiliates and Representatives not to) contact or communicate with any of the employees (other than the employee set forth on Section 5.4(b) of the Company Disclosure Schedule), licensors, customers or vendors of the Company or any of its Subsidiaries after providing notice to the Company, without the prior written consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed, except that the Company shall have the right to have the Company’s representative present at such meeting), it being understood that (I) the Company will cooperate in good faith with the Parent to arrange for an appropriate response to unsolicited outreach to the Parent or any of its Affiliates or Representatives by such licensors, customers or vendors (which response shall include, at the Company’s request, a representative of the Company), and (II) this Section 5.4(b) shall not prohibit the Parent or any of its Affiliates or Representatives from contacting such licensors, customers or vendors in the Ordinary Course of Business if such contacts are unrelated to this Agreement and the transactions contemplated hereby.

(c)At the Effective Time, the Confidentiality Agreement will automatically terminate and be of no further force or effect, without any further action of the Parties or any other parties thereto. 

(a)Subject to the terms hereof, each party hereto shall each use its reasonable best efforts to: 

(i)take, or cause to be taken, all actions, and do, or cause to be done, and to assist and cooperate with the other parties hereto in doing, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby as promptly as practicable; 

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(ii)as promptly as practicable, obtain any consents, licenses, permits, waivers, approvals, authorizations, or orders required to be obtained by such party (or any of its Subsidiaries) from any Governmental Entity or third party (including, with respect to the Company, those set forth on Section 2.4(b)(ii) of the Company Disclosure Schedule) in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; provided, however, that in no event shall the Parent, Merger Sub, the Company or any of their respective Subsidiaries be required to pay any monies (except for filings or similar fees) or agree to any material undertaking in connection with any of the foregoing; 

(iii)as promptly as practicable, make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement and the Merger required under (A) the Exchange Act, and any other applicable federal or state securities Laws, and (B) any other applicable Law; 

(v)execute or deliver any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. 

(b)Subject to the terms hereof, and without limiting the Parent’s obligations under Section 5.5(c), the parties hereto shall, and shall cause each of their respective Subsidiaries to, cooperate and use their respective reasonable best efforts to obtain any government clearances or approvals required for the Closing under any Antitrust Law, to respond to any government requests for information under any Antitrust Law, to cause any waiting periods under any applicable Antitrust Laws to expire or be terminated, and to contest and resist any action, including any legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any Restrictive Order.  The parties hereto shall consult and cooperate with one  

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another, and consider in good faith the views of one another, in connection with, and provide to the other parties in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to any Antitrust Law.  To the extent permitted by law or any Governmental Entity reviewing the transactions contemplated by this Agreement, the parties will provide each other the opportunity to participate in meetings and other substantive conversations with any such Governmental Entity.

(c)Notwithstanding anything to the contrary in this Agreement, the Parent shall propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of such assets or businesses of the Parent or, effective as of the Effective Time, the Surviving Corporation, or their respective Subsidiaries, or otherwise offer to take or offer to commit to take any action which it is capable of taking and if the offer is accepted, take or commit to take such action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, services or assets of the Parent, the Surviving Corporation or their respective Subsidiaries, in order to avoid the entry of, or to effect the dissolution of, any Restrictive Order challenging any of the transactions contemplated hereby as violative of any Antitrust Law, which would have the effect of preventing or delaying the Closing beyond the Termination Date; provided, however, that neither the Parent nor Merger Sub shall be required to take, or to cause the Surviving Corporation to take, any of the actions under this Section 5.5(c) or any other provision of Section 5.5 that would reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect or a material adverse effect on the business, financial condition or results of operations of the Parent and its Affiliates. 

(a)From and after the Effective Time through the six-year anniversary of the date on which the Effective Time occurs, the Parent and the Surviving Corporation shall, jointly and severally, indemnify and hold harmless each Indemnified Party against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, Action or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that the Indemnified Party is or was an officer, director, manager, employee or agent of the Company or any of its Subsidiaries or, while a director, manager or officer of the Company or any of its Subsidiaries, is or was serving at the request of the Company or one of its Subsidiaries as an officer, director, manager, employee or agent of another Person, in respect of acts or omissions occurring or alleged to have occurred at or prior to the Effective Time, whether  

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asserted or claimed prior to, at or after the Effective Time, in each case to the fullest extent that the Company would have been permitted to do so under applicable Law. Each Indemnified Party will be entitled to advancement of reasonable expenses (including reasonable attorneys’ fees) incurred in the defense of any such claim, Action or investigation from each of the Parent and the Surviving Corporation (without duplication) within ten Business Days of receipt by the Parent or the Surviving Corporation from the Indemnified Party of a request therefor; provided that any Indemnified Party to whom expenses are to be advanced provides prior to any receipt of such advances an undertaking, to the extent required by the DGCL or other applicable Law, to repay such advances if it is determined by a final determination of a court of competent jurisdiction (which determination is not subject to appeal) that such Indemnified Party is not entitled to indemnification under applicable Law.

(c)Subject to the next sentence, the Surviving Corporation shall either (i) maintain, and the Parent shall cause the Surviving Corporation to maintain, at no expense to the beneficiaries, in effect for six years from the Effective Time the Current D&O Insurance with respect to matters existing or occurring at or prior to the Effective Time (including the transactions contemplated by this Agreement), or (ii) purchase a Reporting Tail Endorsement and maintain such endorsement in full force and effect for its full term, provided that in the case of clause (i) and clause (ii), the Surviving Corporation shall not be required to pay an annual premium in excess of the Maximum Premium.  If the Company’s or the Surviving Corporation’s existing insurance expires, is terminated or cancelled during such six-year period or exceeds the Maximum Premium, or (if applicable) if the Reporting Tail Endorsement would exceed the Maximum Premium, the Surviving Corporation shall obtain, and the Parent shall cause the Surviving Corporation to obtain, as much directors’ and officers’ liability insurance (or coverage under a Reporting Tail Endorsement, if applicable) as can be obtained for the remainder of such period for an annualized premium not in excess of the Maximum Premium, on terms and conditions substantially comparable, in the aggregate, to the Indemnified Parties under the Current D&O Insurance. 

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(e)In the event the Parent or the Surviving Corporation or any of its respective successors or assigns (in the case of a transfer of all or substantially all of the Parent’s or the Surviving Corporation’s properties and assets), (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns (in the case of a transfer of all or substantially all of the Parent’s or the Surviving Corporation’s properties and assets) of the Parent or the Surviving Corporation, as the case may be, shall expressly assume and succeed to the obligations set forth in this Section 5.7. 

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(a)Cooperation with Debt Financing. Prior to the Effective Time, the Company will use its reasonable best efforts to, and will use its reasonable best efforts to cause each of its Subsidiaries and its and their respective Representatives to, do the following: 

(i)providing the Parent and Merger Sub with such reasonable cooperation as may be reasonably requested by the Parent or Merger Sub to assist them in arranging the debt financing (if any) to be obtained by the Parent, Merger Sub or their respective Affiliates in connection with the Merger (the “Debt Financing”); 

(ii)participating (and causing senior management and Representatives, with appropriate seniority and expertise, of the Company to participate) in a reasonable number of meetings and presentations with actual or prospective lenders, road shows and due diligence sessions, drafting sessions and sessions with rating agencies, and otherwise cooperating with the marketing and due diligence efforts for any of the Debt Financing; 

(iii)assisting Parent and the Debt Financing Sources with the timely preparation of customary (A) rating-agency presentations, bank information memoranda, confidential information memoranda, lender presentations and similar documents required in connection with or proper for the Debt Financing or customarily used to arrange transactions  

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similar to the Debt Financing by companies of a comparable size in a comparable industry as the Company and its Subsidiaries, taken as a whole; and (B) pro forma financial statements and forecasts of financial statements of the Surviving Corporation for one or more periods following the Closing Date, in each case based on financial information and data derived from the Company’s historical books and records; provided, however, that the Company and its Subsidiaries will not be required to provide any information or assistance with respect to the preparation of pro forma financial statements and forecasts of financing statements relating to (i) the determination of the proposed aggregate amount of the Debt Financing, the interest rates thereunder or the fees and expenses relating thereto; (ii) the determination of any post-Closing or pro forma cost savings, synergies, capitalization, ownership or other pro forma adjustments desired to be incorporated into any information used in connection with the Debt Financing; or (iii) any financial information related to Parent or any of its Subsidiaries or any adjustments that are not directly related to the acquisition of the Company;

(iv)assisting Parent in connection with the preparation, registration, execution and delivery (but in the case of execution and delivery, solely to the extent any such execution and delivery would only be effective on or after the Closing Date) of any pledge and security documents, mortgages, currency or interest hedging arrangements and other definitive financing documents and certificates as may be reasonably requested by Parent or the Debt Financing Sources (including using reasonable best efforts to obtain, to the extent applicable, consents of accountants for use of their reports in any materials relating to the Debt Financing as reasonably requested by Parent), obtaining insurance certificates and endorsements, and facilitating the delivery of all stock and other certificates representing equity interests in the Company and its Subsidiaries to the extent required in connection with the Debt Financing, and otherwise reasonably facilitating the pledging of collateral and the grant of security interests in respect of the Debt Financing, it being understood that such documents will not take effect until the Effective Time; 

(v)furnishing the Parent, Merger Sub and the Debt Financing Sources, as promptly as practicable, with, to the extent customarily provided by companies of comparable size and comparable industry in transactions similar to the Debt Financing for a financing of the type being incurred, financial and other pertinent and customary information (and supplementing such information to the extent any such information contains any material misstatement of fact or omits to state a material fact necessary to make such information not misleading) regarding the Company and its Subsidiaries as may be reasonably requested by Parent or the Debt Financing Sources to the extent that such information is of the type and form customarily included in a bank confidential information memorandum in connection with the arrangement of financing similar to the Debt Financing or in rating agency presentations, lender presentations or other customary marketing materials; 

(vi)cooperating with Parent to obtain customary and reasonable corporate and facilities ratings, consents, landlord waivers and estoppels, non-disturbance agreements, environmental assessments, non-imputation affidavits, legal opinions, surveys and title insurance as reasonably requested by Parent, including in connection with any sale-and-leaseback agreements or arrangements to be effected at or after the Closing; 

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(vii)reasonably facilitating the grant of security interests (and perfection thereof) in collateral or the reaffirmation of the pledge of collateral on or after the Effective Time, and obtaining and delivering any pay-off letters and other cooperation in connection with the repayment or other retirement of existing indebtedness required to be repaid at the Closing and the release and termination of any and all related liens on or prior to the Effective Time; 

(viii)delivering notices of prepayment within the time periods required by the relevant agreements governing indebtedness and obtaining customary payoff letters, lien terminations and instruments of discharge to be delivered at the Closing, giving any other necessary notices, to allow for the payoff, discharge and termination in full at the Closing of all indebtedness of the Company and its Subsidiaries (or such portions or items thereof as Parent elects) to have repaid at the Closing; and cooperating in the replacement, backstop or cash collateralization of any outstanding letters of credit issued for the account of the Company or any of its Subsidiaries; 

(ix)providing customary authorization letters, confirmations and undertakings to the Debt Financing Sources authorizing the distribution of information to prospective lenders or investors and containing a representation to the Debt Financing Sources that the information pertaining to the Company and its Subsidiaries and based on financial information and data derived from the Company’s historical books and records contained in the disclosure and marketing materials related to the Debt Financing is complete and correct in all material respects and that the public side versions of such documents, if any, do not include material non-public information about the Company or its Subsidiaries or securities; provided, however, that all such materials have been previously identified to, and provided to, the Company); 

(x)facilitating and assisting in the preparation, execution and delivery of one or more credit agreements, guarantees, certificates and other definitive financing documents as may be reasonably requested by Parent (including furnishing all information relating to the Company and its Subsidiaries and their respective businesses to be included in any schedules thereto or in any perfection certificates); provided that the foregoing documentation shall be subject to the occurrence of the Closing Date and become effective no earlier than the Closing Date; 

(xi)taking all corporate and other actions, subject to the occurrence of the Closing, reasonably requested by the Parent to (A) permit the consummation of the Debt Financing (including distributing the proceeds of the Debt Financing, if any, obtained by any Subsidiary of the Company to the Surviving Corporation); and (B) cause the direct borrowing or incurrence of all of the proceeds of the Debt Financing by the Surviving Corporation or any of its Subsidiaries concurrently with or immediately following the Effective Time; 

(xii)promptly (but in no event later than three Business Days prior to the Closing Date) furnishing Parent and the Debt Financing Sources with all documentation and other information about the Company and its Subsidiaries as is reasonably requested by Parent or the Debt Financing Sources relating to applicable “know your customer” and anti-money  

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laundering rules and regulations, including the USA PATRIOT Act, to the extent requested in writing at least seven Business Days prior to the Closing Date; and

(xiii)cooperating in satisfying the conditions precedent set forth in the definitive agreements relating to the Debt Financing to the extent satisfaction thereof requires the cooperation, or is within the control, of the Company, its Subsidiaries or their respective Representatives. 

(b)Obligations of the Company. Nothing in this Section 5.13 will require the Company to (i) waive or amend any terms of this Agreement or agree to pay any fees or reimburse any expenses prior to the Effective Time for which it has not received prior reimbursement or is not otherwise indemnified by or on behalf of Parent; (ii) enter into any definitive agreement or distribute any cash (except to the extent subject to concurrent reimbursement by Parent) that will be effective prior to the Closing Date; (iii) give any indemnities in connection with the Debt Financing effective prior to the Effective Time; (iv) take any action that, in the good-faith determination of the Company, would unreasonably interfere with the conduct of the business of the Company and its Subsidiaries or create an unreasonable risk of damage or destruction to any property or assets of the Company and its Subsidiaries; or (v) take any action that will conflict with or violate its organizational documents or any applicable Laws or would result in a material violation or breach of, or default under, any material agreement to which the Company or any of its Subsidiaries is a party. In addition, any bank information memoranda required in relation to the Debt Financing will contain disclosure reflecting the Surviving Corporation or its Subsidiaries as the obligor. Nothing in this Section 5.13 will require (1) any officer or Representative of the Company or any of its Subsidiaries to deliver any certificate or opinion or take any other action under this Section 5.13 that could reasonably be expected to result in personal liability to such officer or Representative; or (2) the Company Board to approve any financing or Contracts related thereto, effective prior to the Closing Date. 

(c)Use of Logos. The Company hereby consents to the use of its and its Subsidiaries’ logos in connection with the Debt Financing so long as such logos (i) are used solely in a manner that is not intended to or likely to harm or disparage the Company or any of its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries; (ii) are used solely in connection with a description of the Company, its business and products or the Merger; and (iii) are used in a manner consistent with the other terms and conditions that the Company reasonably imposes. 

(d)Confidentiality. All non-public or other confidential information provided by the Company or any of its Representatives pursuant to this Agreement will be kept confidential in accordance with the Confidentiality Agreement, except that the Parent and Merger Sub will be permitted to disclose such information to any Debt Financing Sources or prospective Debt Financing Sources and other financial institutions and investors that may become parties to the Debt Financing (and, in each case, to their respective counsel and auditors) so long as such Persons, at the election of the Parent (i) agree to be bound by the Confidentiality Agreement as if parties thereto; or (ii) are subject to other confidentiality undertakings reasonably satisfactory to the Company and of which the Company is a beneficiary. 

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(e)Reimbursement. Promptly upon request by the Company, the Parent will reimburse the Company for any documented and reasonable out-of-pocket costs and expenses (including attorneys’ fees) incurred by the Company and its Subsidiaries in connection with the cooperation of the Company and its Subsidiaries contemplated by this Section 5.13.  The Parent and Merger Sub shall indemnify and hold harmless the Company, each of its Subsidiaries and their respective Representatives from and against all liabilities, losses, damages, claims, obligations, demands, damages, costs or expenses (including attorneys’ fees), interest, awards, judgments, penalties and amounts paid in settlement suffered or incurred by any of them in connection with the obligations of the Company and its Subsidiaries under this Section 5.13, or the provision of information utilized in connection therewith, except to the extent resulting from willful and material misconduct or fraud committed by or on behalf of the Company, its Subsidiaries or their respective Representatives.  The Parent’s obligations pursuant to this Section 5.13(e) are referred to collectively as the “Parent Reimbursement Obligations.” 

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such service under any similar Company Employee Plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply (i) to the extent that its application would result in a duplication of benefits, and (ii) for purposes of any equity or phantom equity plan or program adopted by the Parent, the Surviving Corporation or any of their respective Subsidiaries after the Closing.  The Parent shall use commercially reasonable efforts to cause the applicable  new plan to:  (x) waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such Company Employees, to the extent such pre-existing conditions, exclusions or waiting periods were satisfied under the similar Company Employee Plan in effect immediately prior to the Effective Time, and (y) provide each such Company Employee with credit for any co-payments and deductibles paid (to the same extent such credit was given for the year under the similar Company Employee Plan in effect immediately prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket requirements.

(d)With respect to any employment agreement to which the Company or any of its Subsidiaries is a party that provides, by its terms, that the term of the employment agreement will automatically renew (unless notice is given by a party to not renew), and for which the expiration of the period in which the Company would have to provide a notice to not renew would fall within 60 days prior to the anticipated Closing Date, the Company shall (i) use commercially reasonable efforts to enter into an amendment with the parties to each such employment agreement, which amendment would extend the period in which the Company (or both parties) would have to provide such a notice to 60 days after the anticipated Closing Date (and to correspondingly change the term of such agreement to end (if such a notice to not renew is ultimately delivered) 60 days after the anticipated Closing Date), and (ii) provide copies of any such amendment reasonably promptly to the Parent. 

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(a)Stockholder Approval.  The Company Voting Proposal shall have been approved by the Required Company Stockholder Vote. 

(c)the Company shall have received a certificate executed by an executive officer of the Parent, dated the Closing Date, confirming on behalf of the Parent and Merger Sub that the conditions set forth in Section 6.2(a) and Section 6.2(b) have been duly satisfied. 

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(where permissible pursuant to applicable Law) by the Parent (on behalf of the Parent and Merger Sub), at or prior to the Effective Time of each of the following conditions:

(c)the Parent and Merger Sub shall have received a certificate executed by an executive officer of the Company, dated the Closing Date, confirming on behalf of the Company that the conditions set forth in Section 6.3(a) and Section 6.3(b) have been duly satisfied. 

(a)at any time prior to the Effective Time (whether prior to or after the receipt of the Company Stockholder Approval) by mutual written consent of the Parent and the Company; 

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become final and non-appealable; or (ii) any statute, rule, regulation or order will have been enacted, entered, enforced or deemed applicable to the Merger that prohibits, makes illegal or enjoins the consummation of the Merger, provided that the right to terminate this Agreement pursuant to this Section 7.1(b) will not be available to any Party that has failed to use its reasonable best efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such injunction, action, statute, rule, regulation or order;

(e)by the Parent (whether prior to or after the receipt of the Company Stockholder Approval), if the Company has breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform would result in a failure of a condition set forth in Section 6.3(a) or Section 6.3(b) to be satisfied, except that if such breach or failure to perform is capable of being cured by the Termination Date, the Parent will not be entitled to terminate this Agreement pursuant to this Section 7.1(e) prior to the delivery by the Parent to the Company of written notice of such breach or failure to perform, delivered at least 30 days prior to such termination (or such shorter period of time as remains prior to the Termination Date, the shorter of such periods, the “Company Breach Notice Period”), stating the Parent’s intention to terminate this Agreement pursuant to this Section 7.1(e) and the basis for such termination, it being understood that the Parent will not be entitled to terminate this Agreement pursuant to this Section 7.1(e) if such breach or failure to perform has been cured within the Company Breach Notice Period (to the extent capable of being cured); 

(f)by the Parent, if at any time the Company Board (or a committee thereof) has effected a Company Board Recommendation Change (in which case, the Company shall provide the Parent with written notification of such Company Board Recommendation Change  

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within 24 hours after the occurrence of such Company Board Recommendation Change), except that the Parent’s right to terminate this Agreement pursuant to this Section 7.1(f) will expire at 5:00 p.m., Eastern time, on the tenth Business Day following the date on which the Company provided such written notice to the Parent of the Company Board Recommendation Change;

(g)by the Company (whether prior to or after the receipt of the Company Stockholder Approval), if the Parent or Merger Sub has breached or failed to perform any of its respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform would result in a failure of a condition set forth in Section 6.2(a) or Section 6.2(b) to be satisfied, except that if such breach or failure to perform is capable of being cured by the Termination Date, the Company will not be entitled to terminate this Agreement pursuant to this Section 7.1(g) prior to the delivery by the Company to the Parent of written notice of such breach or failure to perform, delivered at least 30 days prior to such termination (or such shorter period of time as remains prior to the Termination Date, the shorter of such periods, the “Parent Breach Notice Period”), stating the Company’s intention to terminate this Agreement pursuant to this Section 7.1(g) and the basis for such termination, it being understood that the Company will not be entitled to terminate this Agreement pursuant to this Section 7.1(g) if such breach or failure to perform has been cured within the Parent Breach Notice Period (to the extent capable of being cured); or 

(h)by the Company, at any time prior to receiving the Company Stockholder Approval if each of the following occurs: (i) the Company has received a Superior Proposal; (ii) the Company Board (or a committee thereof) has authorized the Company to enter into an Alternative Acquisition Agreement to consummate such Superior Proposal in accordance with Section 5.1; (iii) the Company has complied in all material respects with Section 5.1 with respect to such Superior Proposal; and (iv) as a condition to such termination, the Company pays the Company Termination Fee due to the Parent in accordance with Section 7.3(b)(iii). 

(a)Manner of Termination. The Party terminating this Agreement pursuant to Section 7.1 (other than pursuant to Section 7.1(a)) must deliver prompt written notice thereof to the other Parties setting forth in reasonable detail the provision of Section 7.1 pursuant to which this Agreement is being terminated and the facts and circumstances forming the basis for such termination pursuant to such provision. 

(b)Effect of Termination. Any proper and valid termination of this Agreement pursuant to Section 7.1 will be effective immediately upon the delivery of written notice by the terminating Party to the other Parties.  In the event of the termination of this Agreement pursuant to Section 7.1, this Agreement will be of no further force or effect without liability of any Party (or any partner, member, manager, stockholder, director, officer, employee, Affiliate, agent or other representative of such Party) to the other Parties, as applicable, except that Section 5.4(a), Section 5.6, this Section 7.2, Section 7.3, Article VIII and Article IX will each survive the termination of this Agreement in accordance with their respective terms. Notwithstanding the foregoing but subject to Section 7.3(f), nothing in this Agreement will relieve any Party from any liability for any fraud or Willful Breach prior to termination of this Agreement. For the avoidance of doubt, in the event of termination of this Agreement, the Debt  

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(a)General. Except as set forth in this Section 7.3, all fees and expenses incurred in connection with this Agreement and the Merger will be paid by the Party incurring such fees and expenses whether or not the Merger is consummated. For the avoidance of doubt, the Parent or the Surviving Corporation will be responsible for all fees and expenses of the Payment Agent. 

(b)Company Payment. 

(i)If (A) this Agreement is validly terminated pursuant to (I) Section 7.1(c), (II) Section 7.1(d), or (III) Section 7.1(e); (B) following the execution and delivery of this Agreement and prior to the termination of this Agreement pursuant to the immediately preceding clause (A), an Acquisition Proposal has been publicly announced or disclosed and not withdrawn or otherwise abandoned; and (C) within one year following the termination of this Agreement pursuant to the preceding clause (A), the Company enters into a definitive agreement providing for the consummation of any transaction or series of related transactions (other than the Merger) involving an Acquisition Proposal (an “Acquisition Transaction”), and the Company at any time thereafter consummates such Acquisition Transaction, then the Company will concurrently with the consummation of such Acquisition Transaction pay to the Parent an amount equal to $710,000 (the “Company Termination Fee”), in accordance with the payment instructions provided to the Company by the Parent.  For purposes of this Section 7.3(b)(i), all references to “15%” in the definition of “Acquisition Proposal” will be deemed to be references to “50%”. 

(ii)If this Agreement is validly terminated pursuant to Section 7.1(f), then the Company must promptly (and in any event within two Business Days) following such termination pay to the Parent the Company Termination Fee in accordance with the payment instructions provided to the Company by the Parent. 

(iii)If this Agreement is validly terminated pursuant to Section 7.1(h), then the Company must, prior to or concurrently with such termination, pay to the Parent the Company Termination Fee in accordance with the payment instructions provided to the Company by the Parent; provided that if (A) such termination occurs prior to the Initial No-Shop Period Start Date (or, if the Superior Proposal with respect to which the Company is terminating this Agreement pursuant to Section 7.1(h) is with an Excluded Party, then if such termination occurs prior to the Excluded Party No-Shop Period Start Date), and (B) the Company has entered into an Alternative Acquisition Agreement to consummate a Superior Proposal at the time of such termination, then the “Company Termination Fee” for purposes of this Agreement shall mean an amount equal to $470,000. 

(c)Parent Payment.  If this Agreement is validly terminated by (i) the Company pursuant to Section 7.1(g), or (ii) the Parent pursuant to Section 7.1(c) and at such time  

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the Company could have validly terminated this Agreement pursuant to Section 7.1(g), then in either case the Parent must promptly (and in any event within five Business Days) following such termination pay to the Company $710,000 in cash (the “Parent Termination Fee”), in accordance with the payment instructions provided to the Parent by the Company.

(d)Single Payment Only. The Parties acknowledge and agree that in no event will the Company or the Parent, as applicable, be required to pay the Company Termination Fee or the Parent Termination Fee, as applicable, on more than one occasion, whether or not the Company Termination Fee or the Parent Termination Fee, as applicable, may be payable pursuant to more than one provision of this Agreement at the same or at different times and upon the occurrence of different events. 

(e)Payments; Default. The Parties acknowledge that the agreements contained in this Section 7.3 are an integral part of this Agreement, and that, without these agreements, the Parties would not enter into this Agreement.  Accordingly, if either Party fails to promptly pay any amount due pursuant to Section 7.3 and, in order to obtain such payment, the payee Party commences an Action that results in a judgment against the payor Party for the amount set forth in Section 7.3 or any portion thereof, the payor Party will pay to the payee Party its reasonable and documented out-of-pocket fees, costs and expenses (including reasonable and documented attorneys’ fees) in connection with such Action, together with interest on such amount or portion thereof at the annual rate of 5% plus the prime rate as published in the Wall Street Journal in effect on the date that such payment or portion thereof was required to be made through the date that such payment or portion thereof was actually received, or a lesser rate that is the maximum permitted by applicable Law (collectively, the “Enforcement Expenses”).  All payments under this Section 7.3 shall be made by the payor Party to the payee Party by wire transfer of immediately available funds to an account designated in writing by the payee Party. 

(f)Sole and Exclusive Remedy. 

(i)If this Agreement is terminated pursuant to Section 7.1, the Company’s receipt of the Parent Termination Fee to the extent owed pursuant to Section 7.3(c), the Parent Reimbursement Obligations, if any, and the Company’s right to seek specific performance pursuant to Section 9.10(b) will be the sole and exclusive remedies of the Company and the Company Related Parties against the Parent Related Parties in respect of this Agreement, any agreement executed in connection herewith and the transactions contemplated hereby and thereby, the termination of this Agreement, the failure to consummate the Merger or any claims or actions under applicable Law arising out of any breach, termination or failure.  Upon payment of the Parent Termination Fee, none of the Parent Related Parties will have any further liability or obligation to any of (A) the Company and its Affiliates; and (B) the former, current and future holders of any equity, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders and assignees of each of the Company and its Affiliates (the Persons in clauses (A) and (B) collectively, the “Company Related Parties”) relating to or arising out of  this Agreement, any agreement executed in connection herewith or the transactions contemplated hereby and thereby for any matters forming the basis of such termination (except that the Parties (or their Affiliates) will remain obligated with respect to, and the Company may be entitled to remedies with respect to, the Confidentiality Agreement and Section 7.3(e), as applicable).  Notwithstanding the foregoing,  

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this Section 7.3(f)(i) will not relieve the Parent, Merger Sub or the Investor from liability for (1) any fraud or Willful Breach of this Agreement, or (2) any breaches of the Confidentiality Agreement; provided that under no circumstances will the collective monetary damages payable by the Parent, Merger Sub or any of their Affiliates for breaches (including any Willful Breach or fraud) under this Agreement (taking into account the payment of the Parent Termination Fee pursuant to this Agreement) or the Equity Commitment Letter exceed an amount equal to $710,000 in the aggregate plus the Enforcement Expenses, if any, and the Parent Reimbursement Obligations, if any (collectively, the “Parent Liability Limitation”).  In no event will any of the Company Related Parties seek or obtain, nor will they permit any of their Representatives or any other Person acting on their behalf to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or award in excess of the Parent Liability Limitation against (A) the Parent, Merger Sub or the Investor; or (B) the former, current and future holders of any equity, controlling persons, directors, officers, employees, agents, attorneys, Debt Financing Sources, Affiliates (other than the Parent, Merger Sub or the Investor), members, managers, general or limited partners, stockholders and assignees of each of the Parent, Merger Sub and the Investor (the Persons in clauses (A) and (B) collectively, the “Parent Related Parties”), and in no event will the Company be entitled to seek or obtain any monetary damages of any kind, including consequential, special, indirect or punitive damages, in excess of the Parent Liability Limitation against the Parent Related Parties for, or with respect to, this Agreement, the Equity Commitment Letter, or the transactions contemplated hereby and thereby (including, any breach by the Parent, Merger Sub or the Investor), the termination of this Agreement, the failure to consummate the Merger or any claims or actions under applicable Law arising out of any such breach, termination or failure.  Other than the Investor’s obligations under the Equity Commitment Letter and other than the obligations of the Parent and Merger Sub to the extent expressly provided in this Agreement, in no event will any Parent Related Party or any other Person have any liability for monetary damages to the Company or any other Person relating to or arising out of this Agreement or the Merger.

(ii)If this Agreement is terminated pursuant to Section 7.1, the Parent’s receipt of the Company Termination Fee, to the extent owed pursuant to Section 7.3(b) and the Parent’s right to seek specific performance pursuant to Section 9.10(b) will be the sole and exclusive remedies of the Parent, Merger Sub, the Investor and the Parent Related Parties against the Company Related Parties in respect of this Agreement, any agreement executed in connection herewith and the transactions contemplated hereby and thereby, the termination of this Agreement, the failure to consummate the Merger or any claims or actions under applicable Law arising out of any breach, termination or failure. Upon payment of the Company Termination Fee, none of the Company Related Parties will have any further liability or obligation to any of the Parent, Merger Sub, the Investor or the Parent Related Parties relating to or arising out of this Agreement, any agreement executed in connection herewith or the transactions contemplated hereby and thereby for any matters forming the basis of such termination (except that the Parties (or their Affiliates) will remain obligated with respect to, and the Parent may be entitled to remedies with respect to, Section 7.3(e)).  The Parent’s receipt of the Company Termination Fee to the extent owed pursuant to Section 7.3(b) will be the only monetary damages the Parent and Merger Sub and each of their respective Affiliates may recover from Company Related Parties in respect of this Agreement, any agreement executed in connection herewith and the transactions contemplated hereby and thereby, the termination of this Agreement, the failure to consummate the Merger or any claims or actions under applicable  

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Law arising out of any such breach, termination or failure, and upon payment of such amount, (1) none of the Company Related Parties will have any further liability or obligation to the Parent or Merger Sub relating to or arising out of this Agreement, any agreement executed in connection herewith or the transactions contemplated hereby and thereby or any matters forming the basis of such termination (except that the Parties (or their Affiliates) will remain obligated with respect to, and the Parent may be entitled to remedies with respect to, the Confidentiality Agreement and Section 7.3(e), as applicable); and (2) none of the Parent, Merger Sub or any other Person will be entitled to bring or maintain any claim, action or proceeding against the Company or any Company Related Party arising out of this Agreement, any agreement executed in connection herewith or the transactions contemplated hereby and thereby or any matters forming the basis for such termination (except that the Parties (or their Affiliates) will remain obligated with respect to, and the Parent may be entitled to remedies with respect to, Section 7.3(e)).  Notwithstanding the foregoing, this Section 7.3(f)(ii) will not relieve the Company and its Subsidiaries from liability for any Willful Breach of this Agreement or for any breaches of the Confidentiality Agreement; provided that under no circumstances will the collective monetary damages payable by the Company for breaches under this Agreement (taking into account the payment of the Company Termination Fee pursuant to this Agreement) exceed an amount equal to $710,000 plus the Enforcement Expenses in the aggregate for all such breaches (the “Company Liability Limitation”).  In no event will any of the Parent Related Parties seek or obtain, nor will they permit any of their Representatives or any other Person acting on their behalf to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or award in excess of the Company Liability Limitation against any of the Company Related Parties, and in no event will the Parent or Merger Sub be entitled to seek or obtain consequential, special, indirect or punitive damages, in excess of the Company Liability Limitation against the Company Related Parties for, or with respect to, this Agreement or the Merger, the termination of this Agreement, the failure to consummate the Merger or any claims or actions under applicable Law arising out of any such breach, termination or failure.

(g)Liquidated Damages. Each of the parties hereto acknowledges that any amount payable by the Company or the Parent pursuant to this Section 7.3, including the Company Termination Fee and the Parent Termination Fee, does not constitute a penalty, but rather shall constitute liquidated damages in a reasonable amount that will compensate a party for the disposition of its rights under this Agreement in the circumstances in which such amounts are due and payable, which amounts would otherwise be impossible to calculate with precision. 

(h)Acknowledgement regarding Specific Performance.  Notwithstanding anything to the contrary in Section 7.3(f), it is agreed that the Parent, Merger Sub and the Company will be entitled to an injunction, specific performance or other equitable relief as provided in Section 9.10(b) except that, although the Company, in its sole discretion, may determine its choice of remedies hereunder, including by pursuing specific performance in accordance with, but subject to the limitations of, Section 9.10(b), under no circumstances will the Company be permitted or entitled to receive both specific performance of the type contemplated by Section 9.10(b) and any monetary damages. 

(i)Investor Affiliates.  In no event will the Company or any of its Subsidiaries seek or obtain, nor will they permit any of their respective Representatives to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or monetary  

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The following capitalized terms shall have the respective meanings set forth below:

“Acceptable Confidentiality Agreement” means an agreement with the Company that is either (a) in effect as of the execution and delivery of this Agreement; or (b) executed, delivered and effective after the execution and delivery of this Agreement, in either case containing provisions that require any counterparty thereto (and any of its Affiliates and Representatives named therein) that receive non-public information of or with respect to the Company to keep such information confidential; provided, however, that in each case, the provisions contained therein are no less restrictive in any material respect to such counterparty (and any of its Affiliates and Representatives named therein) than the terms of the Confidentiality Agreement (it being understood that such agreement need not contain any “standstill” or similar provisions or otherwise prohibit the making of any Acquisition Proposal).

“Acquisition Proposal” means any proposal or offer (a) for a merger, consolidation, liquidation, dissolution, recapitalization, share exchange, tender offer or other business combination involving the Company or any of its Subsidiaries, (b) for the direct or indirect purchase or other acquisition by any Third Person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of Third Persons, or the issuance by the Company, of 15% or more of the Company’s equity securities, or the equity securities of the Company and its Subsidiaries, or (c) for any direct or indirect purchase, license or other acquisition by any Third Person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of Third Persons of assets constituting or accounting for more than 15% of the consolidated assets, revenue or net income of the Company and its Subsidiaries, taken as a whole (measured by the fair market value thereof as of the date of such proposal or offer), in each case other than the transactions contemplated by this Agreement or any offer or proposal by the Parent, any Subsidiary of the Parent or the Investor.

“Action” means any claim, litigation, action, suit, arbitration, inquiry, proceeding, or investigation.

“Affiliate” when used with respect to any Person, means any other Person who is an “affiliate” of that first Person within the meaning of Rule 405 promulgated under the Securities Act.

“Agreement” has the meaning set forth in the preamble.

“Alternative Acquisition Agreement” has the meaning set forth in Section 5.1(a).

“Anthony Warrant” means that certain Warrant to Purchase 300,000 Shares of Common Stock dated January 16, 2013 between Paul Anthony and Auxilio, Inc.    

“Antitrust Laws” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Sherman Act, the Clayton Act, the Federal Trade Commission Act, and any other

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applicable federal, state or foreign law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade.

“BA Agreements” has the meaning set forth in Section 2.25(e).

“Business Day” means any day on which the principal offices of the SEC in Washington, DC, are open to accept filings other than a day on which banking institutions located in New York, New York, are permitted or required by law, executive order or governmental decree to remain closed.

“Capitalization Date” means the close of business on May 17, 2022.

“Certificate” means a certificate that immediately prior to the Effective Time represents shares of Company Common Stock.

“Closing” means the closing of the Merger.

“Closing Date” means the date on which the Closing occurs.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the preamble.

“Company Balance Sheet” means the audited consolidated balance sheet of the Company as of December 31, 2021.

“Company Board” means the Board of Directors of the Company (together with any duly constituted and authorized committee thereof).

“Company Board Recommendation” has the meaning set forth in Section 5.2(b).

“Company Board Recommendation Change” has the meaning set forth in Section 5.1(e).

“Company Breach Notice Period” has the meaning set forth in Section 7.1(e).

“Company Common Stock” means the common stock, par value $0.001 per share, of the Company.

“Company Disclosure Schedule” means the disclosure schedule delivered by the Company to the Parent and Merger Sub and dated as of the date of this Agreement.

“Company Employee” means any person employed by the Company or a Subsidiary of the Company as of the Effective Time.

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“Company Employee Plans” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) (in each case, whether or not such plan is subject to ERISA), and any other plan, policy, agreement or arrangement relating to insurance coverage, severance benefits, retention benefits, change in control benefits, employment, fringe benefits, supplemental benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation, for the benefit of, or relating to, any current or former employee of the Company or any of its Subsidiaries and as to which the Company or any Subsidiary has any liability (including any such plan, policy, agreement or arrangement provided through a professional employer organization or co-employer), but excludes any plan, agreement or arrangement required to be maintained by non-U.S. law.

“Company Intellectual Property” means any Intellectual Property owned or licensed, or purported to be owned or licensed, by the Company or any of its Subsidiaries or that is otherwise used in the conduct of the Company’s or its Subsidiaries’ respective businesses as currently conducted.

“Company Leases” means the leases, subleases or licenses pursuant to which the Company or any of its Subsidiaries leases, subleases or licenses from third parties any real property.

“Company Liability Limitation” has the meaning set forth in Section 7.3(f)(ii).

“Company Material Adverse Effect” means any effect, change, event, occurrence or development that is, or could reasonably be expected to be, materially adverse to the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that no effect, change, event, occurrence or development resulting from, arising out of, attributable to, or related to any of the following shall be deemed to be or constitute a “Company Material Adverse Effect,” and no effect, change, event, occurrence or development resulting from, arising out of, attributable to, or related to any of the following shall be taken into account when determining whether a “Company Material Adverse Effect” has occurred or may, would or could occur: (a) general economic conditions (or changes in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally; (b) conditions (or changes in such conditions) in the securities markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (i) changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries and (ii) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world; (c) conditions (or changes in such conditions) in the industries in which the Company and its Subsidiaries conduct business; (d) political conditions (or changes in such conditions) in the United States or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States or any other country or region in the world; (e) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions, epidemics, disease outbreaks,

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pandemics (including, for the avoidance of doubt, any effect resulting from, arising in connection with or otherwise related to COVID-19), public health emergencies, widespread occurrences of infectious disease or other comparable events, and any other force majeure events in the United States or any other country or region in the world; (f) the announcement of this Agreement or the pendency or consummation of the transactions contemplated hereby, including the identity of the Parent (provided that this clause (f) shall not apply to any representation or warranty in Section 2.4); (g) any actions taken or failure to take action, in each case, to which the Parent has approved, consented to or requested in each case in writing, or the taking of any action required by this Agreement (other than any action required by the first sentence of Section 4.1), or the failure to take any action prohibited by this Agreement; (h) changes in law or other legal or regulatory conditions or change in GAAP or other accounting standards (or the interpretation thereof); (i) any fees or expenses incurred in connection with the transactions contemplated by this Agreement; (j) changes in the Company’s stock price or the trading volume of the Company’s stock, or any failure by the Company to meet any public estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, or any failure by the Company or any of its Subsidiaries to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise be excepted from this definition); or (k) any Actions made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company) against the Company, Merger Sub, the Parent or any of their directors or officers arising out of the Merger or in connection with any other transactions contemplated by this Agreement; provided that that with respect to the exceptions set forth in clauses (a), (b), (c), (d), (e) and (h), if any such effect, change, event, occurrence or development has had a disproportionate adverse impact on the Company relative to other companies of comparable size to the Company operating in the industry in which the Company operates, then the incremental impact of such event shall be taken into account for the purpose of determining whether a “Company Material Adverse Effect” has occurred or may, would or could occur.

“Company Material Contract” means any Contract to which the Company or one of its Subsidiaries is a party or by which any of them or any of their respective properties, rights or assets are bound: (a) that would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act; (b) that (i) prohibits or otherwise restricts, in any material respect, the Company or any of its Subsidiaries from freely engaging in any business anywhere in the world; (ii) requires the Company or any of its Subsidiaries to conduct any business on a “most favored nations” basis with any third party or (iii) provides for “exclusivity” or any similar requirement in favor of a third party; (c) that provides for or governs the formation, creation, operation, management or control of any partnership, joint venture or similar arrangement; (d) that constitutes an IP License; (e) that constitutes a customer, vendor, distribution or marketing agreement that provides for payment obligations to the Company or any of its Subsidiaries of at least $100,000 or more in the past 12 months or in any prospective 12-month period; (f) that provides for payment obligations by the Company or any of its Subsidiaries of at least $100,000 or more in the past 12 months or in any prospective 12-month period; (g) that are entered into with subcontractors to perform work for a customer of the Company or any of its Subsidiaries, or for a product that the Company or any of its Subsidiaries is re-selling or using in conjunction with a deliverable under a customer Contract, in each case that provides for payment obligations by the Company or any of its

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Subsidiaries of at least $50,000 or more in the past 12 months or in any prospective 12-month period; (h) that is entered into with a group purchasing organization or similar entity or organization; (i) pursuant to which the Company or any of its Subsidiaries has or may have guarantee, “earn-out” or other contingent payment obligations; (j) that constitutes a settlement, conciliation or similar agreement (A) that is with any Governmental Entity, (B) pursuant to which the Company or any of its Subsidiaries is obligated after the date of this Agreement to pay consideration to a Governmental Entity or (C) that would otherwise limit the operation of the Company or any of its Subsidiaries in any material respect after the Closing; (k) pursuant to which any indebtedness for borrowed money of the Company or any of its Subsidiaries is outstanding; (l) that was entered into after January 1, 2017, and provides for the acquisition or disposition, directly or indirectly (by merger or otherwise), of a business, capital stock, other equity interests or all or substantially all the assets of another Person; or (m) that relates to the grant of any preferential right of first refusal, first offer or other right to purchase any material assets or property of the Company or any of its Subsidiaries.

“Company Related Parties” has the meaning set forth in Section 7.3(f)(i).

“Company RSUs” mean restricted stock units with respect to shares of Company Common Stock granted under any Company Stock Plan.

“Company Severance Practices” has the meaning set forth in Section 4.1(i).

“Company Stock Option” means each option to purchase shares of Company Common Stock granted pursuant to any Company Stock Plan.  

“Company Stock Plan” means each of the CynergisTek, Inc. 2011 Stock Incentive Plan and the CynergisTek, Inc. 2020 Equity Incentive Plan.

“Company Systems” means the Computer Software, computer firmware, computer hardware, electronic data processing, information, record keeping, communications, telecommunications, networks, interfaces, platforms, peripherals and computer systems that are owned or used or relied on by the Company or its Subsidiaries.

“Company’s Knowledge” means the actual knowledge, as of the date hereof, and after reasonable inquiry, of the individuals identified in Section 8.1 of the Company Disclosure Schedule.

“Computer Software” has the meaning set forth in Section 2.10(h).

“Company Termination Fee” has the meaning set forth in Section 7.3(b)(i).

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“Confidentiality Agreement” means the Nondisclosure Agreement, dated as of May 7, 2019, between the Company and Clearwater Compliance Holding Company LLC, as amended by that certain Amendment dated as of January 12, 2022.

“Consent” means any consent, approval, filing, registration, notification, Permit, order or authorization.

“Contract” means, with respect to any Person, any contract, lease, license, indenture, note, agreement or other legally binding instrument to which such Person or its Subsidiaries is a party or by which any of their respective properties, rights or assets is bound.

“COVID-19” means the COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof or related health condition).

“COVID-19 Measures” means any quarantine, “shelter in place”, “stay at home”, workforce reduction, social distancing, shut down, closure or sequester order, guideline, recommendation or Law, or any other applicable Laws, guidelines or recommendations by any Governmental Entity in connection with or in response to COVID-19.

“Current D&O Insurance” means the current directors’ and officers’ liability insurance policies maintained by the Company as of the date of this Agreement.

“Debt Financing” has the meaning set forth in Section 5.13(a).

“Debt Financing Sources” means the Persons (other than the Parent and its Affiliates), if any, that provide the Debt Financing in connection with the Merger and any joinder agreements or credit agreements entered into pursuant thereto or relating thereto, together with their Affiliates and their and their Affiliates’ current, former and future officers, directors, general or limited partners, shareholders, members, controlling persons, employees, agents and representatives involved in the Debt Financing and the successors and assigns of each of the foregoing.

“DGCL” means the Delaware General Corporation Law.

“Equity Commitment Letter” has the meaning set forth in Section 3.4.

“Enforcement Expenses” has the meaning set forth in Section 7.3(e).

“Environmental Law” means any Law, regulation, order, decree, permit or requirement of any Governmental Entity relating to: (a) the protection, investigation, clean up, remediation or restoration of the environment, human or occupational health or safety, or natural resources; (b) pollution control; or (c) Hazardous Substances, including the handling, use, generation, transportation, storage, distribution in commerce, release and/or disposal of Hazardous Substances; or (d) noise, odor or wetlands protection.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity which is a member of (a) a controlled group of corporations (as defined in Section 414(b) of the Code), (b) a group of trades or businesses under common control (as defined in Section 414(c) of the Code) or (c) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included the Company or any of its Subsidiaries.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excise Tax” has the meaning set forth in Section 5.14(c).

“Excluded Party” means any Third Person (or if a group, includes any Third Person, so long as such Third Person, together with all other members of such group, if any, who were members of such group or another group that included such Third Person immediately prior to the Initial No-Shop Period Start Date, represent more than 50% of the equity financing of such group at all times following the Initial No-Shop Period Start Date and prior to the closing of the transactions contemplated by the applicable Acquisition Proposal) (a) who submits a written bona fide Acquisition Proposal to the Company or any of its Representatives after the date of this Agreement and prior to the Initial No-Shop Period Start Date, and (b) whose Acquisition Proposal is determined by the Company Board in good faith (after consultation with its outside counsel and its financial advisor), prior to the Initial No-Shop Period Start Date, to be, or would reasonably be expected to lead to, a Superior Proposal; provided, however, that a Third Person shall immediately cease to be an Excluded Party (and the provisions of this Agreement applicable to Excluded Parties shall cease to apply with respect to such Third Person) if such Acquisition Proposal is withdrawn or terminated by such Third Person (or group, if applicable) or is modified in any material respect by such Third Person (or group, if applicable) such that the Acquisition Proposal submitted by such Person (or group, if applicable) would no longer be a Superior Proposal.

“Excluded Party No-Shop Period Start Date” has the meaning set forth in Section 5.1(a).

“Financing” has the meaning set forth in Section 3.4.

“GAAP” means United States generally accepted accounting principles.

“Go-Shop Period” has the meaning set forth in Section 5.1(a).

“Government Contract” means any Contract with any Governmental Entity.

“Governmental Entity” means any foreign or domestic court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority, agency or instrumentality, or any self-regulatory body or organization having authority or jurisdiction over the activities of any party or any Subsidiary of any party.

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“Hazardous Substance” means: (a) any substance, material or waste, whether solid, liquid or gas, that is or comes to be regulated as a hazardous substance or which falls within the definition of a “hazardous substance,” “hazardous waste” or “hazardous material” pursuant to any Environmental Law (b) any petroleum product or by-product, asbestos-containing material, polychlorinated biphenyls, mold, radioactive materials or radon, or (c) any substance, material or waste, whether solid, liquid or gas, defined, characterized or regulated by any Governmental Entity as hazardous, toxic, infectious, reactive, corrosive, ignitable, flammable, dangerous, a pollutant, or words of similar meaning and effect.

“Horton Warrant” means the warrant to purchase shares of Company Common Stock issued to Horton Capital Management, LLC pursuant to that certain Initial Warrant dated April 3, 2020 between the Company and Horton Capital Management, LLC.

“Indemnified Party” means each Person who is now, or has been at any time prior to the date hereof, or who becomes prior to the Effective Time a director, manager or officer of the Company or any of its Subsidiaries.

“Information Privacy and Security Laws” means the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C.A § 1320d et seq.) (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act, and the regulations promulgated thereunder, and any other or comparable foreign, federal, state, provincial or local laws and any other Laws concerning the privacy and/or security of Personal Information, including but not limited to the Gramm-Leach-Bliley Act, the California Consumer Privacy Act, the EU General Data Protection Regulation and state data breach notification laws, state health information privacy laws and state consumer protection laws.

“Initial No-Shop Period Start Date” has the meaning set forth in Section 5.1(a).

“Intellectual Property” means (a) patents, patent applications, inventions and invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof, (b) trademarks, service marks, trade dress, logos, trade names, corporate names, internet domain names, social media accounts, design rights and other source identifiers, together with the goodwill symbolized by any of the foregoing, (c) copyrightable works and copyrights, (d) trade secrets, know-how, processes, ideas, formulae, models, schematics, technology, Computer Software, programs, code, databases, computer applications and methodologies, (e) other tangible or intangible proprietary or confidential information and materials, (f) all rights in the foregoing and in other similar intangible or intellectual property assets, and (g) all applications and registrations for the foregoing.

“Intervening Event” has the meaning set forth in Section 5.1(e)(i).

“Investor” has the meaning set forth in Section 3.4.

“IP Licenses” means (a) all agreements under which the Company or any of its Subsidiaries licenses or sublicenses from any other Person any material Company Intellectual Property (other than Off-the-Shelf Software); and (b) all agreements under which the Company or any of its Subsidiaries has licensed to any other Person the right to use any Company

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Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole, other than agreements pursuant to which non-exclusive rights with respect to Company Intellectual Property have been granted in the Ordinary Course of Business to customers or users of the Company’s products or services for the purpose of using such products or services or to independent contractors, vendors and similar Persons solely for the purpose of performing activities for or on behalf of the Company or any of its Subsidiaries.

“Law” means any local, county, state, federal, foreign or other constitution, law, statute, treaty, regulation, ordinance, code, common law or any rule, order, decree, judgment, judicial consent, consent decree, edict, Permit, directive or governmental requirement enacted, promulgated, entered into, agreed or imposed by any Governmental Entity.

“Leased Real Property” has the meaning set forth in Section 2.9(b).

“Lien” means any mortgage, security interest, pledge, lien, charge or encumbrance, other than (a) mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s or other statutory liens arising in the Ordinary Course of Business, (b) liens for Taxes, assessments and other governmental charges and levies that are not due and payable or that are being contested in good faith by appropriate proceedings and for which reserves have been reflected on the Company Balance Sheet to the extent required by GAAP, (c) liens arising from actions of the Parent or Merger Sub (including in connection with any financing), (d) with respect to real property, liens, defects or irregularities in title, easements, rights-of-way, covenants, restrictions, and other, similar matters of record that are, in each case, shown in public records, (e) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business, (f) liens arising under applicable securities Laws, (g) non-exclusive licenses of Company Intellectual Property granted by the Company or any of its Subsidiaries to its customers in connection with the sale of products and services in the Ordinary Course of Business and (h) zoning, building and other similar codes and regulations relating to real property.

“Maximum Premium” means 250% of the last annual premium paid prior to the Effective Time for the Current D&O Insurance.

“Merger” has the meaning set forth in the Recitals.

“Merger Consideration” has the meaning set forth in the Recitals.

“Merger Sub” has the meaning set forth in the preamble.

“No-Shop Period Start Date” has the meaning set forth in Section 5.1(a).

“Notice Period” has the meaning set forth in Section 5.1(e)(ii)(c).

“NYSE American” means the NYSE American Stock Market.

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“Off-the-Shelf Software” means any generally commercially available, off-the-shelf software that is licensed in the Ordinary Course of Business for use on desktop or laptop computers, mobile devices (including smartphones, tablets and e-readers), network servers or similar devices, other than through a written agreement executed by the licensee (such as via clickwrap, browsewrap, or shrinkwrap licenses or terms and conditions that are not substantially negotiable).

“Ordinary Course of Business” means the ordinary course of business consistent in all material respects with past practice.

“Parent” has the meaning set forth in the preamble.

“Parent Breach Notice Period” has the meaning set forth in Section 7.1(g).

“Parent Liability Limitation” has the meaning set forth in Section 7.3(f)(i).

“Parent Material Adverse Effect” means any change, event or development that would reasonably be expected to prevent, or materially impair or delay, the ability of the Parent or Merger Sub to consummate the Merger.

“Parent Reimbursement Obligations” has the meaning set forth in Section 5.13(e).

“Parent Related Parties” has the meaning set forth in Section 7.3(f)(i).

“Parent Termination Fee” has the meaning set forth in Section 7.3(c).

“Paying Agent” means Colonial Stock Transfer Company, Inc., or another bank or trust company mutually acceptable to the Parent and the Company, which shall be engaged by the Parent to act as paying agent for the payment of the Merger Consideration to the holders of shares of Company Common Stock outstanding immediately prior to the Effective Time.

“Permit” means any license, permit, registration, variance, exemption, Consent, waiver, authorization, right, certificate, franchise, order or approval, qualification, or similar document or authority, and all pending applications therefor or renewals thereof.

“Permitted Liens” means (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the Ordinary Course of Business, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the Ordinary Course of Business and Liens for Taxes that are not due and payable or which are being contested in good faith and for which adequate reserves have been established in accordance with GAAP, (iii) Liens that secure obligations reflected on the Company Balance Sheet or Liens the existence of which is referred to in the notes to the Company Balance Sheet, (iv) leases, subleases and licenses (other than capital leases and leases underlying sale and

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leaseback transactions); (v) Liens imposed by applicable Law (other than Tax Law); (vi) pledges or deposits to secure obligations pursuant to workers’ compensation laws or similar legislation or to secure public or statutory obligations; (vii) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the Ordinary Course of Business; (viii) defects, imperfections or irregularities in title, easements, covenants and rights of way (unrecorded and of record) and other similar liens (or other encumbrances of any type), and zoning, building and other similar codes or restrictions, in each case that do not adversely affect in any material respect the current use or value of the applicable property owned, leased, used or held for use by the Company and its Subsidiaries, and (ix) imperfections of title or encumbrances that, individually or in the aggregate, do not impair materially the use of the assets to which they relate in the conduct of the business of the Company and its Subsidiaries.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, trust, Governmental Entity, unincorporated organization or other entity.

“Personal Information” means any information that identifies a specific natural person, including, without limitation, (A) a natural person’s first and last name, in combination with (1) a social security number or tax identification number, or (2) credit card number, bank account information or other financial account information, or financial customer and account numbers, account access codes and passwords, and (B) Protected Health Information as defined under HIPAA, and (C) any information pertaining to an individual that is regulated or protected by Law.

“Personnel” means any current or former director, officer, employee, representative, agent or contractor of the Company or any of its Subsidiaries.

“Pre-Closing Period” means the period commencing on the date of this Agreement and ending at the Effective Time.

“Privacy Agreements” has the meaning set forth in Section 2.25(e).

“Privacy Policies” has the meaning set forth in Section 2.25(a).

“Proprietary Software” means Computer Software that is owned or purported to be owned by the Company or its Subsidiaries.

“Protected Information” has the meaning set forth in Section 2.25(a).

“Providers” has the meaning set forth in Section 2.25(h).

“Registered IP” has the meaning set forth in Section 2.10(a).

“Reporting Tail Endorsement” means a six year extended reporting period endorsement with respect to the Current D&O Insurance, on terms and conditions providing coverage

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retentions, limits and other material terms substantially equivalent to the Current D&O Insurance.

“Representatives” means, with respect to any Person, such Person’s directors, managers, officers, employees, investment bankers, attorneys, accountants and other advisors or representatives.

“Restrictive Order” has the meaning set forth in Section 5.5.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

“SEC” means the United States Securities and Exchange Commission.

“Secretary of State” means the Secretary of State of the State of Delaware.

“Securities Act” means the Securities Act of 1933, as amended.

“Significant Customer” has the meaning set forth in Section 2.24.

“Significant Vendor” has the meaning set forth in Section 2.23.

“Subsidiary” means, with respect to any Person, another Person (a) of which such first Person owns or controls, directly or indirectly, securities or other ownership interests representing (i) more than 50% of the voting power of all outstanding stock or ownership interests of such second Person or (ii) the right to receive more than 50% of the net assets available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution, (b) of which the power to vote or direct voting of sufficient voting securities, other voting rights or voting partner interests to elect a majority of the board of directors or other governing body or persons performing similar functions is directly or indirectly held by such Person, or (c) of which such first Person is a general partner or managing member.

“Superior Proposal” means any bona fide written proposal made by a third party after the date of this Agreement to acquire more than 50% of the equity securities or consolidated total assets of the Company and its Subsidiaries, pursuant to a tender or exchange offer, a merger, a consolidation, business combination or recapitalization or a sale of its assets, (a) on terms which the Company Board determines in its good faith judgment pursuant to applicable Law to be more favorable to the holders of Company Common Stock than the transactions contemplated by this Agreement (after consultation with its financial and legal advisors), taking into account all the terms and conditions of such proposal and this Agreement (including any written, binding offer by the Parent to amend the terms of this Agreement) that the Company Board determines to be relevant and (b) which the Company Board determines to be reasonably capable of being completed on the terms proposed, taking into account all financial, regulatory, legal and other aspects of such proposal that the Company Board determines to be relevant.

“Surviving Corporation” means the Company following the Merger.

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“Tax Returns” means all reports, returns, forms, or statements required to be filed with a public Governmental Entity with respect to Taxes.

“Taxes” means all taxes or other similar assessments or liabilities in the nature of a tax, including income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, services, transfer, withholding, employment, payroll and franchise taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, or additions to tax imposed or assessed with respect thereto and shall include any liability for such amounts as a result of (a) being a transferee or successor or member of a combined, consolidated, unitary or affiliated group, or (b) a contractual obligation to indemnify any Person.

“Termination Date” has the meaning set forth in Section 7.1(c).

“Third Person” means any Person or “group” (within the meaning of Section 13(d) of the Exchange Act), other than (a) the Company or any of its controlled Affiliates or (b) the Parent, Merger Sub or the Investor or any of their respective Affiliates or any “group” including the Parent, Merger Sub, the Investor or any of their respective Affiliates.

“Transactions” means, collectively, the transactions contemplated by this Agreement, including, without limitation, the Merger.

“Unauthorized Use” has the meaning set forth in Section 2.10(h).

“Uncertificated Shares” means uncertificated shares that immediately prior to the Effective Time represented any shares of Company Common Stock.

“Vendor BA Agreements” has the meaning set forth in Section 2.25(e).

“Warrant” means the Anthony Warrant and the Horton Warrant.

“WARN” means the Worker Adjustment Retraining and Notification Act of 1988 as amended, as well as analogous applicable foreign, state or local Laws.

“Willful Breach” means a material breach of any covenant or agreement set forth in this Agreement that is a consequence of an act or failure to act undertaken by the breaching party with the knowledge that the taking of such act or failure to act would result in such breach.

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(a)if to the Parent or Merger Sub, or after the Effective Time, the Surviving Corporation, to: 

Clearwater Compliance LLC

40 Burton Hills Blvd., Suite 200

Nashville, TN  37215

Attn: Steve Cagle

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determination shall have the power to limit the term or provision (or part thereof), to delete specific words or phrases, or to replace any invalid or unenforceable term or provision (or part thereof) with a term or provision (or part thereof) that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision (or part thereof), and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto shall replace such invalid or unenforceable term or provision (or part thereof) with a valid and enforceable term or provision (or part thereof) that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term (or part thereof).

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would cause the application of laws of any jurisdictions other than those of the State of Delaware.

(a)Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Person will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Person, and the exercise by a Person of any one remedy will not preclude the exercise of any other remedy. 

(b)Irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached, as money damages or other legal remedies (including any fees payable pursuant to Section 7.3), even if available, would not be an adequate remedy for any such damages, including if the parties hereto fail to take any action required of them hereunder to consummate this Agreement.  Accordingly, in the event of any breach or threatened breach by the Company, on the one hand, or the Parent and/or Merger Sub, on the other hand, of any of their respective covenants or obligations set forth in this Agreement, the Company, on the one hand, and the Parent and Merger Sub, on the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement, by the other (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement, in each case without posting a bond or other security.  The parties acknowledge and agree that (i) the provisions set forth in Section 7.3 (A) are not intended to and do not adequately compensate for the harm that would result from a breach of this Agreement and (B) shall not be construed to diminish or otherwise impair in any respect any party’s right to specific enforcement and (ii) the right of specific enforcement is an integral part of the Transactions and without that right, neither the Company nor the Parent would have entered into this Agreement. It is explicitly agreed that, subject to the limitations in the next two sentences of this Section 9.10(b), the Company shall have the right to an injunction, specific performance or other equitable remedies in connection with enforcing the Parent’s and Merger Sub’s obligations to consummate the Merger and cause the Financing to be funded (including to cause the Parent to enforce the obligations of the Investor under the Equity Commitment Letter in order to cause the Financing to be timely completed in accordance with and subject to the terms and conditions set forth in the Equity Commitment Letter) subject to the terms and conditions set forth therein and herein.  Notwithstanding the foregoing and subject to the rights of the parties to the definitive agreements for any Financing under the terms thereof, none of the Company and its Affiliates and their direct and indirect equityholders shall be entitled to directly seek the remedy of specific performance of this Agreement against any Debt Financing Source. Notwithstanding anything to the contrary in this Agreement, it is explicitly agreed that the right of the Company to seek an injunction, specific performance or other equitable remedies in connection with enforcing the Parent’s obligation to cause the Financing to be funded shall be subject to the requirements that (i) all of the conditions set forth in Section 6.1 and Section 6.3 have been satisfied (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions), and (ii) the Company has irrevocably confirmed in writing that if the Financing is funded, then the Company shall take such actions that are required of it by this Agreement to consummate the Closing  

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pursuant to the terms of this Agreement. No party hereto shall raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of this Agreement, or to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the parties under this Agreement. Any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each Party irrevocably waives any right that it may have to require the obtaining, furnishing or posting of any such bond or other security.

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EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, INCLUDING THE MERGER. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

[Remainder of Page Intentionally Left Blank.]

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The Parent, Merger Sub and the Company have executed this Agreement as of the date set forth in the initial caption of this Agreement.

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AMENDMENT TO BY-LAWS OF

CYNERGISTEK, INC.

(A DELAWARE CORPORATION)

EFFECTIVE MAY 23, 2022

On May 23, 2022, the Board of Directors (the “Board”) of CynergisTek, Inc., a Delaware corporation (the “Company”), adopted the following amendment to the By-Laws of the Company:

WHEREAS, the Board has determined that it is desirable and in the best interests of the Company and its stockholders that litigation involving the Company and its directors, officers and shareholders be brought exclusively in the state courts located in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware. 

NOW THEREFORE, BE IT: 

RESOLVED, that the By-laws of the Company shall be amended by renumbering Article IX and Sections 9.1 and 9.2 as Article X and Section 10.1 and 10.2, respectively, and by adding a new Article IX and Section 9.1 as follows: 

“IX.

EXCLUSIVE FORUM

9.1Exclusive Forum. 

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the Delaware General Corporation Law or the certificate of incorporation, as amended, or these bylaws (as they may be amended from time to time), or (iv) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation governed by the internal affairs doctrine, shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).” 

Voting Agreement

THIS AGREEMENT (“Agreement”) is made and entered into as of the 23^rd day of May 2022, by and among the undersigned stockholders (each, a “Stockholder,” and collectively, the “Stockholders”) of CynergisTek, Inc., a Delaware corporation (the “Company”), and Clearwater Compliance LLC, a Tennessee limited liability company (the “Parent”).

Witnesseth:

WHEREAS, the Company and the Parent, together with the Parent’s wholly-owned subsidiary Clearwater Compliance Acquisition Company I, a Delaware corporation, have entered into an Agreement and Plan of Merger dated as of the date hereof (the “Merger Agreement”) (capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Merger Agreement); and

WHEREAS, each Stockholder owns and is entitled to vote the number of issued and outstanding shares of common stock of the Company (the “Company Common Shares”) set forth opposite such Stockholder’s name on Schedule 1 attached hereto and has agreed to vote such Stockholder’s Company Common Shares pursuant to the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements set forth herein, the Stockholders and the Parent hereby agree as follows:

Section 1.Voting of Shares.  Each Stockholder hereby agrees that at any meeting of the stockholders of the Company and in any action by written consent of the stockholders of the Company, such Stockholder shall vote the Company Common Shares which such Stockholder owns and is entitled to vote (a) in favor of the Merger Agreement and the transactions contemplated thereby, (b) against any action or agreement which would result in a breach of any term of, or any other obligation of the Company under, the Merger Agreement, and (c) against any action or agreement which would impede, interfere with or attempt to discourage the transactions contemplated by the Merger Agreement; provided, however, that each Stockholder makes no agreement or understanding in this Agreement in such Stockholder’s capacity as a director or officer of the Company or any of its subsidiaries (if Stockholder holds such office), and nothing in this Agreement: (y) will limit or affect any actions or omissions taken by Stockholder in stockholder’s capacity as such a director or officer, including in exercising rights under the Merger Agreement, and no such actions or omissions shall be deemed a breach of this Agreement; or (z) will be construed to prohibit, limit, or restrict a Stockholder from exercising such Stockholder’s fiduciary duties as an officer or director to the Company or its stockholders.  Each Stockholder agrees that the Company shall be authorized to include in any proxy or material transmitted to stockholders of the Company, a statement to the effect that the Stockholder is a party to this Agreement and has committed to vote in favor of the Merger Agreement and the transactions contemplated thereby as set forth in this Section 1. 

Section 2.Term of Agreement.  This Agreement shall be effective from the date hereof and shall terminate and be of no further force and effect upon the earlier of (a) the Effective Time (as defined in the Merger Agreement), (b) the termination of the Merger Agreement in accordance with its terms, which includes termination in the event the Company Board determines that its fiduciary duties require it  

to accept an Acquisition Proposal from a third party pursuant to Section 5.1 of the Merger Agreement, or (c) the Termination Date (as defined in the Merger Agreement).

Section 3.Covenants of Stockholders.  Each Stockholder agrees not to: except to the extent contained in this Agreement, grant any proxies, deposit any Company Common Shares into a voting trust or enter into a voting agreement with respect to any Company Common Shares; or without the prior written approval of the Parent or as contemplated in Section 5.1 of the Merger Agreement, solicit, initiate or encourage any Acquisition Proposal involving the Company. 

Section 4.Representations and Warranties of Stockholders.  Each Stockholder represents and warrants to the Parent as follows:  (a) such Stockholder has beneficial ownership of, and is entitled to vote in accordance with such Stockholder’s commitments under this Agreement, the number of Company Common Shares set forth opposite his name on Schedule 1 hereto, and does not own or have any right to acquire any Company Common Shares not listed on Schedule 1; (b) such Stockholder has the right, power and authority to execute, deliver and perform under this Agreement; such execution, delivery and performance will not violate, or require any consent, approval, or notice under any provision of law or result in the breach of any outstanding agreements or instruments to which such Stockholder is a party or is subject; and this Agreement has been duly executed and delivered by such Stockholder and constitutes a legal, valid and binding agreement of such Stockholder, enforceable in accordance with its terms; (c) such Stockholder’s Company Common Shares listed as owned on Schedule 1 hereto are now and, until the termination of this Agreement, will remain owned by such Stockholder, free and clear of all voting trusts, voting agreements, proxies, liens, claims, liabilities, security interests, marital property rights or any other encumbrances whatsoever (other than rights of the Parent and encumbrances respecting such Company Common Shares created pursuant to this Agreement or the Merger Agreement); and (d) other than this Agreement and the Merger Agreement, there are no outstanding options, warrants or rights to purchase or acquire, or agreements related to, such Stockholder’s Company Common Shares. Notwithstanding this representation, no Stockholder shall be prevented by this Agreement from the following transfers of Company Common Shares: (w) transfers by will or by operation of law (in which case this Agreement shall bind the transferee); (x) transfers for estate and tax planning purposes, subject in each case to the transferee agreeing in writing to be bound by the terms of this Agreement; (y) with the prior written consent of the Parent (which consent shall not be unreasonably withheld), for any sales, assignments, transfers or other dispositions necessitated by hardship; or (z)  as the Parent may otherwise agree in writing. 

Section 5.Representations and Warranties of the Parent.  The Parent has the right, power and authority to execute and deliver this Agreement; such execution and delivery will not violate, or require any consent, approval, or notice under any provision of law or result in the breach of any outstanding agreements or instruments to which the Parent is a party or is subject; and this Agreement has been duly executed and delivered by the Parent and constitutes a legal, valid and binding agreement of the Parent, enforceable in accordance with its terms. 

Section 6.Transferability.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that the Parent may assign this Agreement to a direct or indirect wholly-owned subsidiary or affiliate of the Parent, provided that no such assignment shall relieve the Parent of its obligations hereunder. 

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Section 7.Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed by any of the Stockholders in accordance with its specific terms or was otherwise breached.  It is accordingly agreed that the Parent shall be entitled to injunctive relief to prevent breaches of this Agreement by the Stockholders and to enforce specifically the terms and provisions hereof in addition to any other remedy to which the Parent is entitled at law or in equity. 

Section 8.Further Assurances.  Each Stockholder agrees to execute and deliver all such further documents and instruments and take all such further action as may be necessary or appropriate in order to consummate the transactions contemplated hereby. 

Section 9.Entire Agreement and Amendment.  (a) Except for the Merger Agreement and its ancillary agreements and instruments, this Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect hereto. 

(b)This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto. 

Section 10.Notices.  Each notice, demand or other communication which may be or is required to be given under this Agreement shall be in writing and shall be deemed to have been given (a) when delivered in person, (b) the third Business Day after being deposited in the United States mail, registered or certified mail (return receipt requested), (c) the first Business Day after being deposited with Federal Express or any other recognized national overnight courier service, or (d) if delivered by electronic mail, upon receipt, in each case addressed to the applicable address set forth herein for the Parent or on Schedule 1 for each of the Stockholders. 

Section 11.General Provisions.  This Agreement shall be governed by the laws of the State of Delaware.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original.  Headings are for convenience only and shall not affect the meaning of this Agreement.  Any term of this Agreement which is invalid or unenforceable shall be ineffective only to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms of this Agreement.  Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, benefit, or remedy of any nature under or by reason of this Agreement. This Agreement may be executed in two or more counterparts (including by facsimile or by an electronic scan (including by portable document format (.pdf)) delivered by electronic mail), each of which shall be deemed an original but all of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile or by an electronic scan (including by portable document format (.pdf)) delivered by electronic mail. 

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

CLEARWATER COMPLIANCE LLC

By: /s/ Steven Cagle  

Name: Steven Cagle

Title: Chief Executive Officer

Address for Notices:

Clearwater Compliance LLC

40 Burton Hills Blvd., Suite 200

Nashville, TN  37215

STOCKHOLDERS:

[Signature Page to Voting Agreement]

CynergisTek Inc. Enters into a Definitive Agreement to be Acquired by Clearwater in a $17.7 million Transaction.

CynergisTek’s Stockholders to Receive $1.25 Per Share in Cash

The transaction is expected to close in the third quarter of 2022, subject to the receipt of approval by CTEK’s stockholders, and subject to other customary closing conditions. The path toward closing requires many steps to secure necessary approvals, including multiple filings with the Securities and Exchange Commission, such as the preparation and filing of our proxy statement as described below and convening a stockholder meeting to vote on the transaction.

Subject to the terms and conditions of the merger agreement with Clearwater, CTEK may solicit superior proposals from third parties for a period continuing through June 21, 2022, and in certain cases for a period continuing through June 26, 2022. In the event that we do not accept a superior offer from a third party, we expect to close the transaction shortly after the stockholder meeting referenced above.

Clearwater is a portfolio company of funds affiliated with Altaris Capital Partners, LLC, an investment firm focused exclusively on the healthcare industry. Clearwater is a leading provider of cybersecurity, risk management, and HIPAA compliance software, consulting, and managed services for the healthcare industry.

Clearwater believes the companies share a common mission, values, and customer focus, and that these are compelling reasons to combine forces. Should this transaction be completed, it will further Clearwater’s vision of establishing a recognized leader in healthcare cybersecurity, compliance and risk management.  

Among other reasons, Clearwater decided to purchase CTEK because of:

·Our industry leadership in the healthcare markets 

·Our experienced and talented employees 

·Our strong customer and partner relationships 

·Our expansive breadth of services 

Being privately owned will allow us more flexibility in the way we run the business, provide a support structure for investment in the business, and means that we will no longer be encumbered by the costs associated with being a public company. 

6.Why weren’t we told earlier? 

The sale of a public company must follow certain rules and regulations. It was very important for the success of the transaction that strict confidentiality be maintained so very few people have been aware of the potential acquisition. We were required to keep things confidential in order to protect the company and our future success.

7.What happens next? 

After the solicitation period referenced in question 2 above ends, we will file a preliminary proxy statement with the Securities and Exchange Commission (SEC). This document will contain detailed information about the transaction and will be available to the public. Once any SEC review is completed (or the SEC declines to review), a “definitive proxy statement” will be filed with the SEC and mailed to stockholders. Following the mailing, a meeting will be held to allow stockholders to vote on the transaction. If the stockholders approve and adopt the merger agreement and approve the merger at the meeting, then, if all closing conditions are met, the transaction can be closed.

8.What happens between now and close? 

Between now and closing very little will change from a business standpoint. We will operate the business as usual as a publicly traded company. We need to continue to remain focused on operating solely in the best interest of CTEK and its current stockholders.

Clearwater has an equally long legacy in serving the healthcare industry and is excited about the opportunity to combine our many strengths.  Clearwater is supportive of our current strategy and views many of our services as complimentary to theirs. Clearwater has a long-term view toward growing its business through value creation for its customers. Clearwater believes that we have excellent prospects for continued cybersecurity, privacy and compliance leadership, and it looks forward to partnering with our team to help realize our market opportunities.

Subject to applicable legal requirements, during the next few months Clearwater will want to spend more time getting to know our people as well as further understanding our business. As we get closer to the closing date of the transaction, we anticipate that senior managers will be meeting with management from Clearwater in order to help them better understand the objectives of the merger, organizational structure and roles of each group.

Clearwater does not anticipate any major restructuring or layoffs at this time. An important factor in this transaction was our experienced and talented employees. Retention and employee satisfaction are very important and a high priority for Clearwater. As always, the executive team will look at how best to structure our organization as we continue to grow and evolve. 

We believe this transaction provides us a greater degree of freedom and flexibility to build a growth-oriented future and drive our business forward.

The Company issued a press release announcing the transaction earlier today. Your comments with respect to the transaction should be limited to publicly available information and written information that we have provided to you for communication with third parties. Press queries and investor questions should be forwarded to Bryan Flynn or Paul Anthony. Except for those individuals who have been designated as our spokespersons, no one should have any contact whatsoever with the media (other than to simply refer any inbound contact to Bryan or Paul).

There are no changes to our relationships with our vendors at this time. We are working on a “business as usual” basis.

The fact that we will be a privately owned company should have little to no impact on the solutions and services we take pride in providing to our customers and partners. It simply means that we will no longer be a publicly traded company.

The executive team has a plan to reach out to our customers and key suppliers. If you have questions or concerns about a particular customer or partner, please reach out to the appropriate executive team member. We are pleased to let our customers know that this transaction is great news, that they can continue to rely on the excellent service they expect and deserve, and that partnering with Clearwater will give us the resources to support our growth and the execution of our strategic plans for the business. From the customers’ perspective, they should not expect any changes, and we will keep them apprised of any updates.

Clearwater does not anticipate any changes to salaries. The merger agreement provides that for a year following the closing of the transaction your base salary will be at least as favorable as the salary in effect prior to the closing. We will update you when we have more information. In the meantime, all payroll, commissions, expense reports and other employee-related payments will be made without interruption.

You will continue to receive employee benefits after the closing.  The merger agreement provides that for a year following the closing, Clearwater will continue to provide benefits under our current plans or under the Clearwater plans, or a combination of our plans and Clearwater plans, with the benefits being substantially similar to the benefits being provided under those plans.  Your bonus opportunity for 2022 will remain in place, but the performance criteria are subject to change.

We currently anticipate that public trading in our stock will be suspended on the closing date of the transaction. Following the closing, our common stock will no longer be listed on the NYSE American stock exchange or registered under the Securities Exchange Act of 1934, as amended.

You may not trade in our stock until our preliminary proxy statement has been filed with the SEC. Of course, even after then you may not trade at any time that you are in possession of material non-public information and all trades must still be made in compliance with our insider trading policies. Please contact Bryan Flynn if you have any questions about your ability to trade.

Prior to completion of the merger, your rights have not changed with regard to your vested options or restricted stock units (“RSUs”) — you are free to exercise any options that are currently vested or that vest prior to completion of the merger, and any RSUs scheduled to vest prior to the merger (or deferred RSUs with a settlement date prior to the merger) will be settled in accordance with your grant (or deferral election). Upon completion of the merger, all outstanding options and RSUs will be canceled as described below.

If the transaction closes, all unvested options and RSUs will fully vest. At Closing, RSU holders will be paid the cash amount equal to $1.25 per share for each RSU held, less applicable withholding taxes, and option holders will be paid the cash amount equal to $1.25 per share for each option held, less the exercise price of the options and less applicable withholding taxes. All options with an exercise price equal to or greater than $1.25 per share will be cancelled for no consideration. Further details and timing of these payments will be provided once the merger is complete.

We have experienced a lot of changes over the past few years. We realize this is another substantial change. It is critical to continue to focus on what you can control and do a great job for our customers, for our employees, partners, and stockholders. Practice operational excellence in everything you do, remain focused on doing a great job and don’t let this transaction defocus you in any way.

Cautionary Note Regarding Forward Looking Statements  

This communication contains certain forward-looking statements relating to the business of CTEK.  These forward-looking statements are within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and can be identified by the use of forward-looking terminology such as “believes,” “expects,” “anticipates,” “would,” “could,” “intends,” “may,” “will,” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including but not limited to uncertainties relating to the failure to obtain the required votes of CTEK’s stockholders; the timing to consummate the proposed merger; the conditions to closing of the proposed merger not being satisfied or the closing of the proposed merger otherwise not occurring; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, including in circumstances that would require CTEK to pay a termination fee; unanticipated difficulties or expenditures relating to the proposed merger; the diversion of management time on merger-related issues; results of litigation, settlements and investigations; actions by third parties, including governmental agencies and including the response of customers, service providers and business partners to the announcement of the proposed merger; product/services development; long and uncertain sales cycles; the ability to obtain or maintain proprietary intellectual property protection; future capital requirements; competition from other providers; the ability of CTEK’s vendors to continue supplying CTEK with supplies and services at comparable terms and prices; CTEK’s ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments; CTEK’s ability to maintain its brand and reputation and retain or replace its significant customers; cybersecurity risks and risks of damage and interruptions of information technology systems; CTEK’s ability to retain key members of management and successfully integrate new executives; CTEK’s ability to complete acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or other transactions on acceptable terms, or at all; potential risks and uncertainties relating to the existing and ultimate impact of the COVID-19 pandemic, including actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on the global economy and financial markets; the general economic impact of the ongoing war in Ukraine, including the impact of related sanctions being imposed by the U.S. Government and the governments of other countries, and the impact of potential reprisals as a consequence of the war in Ukraine and any related sanctions; and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected.   Certain of these risks and uncertainties are or will be described in greater detail in CTEK’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended on Form 10-K/A) and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, each filed with the Securities and Exchange Commission (“SEC”), which are available at http://www.sec.gov.  Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Many of the risks listed above have been, and may further be, exacerbated by the COVID-19 pandemic, including its impact on the healthcare industry, or the ongoing war in Ukraine. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. The forward-looking statements are made as of the date of this communication, and CTEK is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.  

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy the securities of CTEK or the solicitation of any vote or approval. The proposed merger and the merger agreement described above will be submitted to CTEK’s stockholders for their consideration at a special meeting of the stockholders. In connection therewith, CTEK intends to file relevant materials with the SEC, including

Participants in the Solicitation

CTEK and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. A list of the names of such directors and executive officers and information concerning such participants’ ownership of CTEK’s common stock is set forth in CTEK’s definitive proxy statement on Schedule 14A for the 2021 annual meeting of stockholders, filed with the SEC on August 26, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such proxy statement, and by CTEK’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022 (as amended on Form 10-K/A, filed with the SEC on April 29, 2022). Additional information about the direct or indirect interests, by security holdings or otherwise, of those participants will be included in the definitive proxy statement and other documents filed with the SEC regarding the proposed merger, if and when they become available.  Free copies of these materials may be obtained as described in the preceding paragraph.