SEC Form 425 filed by Bed Bath & Beyond Inc.
$BBBY
Catalog/Specialty Distribution
Consumer Discretionary
UNITED STATES
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
November 24, 2025
Date of Report (Date of earliest event reported)
Bed Bath & Beyond, Inc.
(Exact name of registrant as specified in its charter)
| Delaware |
000-41850
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87-0634302 |
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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433 W. Ascension Way, 3rd Floor
Murray
Utah 84123
(Address of principal executive offices)(Zip Code)
(801) 947-3100
Registrant’s telephone number, including area code
Not Applicable
(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:
| ☒ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which
registered
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Common Stock, $0.0001 par value per share
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BBBY |
New York Stock Exchange
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Warrants to Purchase Shares of Common Stock
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BBBY WS |
New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company 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. ☐
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Item 1.01
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Entry into a Material Definitive Agreement.
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Merger Agreement
On November 24, 2025, Bed Bath & Beyond, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan
of Merger (the “Merger Agreement”),
by and among the Company, Knight Merger Sub II, Inc., a Delaware corporation and wholly owned subsidiary of the Company, and The Brand House Collective, Inc., a Tennessee corporation (“TBHC”), pursuant to which, subject to the terms and conditions set forth therein, Merger Sub will merge with and into TBHC (the “Merger”), with TBHC surviving such Merger as a wholly owned subsidiary of the Company.
Merger Consideration
Under the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, no par value, of TBHC (the “TBHC Common Stock”) issued and outstanding immediately prior
to the Effective Time (other than treasury shares and any shares of TBHC Common Stock held directly by the Company or Merger Sub) will be converted into the right to receive 0.1993 shares (the “Exchange Ratio”) of a fully paid and non-assessable share of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”) and, if applicable, cash in lieu of fractional shares, subject to any applicable withholding.
At the Effective Time, (i) each award of TBHC restricted share units (“TBHC RSU”) that is outstanding as of immediately prior to the Effective Time will automatically fully vest and be converted into the right to receive, without interest and subject to applicable withholding taxes, (A) a number of
shares of Company Common Stock equal to the number of shares of TBHC subject to the TBHC RSU multiplied by the Exchange Ratio and (B) if applicable, cash in lieu of fractional shares, and (ii) each option to purchase TBHC Common Stock (“TBHC Option”) that is outstanding as of immediately prior to the Effective Time will be automatically converted into the right to receive, without interest
and subject to applicable withholding taxes, (A) a number of shares of Company Common Stock equal to the Net Option Share Amount (as defined in the Merger Agreement) applicable to the TBHC Option multiplied by the Exchange Ratio and (B) if
applicable, cash in lieu of fractional shares.
Conditions to the Merger
The obligation of TBHC and the Company to consummate the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver
of a number of customary conditions, including: (i) the adoption of the Merger Agreement by TBHC’s shareholders, including the affirmative vote of a majority of the votes cast by Disinterested Shareholders (as defined in the Merger Agreement) at
a meeting duly called and held for such purpose; (ii) the Company’s registration statement on Form S-4 to be filed in connection with the Merger having become effective, and the shares of Company Common Stock issuable in the Merger having been
approved for listing on the New York Stock Exchange; (iii) at the Company’s election, either (A) the payoff of TBHC’s credit facility with Bank of America, N.A. (the “TBHC ABL”) or (B) the use of commercially reasonable efforts by the Company and TBHC to amend the TBHC ABL in form and substance reasonably acceptable to the Company and TBHC; (iv) the absence of laws or orders
restraining the consummation of the Merger; (v) the representations and warranties of TBHC and the Company being true and correct, subject to the materiality standards contained in the Merger Agreement, and TBHC and the Company having complied in
all material respects with their respective obligations under the Merger Agreement; and (vi) the absence of any effects that have constituted or resulted in, or would reasonably be expected to constitute or result in, a material adverse effect
for TBHC or the Company.
1
Representations and Warranties; Covenants
The Merger Agreement contains customary representations and warranties given by TBHC, the Company and Merger Sub. TBHC has also made customary
covenants in the Merger Agreement, including covenants relating to conduct of its business prior to the closing of the Merger. The Company has agreed to (i) appear at any TBHC shareholder meeting to have the Company’s shares counted as present
for purposes of establishing a quorum and (ii) vote the Company’s shares in favor of the adoption of the Merger Agreement and the Merger.
The Merger Agreement also contains covenants by TBHC not to solicit or participate in any discussions or negotiations with any person making an
inquiry or proposal for an alternative transaction, and requiring TBHC’s board of directors to recommend the transaction-related proposals to its shareholders, in each case subject to certain exceptions. Prior to the approval of the
transaction-related proposals by TBHC’s shareholders, the board of directors of TBHC may change its recommendation in response to an unsolicited proposal for an alternative transaction, if it determines that the proposal constitutes a “Company Superior Proposal” (as defined in the Merger Agreement) and that failure to take such action would reasonably be expected to be inconsistent with its
fiduciary duties to its shareholders under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. Prior to the approval of the transaction-related proposals by TBHC’s shareholders, TBHC’s board of
directors may also change their recommendation if a “Company Intervening Event” (as defined in the Merger Agreement) occurs, and TBHC’s board of directors
determines, after consultation with its outside legal counsel and financial advisor, that failing to change its recommendation would be reasonably likely to be inconsistent with its fiduciary duties, subject to complying with certain procedures
set forth in the Merger Agreement.
Termination and Termination Fees
The Merger Agreement contains customary mutual termination rights for TBHC and the Company, including if the Merger is not completed by May
24, 2026 (subject to extension under certain circumstances) (the “Outside Date”), and if the required approval of TBHC’s shareholders
is not obtained. The Merger Agreement also contains customary termination rights for the benefit of each party, including (i) if the board of directors of the other party changes its recommendation, (ii) if the board of directors of such party
authorizes entry into a definitive agreement relating to a superior proposal and (iii) if the other party breaches its representations, warranties or covenants under the Merger Agreement in a way that would result in a failure of its condition
to closing being satisfied (subject to certain procedures and cure periods).
Under the Merger Agreement, TBHC will be required to pay a termination fee to the Company equal to $1,025,300 if the Merger Agreement is terminated
in certain circumstances, including if the Merger Agreement is terminated because TBHC’s board of directors has changed its recommendation or if the required approval of TBHC’s shareholders is not obtained. In the event that the required approval
of TBHC’s shareholders is not obtained, TBHC will also reimburse the Company’s expenses in an amount equal to $341,800.
Additional Information
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
2
A copy of the Merger Agreement has been included to provide investors with information regarding its terms and is not intended to provide any factual
information about TBHC or the Company. The Merger Agreement contains representations, warranties, covenants and agreements, which were made only for purposes of such agreement and as of specified dates. The representations and warranties in the
Merger Agreement reflect negotiations between the parties to the Merger Agreement and are not intended as statements of fact to be relied upon by stockholders, or any individual or other entity other than the parties. In particular, the
representations, warranties, covenants and agreements in the Merger Agreement may be subject to limitations agreed by the parties, including having been modified or qualified by certain confidential disclosures that were made between the parties
in connection with the negotiation of the Merger Agreement, and having been made for purposes of allocating risk among the parties rather than establishing matters of fact. In addition, the parties may apply standards of materiality in a way that
is different from what may be viewed as material by investors. As such, the representations and warranties in the Merger Agreement may not describe the actual state of affairs at the date they were made or at any other time and you should not
rely on them as statements of fact. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, and unless required by applicable law, the Company undertakes no
obligation to update such information.
Second Amendment to Amended and Restated Credit Agreement
As previously disclosed, on May 7, 2025, the Company, TBHC, KIRKLAND’S STORES, INC., a Tennessee corporation (the “Term Loan Lead Borrower”) and the other loan parties thereto entered into that certain Amended and Restated
Term Loan Credit Agreement (as amended by that certain Amendment No. 1 to Amended and Restated Term Loan Credit Agreement, dated as of September 15, 2025, the “Existing
Credit Agreement”).
On November 24, 2025, the Company, TBHC, and the other loan parties party thereto entered into that certain Amendment No. 2 to Amended and Restated
Term Loan Credit (the “Second Amendment”), pursuant to which the Company agreed to increase the delayed draw term loan commitments made available by the
Company to TBHC by $10,000,000, to an aggregate amount of $30,000,000. Concurrently with the Second Amendment, the Term Loan Lead Borrower borrowed $10,000,000 of delayed draw term loans.
The foregoing description of the Second Amendment to Amended and Restated Credit Agreement is qualified in its entirety by reference to the Second
Amendment, which is filed as Exhibit 10.1 to this Current Report Form 8-K.
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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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The foregoing disclosure under “Second Amendment to Amended and Restated Credit
Agreement” in Item 1.01 hereof is incorporated by reference into this Item 2.03.
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Item 9.01.
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Financial Statements and Exhibits
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(d) Exhibits.
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Exhibit Number
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Exhibit Description
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Agreement and Plan of Merger, dated as of November 24, 2025, by and among Bed Bath & Beyond, Inc., Knight
Merger Sub II, Inc., and The Brand House Collective, Inc.
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Amendment No. 2 to Amended and Restated Term Loan Credit Agreement, dated as of
November 24, 2025, entered into by and among Kirkland’s Stores, Inc., a Tennessee corporation, as Lead Borrower, the other Loan Parties party thereto, the lenders party thereto and Bed Bath &
Beyond, Inc., as Administrative Agent and Collateral Agent.
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104
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The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101)
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* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Reporting Company agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the SEC upon request.
3
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements 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”). Such forward-looking statements include all statements other than statements of historical fact, including but not limited to statements regarding the Merger, its consummation, shareholder approval
and listing requirements, termination fees if the Merger is not consummated, our anticipated financial performance, including the anticipated closing of and synergies related to the Merger, actions related to the TBHC ABL, our industry, business
strategy, plans, goals and expectations concerning our market position, future operations and other financial and operating information, and the timing of any of the foregoing. Forward-looking statements are neither promises nor guarantees, but
involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to uncertainties as to the timing of the consummation of the proposed transaction and the ability of the parties to consummate the proposed transactions; the satisfaction of the conditions
precedent to consummation of the proposed transaction, including the approval of TBHC’s shareholders; the ability to obtain required regulatory approvals at all or in a timely manner; any litigation related to the proposed transaction; disruption
of the Company’s or TBHC’s current plans and operations as a result of the proposed transaction; the ability the Company or TBHC to retain and hire key personnel; competitive responses to the proposed transaction; unexpected costs, charges or
expenses resulting from the proposed transaction; the ability of the Company to successfully integrate TBHC’s operations; the ability of the Company to implement its plans, forecasts and other expectations with respect to TBHC’s business after
the completion of the transaction, if consummated; the ability of the Company to realize the anticipated synergies and related benefits from the proposed transaction in the anticipated amounts or within the anticipated timeframes or at all; and
the ability to maintain relationships with the Company’s and TBHC’s respective employees, customers, other business partners and governmental authorities. These and other important factors are discussed under the caption “Risk Factors” in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on
February 25, 2025, Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, filed with the SEC on November 14, 2025, and in our subsequent filings with the SEC.
Important Additional Information Regarding the Transaction Will Be Filed With the SEC
In connection with the proposed Merger, the Company and TBHC will file relevant materials with the SEC, including a Company registration statement on Form S-4 that
will include a proxy statement of TBHC and will also constitute a prospectus of the Company, and a definitive proxy statement will be mailed to shareholders of TBHC. INVESTORS AND
SECURITY HOLDERS OF THE COMPANY AND TBHC ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS THAT WILL BE INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4, AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS (IF ANY) CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION, THE PARTIES
TO THE PROPOSED TRANSACTION AND THE RISKS ASSOCIATED WITH THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain, without charge, a copy of the registration statement, the proxy statement/prospectus and other
relevant documents filed with the SEC (when available) from the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company’s investor relations website at
investors.beyond.com. Copies of the documents filed with the SEC by TBHC will be available free of charge on TBHC’s investor relations website at ir.kirklands.com.
4
Participants in the Solicitation
The Company, TBHC and certain of their directors, executive officers and other members of management may be deemed to be participants in the solicitation of proxies
with respect to the proposed transactions. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of TBHC in connection with the proposed transactions, including a
description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus when it is filed with the SEC. Information regarding the Company’s directors and executive officers is
contained in the Company’s definitive proxy statement in connection with its annual meeting of stockholders held in 2025, which was filed with the SEC on March 28, 2025. Information regarding TBHC’s directors and executive officers is contained
in TBHC’s definitive proxy statement in connection with its annual meeting of shareholders held in 2025, which was filed with the SEC on June 30, 2025. Security holders and investors may obtain additional information regarding the interests of
such persons, which may be different than those of the Company’s security holders generally, by reading the proxy statement/prospectus and other relevant documents regarding the transaction, which will be filed with the SEC. You may obtain these
documents (when they become available) free of charge through the website maintained by the SEC at www.sec.gov and the Company’s or TBHC’s investor relations websites as described above.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase
or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. This communication does not constitute a prospectus or prospectus equivalent document.
No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. In connection with the proposed
transactions, the Company will file a registration statement on Form S-4 that will include a proxy statement of TBHC and will also constitute a prospectus of the Company. INVESTORS
AND SECURITY HOLDERS OF THE COMPANY AND TBHC ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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BED BATH & BEYOND, INC.
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By:
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/s/ Adrianne B. Lee
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Adrianne B. Lee
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President and Chief Financial Officer
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Date:
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November 25, 2025
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AGREEMENT AND PLAN OF MERGER
among
BED BATH & BEYOND, INC.
KNIGHT MERGER SUB II, INC.
and
THE BRAND HOUSE COLLECTIVE, INC.
Dated as of November 24, 2025
TABLE OF CONTENTS
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Page
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ARTICLE I THE MERGER
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2
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Section 1.1
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The Merger
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2
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Section 1.2
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Closing; Effective Time
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2
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Section 1.3
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Effects of the Merger
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3
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Section 1.4
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Certificate of Incorporation and Bylaws
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3
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Section 1.5
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Directors; Officers
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3
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Section 1.6
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Subsequent Actions
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3
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ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
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4 | ||
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Section 2.1
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Conversion of Capital Stock
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4 |
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Section 2.2
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Exchange and Payment
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5 |
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Section 2.3
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Treatment of Options and Other Equity-Based Awards
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8 |
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Section 2.4
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No Fractional Shares
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9 |
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Section 2.5
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Tax Withholding
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9
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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10 |
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Section 3.1
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Organization, Standing and Power
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10
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Section 3.2
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Capital Stock
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11 |
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Section 3.3
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Authority
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12
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Section 3.4
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No Conflict; Consents and Approvals
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13 |
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Section 3.5
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SEC Reports; Financial Statements
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14
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Section 3.6
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No Undisclosed Liabilities
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16
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Section 3.7
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Certain Information
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16
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Section 3.8
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Absence of Certain Changes or Events
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16
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Section 3.9
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Litigation
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16
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Section 3.10
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Compliance with Laws
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17
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Section 3.11
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Benefit Plans
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18
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Section 3.12
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Labor Matters
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20
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Section 3.13
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Environmental Matters
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22
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Section 3.14
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Taxes
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23
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Section 3.15
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Contracts
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25
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Section 3.16
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Insurance
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28
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Section 3.17
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Properties
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29
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Section 3.18
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Intellectual Property
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29 |
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Section 3.19
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Data Privacy
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31
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Section 3.20
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Certain Payments
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32
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Section 3.21
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State Takeover Statutes
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32
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i
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Section 3.22
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Affiliate Transactions
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32
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Section 3.23
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Brokers
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33
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Section 3.24
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Opinion of Financial Advisor
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33
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Section 3.25
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No Other Representations or Warranties
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33
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Section 3.26
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No Reliance
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34
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
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34
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Section 4.1
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Organization, Standing and Power
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34
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Section 4.2
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Capital Stock
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35
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Section 4.3
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Authority
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36
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Section 4.4
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No Conflict; Consents and Approvals
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37
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Section 4.5
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SEC Reports; Financial Statements
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37
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Section 4.6
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No Undisclosed Liabilities
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39
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Section 4.7
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Certain Information
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39
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Section 4.8
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No Parent Material Adverse Effect
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40 |
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Section 4.9
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Litigation
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40
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Section 4.10
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Compliance with Laws
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40
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Section 4.11
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Brokers
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41
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Section 4.12
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No Prior Activities
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41
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Section 4.13
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No Other Representations or Warranties
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41
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Section 4.14
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No Reliance
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41
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ARTICLE V COVENANTS
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42
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Section 5.1
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Conduct of Business of the Company
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42
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Section 5.2
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Conduct of Business of Parent
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46
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Section 5.3
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No Control of Other Party’s Business
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46
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Section 5.4
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No Solicitation by the Company
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47
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Section 5.5
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Preparation of Form S-4 and Proxy Statement; Company Shareholders Meeting
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52
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Section 5.6
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Access to Information; Confidentiality
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54
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Section 5.7
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Further Action; Efforts
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55
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Section 5.8
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Company 401(k) Plan
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55
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Section 5.9
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Takeover Laws
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55
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Section 5.10
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Stock Exchange Listing
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55
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Section 5.11
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Stock Exchange Delisting
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56
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Section 5.12
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Indemnification, Exculpation and Insurance
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56
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Section 5.13
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Rule 16b-3
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58
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Section 5.14
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Public Announcements
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58
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Section 5.15
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Obligations of Merger Sub
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58
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Section 5.16
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Notices of Certain Events
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58
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Section 5.17
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Stockholder Litigation
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59
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Section 5.18
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Certain Tax Matters
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59
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Section 5.19
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Revolver Loan Credit Facility
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60 |
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Section 5.20
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Existing Agreements
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63
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ii
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Section 5.21
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Director Resignations
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63
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Section 5.22
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280G Analysis
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63
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Section 5.23
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Parent Support Agreement
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64
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ARTICLE VI CONDITIONS PRECEDENT
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64
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Section 6.1
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Conditions to Each Party’s Obligation to Effect the Merger
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64
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Section 6.2
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Conditions to the Obligations of the Company
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65
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Section 6.3
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Conditions to the Obligations of Parent and Merger Sub
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66
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Section 6.4
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Frustration of Closing Conditions
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66
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
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67
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Section 7.1
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Termination
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67
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Section 7.2
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Effect of Termination
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68
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Section 7.3
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Fees and Expenses
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69
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Section 7.4
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Amendment or Supplement
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70
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Section 7.5
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Extension of Time; Waiver
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71
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ARTICLE VIII GENERAL PROVISIONS
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71
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Section 8.1
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Nonsurvival of Representations and Warranties and Pre-Closing Covenants
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71
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Section 8.2
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Notices
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71
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Section 8.3
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Certain Definitions
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72
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Section 8.4
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Interpretation
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78
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Section 8.5
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Entire Agreement
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78
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Section 8.6
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Parties in Interest
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79
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Section 8.7
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Governing Law
|
79
|
|
|
Section 8.8
|
Submission to Jurisdiction
|
79
|
|
|
Section 8.9
|
Assignment; Successors
|
80 |
|
|
Section 8.10
|
Specific Performance
|
80
|
|
|
Section 8.11
|
Currency
|
80
|
|
|
Section 8.12
|
Severability
|
80
|
|
|
Section 8.13
|
Waiver of Jury Trial
|
80
|
|
|
Section 8.14
|
Counterparts
|
81
|
|
|
Section 8.15
|
Facsimile or .pdf Signature
|
81
|
|
|
Section 8.16
|
No Presumption Against Drafting Party
|
81
|
|
|
Section 8.17
|
Non-Recourse
|
81
|
|
|
Exhibits
|
|
|
Exhibit A
|
Form of Certificate of Merger
|
|
Exhibit B
|
Form of Articles of Merger
|
iii
INDEX OF DEFINED TERMS
|
Definition
|
Section
|
|
Action
|
3.9
|
|
Affiliate
|
8.3(a)
|
|
Agreement
|
Preamble
|
|
Anti-Corruption Laws
|
3.19
|
|
Articles of Merger
|
1.2(b)
|
|
Book-Entry Shares
|
2.2(c)
|
|
Business Day
|
8.3(b)
|
|
Cancelled Shares
|
2.1(a)(ii)
|
|
Certificate of Merger
|
1.2(b)
|
|
Certificates
|
2.2(c)
|
|
Closing
|
1.2(a)
|
|
Closing Date
|
1.2(a)
|
|
Code
|
Recitals
|
|
Collateral Agent
|
5.19(a)
|
|
Company
|
Preamble
|
|
Company 401(k) Plan
|
5.8
|
|
Company Acquisition Proposal
|
5.4(i)(i)
|
|
Company Adverse Recommendation Change
|
5.4(c)
|
|
Company Alternative Acquisition Agreement
|
5.4(c)
|
|
Company Award
|
3.2(d)
|
|
Company Award Consideration
|
2.3(b)
|
|
Company Awards
|
2.3(b)
|
|
Company Board
|
Recitals
|
|
Company Board Recommendation
|
3.2(d)
|
|
Company Bylaws
|
3.1(b)
|
|
Company Charter
|
3.1(b)
|
|
Company Closing Price
|
8.3(c)
|
|
Company Disclosure Letter
|
III
|
|
Company Intervening Event
|
5.4(i)(ii)
|
|
Company Leased Real Property
|
3.17(a)
|
|
Company Material Adverse Effect
|
8.3(e)
|
|
Company Material Contract
|
3.15(a)
|
|
Company Plan
|
3.11(a)
|
|
Company Real Property Leases
|
3.17(a)
|
|
Company Registered IP
|
3.18(b)
|
|
Company RSU
|
2.3(b)
|
|
Company RSU Consideration
|
2.3(b)
|
|
Company SEC Documents
|
3.5(a)
|
|
Company Shareholder Approval
|
8.3(e)
|
|
Company Shareholders Meeting
|
5.5(a)
|
|
Company Shares
|
2.1(a)(i)
|
|
Company Stock Option
|
2.3(a)
|
|
Company Stock Option Consideration
|
2.3(a)
|
iv
INDEX OF DEFINED TERMS
(Continued)
|
Definition
|
Section
|
|
Company Superior Proposal
|
5.4(i)(iii)
|
|
Company Superior Proposal Notice
|
5.4(d)(ii)
|
|
Company Termination Fee
|
7.3(b)(iii)
|
|
Confidentiality Agreement
|
5.6
|
|
Contract
|
3.4(a)
|
|
control
|
8.3(f)
|
|
Credit Facility
|
5.19(a)
|
|
Credit Facility Amendment
|
5.19(a)
|
|
Delaware Secretary of State
|
1.2(b)
|
|
DGCL
|
Recitals
|
|
Disinterested Shareholder
|
8.3(g)
|
|
Effect
|
8.3(e)
|
|
Effective Time
|
1.2(b)
|
|
Encumbrance
|
8.3(l)
|
|
Environmental Laws
|
3.13(c)(i)
|
|
Environmental Permits
|
3.13(c)(ii)
|
|
Equity Interest
|
8.3(m)
|
|
ERISA
|
3.11(a)
|
|
ERISA Affiliate
|
3.11(c)
|
|
Exchange Act
|
3.4(b)
|
|
Exchange Agent
|
2.2(a)
|
|
Exchange Fund
|
2.2(b)
|
|
Exchange Ratio
|
8.3(n)
|
|
Form S-4
|
3.7
|
|
Fractional Share Cash Consideration
|
2.4(b)
|
|
GAAP
|
3.5(b)
|
|
Government Official
|
3.19
|
|
Governmental Entity
|
3.4(b)
|
|
Indemnified Parties
|
5.12(a)
|
|
Intended Tax Treatment
|
Recitals
|
|
IRS
|
3.11(a)
|
|
knowledge of Parent
|
8.3(p)
|
|
knowledge of the Company
|
8.3(q)
|
|
Labor Agreement
|
3.12(a)
|
|
Law
|
3.4(a)
|
|
Liens
|
3.2(c)
|
|
Materials of Environmental Concern
|
3.13(c)(iii)
|
|
Maximum Annual Premium
|
5.12(c)
|
|
Measurement Date
|
3.2(a)
|
|
Merger
|
Recitals
|
|
Merger Consideration
|
2.1(a)(i)
|
|
Merger Sub
|
Preamble
|
|
Merger Sub Board
|
Recitals
|
v
INDEX OF DEFINED TERMS
(Continued)
|
Definition
|
Section
|
|
Most Recent Company Balance Sheet
|
3.6
|
|
Most Recent Parent Balance Sheet
|
4.6
|
|
Nasdaq
|
3.4(b)
|
|
Net Option Share Amount
|
2.3(a)
|
|
NYSE
|
4.4(b)
|
|
OFAC
|
8.3(z)
|
|
Organizational Documents
|
8.3(r)
|
|
Parent
|
Preamble
|
|
Parent Board
|
Recitals
|
|
Parent Bylaws
|
4.1(b)
|
|
Parent Charter
|
4.1(b)
|
|
Parent Common Stock
|
Recitals
|
|
Parent Disclosure Letter
|
IV
|
|
Parent Material Adverse Effect
|
8.3(s), 8.3(t)
|
|
Parent SEC Documents
|
4.5(a)
|
|
Parent Stock Issuance
|
Recitals
|
|
Parent Stock Options
|
4.2(a)
|
|
Payoff Letter
|
5.19(a)
|
|
Permits
|
3.10
|
|
Permitted Encumbrance
|
8.3(u)
|
|
Person
|
8.3(v)
|
|
Personal Information
|
8.3(w)
|
|
Preferred Stock
|
3.2(a)
|
|
Privacy Laws
|
8.3(x)
|
|
Privacy Requirements
|
3.19(a)
|
|
Process
|
8.3(y)
|
|
Prohibited Person
|
8.3(z)
|
|
Proxy Statement
|
5.5(a)
|
|
Relevant Legal Restraint
|
6.1(b)
|
|
Representatives
|
5.4(a)
|
|
Required Lenders
|
5.19(a)
|
|
Sarbanes-Oxley Act
|
3.5(a)
|
|
SEC
|
3.5(a)
|
|
Securities Act
|
3.5(a)
|
|
Security Incident
|
8.3(bb)
|
|
Subsidiary
|
8.3(cc)
|
|
Surviving Corporation
|
Recitals
|
|
Takeover Laws
|
3.21
|
|
Tax Returns
|
3.14(d)(i)
|
|
Taxes
|
3.14(d)(ii)
|
|
TBCA
|
Recitals
|
|
Tennessee Secretary of State
|
1.2(b)
|
|
Term Loan Credit Facility
|
5.20, 5.20, 5.20
|
vi
INDEX OF DEFINED TERMS
(Continued)
|
Definition
|
Section
|
|
Termination Date
|
7.1(b)(i)
|
|
Third Party
|
47
|
|
Willful Breach
|
8.3(dd)
|
vii
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of November 24,
2025, is made by and among Bed Bath & Beyond, Inc., a Delaware corporation (“Parent”), Knight Merger Sub II, Inc., a Delaware corporation and a wholly-owned Subsidiary of Parent
(“Merger Sub”), and The Brand House Collective, Inc., a Tennessee corporation (the “Company”).
RECITALS
WHEREAS, upon the terms and subject to the conditions of this Agreement and in accordance with the General Corporation Law of the State of
Delaware (the “DGCL”) and the Tennessee Business Corporation Act (the “TBCA”), Parent, Merger Sub and the Company have
agreed to enter into a business combination transaction pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company being the surviving
corporation (the Company, in its capacity as the surviving corporation of the Merger, is sometimes referred to as the “Surviving Corporation”);
WHEREAS, for U.S. federal income Tax purposes, the parties hereto intend that (i) the Merger qualifies as a “reorganization” within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) (the “Intended Tax Treatment”),
and (ii) this Agreement is, and hereby is adopted as, a “plan of reorganization” for purposes of Sections 354, 361 and the 368 of the Code and within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a);
WHEREAS, the board of directors of the Company (the “Company Board”) unanimously
(a) determined that the terms of this Agreement and the transactions contemplated hereby, including the Merger, are fair to, and in the best interests of, the Company and its shareholders, (b) determined that it is in the best interests of
the Company and its shareholders, and declared it advisable, to enter into this Agreement, (c) approved the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and agreements contained
herein and the consummation of the Merger and the other transactions contemplated hereby upon the terms and subject to the conditions contained herein and (d) subject to Section 5.4,
resolved to recommend that the Company’s shareholders vote to adopt this Agreement;
WHEREAS, the board of directors of Parent (the “Parent Board”) unanimously (a)
determined that the terms of this Agreement and the transactions contemplated hereby, including the Merger, are fair to, and in the best interests of, Parent and its stockholders, (b) determined that it is in the best interests of Parent and
its stockholders, and declared it advisable, to enter into this Agreement, (c) approved the execution and delivery by Parent of this Agreement, the performance by Parent of its covenants and agreements contained herein and the consummation of
the Merger and the other transactions contemplated hereby upon the terms and subject to the conditions contained herein and (d) resolved to approve the issuance of common stock, par value $0.0001 per share, of Parent (“Parent Common Stock”) pursuant to the Merger as contemplated by, and subject to the terms and conditions set forth in, this Agreement (the “Parent
Stock Issuance”);
WHEREAS, the board of directors of Merger Sub (the “Merger Sub Board”) (a)
approved this Agreement and declared its advisability and (b) resolved to recommend the adoption of this Agreement by the sole stockholder of Merger Sub;
WHEREAS, Parent, as the sole stockholder of Merger Sub, shall adopt this Agreement immediately following the execution of this Agreement upon
the recommendation of the Merger Sub Board; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with
the Merger and the other transactions contemplated by this Agreement and also to prescribe certain terms and conditions to the Merger as specified herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions of this Agreement, at the Effective Time and in accordance with
the DGCL and the TBCA, Merger Sub shall be merged with and into the Company pursuant to which (i) the separate corporate existence of Merger Sub shall cease, (ii) the Company shall be the Surviving Corporation in the Merger and shall continue its corporate existence under the laws of the State of Tennessee as a
direct, wholly owned Subsidiary of Parent and (iii) all of the properties, rights, privileges, powers and franchises of the Company and Merger Sub will vest in the Surviving Corporation, and all of the debts, liabilities, restrictions,
obligations and duties of the Company will become the debts, liabilities, restrictions, obligations and duties of the Surviving Corporation, all as provided under the DGCL and the TBCA.
Section 1.2 Closing;
Effective Time.
(a) The closing of the
Merger (the “Closing”) shall take place at 9:00 a.m., Eastern time, no later than the third (3rd) Business Day following the satisfaction or, to the extent permitted hereunder and
by applicable Law, waiver of the last to be satisfied or waived of all conditions to the parties’ respective obligations to effect the Merger set forth in Article VI (other than
those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted hereunder and by applicable Law, waiver of those conditions at the Closing), at the offices of Latham
& Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611, unless another date, time or place is agreed to in writing by Parent and the Company; provided,
that the Closing may occur remotely via electronic exchange of required Closing documentation in lieu of an in-person Closing, and the parties shall cooperate in connection therewith. The date on which the Closing actually occurs is
referred to in this Agreement as the “Closing Date.”
2
(b) Subject to the
provisions of this Agreement, at the Closing, the parties shall cause (i) a certificate of merger with respect to the Merger in the form set forth as Exhibit A hereto (the “Certificate of Merger”) to be duly executed and filed with the Secretary of State of the State of Delaware (the “Delaware Secretary of
State”), in accordance with the relevant provisions of the DGCL, and (ii) articles of merger with respect to the Merger in the form set forth as Exhibit B hereto
(the “Articles of Merger”) to be duly executed and filed with the Secretary of State of the State of Tennessee (the “Tennessee
Secretary of State”), in accordance with the relevant provisions of the TBCA. The Merger shall become effective upon the filing of the Certificate of Merger with the Delaware Secretary of State or at such other time as the
parties may mutually agree to in writing and as shall be specified in the Certificate of Merger. The date and time when the Merger shall become effective is herein referred to as the “Effective
Time.”
Section 1.3 Effects
of the Merger. The Merger shall have the effects provided for in this Agreement and in the applicable provisions of the DGCL and the TBCA.
Section 1.4 Certificate of Incorporation and Bylaws. From and after the Effective Time, subject to Section 5.10, the certificate of incorporation and the bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation and bylaws, respectively, of the Surviving Corporation, with such changes as reasonably required
in accordance with applicable Law, until thereafter changed or amended as provided therein or by applicable Law (and subject to the provisions of Section 5.10).
Section 1.5 Directors; Officers. From and after the Effective Time, (i) the directors of Merger Sub immediately prior to the Effective
Time shall be the only directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified and (ii) the officers of Merger Sub immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.
Section 1.6 Subsequent Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of the Company or Merger Sub,
as applicable, acquired or to be acquired by the Surviving Corporation as a result of or in connection with the Merger or otherwise to carry out this Agreement, the officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name of and on behalf of either the Company or Merger Sub, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each such corporation or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Corporation, or otherwise to carry out this
Agreement.
3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Capital Stock.
(a) Subject to the terms
and conditions of this Agreement, at the Effective Time, automatically, by virtue of the Merger and without any action on the part of the Company, Parent, Merger Sub or the holders of any shares of capital stock of the Company, Parent or
Merger Sub, and subject to the provisions of this Article II:
(i) each share of
common stock, no par value, of the Company (such shares, collectively, the “Company Shares”) issued and outstanding immediately prior to the Effective Time (other than Cancelled
Shares), shall be converted automatically into and shall thereafter represent the right to receive, without interest, a number of validly issued, fully paid and nonassessable shares of Parent Common Stock equal to the Exchange Ratio,
rounded down to the nearest whole share as contemplated by Section 2.4 with respect to fractional shares and any required withholding of Taxes pursuant to Section 2.5 (together
with the Fractional Share Cash Consideration, the “Merger Consideration”).
(ii) each Company Share
held in the treasury of the Company or held directly by Parent, any Subsidiary thereof, including Merger Sub, the Company or any wholly-owned Subsidiary of the Company immediately prior to the Effective Time shall automatically be cancelled
and shall cease to exist, and no consideration shall be delivered in exchange therefor (such shares, the “Cancelled Shares”); and
(iii) each share of common stock, par value $0.0001 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 $0.0001 per share, of the Surviving Corporation with the same rights, powers, and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving
Corporation.
(b) If at any time during the period between the date of this Agreement and the Effective Time (and as permitted by Article V), any change in the outstanding shares
of capital stock of Parent or the Company, or securities convertible into or exchangeable into or exercisable for shares of such capital stock, shall occur as a result of any reclassification, recapitalization, stock split (including a
reverse stock split) or subdivision or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period, merger or other similar transaction, then the Merger Consideration
and any other amounts payable pursuant to this Agreement shall be adjusted to the extent appropriate to provide the same economic effect as contemplated by this Agreement prior to such action; provided, that nothing in this Section 2.1 shall be construed to permit the Company or Parent to take any action with respect to its securities that is
prohibited by the terms of this Agreement. In addition to the foregoing, if Parent makes any dividend of cash or other property in respect of the capital stock of Parent the record date of which occurs prior to the Effective Date that
would adversely affect the Company shareholders in a manner disproportionate to Parent and its shareholders, then the Exchange Ratio shall be subject to equitable adjustment as determined by Parent in good faith and in its sole discretion
to provide the same economic effect as contemplated by this Agreement prior to such action.
4
Section 2.2 Exchange and Payment.
(a) Appointment of Exchange Agent. Prior to the mailing of the Proxy Statement, Parent shall enter into an agreement (in a form reasonably acceptable to the Company) with a nationally recognized financial institution or
trust company to act as an exchange agent (the “Exchange Agent”) for the purpose of paying the Merger Consideration and the Exchange Agent’s other responsibilities under this
Agreement.
(b) Prior to the
Effective Time, Parent shall deposit (or cause to be deposited) with the Exchange Agent (i) the aggregate Fractional Share Cash Consideration payable in the Merger to holders of Company Shares and (ii) evidence of Parent Common Stock in
book-entry form representing the number of shares of Parent Common Stock sufficient to deliver the aggregate Merger Consideration payable in the Merger to holders of Company Shares (such cash and book-entry shares, together with any
dividends or distributions with respect thereto, the “Exchange Fund”). The Exchange Fund shall not be used for any purpose other than to fund payments in respect of Company Shares
converted into Merger Consideration pursuant to Section 2.1(a), except as provided in this Agreement (including payment of the Fractional Share Cash Consideration). Parent shall
pay all charges and expenses of the Exchange Agent incurred by it in connection with the exchange of Company Shares for the Merger Consideration.
(c) As promptly as reasonably practicable after the Effective Time (but in no event later than three (3) Business Days after the Effective
Time), the Surviving Corporation shall cause the Exchange Agent to mail to each holder of record of an outstanding certificate or outstanding certificates (“Certificates”) that immediately prior to the Effective Time represented outstanding Company Shares that were converted into the right to receive the Merger Consideration
with respect thereto pursuant to Section 2.1(a), (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates held by such Person shall pass, only upon
proper delivery of the Certificates to the Exchange Agent) and (ii) instructions for use in effecting the surrender of such Certificates in exchange for the Merger Consideration payable with respect thereto pursuant to Section 2.1(a),
the Fractional Share Cash Consideration payable pursuant to (a) and any dividends or other distributions such holder is entitled to receive pursuant to Section 2.2(i) below. Upon surrender of a Certificate to the Exchange
Agent, together with such letter of transmittal, duly completed, in proper form and validly executed in accordance with the instructions thereto, with all required enclosures and attachments, with respect to such Certificates, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each Company Share formerly represented by such Certificate
(subject to deduction for any required withholding Tax), and the Certificate so surrendered shall forthwith be cancelled and any shares of Parent Common Stock issued in connection with the foregoing shall be in non-certificated book-entry
form. As promptly as reasonably practicable after the Effective Time, the Surviving Corporation shall cause the Exchange Agent to deliver to each holder of record immediately prior to the Effective Time of (1) uncertificated Company
Shares represented by book entry (“Book-Entry Shares”) and (2) Certificates, the Merger Consideration payable with respect thereto pursuant to Section
2.1(a), the Fractional Share Cash Consideration payable pursuant to (a) and any dividends or other distributions such holder is entitled to receive pursuant to Section 2.2(i) below, in each case without the need for
receipt of any further documentation, including any “agent’s message” or other evidence of surrender. The shares of Parent Common Stock issued in connection with the foregoing shall be in non-certificated book-entry form. No interest will
be paid or accrued for the benefit of holders of Certificates or Book-Entry Shares on the Merger Consideration payable in respect of Certificates or Book-Entry Shares.
5
(d) If payment of the Merger Consideration or Fractional Share Cash Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate or Book-Entry Share is registered, it shall be a
condition of payment that such Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer or such Book-Entry Share shall be properly transferred and that the Person requesting such payment
shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate or Book-Entry Share surrendered or shall have established to the
satisfaction of Parent that such Tax either has been paid or is not applicable.
(e) Until surrendered as contemplated hereby, each Certificate or Book-Entry Share shall, at any time after the Effective Time, represent only the right to receive the applicable
Merger Consideration provided in this Agreement and any dividends or other distributions
such holder is entitled to receive pursuant to Section 2.2(i) below, in each case, in respect of Company Shares theretofore represented by such Certificate or Book-Entry Shares, as applicable, without any interest thereon.
(f) The Merger Consideration and any dividends or other distributions payable pursuant to Section 2.2(i) paid upon the surrender of Certificates or Book-Entry Shares
in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the Company Shares formerly represented by
such Certificates or Book-Entry Shares. At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the
Company Shares that were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates and Book-Entry Shares representing the Company Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares except as otherwise provided for herein or by applicable Law. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange
Agent for transfer or transfer is sought for Book-Entry Shares, such Certificates or Book-Entry Shares shall be cancelled and exchanged as provided in this Article II.
(g) The Exchange Agent shall, if directed by Parent in its sole discretion, invest any cash included in the Exchange Fund as directed by Parent, on a daily basis; provided,
that any investment of such cash shall in all events be in short-term obligations of the United States of America with maturities of no more than 30 days or guaranteed by the United States of America and backed by the full faith and
credit of the United States of America or in commercial paper obligations rated A‑1 or P‑1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively. If for any reason (including investment losses)
the cash in the Exchange Fund is insufficient to fully satisfy all of the payment obligations to be made in cash by the Exchange Agent hereunder, Parent shall cause the Surviving Corporation to promptly deposit cash into the Exchange Fund
in an amount which is equal to the deficiency in the amount of cash required to fully satisfy such cash payment obligations. Any interest and other income resulting from such investments shall be payable to the Surviving Corporation or
such other party as may be determined by Parent.
6
(h) At any time following the date that is twelve (12) months after the Effective Time, the Surviving Corporation shall be entitled to require the Exchange Agent to deliver to it any funds (including any interest received with
respect thereto) which have been made available to the Exchange Agent and which have not been disbursed to holders of Certificates or Book-Entry Shares, and thereafter such holders shall be entitled to look to Parent and the Surviving
Corporation (subject to abandoned property, escheat or other similar Laws) only as general creditors thereof with respect to the Merger Consideration (and any dividends or other distributions payable with respect thereto pursuant to Section 2.2(i)) payable upon due surrender of their Certificate or Book-Entry Shares. Notwithstanding the foregoing, neither the Surviving Corporation nor Parent shall be liable to
any holder of Company Shares for any amounts paid to a public official pursuant to applicable abandoned property, escheat, or similar Laws. Any amounts remaining unclaimed by holders of the Company Shares two (2) years after the Effective
Time, or such earlier date, immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Entity shall become, to the extent permitted by applicable Law, the property of the Surviving
Corporation (or, at the option of Parent, Parent) free and clear of any claims or interest of any Person previously entitled thereto.
(i) If any Certificate
shall have been lost, stolen or destroyed, upon the holder’s compliance with the replacement requirements established by the Exchange Agent, including, if necessary, an indemnity by such Person for any claim that may be made against it or
the Surviving Corporation with respect to such Certificate, the Exchange Agent will deliver in exchange for such lost, stolen or destroyed Certificate the Merger Consideration, the Fractional Share Cash Consideration and any dividends or
other distributions payable with respect thereto pursuant to Section 2.2(i), payable in respect thereof pursuant to this Agreement.
(j) No dividends or other distributions declared or made after the Effective Time with respect to shares of Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate or Book-Entry Share with respect to the shares of Parent Common Stock that the holder thereof has the right to receive upon the surrender thereof, and no Fractional Share Cash Consideration shall be paid to any such holder
pursuant to Section 2.4(b), in each case until the holder of such Certificate or Book-Entry Share shall have surrendered such Certificate or Book-Entry Share in accordance with
this Article II. Following the surrender of any Certificate or Book-Entry Share, there shall be paid promptly to the holder of the Certificate or Book-Entry Share representing
shares of Parent Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to
such shares of Parent Common Stock and the Fractional Share Cash Consideration to which such holder is entitled pursuant to Section 2.4(b) and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such shares of Parent Common Stock.
7
Section 2.3 Treatment
of Options and Other Equity-Based Awards.
(a) Company Stock Options. At the Effective Time, subject to and in accordance with the terms of the Company Stock Plan, each option to purchase Company Shares (“Company Stock Option” ) that is outstanding as of immediately prior to the Effective Time, will automatically, without any action on the part of Parent, Merger Sub, the Company or the holder thereof, be
cancelled and converted into the right to receive, without interest and subject to applicable withholding Taxes, a number of validly issued, fully paid and nonassessable shares of Parent Common Stock equal to (i) the Net Option Share Amount
multiplied by (ii) the Exchange Ratio, plus any Fractional Share Cash Consideration in
accordance with Section 2.4 (the “Company Stock Option Consideration” ). For purposes of this Agreement, “Net Option Share Amount”
means, with respect to each Company Stock Option, the quotient obtained by dividing (A) the product of (1) the excess, if any, of the Company Closing Price over the exercise price per Company Share subject to such Company Stock Option as of
immediately prior to the Effective Time multiplied by (2) the number of Company Shares subject to such Company Stock Option immediately prior to the Effective Time,
by (B) the Company Closing Price. For the avoidance of doubt, any Company Stock Option with an exercise price equal to or in excess of the Company Closing Price shall
be cancelled and have no further force or effect by virtue of the Merger without any action on the part of the holder thereof and without any payment to the holder thereof.
(b) Company Restricted Stock Units. At the Effective Time, subject to and in accordance with the terms of the Company Stock Plan, each Company restricted share unit (“Company RSU,” together with the Company Stock Options, the “Company Awards” ) that is outstanding as of immediately prior
to the Effective Time, whether vested or unvested, will automatically, without any action on the part of Parent, Merger Sub, the Company or the holder thereof, fully vest and be converted into the right to receive, without interest and
subject to applicable withholding Taxes, a number of validly issued, fully paid and nonassessable shares of Parent Common Stock equal to (i) the number of Company Shares subject to such Company RSU immediately prior to the Effective Time
multiplied by (ii) the Exchange Ratio, plus any Fractional Share Cash Consideration in
accordance with Section 2.4 (the “Company RSU Consideration,” together with the Company Stock Option Consideration, the “Company
Award Consideration” ).
(c) Payment Procedures. At or prior to the Effective Time, Parent shall deposit (or cause to be deposited) with the Exchange Agent the Company Award Consideration inclusive
of (i) the aggregate Fractional Share Cash Consideration payable in the Merger to holders of Company Awards and (ii) evidence of Parent Common Stock in book-entry form representing the number of shares of Parent Common Stock sufficient to
deliver the aggregate Company Award Consideration payable in the Merger to holders of Company Awards, which amount of cash and Parent Common Stock shall be deemed to be a part of the Exchange Fund, subject to Section 2.2 herein, and shall
not be used for any purpose other than to fund payments in respect of Company Awards pursuant to this Section 2.3. Notwithstanding anything to the contrary contained in this Agreement, to the extent any Company RSU or Company Stock Option
may constitute “nonqualified deferred compensation” subject to Section 409A of the Code, any payment made in respect thereof shall be paid on the applicable payment date for such Company RSU or Company Stock Option, as applicable, if
required to comply with or be exempt from Section 409A of the Code.
8
Section 2.4 No Fractional Shares.
(a) No fractional shares of Parent Common Stock shall be issued in connection with the Merger, and no certificate or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates or Book-Entry Shares or any other provision of Article II, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of
a stockholder of Parent.
(b) Notwithstanding any other provision of this Agreement, each holder of Company Shares converted pursuant to the Merger who would
otherwise be entitled to receive a fraction of a share of Parent Common Stock (or holder of other equity interests of the Company who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock pursuant to
the provisions of Section 2.3) (after aggregating all fractional shares of Parent Common Stock otherwise issuable to such holder pursuant to Section 2.1(a)) shall, in lieu thereof and upon surrender of such holder’s
Certificates and Book-Entry Shares, as applicable, be paid in cash the dollar amount (rounded to the nearest whole cent), without interest and subject to any required tax withholding, determined by multiplying such fraction by the Parent
Closing Price (the “Fractional Share Cash Consideration”). No such holder shall be entitled to dividends, voting rights or any other rights in respect of any
fractional share of Parent Common Stock that would otherwise have been issuable as part of the Merger Consideration. As soon as practicable after the determination of the amount of the Fractional Share Cash Consideration, if any, to be
paid to holders of the Company Shares in respect of any fractional shares, the Exchange Agent shall make available such amounts to the holders of the Company Shares entitled to receive such cash. The payment of Fractional Share Cash Consideration in lieu of fractional share interests pursuant to this Section 2.4(b) is not a separately bargained-for consideration but merely represents a
mechanical rounding-off of the fractional share interests in the exchange.
Section 2.5 Tax Withholding. Each of Parent, the Exchange Agent, Merger Sub, the Company, the Surviving Corporation and their respective Affiliates, as applicable, shall be entitled to deduct and
withhold from any amounts otherwise payable pursuant to this Agreement, any amounts as are required to be deducted and withheld with respect to the making of such payment pursuant to the Code or any other applicable Tax Law. In the event
any such deduction and withholding required to be made in respect of Parent Common Stock to be received by a holder of Company Shares in the Merger or with respect to Company Award Consideration, such deduction and withholding shall be
satisfied by reducing the number of shares of Parent Common Stock to which such holder otherwise would be entitled under this Agreement by a number of shares equal to (x) the dollar amount of such deduction and withholding, divided by (y)
the Parent Closing Price. To the extent that amounts are so deducted or withheld and, if required, paid over to the appropriate Governmental Entity, such amounts shall be treated for all purposes of this Agreement as having been paid to the
Person in respect of which such deduction and withholding were made.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (a) as disclosed or reflected in the Company SEC Documents filed and publicly available after January 1, 2023 but at least two (2)
Business Days prior to the date of this Agreement (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements
that are similarly predictive or forward-looking in nature, in each case, other than any specific factual information contained therein), or (b) as set forth in the disclosure letter delivered by the Company to Parent concurrently with the
execution of this Agreement (the “Company Disclosure Letter”) (it being agreed that disclosure of any information in a particular section or subsection of the Company Disclosure
Letter shall be deemed disclosure with respect to any other section or subsection of this Agreement to the extent to which the relevance of such information is reasonably apparent on its face that such disclosure also qualifies or applies to
such other section or subsections), the Company represents and warrants to Parent and Merger Sub as follows:
Section 3.1 Organization,
Standing and Power.
(a) The Company (i) is a
corporation duly organized, validly existing and in good standing under the Laws of the State of Tennessee, (ii) has all requisite corporate or organizational, as the case may be, power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted and proposed to be conducted in all material respects and (iii) is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize
such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except, with respect to clauses (ii) and (iii), for any such
failure to have such power and authority or to be so qualified or licensed or in good standing that, individually or in the aggregate, would not be, and would not reasonably be expected to be, materially adverse to the Company or its
Subsidiaries, taken as a whole.
(b) The Company has
previously furnished or otherwise made available to Parent a true and complete copy of the Company’s certificate of incorporation (the “Company Charter”) and bylaws (the “Company Bylaws”), in each case as amended to the date of this Agreement, and each as so delivered is in full force and effect. The Company is not in material violation of any provision
of the Company Charter or Company Bylaws.
(c) Each of the Company’s
Subsidiaries (i) is an entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize such concept) under the Laws of the jurisdiction of its organization, (ii) has all requisite corporate or
similar power and authority to own, lease and operate its properties and to carry on its business as now being conducted and (iii) is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that
recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except in each case of clauses (i), (ii) and (iii),
that, individually or in the aggregate, would not be, and would not reasonably be expected to be, materially adverse to the Company or its Subsidiaries, taken as a whole.
(d) The Company has previously furnished or otherwise made available to Parent a true and complete copy of the Organizational Documents of each Subsidiary of the Company, in each case as amended to the date of this Agreement,
and each such Organizational Document as so delivered is in full force and effect. Except as would not be, and would not reasonably be expected to be, materially adverse to the Company or its Subsidiaries, taken as a whole, no such
Subsidiary is in violation of any of the provisions of such Organizational Documents.
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Section 3.2 Capital
Stock.
(a) The authorized
capital stock of the Company consists of (i) 80,000,000 Company Shares and (ii) 10,000,000 shares of preferred stock, no par value (the “Preferred Stock”). As of November 19, 2025
(the “Measurement Date”), (1) 22,461,383 Company Shares were issued and outstanding, all of which were validly issued, fully paid and nonassessable and were free of preemptive
rights, (2) no Company Shares were held in treasury, (3) no shares of Preferred Stock were outstanding, (4) an aggregate of 1,757,160 Company Shares were subject to or otherwise deliverable in connection with outstanding Company RSUs, (5)
258,164 Company Shares were issuable upon the exercise of outstanding Company Stock Options, and (6) 3,319,738 Company Shares were available for issuance of future awards under the Company Equity Plans (assuming all Company Awards are
settled in Company Shares) and no other Company Shares were available for issuance of future awards under any other Company equity compensation plan or arrangement.
(b) Except as set forth above and except for changes since the Measurement Date resulting from the exercise of Company Stock Options outstanding on such date, as of the date of this Agreement, (1) there are not outstanding or
authorized any (A) shares of capital stock or other Equity Interests of the Company, (B) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company
or any of its Subsidiaries or (C) options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock or Equity Interests of the Company
or any of its Subsidiaries, (2) there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock or Equity Interests of the Company or any of its Subsidiaries, (3)
there are no Liens relating to the issued or unissued capital stock of the Company or any of its Subsidiaries to which the Company or any of its Subsidiaries is a party, (4) there are no bonds, debentures, notes or other indebtedness of
the Company or any of its Subsidiaries issued and outstanding having the right to vote (or convertible or exercisable or exchangeable for securities having the right to vote) on any matters on which shareholders of the Company may vote,
and (5) there is no Contract to which the Company or any of its Subsidiaries is a party relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting
any option or similar right with respect to), any Company Shares or capital stock or other Equity Interests of any of the Company’s Subsidiaries.
(c) Each of the
outstanding shares of capital stock of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and all such shares are owned by the Company or another wholly-owned Subsidiary of the Company and
are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights, charges, options, calls, warrants, preemptive rights, conversion rights, rights of first refusal or other rights,
agreements, arrangements or other commitments or other Encumbrances (collectively, other than Encumbrances under applicable securities Laws, “Liens”) of any nature whatsoever,
except where any such failure to own any such shares free and clear, individually or in the aggregate, has not been and would not be materially adverse to the Company or its Subsidiaries, taken as a whole. Section 3.2(c) of the Company Disclosure Letter sets forth a true and complete list of each Subsidiary of the Company and its jurisdiction of incorporation or organization.
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(d) With respect to each
Company RSU and Company Stock Option granted under the Company Equity Plans as of the Measurement Date (each, a “Company Award”), Section
3.2(d) of the Company Disclosure Letter sets forth, as of the Measurement Date: (i) the name or identification number of each holder of such Company Award; (ii) the type of Company Award; (iii) the name of the relevant
Company Equity Plan under which the Company Award was issued; (iv) the date of grant; (v) the relevant vesting schedule and, if applicable, performance metrics, for the Company Award; (vi) the number of vested and unvested Company Shares
covered by such Company Award; (vii) any portion of the Company Award, if applicable, that has been forfeited, cancelled or exercised; (viii) a description of the accelerated vesting, if applicable, for each Company Award, in connection
with the transactions contemplated by this Agreement; (ix) the cash exercise price per Company Share of such Company Award, if applicable; and (x) the applicable expiration date.
(e) All Company Awards were issued under the Amended and Restated Kirkland’s, Inc. 2002 Equity Incentive Plan (as amended from time to time, the “Company Stock Plan”).
All Company Awards were duly issued under the Company Stock Plan. No Company Stock Option has an exercise price less than the fair market value of a Company Share on the date such Company Stock Option was granted, as determined in
accordance with Section 409A of the Code.
Section 3.3 Authority. The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to the Company Shareholder Approval,
to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to approve this Agreement or to consummate the transactions contemplated hereby, subject, in the case of the
consummation of the Merger, to obtaining the Company Shareholder Approval. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Merger Sub, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity). As of the date hereof, the Company Board has, at a
meeting duly called and held, (a) unanimously adopted resolutions (i) determining that the transactions contemplated by this Agreement, including the Merger, are
advisable, fair to and in the best interests of the Company and its shareholders, (ii) approving, adopting and declaring advisable this Agreement and the transactions contemplated by this Agreement, including the Merger, (iii) directing
that this Agreement be submitted to the shareholders of the Company for its adoption, and (iv) recommending that the Company’s shareholders adopt this Agreement (the “Company Board Recommendation”) and (b) resolved to include the Company Board Recommendation in the Proxy Statement. The Company Shareholder Approval is the only vote or consent of the holders of any class or series of capital
stock of the Company necessary to approve this Agreement or the Merger or the other transactions contemplated hereby.
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Section 3.4 No
Conflict; Consents and Approvals.
(a) The execution, delivery and performance of this Agreement by the Company, and the consummation by the Company of the transactions contemplated hereby, do not and will not (i) conflict with or violate the
Company Charter or Company Bylaws or the equivalent Organizational Documents of any of the Company’s Subsidiaries, (ii) result in the creation of any Lien upon any
assets of the Company or any of its Subsidiaries that is material to the operation of the Company and its Subsidiaries or the suspension, revocation or forfeiture of any material franchise, permit or license granted by a governmental
authority to the Company or any of its Subsidiaries, other than liens under federal or state securities laws, (iii) result in any breach or violation of, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under any material indenture or other agreement or instrument evidencing material indebtedness binding upon the Company or any of its Subsidiaries or their respective assets, or give rise to a right of any third
party thereunder to require any material payment, repurchase or redemption to be made by the Company or any of its subsidiaries, or give rise to a right of, or result in, termination, cancellation or acceleration of any material
obligation thereunder, (iv) assuming that all consents, approvals and authorizations contemplated by clauses (i) through (iv) of subsection (b) below have been obtained and all filings described in such clauses have been made,
conflict with or violate any law, rule, regulation, order, judgment or decree (collectively, “Law”) applicable to the Company or any of its Subsidiaries or
by which any of their respective properties are bound or (v) result in any breach or violation of, or constitute a default (or an event which with notice or lapse
of time or both would become a default), or result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit or other instrument or obligation (each, a “Contract”) to which the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or any of their respective properties are bound, except, in the case of clauses (iv) and (v), for any such conflict, breach, violation,
default, loss, right or other occurrence that, individually or in the aggregate, would not be, and would not reasonably be expected to be, materially adverse to the Company or its Subsidiaries, taken as a whole.
(b) The execution,
delivery and performance of this Agreement by the Company, and the consummation by the Company of the transactions contemplated hereby, do not and will not require any consent, approval, authorization or permit of, action by, filing with or
notification to, any governmental or regulatory (including stock exchange) authority, agency, court commission, or other governmental body (each, a “Governmental Entity”), except
for (i) such filings as may be required under applicable requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations
promulgated thereunder, and under state securities, takeover and “blue sky” laws, (ii) such filings as necessary to comply with the applicable requirements of The Nasdaq Stock Market (“Nasdaq”),
(iii) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL, (iv) the filing with the Secretary of State of the State of Tennessee of the Articles of Merger, and (v) any such
consent, approval, authorization, permit, action, filing or notification, in each case with respect to a Governmental Entity, the failure of which to make or obtain that, individually or in the aggregate, would not be, and would not
reasonably be expected to be, materially adverse to the Company or its Subsidiaries, taken as a whole. The Company has taken all appropriate actions so that the restrictions on business combinations contained in TBCA Sections 48-103-205 and
48-103-206 will not apply with respect to or as a result of the consummation of the transactions contemplated hereby, without any further action on the part of the Company’s shareholders or the Company Board.
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Section 3.5 SEC
Reports; Financial Statements.
(a) The Company has
timely filed, furnished or otherwise transmitted all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the U.S. Securities and
Exchange Commission (the “SEC”) since January 1, 2023 (all such forms, reports, statements, certificates and other documents filed since January 1, 2023 and prior to the date
hereof, collectively, the “Company SEC Documents”). As of their respective dates, or, if amended, as of the date of the last such amendment, each of the Company SEC Documents
complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act, and the
applicable rules and regulations promulgated thereunder, as the case may be, each as in effect on the date so filed. As of their respective filing dates (or, if amended or superseded by a subsequent filing prior to the date hereof, as of
the date of such amendment or superseding filing), none of the Company SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of the Company has been required to file any forms, reports or other documents with the SEC at
any time since January 1, 2023. Since January 1, 2023 no executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated in connection therewith (as amended from time to time, the “Sarbanes-Oxley Act”). Neither the Company nor any of its executive officers has received
notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(b) The audited
consolidated financial statements of the Company (including any related notes thereto) included in or incorporated by reference in the Company SEC Documents (i) complied as to form in all material respects with the published rules and
regulations of the SEC applicable thereto; (ii) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q or any successor form under the Exchange Act, and except that unaudited financial statements
may not contain footnotes and are subject to normal and recurring year-end adjustments); (iii) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries at the respective dates thereof
and the results of their operations and cash flows for the periods indicated subject, with respect to unaudited interim statements, to normal and recurring year-end adjustments.
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(c) The Company maintains, and at all times since January 1, 2023 has maintained, disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and procedures are designed
to ensure that information required to be disclosed by the Company in its filings with the SEC under the Exchange Act is recorded and reported on a timely basis to the individuals responsible for the preparation of the Company’s filings
with the SEC under the Exchange Act. The Company maintains internal control over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable, under the Exchange Act). Such internal control over financial reporting is designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s management has completed an assessment of the
effectiveness of the Company’s system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the fiscal year ended February 1, 2025, and such assessment concluded that
such controls were effective and the Company’s independent registered accountant has issued an attestation report concluding that the Company maintained effective internal control over financial reporting as of February 1, 2025. The
Company has disclosed, based on the most recent evaluation of its Chief Executive Officer and its Chief Financial Officer prior to the date of this Agreement, to the Company’s auditors and the audit committee of the Company Board (i) any
significant deficiencies and material weaknesses in the design or operation of its internal controls over financial reporting and (ii) any 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, and each such deficiency, weakness and fraud so disclosed to auditors, if any, has been disclosed to Parent prior to the date hereof.
(d) Since January 1, 2023, (i) none of the Company or any Subsidiary of the Company nor, to the knowledge of the Company, any director or officer of the Company or any Subsidiary of the Company has received or otherwise had or
obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding accounting, internal accounting controls or auditing practices, procedures, methodologies or methods of the Company or any
Subsidiary of the Company or any material complaint, allegation, assertion or claim from employees of the Company or any Subsidiary of the Company regarding questionable accounting or auditing matters with respect to the Company or any
Subsidiary of the Company, and (ii) to the knowledge of the Company, no attorney representing the Company or any Subsidiary of the Company, whether or not employed by the Company or any Subsidiary of the Company, has reported evidence of
a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company, any Subsidiary of the Company or any of their respective officers, directors, employees or agents to the Company Board or any committee
thereof, or to the General Counsel or Chief Executive Officer of the Company.
(e) As of the date
hereof, the Company is in compliance in all material respects with all current listing requirements of Nasdaq.
(f) Neither the Company nor any Subsidiary of the Company is a party to, or has a commitment to effect, enter into or create, any joint venture, or “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K
under the Exchange Act).
(g) As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Company SEC Documents, and none of the Company SEC Documents is, to the
knowledge of the Company, the subject of ongoing SEC review or investigation.
15
Section 3.6 No
Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any liabilities of any nature or type, whether accrued, absolute, determined, contingent, secondary, direct or otherwise and whether due or to become due or
required to be reflected in the Company’s financial statements, except for: (i) liabilities disclosed in the financial statements (including any related notes) contained in the most recent audited balance sheet included in the Company SEC
Documents (the “Most Recent Company Balance Sheet”); (ii) liabilities incurred in the ordinary course of business since the date of the Most Recent Company Balance Sheet; (iii) liabilities that, individually or in the aggregate, are
not, and would not reasonably be expected to become, materially adverse to the Company and its Subsidiaries, taken as a whole; and (iv) liabilities and obligations incurred in connection with the transactions contemplated by this Agreement.
Section 3.7 Certain Information. The information supplied or to be supplied by the Company specifically for inclusion in the registration statement on Form S‑4 to be filed by Parent in connection with the
Parent Stock Issuance (as amended or supplemented from time to time, the “Form S-4”) shall not, at the time that the Form S‑4 is declared effective by the
SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company with respect to statements made therein based on information supplied by or on behalf of Parent or Merger Sub specifically for inclusion in the Form S‑4. At the date the Proxy Statement, or any amendment or supplement thereof, is first mailed to the shareholders of the Company and at the time of the Company Shareholders
Meeting, the Proxy Statement (or any amendment or supplement thereof, as applicable) will contain all information required to be included therein by the Company’s Organizational Documents and the TBCA and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that, in
each case, no representation or warranty is made by the Company with respect to statements made therein based on information supplied by or on behalf of Parent or Merger Sub specifically for inclusion in the Proxy Statement.
Section 3.8 Absence of Certain Changes or Events. Since January 1, 2025 through the date of this Agreement, (a) the businesses of the Company and its Subsidiaries have been conducted in the ordinary course of
business in all material respects and in a manner consistent with past practice, and neither the Company nor any of its Subsidiaries has undertaken any action that if proposed to be taken after the date of this Agreement would require
Parent’s consent pursuant to Section 5.1(b)(iii), (v), (ix), (x), (xi), (xiv), (xviii) or, as it relates to any of the foregoing clauses, Section 5.1(b)(xx), and (b) there has not been any Effect that has constituted or resulted in, or that would reasonably be expected to constitute or result in, a Company Material Adverse Effect.
Section 3.9 Litigation. Except as, individually or in the aggregate, is not materially adverse to the Company and its Subsidiaries, taken as a whole, (a) there is no suit, claim, action, proceeding, arbitration,
mediation or investigation, whether civil, legal or administrative, before any court or public or private body or tribunal or other Governmental Entity (each, an “Action”)
pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective properties or assets, (b) neither the Company nor any of its Subsidiaries nor any of their respective
properties or assets is or are subject to any judgment, order, injunction, rule or decree of any Governmental Entity and (c) there are no subpoenas, civil investigative demands or other written requests for information issued to the Company
or any of its Subsidiaries relating to potential or actual violations of any Law that are pending or, to the knowledge of the Company, threatened, or any investigations or claims against or affecting the Company or any of its Subsidiaries,
or any of their respective properties or assets, relating to potential or actual violations of any Law.
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Section 3.10 Compliance with Laws. The Company and each of its Subsidiaries are in compliance with, and have maintained and enforced policies and procedures reasonably designed to promote compliance with, all Laws
applicable to them or by which any of their respective properties are bound, except where any non-compliance, individually or the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its
Subsidiaries, taken as a whole. Neither the Company nor any of its Subsidiaries has, during the three (3)-year period prior to the date of this Agreement: (i) to the knowledge of the Company, received any written notice or verbal notice
from any Governmental Entity regarding any potential or actual material violation by the Company or any of its Subsidiaries of any Law; or (ii) provided any notice to any Governmental Entity regarding any potential or actual material
violation by the Company or any of its Subsidiaries of any Law. The Company and its Subsidiaries have in effect all permits, registrations, licenses, exemptions, authorizations, franchises, orders, clearances and approvals of all
Governmental Entities (collectively, “Permits”) necessary for them to own, lease or operate their properties and to carry on their businesses as now conducted,
except for any Permits the absence of which, individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole. Except as, individually or in
the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole, (w) all of the Company and its Subsidiaries’ Permits are valid and in full force and effect
and are not subject to any administrative or judicial proceeding that could result in any modification, termination or revocation thereof and, to the knowledge of the Company, no suspension or cancellation of any such Permit is threatened,
(x) no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation of any term, condition or provision of any such Permit (y) all fees and assessments due and payable in connection with such
Permits have been timely paid, and (z) the Company and each of its Subsidiaries is in compliance with the terms and requirements of all such Permits. There are no Actions pending or, to the knowledge of the Company, threatened, that seek
the revocation, cancellation or modification of any Permit. Neither the Company nor its Subsidiaries have, since January 1, 2023, received written notice of any
charge, claim or assertion alleging any violations of or noncompliance with any Permit, nor to the knowledge of the Company, has any charge, claim or assertion been threatened, except as, individually or in the aggregate, has not been, and
would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole.
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Section 3.11 Benefit
Plans.
(a) Section 3.11(a) of the Company Disclosure Letter sets forth a true and complete list of each Company Plan. For purposes of this Agreement, “Company
Plan” means each “employee benefit plan” (within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), each
“multiemployer plan” (within the meaning of ERISA section 3(37)), and each bonus (including transaction bonus), incentive compensation, stock appreciation right, phantom stock, stock option, restricted stock, restricted stock unit,
performance stock, performance stock unit, employee stock ownership, stock purchase, equity or equity-based, deferred compensation, change in control, employment, vacation, holiday, sick leave, retention, severance, retirement, defined
benefit, defined contribution, pension, money purchase, target benefit, cash balance, pension equity, 401(k), savings, profit sharing, supplemental or executive retirement, excess benefit, medical, dental, vision, life insurance, cafeteria
(Code Section 125), adoption assistance, dependent care assistance, health savings, health reimbursement, flexible spending, accident, disability, long-term care, employee assistance, scholarship, fringe benefit, expense reimbursement,
welfare benefit, paid time off, salary continuation, and employment agreement, plan, policy, practice or arrangement and all other plans, agreements, programs, policies or other arrangements providing compensation or benefits, whether or not
subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, written, legally binding or not,
under which any employee or former employee of the Company or its Subsidiaries has any present or future right to benefits, with respect to which the Company or its Subsidiaries has any liability, or which is sponsored, maintained or
contributed to by the Company or its Subsidiaries. With respect to each Company Plan, the Company has furnished or made available to Parent a current, accurate and complete copy thereof (or, in the case of an unwritten Company Plan, a summary
of the material terms and conditions thereof) and, to the extent applicable: (i) any related trust agreement or other funding instrument (including insurance contracts), (ii) the most recent determination, advisory or opinion letter from the
Internal Revenue Service (the “IRS”), (iii) any summary plan description and summary of material modifications thereto and other equivalent written communications by the Company or
its Subsidiaries to their employees; (iv) for the three most recent years (A) the Form 5500 and attached schedules, (B) audited financial statements, (C) actuarial valuation reports, and (D) nondiscrimination and other testing results; and
(vi) copies of all material non-routine correspondence with any Governmental Entity in the past three years (including any filings under the Company Plans’ “Compliance Resolution System” or the Department of Labor Delinquent Filer Program).
(b) With respect to the Company Plans:
(i) (A) each Company Plan has been maintained, funded and administered in all material respects in accordance with its terms and in compliance in all material respects with all applicable Laws, (B) to the knowledge of the
Company, no prohibited transaction, as described in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Company Plan, and (C) all contributions required to be made under the terms of any Company Plan or
applicable Law have been timely made or accrued in all material respects;
(ii) (A) no breaches of fiduciary duty or other failures to act or comply in connection with the administration or investment of the assets of such Company Plan have occurred for which the Company or any of its Subsidiaries has or
could reasonably be expected to incur any material liability, and (B) no lien has been imposed under the Code, ERISA or any other applicable law;
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(iii) each Company Plan intended to be qualified under Section 401(a) of the Code has received a currently effective, favorable determination, advisory and/or opinion letter, as applicable, from the IRS as to its qualified status,
to the knowledge of the Company, nothing has occurred that would reasonably be expected to cause the loss, or failure to have, such qualified status of such Company Plan;
(iv) there are no (and in the past three (3) years have not been any) Actions (including any investigation, audit or other administrative proceeding) or other claims by the Department of Labor, the Pension Benefit Guaranty
Corporation, the IRS or any other Governmental Entity or by any plan participant, beneficiary or other Person pending, or to the knowledge of the Company, threatened, relating to the Company Plans, any fiduciaries thereof with respect to
their duties to the Company Plans or the assets of any of the trusts under any of the Company Plans (other than routine claims for benefits), that would reasonably be expected to result in a material liability of the Company or its
Subsidiaries.
(c) No Company Plan is,
and none of the Company, any of its Subsidiaries or any ERISA Affiliate maintains, sponsors or contributes to or has any liability with respect to (including on account of previously maintaining, sponsoring or contributing to) a plan that is
subject to Section 302 or Title IV of ERISA or Section 412 of the Code. For purposes of this Agreement, “ERISA Affiliate” means any trade or business (whether or not incorporated)
which is treated as a single employer along with the Company or any of its Subsidiaries for purposes of Section 4001 of ERISA or Section 414 of the Code. No Company Plan is, and none of the Company or its Subsidiaries has any liability with
respect to a plan that is, a “multiemployer plan” within the meaning of Section 3(37) of ERISA or a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA.
(d) None of any Company Plan, the Company or any of its Subsidiaries provides or has any obligation to provide health or other welfare benefits following any current or former employee’s termination of employment or retirement with the
Company or its Subsidiaries, except (i) to the extent required by Section 4980B of the Code or similar applicable Law or (ii) benefits in the nature of severance pay with respect to one or more of the Company Plans set forth on Section 3.11(a) of the Company Disclosure Letter.
(e) Each Company Plan
that is subject to Section 409A of the Code has at all relevant times been in documentary and operational compliance with Section 409A of the Code in all material respects. Neither the Company nor any of its Subsidiaries is under any
obligation to gross up or make any Person whole for any Taxes, including under or relating to Sections 409A or 4999 of the Code.
(f) No current or former employee or other individual service provider of the Company or any of its Subsidiaries will be or become entitled to any compensation or other consideration or any benefit or increased compensation or
benefit in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated herein (either alone or in combination with another event) and neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein (either alone or in combination with another event) will accelerate the time of payment, funding or vesting, or increase the amount, of any compensation, equity award or any other
benefit to any current or former employee or other individual service provider of the Company or any of its Subsidiaries. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated herein
(whether contingent or otherwise) will result in any payments or benefits constituting an “excess parachute payment,” within the meaning of Section 280G of the Code (or any corresponding provision of state, local, or foreign Tax law).
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Section 3.12 Labor
Matters.
(a) The Company has
provided Parent with a complete and accurate list, as of November 12, 2025, of each employee of the Company and its Subsidiaries (each, a “Company Employee”) as of the date hereof,
which includes, with respect to each such Company Employee, the Company Employee’s (i) name, (ii) primary work location, (iii) employing entity, (iv) hire date, (v) title, (vi) exempt/non-exempt status, (vii) full or part-time status, (viii)
current base salary or hourly wage rate, (ix) current annual incentive compensation opportunity (including annual bonus, commission, and/or other incentive compensation), and (x) active or inactive status and, if on leave, if available,
anticipated return date.
(b) The Company has provided Parent with a complete and accurate list, as of November 13, 2025, of each individual independent contractor of the Company and its Subsidiaries (each, a “Company
Contractor”), which includes, with respect to each such Company Contractor, such Company Contractor’s (i) name, (ii) date of retention, (iii) primary work location, (iv) Company entity which engages such Company Contractor,
(v) rate and frequency of remuneration, and (vi) type of services provided to the Company or its Subsidiaries.
(c) The Company is not a party to or otherwise bound by any collective bargaining agreement or other labor-related Contract, arrangement or understanding with a labor or trade or labor union, labor organization, employee
representative body or works council (each, a “Labor Agreement”), nor is any such Labor Agreement presently being negotiated, nor, to the knowledge of the Company, are there any
employees of the Company or any of its Subsidiaries represented by a labor or trade union, labor organization, employee representative body or works council with respect to such employment. To the knowledge of the Company, there are no
organizing activities, representation campaigns, certification proceedings or petitions seeking a representation proceeding pending or threatened by or with respect to any of the employees of the Company or any of its Subsidiaries. In the
past five (5) years, there has not been any, and there are no pending or, to the knowledge of the Company, threatened strikes, walkouts, lockouts, slowdowns or other labor stoppages against or affecting the Company or its Subsidiaries.
(d) The Company and its
Subsidiaries are, and for the past five (5) years, have been, in compliance in all material respects with the terms of any applicable Labor Agreement and all applicable Laws respecting or relating to recruitment, employment and employment
practices, and agency and other workers, including all Laws respecting terms and conditions of employment, health and safety, wages and hours, worker classification and authorization, child labor, immigration, harassment, employment
discrimination, retaliation, privacy, record retention, whistleblowing, social welfare obligations, civil, veterans’ and disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation,
labor relations, employee leave issues (including family and medical leave) and unemployment insurance.
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(e) Except as has not had,
and would not reasonably be expected to result in, any material liability of the Company and its Subsidiaries, individually or in the aggregate, there are no Actions against the Company or any of its Subsidiaries pending now or at any time in
the past five (5) years, or, to the knowledge of the Company, threatened to be brought or filed, by or with any Governmental Entity in connection with the employment or engagement of any current or former employee, applicant for employment,
independent contractor, temporary employee, or other individual service provider of the Company or any of its Subsidiaries or otherwise concerning the Company’s or any of its Subsidiaries’ labor or employment-related practices, including any
claim relating to unfair labor practices, employment discrimination, harassment, retaliation, failure to properly pay wages, equal pay or any other employment related matter arising under applicable Laws.
(f) In the past five (5) years, neither the Company nor any of its Subsidiaries has received any sexual harassment or other discrimination or retaliation allegations brought by or with respect to any current or former employee or
other current or former individual service provider of the Company or any of its Subsidiaries that has resulted, or would reasonably be expected to result in any material liability to the Company and its Subsidiaries. Neither the Company
nor any of its Subsidiaries has, in the past five (5) years, entered into any settlement, separation, or severance agreements related to allegations of sexual harassment or other sexual misconduct by any current or former employee or other
individual service provider of the Company or any of its Subsidiaries.
(g) To the knowledge of the Company, no current or former director, officer, employee or other individual service provider of the Company or any of its Subsidiaries is in any material respect in violation of any term of any employment
agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or other legal or contractual obligation to the Company or any of its Subsidiaries or to a former
employer of any such employee relating (i) to the right of any such individual to be employed by or provide services for the Company or its Subsidiaries or (ii) to the knowledge or use of trade secrets or proprietary information.
(h) During the
five (5)-year period immediately prior to the date of this Agreement, neither the Company nor its Subsidiaries have implemented any “plant closing” or “mass layoff” (in each case, as defined under the Worker Adjustment and Retraining
Notification Act of 1988, as amended, or any similar applicable foreign, state or local Law).
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Section 3.13 Environmental
Matters.
(a) Except as,
individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole: (i) the Company and each of its Subsidiaries are, and during the past three
(3) years have been, in compliance with all applicable Environmental Laws, and possess and are, and during the past three (3) years have been, in compliance with all applicable Environmental Permits required under such Environmental Laws to
operate the business; (ii) there has been no release, discharge or disposal of Materials of Environmental Concern that could reasonably be expected to result in a violation by, or a liability of, the Company and each of its Subsidiaries under
any Environmental Laws (A) on, under, in or at any owned or leased real property, or (B) to the knowledge of the Company, on, under, in or at any real property formerly owned or leased by the Company or its Subsidiaries or at any third party
waste disposal location used by the Company or its Subsidiaries; (iii) neither the Company nor any of its Subsidiaries have received any written request for information pursuant to section 104(e) of the Comprehensive Environmental Response,
Compensation and Liability Act or similar state statute, concerning any release or threatened release of Materials of Environmental Concern at any location except, with respect to any such request for information concerning any such release
or threatened release, to the extent such matter has been resolved as evidenced by a certificate of completion or other formal closure document issued by the appropriate foreign, federal, state or local regulatory authority; (iv) within the
last three (3) years, neither the Company nor any of its Subsidiaries has received any written notice, claim or complaint, or is presently subject to any action or proceeding, relating to actual or alleged noncompliance with, or liability
arising under, Environmental Laws or any other liabilities pursuant to Environmental Laws that is unresolved, and to the knowledge of the Company, no such matter has been threatened in writing; and (v) the Company has provided Parent
reasonable access to all material environmental investigations, studies, audits, analyses or other reports (including any Phase I or Phase II reports) in the possession, custody or control of the Company or its Subsidiaries relating to the
Company or each of its Subsidiaries compliance with Environmental Law or the presence of contamination by Materials of Environmental Concern on, under, in or at any property currently or formerly owned, leased, operated or occupied by the
Company or its Subsidiaries.
(b) Notwithstanding any other representations and warranties in this Agreement, the representations and warranties in this Section 3.12 are the only representations and
warranties in this Agreement with respect to Environmental Laws or Materials of Environmental Concern.
(c) For purposes of this Agreement, the following terms shall have the meanings assigned below:
(i) “Environmental Laws” means all foreign, federal, tribal, state, or local statutes, regulations, ordinances, codes, or decrees protecting the quality of the environment and natural
resources, including the ambient air, soil, surface water or groundwater, and human health and safety (in relation to exposure to Materials of Environmental Concern).
(ii) “Environmental Permits” means all permits, licenses, franchises, approvals, consents, registrations, and other authorizations required under applicable Environmental
Laws.
(iii) “Materials of Environmental Concern” means any pollutant, contaminant, waste, or chemical or any radioactive, ignitable, corrosive, reactive, hazardous, acutely hazardous,
or toxic substance or waste defined and regulated as such, or which could give rise to liability, under applicable Environmental Laws, including the Comprehensive Environmental Response, Compensation and Liability Act or the Resource
Conservation and Recovery Act (or their state Law equivalents) or any substance, waste or material having or displaying any of the foregoing characteristics, including per- and polyfluoroalkyl substances, polychlorinated biphenyls and
petroleum, its derivatives, by products and other hydrocarbons.
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Section 3.14 Taxes.
(a) Except as, individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or result in, any material liability of the Company and its Subsidiaries, individually or in the
aggregate:
(i) All Tax Returns required by applicable Law to be filed by or on behalf of the Company or any of its Subsidiaries have been timely filed in accordance with all applicable Laws (after giving effect to any extensions of time in
which to make such filings), and all such Tax Returns are true, correct and complete.
(ii) The Company and its Subsidiaries have timely paid in full to the appropriate Governmental Entity all Taxes required to be paid by any of them (whether or not shown on any Tax Return) and have established adequate accruals and
reserves in accordance with GAAP on the financial statements included in the Company SEC Documents for all Taxes payable by the Company and its Subsidiaries with respect to all taxable periods (and portions thereof) through the date of such
financial statements.
(iii) Each of the Company and its Subsidiaries has (i) timely deducted, withheld and collected all amounts required to be deducted, withheld or collected by any of them with respect to any payment owing to, or received from, their
employees, creditors, independent contractors, customers and other third parties and have timely paid or remitted over any amounts so withheld, deducted or collected to the appropriate Governmental Entity and (ii) otherwise complied with
all applicable Laws relating to the withholding, collection and remittance of Taxes (including information reporting requirements).
(iv) There are no Liens for Taxes with respect to any assets or properties of the Company or any of its Subsidiaries, except for statutory Liens for Taxes not yet due and payable.
(v) No claim has been made in writing by any Tax authority in a jurisdiction where the Company or any of its Subsidiaries has not filed (and is not filing) a Tax Return of a particular type that the Company or its applicable
Subsidiary, as the case may be, is or may be subject to Tax by, or required to file Tax Returns in, such jurisdiction with respect to Taxes that are the subject to such Tax Return, in each case, that remains unresolved with no further
liability for Taxes with respect to such claim.
(vi) Neither the Company nor any its Subsidiaries (A) is or has been a member of any affiliated, combined, consolidated, unitary or similar group for purposes of filing Tax Returns or paying Taxes (except for any such group of
which the Company is the common parent) or (B) has any liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulations Section 1.1502-6 (or any similar state, local or non-U.S. Law) or as a
transferee or successor or otherwise pursuant to applicable Law.
(vii) Neither the Company nor any of its Subsidiaries is a party to or bound by, or has any obligation under, any Tax indemnity, sharing, allocation, or reimbursement agreement or arrangement, other than (A) customary Tax
provisions in ordinary course commercial agreements, the principal purpose of which is not related to Taxes and (B) any agreement or arrangement solely between or among the Company and/or any of its Subsidiaries.
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(viii) No audits or other proceedings are currently ongoing or pending, or threatened or proposed in writing, against or with respect to the Company or any of its Subsidiaries with respect to any Tax or Tax Return. No deficiencies
for any amount of Taxes have been asserted or assessed in writing against the Company or any of its Subsidiaries that have not been paid in full by any of them or that are not being contested in good faith and for which adequate accruals or
reserves for such deficiency have been established in accordance with GAAP on the financial statements included in the Company SEC Documents.
(ix) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or any portion thereof) ending after the Closing
Date as a result of (A) any installment sale or other open transaction disposition made prior to the Closing, (B) any “closing agreement” as described in Section 7121 of the Code (or any comparable, analogous or similar provision under any
U.S. state or local or non-U.S. Law) executed prior to the Closing, (C) having entered into a “gain recognition agreement” within the meaning of Treasury Regulation Section 1.367(a)-8 or (D) pursuant to Section 965 of the Code. Neither the
Company nor any of its Subsidiaries has made an election pursuant to Section 965(h) of the Code.
(x) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or any portion thereof) ending after the Closing
Date as a result of (A) any installment sale or other open transaction disposition made prior to the Closing, (B) any adjustment under Section 481(a) of the Code (or any comparable, analogous or similar provision under any U.S. state or
local or non-U.S. Law) in respect of a change in method of accounting that occurred in a taxable period ending on or prior to the Closing Date, (C) any “closing agreement” as described in Section 7121 of the Code (or any comparable,
analogous or similar provision under any U.S. state or local or non-U.S. Law) executed prior to the Closing, (D) any prepaid amount or deferred revenue received or accrued prior to the Closing other than as reported by the Company in the
ordinary course of business, (E) having entered into a “gain recognition agreement” within the meaning of Treasury Regulation Section 1.367(a)-8 or (F) pursuant to Section 965 of the Code. Neither the Company nor any of its Subsidiaries has
made an election pursuant to Section 965(h) of the Code.
(xi) Neither the Company nor any of its Subsidiaries (A) has filed any extension of time within which to file any Tax Returns that have not been filed, except in the ordinary course of business with respect to extensions not
requiring the consent of any Governmental Entity, where such extension remains in effect, (B) has entered into any agreement or other arrangement waiving or extending the statute of limitations or the period of assessment or collection of
any Taxes that remains in effect, (C) has granted any power of attorney that is in force (and will remain in force following the Closing) with respect to any matters relating to Taxes, (D) has applied for a ruling from any Tax authority
relating to any Taxes that has not been granted or has proposed to enter into an agreement with a Tax authority that is pending, (E) has been issued any private letter rulings, technical advice memoranda or similar agreement or rulings by
any Tax authority or (F) is currently the beneficiary of any Tax holiday or other Tax reduction or incentive arrangement with any Tax authority (other than those generally available to taxpayers who otherwise qualify under applicable Law)
which is subject to termination, reduction, clawback or similar adverse consequence as a result of the Merger.
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(xii) Neither the Company nor any of its Subsidiaries has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar state, local or non-U.S. Law).
(xiii) Neither the Company nor any of its Subsidiaries conducts a trade or business, has a permanent establishment (within the meaning of an applicable Tax treaty), operates or conducts business through any branch or is otherwise
subject to taxation in any country other than the country of its formation.
(xiv) The Company has not been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(b) Neither the Company nor any of its Subsidiaries has 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) or otherwise as part of a plan (or series of related transactions), within the meaning of Section 355(e) of the Code, that includes
the Merger.
(c) Neither the Company nor any of its Subsidiaries has knowledge of any facts, agreements, plans or other circumstances or has taken or agreed to take any action that would reasonably be expected to prevent the Merger from qualifying
for the Intended Tax Treatment.
(d) As used in this Agreement:
(i) “Tax Returns” means any and all U.S. and non-U.S. (whether national, federal, state, provincial, local or otherwise) returns, claims for refund, declarations, forms,
statements, reports or other documents filed or required to be filed with any Governmental Entity with respect to Taxes, including any schedules or attachments thereto and any amendments thereof.
(ii) “Taxes” means any and all U.S. federal, state and local and non-U.S. taxes, assessments, levies, duties, tariffs, imposts and other charges and fees of any kind
whatsoever similar to, or in the nature of, a tax imposed by a Governmental Entity, including any income, franchise, windfall or other profits, gross receipts, premiums, property, sales, use, net worth, capital stock, payroll, employment,
social security, workers’ compensation, unemployment compensation, excise, withholding, ad valorem, stamp, transfer, value-added, and license, registration and documentation fees, severance, occupation, environmental, disability, real
property, personal property, escheat or unclaimed property obligations, registration, alternative or add-on minimum or estimated taxes, together with any interest, penalties and additions imposed with respect thereto.
Section 3.15 Contracts.
(a) Except for this
Agreement and except as filed with the SEC as an exhibit to any Company SEC Document, as of the date hereof, none of the Company or any of its Subsidiaries is a party to or is bound by any of the following categories of Contracts (each such
Contract required to be filed as an exhibit to any Company SEC Document or required to be listed in Section 3.15(a) of the Company Disclosure Letter, a “Company Material Contract”):
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(i) any Contract 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 that has not been so filed (except for a Company Plan listed in Section 3.11(a) of the Company Disclosure Letter);
(ii) any Contract to which the Company is a party that (a) restricts the ability of the Company, its Subsidiaries or its Affiliates to (x) engage in or compete in any geographic area or line of business, market or field, (y)
transaction with any Person or (z) solicit any client or customer, in each case in any manner that is material to the Company or that would restrict in any material respect Parent or its Subsidiaries following the Closing, (b) requires the
Company, its Subsidiaries or its Affiliates to conduct any business on a “most favored nations” basis with any third party that restricts in any material respect the business of the Company or that would restrict in any material respect
Parent or its Subsidiaries following the Closing, or (c) provides for “exclusivity,” rights of first refusal or offer or any similar requirement or right in favor of any third party that restricts in any material respect the business of the
Company or that would restrict in any material respect Parent or its Subsidiaries following the Closing;
(iii) any purchase, sale or supply Contract that contains “take or pay” provisions, volume requirements or commitments, exclusive or preferred purchasing arrangements, “most favored nation” provisions or promotional requirements;
(iv) any Contract to which the Company is a party that provides for payments to or from the Company in excess of $500,000 in the aggregate annually, but excluding for this purpose purchase orders for and invoices for
transportation related to the shipment of inventory entered into on customary terms in the ordinary course of business;
(v) any Contract creating, guaranteeing or securing indebtedness for borrowed money of the Company, in each case in excess of $500,000;
(vi) any Contract with respect to the creation, formation, governance or control of any material partnerships, joint ventures or joint ownership arrangements with third parties;
(vii) any Contract that (A) relates to the acquisition of material assets or capital stock or other securities (by merger, capital contribution or otherwise) of any Person after the date of this Agreement with a total consideration
of more than $500,000 in the aggregate, (B) relates to the disposition (after the date of this Agreement), directly or indirectly, of material assets of the Company or its Subsidiaries or any capital stock or other securities (by merger,
capital contribution or otherwise) of the Company or its Subsidiaries or (C) contains a put, call, right of first refusal or similar right pursuant to which the Company or its Subsidiaries could be required to purchase or sell, as
applicable, any of the foregoing;
(viii) any Contract that relates to the sale, transfer or other disposition of a business or assets by the Company pursuant to which the Company has any continuing indemnification, guarantee, “earnout” or other contingent, deferred
or fixed payment obligations;
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(ix) any Contract with a term exceeding one year after the date of this Agreement which is a financial derivative interest rate hedge with a value in excess of $250,000;
(x) any Contract pursuant to which the Company or any of its Subsidiaries grants to or receives from a third party a license or other right to use any Intellectual Property that is material to the Company or any of
its Subsidiaries or the operation of their businesses, excluding non-exclusive licenses to software that is commercially available to the public generally (including any such software provided on a SaaS basis) in each case with
annual or one-time license, maintenance, support and other fees of less than $250,000;
(xi) each Contract that
grants any right of first refusal, first notice, first negotiation or right of first offer or similar right with respect to any assets, rights or properties of the Company or its Subsidiaries;
(xii) each Labor Agreement;
(xiii) any Contract with a Governmental Entity;
(xiv) the Company Real Property Leases;
(xv) each Contract (other than any Organizational Document) between the Company or any of its Subsidiaries, on the one hand, and any director, officer or Affiliate (other than a wholly owned Subsidiary of the Company) of the
Company or any of its Subsidiaries or any of their respective “associates” or “immediate family” members (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act), on the other hand, including (but not limited to) any
Contract pursuant to which the Company or any of its Subsidiaries has an obligation to indemnify such director, officer, Affiliate or “associate” or “immediate family” member, but excluding any Company Plan;
(xvi) each Contract expressly limiting or restricting the ability of the Company or its Subsidiaries (i) to make distributions or declare or pay dividends in respect of their capital stock, partnership interests, membership
interests or other equity interests, as the case may be, (ii) to pledge their capital stock or other equity interests, (iii) to issue any guaranty, (iv) to make loans to the Company or its Subsidiaries, or (v) to grant liens on the property
of the Company or its Subsidiaries; and
(xvii) each Contract that obligates the Company or its Subsidiaries to make any loans, advances or capital contributions to, or investments in, any Person, except for (i) loans or advances for indemnification, attorneys’ fees, or
travel and other business expenses in the ordinary course of business, or (ii) loans, advances or capital contributions to, or investments in, any Person that is not an Affiliate or Company Employee not in excess of $100,000 individually;
(xviii) each Contract that is a (A) bid bonds, payment bonds, performance bonds, Tax bonds, licensing bonds, reclamation bonds, surety bonds or any similar undertaking or financial security arrangements or (B) indemnity or underwriting
agreements or other contracts with a surety, in each case in excess of $500,000.
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(b) Each Company Material Contract has not been terminated prior to the date of this Agreement, is valid and binding on the Company and each of its Subsidiaries party thereto and, to the knowledge of the Company, any other party
thereto, except (i) for such failures to be valid and binding or to be in full force and effect that, individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its
Subsidiaries, taken as a whole, or (ii) to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally or by general
principles of equity. Except as, individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole, there are no existing breaches or
defaults under any Company Material Contract or Company Real Property Lease by the Company or any of its Subsidiaries party thereto or, to the knowledge of the Company, any other party thereto, and no event or action has occurred or failed
to occur that with the lapse of time or the giving of notice or both would constitute a default thereunder by the Company or any of its Subsidiaries party thereto or, to the knowledge of the Company, any other party thereto. Prior to the
date of this Agreement, the Company has made available to Parent accurate and complete copies of each Company Material Contract in effect as of the date of this Agreement, together with all material amendments and supplements thereto in
effect as of the date of this Agreement. Prior to the date of this Agreement, no counterparty to a Company Material Contract or Company Real Property Lease has cancelled, terminated or substantially curtailed its relationship with the
Company or its Subsidiaries, given notice to the Company or its Subsidiaries of any intention to cancel, terminate or substantially curtail its relationship with the Company or its Subsidiaries, or, to the knowledge of the Company,
threatened to do any of the foregoing or, to the knowledge of the Company, been threatened with bankruptcy or insolvency.
Section 3.16 Insurance.
Except as, individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole, (a) all insurance policies of the Company and its Subsidiaries
are in full force and effect and provide insurance in such amounts and against such risks as is, in all material respects, commercially reasonable, (b) neither the Company nor any of its Subsidiaries is in breach or default, and neither the
Company nor any of its Subsidiaries has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification of, any of such insurance policies
(including the payment of all premiums and other payments due on such policies in due and timely fashion) and (c) since the earlier of the most recent renewal date and January 1, 2023, as of the date hereof, the Company has not received any
written notice (i) threatening termination of, or premium increases with respect to, or material alteration of coverage under, any such policies, other than premium increases or alterations of coverage occurring in the ordinary course during
the renewal process for any such policies, (ii) refusal of any coverage or rejection of any material claim under any insurance policy held by the Company or any of its Subsidiaries. As of the date of this Agreement, there is no pending
material Action by the Company or its Subsidiaries against any insurance carrier under any insurance policy held by the Company or its Subsidiaries.
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Section 3.17 Properties.
(a) Section 3.17(a) of the Company Disclosure Letter sets forth a true and complete list of all the leased real property that the Company or a Subsidiary leases, subleases or otherwise
occupies (the “Company Leased Real Property” ) pursuant to which the Company or a Subsidiary is a tenant, subtenant, or otherwise occupies such Company Leased Real Property
(individually and collectively, the “Company Real Property Leases” ) and the parties to such agreement. The Company Real Property Leases are in full force and effect and constitute a
legal, valid and binding obligation on the Company or the applicable Subsidiary which is a party to it, enforceable in accordance with its terms, except as, individually or in the aggregate, has not been, and would not reasonably be expected
to be, materially adverse to the Company and its Subsidiaries, taken as a whole. There are no subleases, licenses, occupancy agreements, consents, assignments, purchase agreements, or other contracts granting to any person (other than the
Company or a Subsidiary) the right to use or occupy the Company Leased Real Property, and no other Person (other than the Company and its Subsidiaries) is in possession of the Company Leased Real Property, except as, individually or in the
aggregate, has not been, and would not reasonably be expected be, materially adverse to the Company and its Subsidiaries, taken as a whole. There are no outstanding options, rights of first offer or rights of first refusal in favor of any
other party to purchase or lease the Company Leased Real Property or any portion thereof or interest therein. The Company or a Subsidiary has provided a true and complete copy of each such Company Real Property Lease. The Company or its
Subsidiaries have a valid leasehold estate in all Company Leased Real Property, free and clear of all Encumbrances, other than Permitted Encumbrances. The Company and its Subsidiaries, as applicable, have materially performed all obligations
required to be performed by them to date under such Company Real Property Lease.
(b) Except as, individually or in the aggregate, has not been, and would not reasonably be expected to be, materially adverse to the Company and its Subsidiaries, taken as a whole, the Company or a Subsidiary of the Company owns and has
good and valid title to all of its tangible personal property. No representation is made under this Section 3.17 with respect to any Intellectual Property, which is the subject of
Section 3.18.
(c) Neither the Company nor any of its Subsidiaries owns any real property.
Section 3.18 Intellectual
Property.
(a) The Company or its
Subsidiaries own, or have the right pursuant to valid and enforceable licenses to use, all Intellectual Property used in or necessary for the business of Company and its Subsidiaries as currently conducted and as proposed to be conducted. All
Company Intellectual Property will be owned or continue to be available for use, following the consummation of the transactions contemplated by this Agreement, on the same terms (including the same payment obligations) as they were owned or
available for use by Company and its Subsidiaries immediately prior to the Effective Time.
(b) Section 3.18(b) of the Company Disclosure Letter sets forth a true and complete list of all Company Owned Intellectual Property that is registered or issued under the authority of any
Governmental Entity or Internet domain name registrar (collectively, “Company Registered IP”), including (i) the name of the applicant/registrant (including, if different, the legal
owner(s) and beneficial owner(s) of such item), (ii) any other co-owners, (iii) the date and jurisdiction of application/registration (including with respect to domain names, the applicable Internet domain name registrar), (iv) the
application or registration number, and (v) the status of such item. Each item of Company Registered IP is subsisting and, to the knowledge of Company, all issued or registered Company Registered IP is valid and enforceable. No Company
Registered IP is involved in any interference, reissue, reexamination, opposition, cancellation or similar proceeding and, to the knowledge of Company, no such action is or has been threatened with respect to any of the Company Registered IP
in the past three (3) years. All material Company Registered IP is owned by or licensed to Company or one its Subsidiaries free and clear of all Encumbrances, other than Permitted Encumbrances. Neither Company nor any of its Subsidiaries has
received any written notice or claim in the three (3) years prior to the date hereof challenging the validity or enforceability or inventorship or ownership of any Company Registered IP.
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(c) Each employee, director, independent contractor or consultant of the Company or any of its Subsidiaries who is or was involved in the creation or development of any material Intellectual Property on behalf of the Company or any of
its Subsidiaries, has signed a valid and enforceable written agreement containing an irrevocable present assignment to the Company or its applicable Subsidiary of all Intellectual Property developed by such Person during such Person’s
employment or engagement with the Company or its Subsidiaries.
(d) Each of the Company and its Subsidiaries has taken commercially reasonable steps to maintain the confidentiality of all information of the Company or its Subsidiaries that derives economic value (actual or potential) from not being
generally known to other Persons who can obtain economic value from its disclosure or use, including taking commercially reasonable steps to safeguard any such information that is accessible through computer systems or networks, and to the
knowledge of the Company, such information has not been used by or disclosed to any Person except pursuant to written, valid and appropriate non-disclosure agreements. Each employee or contractor of the Company and its Subsidiaries with
access to any such information is subject to legally binding obligations to maintain the confidentiality of such information.
(e) To the knowledge of the Company (i) the Company and its Subsidiaries are not infringing, misappropriating, diluting, or otherwise violating any Intellectual Property of any third party and (ii) no third party is misappropriating or
infringing any Company Intellectual Property owned by the Company. Neither the Company nor any of its Subsidiaries has delivered or received in the three (3) years prior to the date hereof any written notice or claim asserting any such
infringement, misappropriation, dilution or other violation of Intellectual Property. No Company Owned Intellectual Property is the subject of any Action between the Company and any other Person or is subject to any outstanding order,
judgment, decree or stipulation restricting or limiting in any material respect the use or licensing thereof by the Company or any of its Subsidiaries.
(f) Neither this Agreement nor the transactions contemplated by this Agreement, including the assignment to, or assumption by, Parent by operation of law or otherwise of any Contracts to which the Company or any of its Subsidiaries is a
party, will result in: (i) Parent or any of its Affiliates granting to any other Person any right to or with respect to any Intellectual Property owned by Parent or any of its Affiliates (other than rights granted by the Company or any of
its Subsidiaries prior to the Closing Date to Company Owned Intellectual Property), (ii) Parent or any of its Affiliates being bound by, or subject to, any non-compete or other material restriction on the operation or scope of their
respective businesses (excluding any non-compete or other material restriction that arises from any agreement to which the Company or any of its Subsidiaries is not a party), or (iii) Parent or any of its Affiliates being obligated to pay
any royalties or other material amounts, or offer any discounts, to any other Person pursuant to any Contract to which the Company is a party in excess of those payable by, or required to be offered by, the Company in the absence of this
Agreement or the transactions contemplated hereby.
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(g) The computers, servers, software, systems, routers, hubs, switches, circuits, networks, data communications lines and all other information technology equipment owned, leased or licensed by the Company and its Subsidiaries and which
are in use in connection with the operation of their businesses (the “Company IT Systems”) operate and perform in all material respects as required by the Company and its
Subsidiaries and have not malfunctioned or failed in any material respect in the past three (3) years. The Company and its Subsidiaries have in place commercially reasonable data backup, system redundancy, and disaster avoidance and
recovery procedures, as well as a commercially reasonable business continuity plan, in each case consistent with customary industry practices. The Company and its Subsidiaries have in place commercially reasonable policies and procedures to
protect the security and integrity of the Company IT Systems. There has been no security breach or other unauthorized access to the Company IT Systems during the past three (3) years which has resulted in the unauthorized access, use,
disclosure, deletion, destruction, modification, encryption or corruption of any material information or data stored therein or processed thereby.
Section 3.19 Data Privacy.
(a) The Company, and to the
knowledge of the Company, all third-parties Processing Personal Information on behalf of the Company (“Data Partners”), comply and have at all times in the three (3) years prior to
the date hereof complied, in all material respects with all applicable (i) Privacy Laws, (ii) policies, notices, and/or statements related to privacy, security, or the Processing of Personal Information, and (iii) contractual commitments
related to the privacy, security, or Processing of Personal Information (collectively, the “Privacy Requirements”). The execution, delivery, and performance of this Agreement and the
Merger will not: (x) conflict with or result in a breach of any Privacy Requirements by the Company; or (y) otherwise prohibit the transfer of Personal Information to Parent.
(b) The Company has at all
times implemented, maintained and complied with, and required all Data Partners to implement, technical, physical, and organizational measures, plans, procedures, controls, and programs, including a written information security program, which
at a minimum meet industry best practice and protect Personal Information and confidential information against Security Incidents. The Company has not, and to the knowledge of the Company, no Data Partner has, in the three (3) years prior to
the date hereof, experienced any Security Incidents that would require notice to any Person under any Privacy Requirement, or that have otherwise resulted in, or are reasonably likely to result in, any liability or material impact.
(c) In the three (3) years prior the date hereof, in relation to any Security Incident and/or actual or alleged violation of a Privacy Requirement, the Company has not (i) notified or been required to notify any customer, consumer,
employee, Governmental Entity, or other Person, or (ii) received any written notice, inquiry, request, claim, complaint, correspondence or other communication from, or been the subject of any investigation or enforcement action by, any
Governmental Entity or other Person. To the knowledge of the Company, there are no facts or circumstances that could give rise to the occurrence of (i) or (ii).
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Section 3.20 Certain Payments. Neither the Company nor any of its Subsidiaries nor any director, officer, employee, agent or other person acting on behalf of the Company or its Subsidiaries has, within the
past five (5) years, directly or indirectly, (a) violated or taken any action that could potentially result in a violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010 or its
predecessor laws, or any other Laws concerning corrupt payments applicable to the Company or its Subsidiaries (collectively, the “Anti-Corruption Laws”) or (b): (i) used, offered to
use or authorized the use of any funds of the Company or any of its Subsidiaries for unlawful contributions, unlawful gifts or unlawful entertainment, or for other unlawful payments, related to political activity or otherwise; (ii) made,
offered to make or authorized any unlawful payment to foreign or domestic Government Officials or employees or to foreign or domestic political parties or campaigns from funds of the Company or its Subsidiaries; (iii) established or
maintained any unlawful fund of monies or other assets of the Company or its Subsidiaries; (iv) made any inaccurate entry on the books or records of the Company or its Subsidiaries; (v) made, offered to make or authorized any bribe, unlawful
rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, in any form or (vi) engaged in or facilitated any transaction or dealing in property or interests in property
of, received from or made any contribution of funds, goods or services to or for the benefit of, provided any payments or material assistance to, or otherwise engage in or facilitated any transactions with any Prohibited Person. Neither the
Company nor any of its Subsidiaries is or within the past five (5) years has been (i) under external or internal investigation by any Governmental Entity for any potential or actual violation of any Anti‑Corruption Laws or (ii) has received
any written or other notice from any Governmental Entity regarding any potential or actual violation of, or potential or actual failure to comply with, any Anti‑Corruption Laws. Since January 1, 2019 neither the Company nor any of its
Subsidiaries has made any disclosure (voluntary or otherwise) to any Governmental Entity with respect to any alleged irregularity, misstatement or omission or other potential violation or liability arising under or relating to any
Anti-Corruption Laws. “Government Official” means any person employed by or that is an agent of any Governmental Entity or any political party or that is a candidate for Governmental
Entity office, or the family member or close affiliate of any of these.
Section 3.21 State Takeover Statutes. No “fair price,” “moratorium,” “control share acquisition,” “interested shareholder,” “business combination” or similar antitakeover Law (collectively, “Takeover Laws”) enacted under of any state Laws in the United States apply to this Agreement or any of the transactions contemplated hereby, including the Merger.
Section 3.22 Affiliate
Transactions. Except (i) as set forth on Section 3.22 of the Company Disclosure Letter or (ii) for directors’ and employment-related Company Material Contracts filed or incorporated by reference as an exhibit to a Company SEC
Document filed by the Company prior to the date hereof and for any intercompany agreements, as of the date hereof, no executive officer or director of the Company is a party to any Company Material Contract with or binding upon the Company or
any of its Subsidiaries or any of their respective properties or assets or has any material interest in any material property owned by the Company or any of its Subsidiaries or has engaged in any material transaction with any of the foregoing
since January 1, 2023.
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Section 3.23 Brokers.
No broker, investment banker, financial advisor or other Person, other than Consensus Advisory Services LLC and Consensus Securities LLC, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has made available to Parent true, correct and complete copies of all
engagement, fee and similar Contracts between the Company (or any Subsidiary of the Company) and Consensus Advisory Services LLC and Consensus Securities LLC under which the Company has continuing obligations as of the date hereof.
Section 3.24 Opinion
of Financial Advisor. Consensus Advisors LLC has delivered to the Company Board its oral opinion (which will be confirmed in writing), dated as of the date of this Agreement, to the effect that, as of the date of this Agreement and
based upon and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Merger Consideration pursuant to this Agreement is fair, from a financial point of view, to the holders of Company Shares (other
than Parent). The Company will make available to Parent a copy of such opinion as soon as practicable following the execution of this Agreement for information purposes only.
Section 3.25 No Other Representations or Warranties. Except for the representations and warranties contained in Article IV or in any certificate delivered pursuant
to this Agreement, the Company acknowledges that none of Parent, Merger Sub nor any other Person on behalf of Parent or Merger Sub makes any other express or implied representation or warranty with respect to Parent or Merger Sub, Parent’s
business or operations or with respect to any other information provided to the Company, any of its affiliates, stockholders and representatives or any other Person or had or has any duty or obligation to provide any information to the
Company or any of its affiliates, stockholders or representatives, or any other Person, in connection with this Agreement, the transactions contemplated hereby or
otherwise. Neither Parent nor any other Person will have or be subject to any liability to the Company, its Subsidiaries, affiliates, and representatives or any other Person resulting from the distribution to the Company or its
Subsidiaries, affiliates, and representatives or the Company’s or its Subsidiaries’, affiliates’, and representatives’ use of, any such information, including any information, documents, projections, forecasts or other material made
available to the Company or its Subsidiaries, affiliates, and representatives in certain “data rooms” or management presentations in expectation of, or in connection with, the transactions contemplated by this Agreement.
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Section 3.26 No Reliance. The Company acknowledges and agrees that it (a) has had an opportunity to discuss and ask questions regarding the business of Parent and its Subsidiaries with the management of
Parent, (b) has had access to the books and records of the Parent and its Subsidiaries, the “data room” maintained by the Parent and its Subsidiaries for purposes of the transactions contemplated by this Agreement and such other information
as it has desired or requested to review and (c) has conducted its own independent investigation of Parent and its Subsidiaries and the transactions contemplated hereby, and has not relied on any representation or warranty by any Person on
behalf of Parent or any of its Subsidiaries, except for the representations and warranties set forth in Article IV or in any certificate delivered in connection with this Agreement.
Without limiting the foregoing, except for the representations and warranties set forth in Article IV of this Agreement or in any certificate delivered in connection with this
Agreement, each of Parent and Merger Sub further acknowledges and agrees that none of Parent or Merger Sub or any of their respective stockholders, directors, officers, employees, Affiliates, advisors, agents or other Representatives has made
any representation or warranty concerning any estimates, projections, forecasts, business plans or other forward-looking information regarding Parent, its Subsidiaries or their respective businesses and operations. The Company hereby
acknowledges that there are uncertainties inherent in attempting to develop such estimates, projections, forecasts, business plans and other forward-looking information with which the Company is familiar, that except for the representations
and warranties set forth in Article IV or in any certificate delivered in connection with this Agreement, the Company are taking full responsibility for making their own evaluation
of the adequacy and accuracy of all estimates, projections, forecasts, business plans and other forward-looking information furnished to them (including the reasonableness of the assumptions underlying such estimates, projections, forecasts,
business plans and other forward-looking information), and the Company will have no claim against Parent, Merger Sub or any of their respective stockholders, directors, officers, employees, Affiliates, advisors, agents or other
Representatives with respect thereto and (subject to the express representations and warranties of Parent set forth in Article IV) the Company and its Subsidiaries, affiliates,
stockholders and representatives expressly disclaim reliance on any such information (including the accuracy or completeness thereof) or any representations or warranties or other statements or omissions that may have been made by Parent or
any Person with respect to Parent other than the representations and warranties set forth in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except (a) as disclosed or reflected in the Parent SEC Documents filed and publicly available after January 1, 2024 but at least two (2)
Business Days prior to the date of this Agreement (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements
that are similarly predictive or forward-looking in nature, in each case, other than any specific factual information contained therein), or (b) as set forth in the disclosure letter delivered by Parent to the Company concurrently with the
execution of this Agreement (the “Parent Disclosure Letter”) (it being agreed that disclosure of any information in a particular section or subsection of the Parent Disclosure Letter
shall be deemed disclosure with respect to any other section or subsection of this Agreement to the extent to which the relevance of such information is reasonably apparent on its face that such disclosure also qualifies or applies to such
other section or subsections), Parent and Merger Sub represent and warrant to the Company as follows:
Section 4.1 Organization,
Standing and Power.
(a) Each of Parent, its
Subsidiaries and Merger Sub (i) is an entity duly organized, validly existing and in good standing under the Laws of the State of Delaware, (ii) has all requisite corporate or organizational, as the case may be, power and authority to own,
lease and operate its properties and to carry on its business as it is now being conducted and proposed to be conducted in all material respects and (iii) is duly qualified or licensed to do business and is in good standing (with respect to
jurisdictions that recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except, with respect to clauses (ii)
and (iii), for any such failure to have such power and authority or to be so qualified or licensed or in good standing that, individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to
constitute or result in, a Parent Material Adverse Effect.
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(b) Parent has previously
furnished or otherwise made available to the Company a true and complete copy of Parent’s certificate of incorporation (the “Parent Charter”) and bylaws (the “Parent Bylaws”), in each case as amended to the date of this Agreement, and each as so delivered is in full force and effect. Parent is not in material violation of any provision of the
Parent Charter or the Parent Bylaws in any material respect.
(c) Each of Parent’s Subsidiaries (i) is an entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize such concept) under the Laws of the jurisdiction of its organization, (ii) has all
requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as now being conducted and (iii) is duly qualified or licensed to do business and is in good standing (with respect to
jurisdictions that recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except in each case of clauses
(i), (ii) and (iii), that, individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect.
Section 4.2 Capital
Stock.
(a) The authorized capital
stock of Parent consists of (i) 100,000,000 shares of Parent Common Stock and (ii) 5,000,000 shares of preferred stock, par value $0.0001 per share. As of November 19, 2025, (1) 68,848,745 shares of Parent Common Stock were issued and
outstanding, all of which were validly issued, fully paid and nonassessable and were free of preemptive rights, (2) 7,489,129 shares were held in treasury, (3) no shares of preferred stock were outstanding, (4) an aggregate of 1,850,133
shares of Parent Common Stock were subject to or otherwise deliverable in connection with outstanding restricted stock units that vest solely based on the passage of time, (5) an aggregate of 851,844 shares of Parent Common Stock were subject
to or otherwise deliverable in connection with outstanding restricted stock units that vest based in whole or in part on performance metrics (at the target level of performance), (6) an aggregate of 2,250,000 shares of Parent Common Stock
were subject to or otherwise deliverable in connection with the exercise of outstanding options to purchase Parent Common Stock (“Parent Stock Options”), (7) 1,471,613 shares of
Parent Common Stock were available for issuance of future awards under Parent’s equity incentive plans, and (8) no shares of Parent Common Stock subject to or otherwise deliverable in connection with the exercise of outstanding convertible
notes.
(b) Except as set forth
above and except for changes since the Measurement Date resulting from the exercise of Parent Stock Options outstanding on such date, as of the date of this Agreement, (1) there are not outstanding or authorized any (A) shares of capital
stock or other Equity Interests of Parent or any of its Subsidiaries, (B) securities of Parent or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of Parent or any of its Subsidiaries
or (C) options or other rights to acquire from Parent or any of its Subsidiaries, and no obligation of Parent or any of its Subsidiaries to issue, any capital stock or Equity Interests of Parent or any of its Subsidiaries, (2) there are no
outstanding obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock or Equity Interests of Parent or any of its Subsidiaries, (3) there are no Liens relating to the issued or unissued
capital stock of Parent or any of its Subsidiaries to which Parent or any of its Subsidiaries is a party, (4) there are no bonds, debentures, notes or other indebtedness of Parent or any of its Subsidiaries issued and outstanding having the
right to vote (or convertible or exercisable or exchangeable for securities having the right to vote) on any matters on which stockholders of Parent may vote, and (5) there is no Contract to which Parent or any of its Subsidiaries is a party
relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect to), any Parent Common Stock or capital stock or
other Equity Interests of any of Parent’s Subsidiaries.
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(c) Each of the
outstanding shares of capital stock of each of Parent’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and all such shares are owned by Parent or another wholly-owned Subsidiary of Parent and are owned free and
clear of all Liens of any nature whatsoever, except where any such failure to own any such shares free and clear, individually or in the aggregate, has not constituted or resulted in and would not reasonably be expected to constitute or
result in, a Parent Material Adverse Effect.
(d) All of the issued and outstanding capital stock or interests of Merger Sub is owned, directly or indirectly, by Parent. Merger Sub has no outstanding options, warrants, rights or any other agreements pursuant to which any Person
other than Parent may acquire any equity security or interests of Merger Sub.
Section 4.3 Authority. Each of Parent and Merger Sub has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and, subject to the approval of this Agreement by Parent as the sole stockholder of Merger Sub, to consummate the
transactions contemplated hereby. The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent and no other corporate proceedings on the part of
Parent or Merger Sub are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed
and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery by Parent and Merger Sub, constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms (except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the enforcement of creditors’ rights generally or by general principles of equity). As of the date hereof, the Parent Board has, at a meeting duly called and held, (a) unanimously adopted resolutions (i) determining that the
transactions contemplated by this Agreement, including the Merger, are advisable, fair to and in the best interests of Parent and its stockholders, (ii) approving, adopting and declaring advisable this Agreement and the transactions
contemplated by this Agreement, including the Merger, and has resolved to adopt and approve the Parent Stock Issuance contemplated hereby.
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Section 4.4 No
Conflict; Consents and Approvals.
(a) The execution,
delivery and performance of this Agreement by each of Parent and Merger Sub, and the consummation by each of Parent and Merger Sub of the transactions contemplated hereby, do not and will not (i) conflict with or violate the Parent Charter or
Parent Bylaws or the equivalent Organizational Documents of any of Parent’s Subsidiaries or Merger Sub, (ii) result in the creation of any Lien upon any assets of Parent or any of its Subsidiaries that is material to the operation of Parent
and its Subsidiaries or the suspension, revocation or forfeiture of any material franchise, permit or license granted by a governmental authority to the Parent or any of its Subsidiaries, other than liens under federal or state securities
laws, (iii) result in any breach or violation of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under any material indenture or other agreement or instrument evidencing material
indebtedness binding upon Parent or any of its Subsidiaries or their respective assets, or give rise to a right of any third party thereunder to require any material payment, repurchase or redemption to be made by Parent or any of its
subsidiaries, or give rise to a right of, or result in, termination, cancellation or acceleration of any material obligation thereunder, (iv) assuming that all consents, approvals and authorizations contemplated by clauses (i) through (iv) of
subsection (b) below have been obtained and all filings described in such clauses have been made, conflict with or violate any Law applicable to Parent, any of its Subsidiaries or
Merger Sub or by which any of their respective properties are bound or (v) result in any breach or violation of, or constitute a default (or an event which with notice or lapse of time or both would become a default), or result in the loss of
a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, any Contract to which Parent, any of its Subsidiaries or Merger Sub is a party or by which Parent, any of its Subsidiaries or Merger Sub or
any of their respective properties are bound, except, in the case of clauses (iv) and (v), for any such conflict, breach, violation, default, loss, right or other occurrence that, individually or in the aggregate, has not constituted or
resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect.
(b) The execution,
delivery and performance of this Agreement by each of Parent or Merger Sub, and the consummation by each of Parent or Merger Sub of the transactions contemplated hereby, do not and will not require any consent, approval, authorization or
permit of, action by, filing with or notification to, any Governmental Entity, except for (i) such filings as may be required under applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder, and under
state securities, takeover and “blue sky” laws, (ii) such filings as necessary to comply with the applicable requirements of the New York Stock Exchange (“NYSE”), (iii) the filing
with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL, (iv) the filing with the Secretary of State of the State of Tennessee of the Articles of Merger, and (v) any such consent, approval,
authorization, permit, action, filing or notification, in each case with respect to a Governmental Entity, the failure of which to make or obtain that, individually or in the aggregate, has not constituted or resulted in, and would not
reasonably be expected to constitute or result in, a Parent Material Adverse Effect.
Section 4.5 SEC
Reports; Financial Statements.
(a) Parent has timely filed, furnished or otherwise transmitted all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it
with the SEC since January 1, 2023 (all such forms, reports, statements, certificates and other documents filed since January 1, 2023 and prior to the date hereof, collectively, the “Parent SEC Documents”). As of their respective dates, or, if amended, as of the date of the last such amendment, each of the Parent SEC Documents complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, and the applicable rules and regulations promulgated thereunder, as the case may be, each as in effect on the date so filed. As of their respective filing dates (or, if amended or
superseded by a subsequent filing prior to the date hereof, as of the date of such amendment or superseding filing), none of the Parent SEC Documents contained any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of Parent has been required to file any forms, reports or other documents with the SEC at any time since January 1, 2023. Since January 1, 2023 no executive officer of Parent has failed in any
respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act. Neither Parent nor any of its executive officers has received notice from any Governmental Entity challenging or questioning the
accuracy, completeness, form or manner of filing of such certifications.
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(b) The audited consolidated financial statements of Parent (including any related notes thereto) included in or incorporated by reference in the Parent SEC Documents (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q or any successor form under the Exchange Act, and except that unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments); (iii) fairly present
in all material respects the consolidated financial position of Parent and its Subsidiaries at the respective dates thereof and the results of their operations and cash flows for the periods indicated subject, with respect to unaudited
interim statements, to normal and recurring year-end adjustments.
(c) Parent maintains, and at all times since January 1, 2023 has maintained, disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and procedures are designed to ensure
that information required to be disclosed by Parent in its filings with the SEC under the Exchange Act is recorded and reported on a timely basis to the individuals responsible for the preparation of Parent’s filings with the SEC under the
Exchange Act. Parent maintains internal control over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable, under the Exchange Act). Such internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Parent’s management has completed an assessment of the effectiveness of Parent’s system of
internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the fiscal year ended December 31, 2024, and such assessment concluded that such controls were effective and Parent’s
independent registered accountant has issued an attestation report concluding that Parent maintained effective internal control over financial reporting as of December 31, 2024. Parent has disclosed, based on the most recent evaluation of
its Chief Executive Officer and its Chief Financial Officer prior to the date of this Agreement, to Parent’s auditors and the audit committee of the Parent Board (i) any significant deficiencies and material weaknesses in the design or
operation of its internal controls over financial reporting and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s internal control over financial reporting, and each
such deficiency, weakness and fraud so disclosed to auditors, if any, has been disclosed to the Company prior to the date hereof.
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(d) Since January 1, 2023, (i) none of Parent or any Subsidiary of Parent nor, to the knowledge of Parent, any director or officer of Parent or any Subsidiary of Parent has received or otherwise had or obtained knowledge of any material
complaint, allegation, assertion or claim, whether written or oral, regarding accounting, internal accounting controls or auditing practices, procedures, methodologies or methods of Parent or any Subsidiary of Parent or any material
complaint, allegation, assertion or claim from employees of Parent or any Subsidiary of Parent regarding questionable accounting or auditing matters with respect to Parent or any Subsidiary of Parent, and (ii) to the knowledge of Parent, no
attorney representing Parent or any Subsidiary of Parent, whether or not employed by Parent or any Subsidiary of Parent, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by
Parent, any Subsidiary of Parent or any of their respective officers, directors, employees or agents to Parent Board or any committee thereof, or to the General Counsel or Chief Executive Officer of Parent.
(e) As of the date hereof, Parent is in compliance in all material respects with all current listing requirements of the NYSE.
(f) Neither Parent nor any Subsidiary of Parent is a party to, or has a commitment to effect, enter into or create, any joint venture, or “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K under the Exchange
Act).
(g) As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Parent SEC Documents, and none of the Parent SEC Documents is, to the knowledge of
Parent, the subject of ongoing SEC review or investigation.
Section 4.6 No
Undisclosed Liabilities. Neither Parent nor any of its Subsidiaries has any liabilities of any nature or type, whether accrued, absolute, determined, contingent, secondary, direct or otherwise and whether due or to become due, required
to be reflected in Parent’s financial statements, except for: (i) liabilities disclosed in the financial statements (including any related notes) contained in the most recent audited balance sheet included in the Parent SEC Documents (the “Most
Recent Parent Balance Sheet”); (ii) liabilities incurred in the ordinary course of business since the date of the Most Recent Parent Balance Sheet; (iii) liabilities that, individually or in the aggregate, have not constituted or
resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect; and (iv) liabilities and obligations incurred in connection with the transactions contemplated by this Agreement.
Section 4.7 Certain
Information. The information supplied or to be supplied by Parent and Merger Sub specifically for inclusion in the Form S-4 and the Proxy Statement shall not, at the time that the Form S‑4 is declared effective by the SEC, contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that
no representation or warranty is made by Parent with respect to statements made therein based on information supplied by or on behalf of the Company specifically for inclusion in the Form S‑4.
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Section 4.8 No Parent Material Adverse Effect. Since January 1, 2024 through the date of this Agreement, there has not been any Effect that has constituted or resulted in, or that would reasonably be expected
to constitute or result in, a Parent Material Adverse Effect.
Section 4.9 Litigation. Except as, in each case, individually or in the aggregate, has not had, or would not reasonably be expected to have a Parent Material Adverse Effect, (a) there is no Action pending or,
to the knowledge of Parent, threatened against Parent or any of its Subsidiaries or any of their respective properties or assets, (b) neither Parent nor any of its Subsidiaries nor any of their respective properties or assets is or are
subject to any judgment, order, injunction, rule or decree of any Governmental Entity and (c) there are no subpoenas, civil investigative demands or other written requests for information issued to Parent or any of its Subsidiaries relating
to potential or actual violations of any Law that are pending or, to the knowledge of Parent, threatened, or any investigations or claims against or affecting Parent or any of its Subsidiaries, or any of their respective properties or assets,
relating to potential or actual violations of any Law.
Section 4.10 Compliance
with Laws. Parent and each of its Subsidiaries are in compliance with, and have maintained and enforced policies and procedures reasonably designed to promote compliance with, all Laws applicable to them or by which any of their
respective properties are bound, except where any non-compliance, individually or the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect. Neither
Parent nor any of its Subsidiaries has, during the three (3)-year period prior to the date of this Agreement: (i) to the knowledge of Parent, received any written notice or verbal notice from any Governmental Entity regarding any potential or
actual material violation by Parent or any of its Subsidiaries of any Law; or (ii) provided any notice to any Governmental Entity regarding any potential or actual material violation by Parent or any of its Subsidiaries of any Law. Parent and
its Subsidiaries have in effect all Permits necessary for them to own, lease or operate their properties and to carry on their businesses as now conducted, except for any Permits the absence of which, individually or in the aggregate, has not
constituted or resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect. Except as, individually or in the aggregate, has not constituted or resulted in, and would not reasonably be
expected to constitute or result in, a Parent Material Adverse Effect, (x) all of Parent and its Subsidiaries’ Permits are valid and in full force and effect and are not subject to any administrative or judicial proceeding that could result
in any modification, termination or revocation thereof and, to the knowledge of Parent, no suspension or cancellation of any such Permit is threatened, (x) no event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation of any term, condition or provision of any such Permit, (y) all fees and assessments due and payable in connection with such Permits have been timely paid, and (z) Parent and each of its Subsidiaries is in
compliance with the terms and requirements of all such Permits. There are no Actions pending or, to the knowledge of Parent, threatened, that seek the revocation, cancellation or modification of any Permit. Neither Parent nor its Subsidiaries
have, since January 1, 2023, received written notice of any charge, claim or assertion alleging any violations of or noncompliance with any Permit, nor to the knowledge of Parent, has any charge, claim or assertion been threatened, except as,
individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect.
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Section 4.11 Brokers.
No broker, investment banker, financial advisor or other Person, other than Ankura Consulting Group, LLC, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made.
Section 4.12 No Prior
Activities. Except for obligations incurred in connection with its organization and the transactions contemplated hereby, Merger Sub has not incurred any obligation or liability nor engaged in any business or activity of any type or
kind whatsoever or entered into any Contract with any Person.
Section 4.13 No Other
Representations or Warranties. Except for the representations and warranties contained in Article III or in any certificate delivered pursuant to this Agreement, each of Parent and Merger Sub acknowledges that neither the
Company nor any other Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries, or any of their respective businesses or operations, with respect to
any other information provided to Parent or Merger Sub, or any of their respective affiliates, stockholders and representatives or any other Person or had or has any duty or obligation to provide any information to Parent or Merger Sub, or
any of their respective affiliates, stockholders or representatives, or any other Person, in connection with this Agreement, the transactions contemplated hereby or otherwise. Neither the Company nor any other Person will have or be subject
to any liability to Parent or Merger Sub, or any of their respective affiliates and representatives, or any other Person resulting from the distribution to Parent or Merger Sub, or any of their respective affiliates and representatives, or
Parent’s or Merger Sub’s, or any of their respective affiliates’ and representatives’, use of, any such information, including any information, documents, projections, forecasts or other material made available to Parent or Merger Sub, or any
of their respective affiliates and representatives, in certain “data rooms” or management presentations in expectation of, or in connection with, the transactions contemplated by this Agreement.
Section 4.14 No Reliance. Each of Parent and Merger Sub acknowledges and agrees that it (a) has had an opportunity to discuss and ask
questions regarding the business of the Company and its Subsidiaries with the management of the Company, (b) has had access to the books and records of the Company, the “data room” maintained by the Company for purposes of the transactions
contemplated by this Agreement and such other information as it has desired or requested to review and (c) has conducted its own independent investigation of the Company and its Subsidiaries and the transactions contemplated hereby, and has
not relied on any representation or warranty by any Person on behalf of the Company or any of its Subsidiaries, except for the representations and warranties set forth in Article III or in any certificate delivered in connection
with this Agreement. Without limiting the foregoing, except for the representations and warranties set forth in Article III of this Agreement or in any certificate delivered in connection with this Agreement, each of Parent and
Merger Sub further acknowledges and agrees that none of the Company or any of its stockholders, directors, officers, employees, Affiliates, advisors, agents or other
Representatives has made any representation or warranty concerning any estimates, projections, forecasts, business plans or other forward-looking information regarding the Company, its Subsidiaries or their respective businesses and
operations. Each of Parent and Merger Sub hereby acknowledges that there are uncertainties inherent in attempting to develop such estimates, projections, forecasts,
business plans and other forward-looking information with which Parent and Merger Sub are familiar, that except for the representations and warranties set forth in Article
III or in any certificate delivered in connection with this Agreement, Parent and Merger Sub are taking full responsibility for making their own evaluation of
the adequacy and accuracy of all estimates, projections, forecasts, business plans and other forward-looking information furnished to them (including the reasonableness of the assumptions underlying such estimates, projections, forecasts,
business plans and other forward-looking information), and that Parent and Merger Sub will have no claim against the Company or any of its stockholders, directors,
officers, employees, Affiliates, advisors, agents or other Representatives with respect thereto and (subject to the express representations and warranties of Parent set forth in Article III) Parent and Merger Sub, and their
respective affiliates, stockholders and representatives, expressly disclaim reliance on any such information (including the accuracy or completeness thereof) or any representations or warranties or other statements or omissions that may
have been made by the Company or any Person with respect to the Company other than the representations and warranties set forth in this Agreement.
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ARTICLE V
COVENANTS
Section 5.1 Conduct of
Business of the Company.
(a) The Company covenants
and agrees that, during the period from the date hereof until the Effective Time, except (i) as expressly required by this Agreement, (ii) as disclosed in Section 5.1(a) of the
Company Disclosure Letter, (iii) as required by applicable Law or (iv) to the extent Parent shall otherwise request or consent to in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall, and
shall cause each of its Subsidiaries to, (w) conduct their respective business in the ordinary course of business consistent with past practice and (x) use commercially reasonable efforts to preserve substantially intact their respective
business organizations and material assets, to keep available the services of its and its Subsidiaries’ current officers and key employees, to preserve their respective present relationships and goodwill with material customers and material
suppliers and others with whom it has business relations and comply in all material respects with all applicable Laws.
(b) Without limiting the
generality of the foregoing, between the date of this Agreement and the Effective Time, except (w) as expressly required by this Agreement, (x) as disclosed in Section 5.1(b) of the
Company Disclosure Letter, (y) as required by applicable Law or (z) to the extent Parent shall otherwise request or consent to in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and
the Company shall cause each of its Subsidiaries not to:
(i) amend or otherwise
change its Organizational Documents (other than such amendments as may be necessary to effect the transactions contemplated by this Agreement, the Merger) or adopt any stockholder rights plan, “poison pill” antitakeover plan or similar
device, in each case, to the extent that it would apply to the transactions contemplated by this Agreement, including the Merger;
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(ii) issue, deliver, sell, pledge, grant, transfer, dispose of or encumber any shares of capital stock, or grant to any Person any right to acquire any additional shares of, or securities convertible or exchangeable for, or
options, warrants or rights to acquire, any shares of its capital stock or other Equity Interests, except pursuant to the exercise of Company Stock Options or settlement of settlement of Company RSUs outstanding as of the date hereof (or
permitted hereunder to be granted after the date hereof) in accordance with their terms;
(iii) declare, set aside,
make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, in respect of any of its capital stock or other Equity Interests (except for any dividend or distribution by a Subsidiary of the Company to the
Company or to other Subsidiaries) or enter into any agreement with respect to the voting or registration of its capital stock or other Equity Interests (other than in connection with this Agreement);
(iv) adjust, split, combine, exchange, redeem, repurchase or otherwise acquire any shares of capital stock or other Equity Interests, or any other securities or obligations convertible (currently or after the passage of time or
the occurrence of certain events) into or exchangeable for any shares of the Company’s or any of its Subsidiaries’ capital stock or other Equity Interests (except in connection with the cashless exercises or similar transactions pursuant to
the exercise of Company Stock Options or settlement of Company RSUs or other awards or obligations outstanding as of the date hereof or permitted to be granted after the date hereof), or reclassify, combine, split, subdivide or otherwise
amend, directly or indirectly, the terms of its capital stock or other Equity Interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable
for any shares of the Company’s or any of its Subsidiaries’ capital stock or other Equity Interests;
(v) (A) acquire (whether by
merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets other than purchases of inventory and other assets in the ordinary course of
business or pursuant to existing Contracts; (B) sell, pledge, assign, transfer, lease, license, guarantee, encumber or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation,
partnership or other business organization or division thereof or any property or assets, other than, in each case, (x) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the
ordinary course of business; (w) as security for any borrowings permitted by Section 5.1(b)(viii); or (y) licenses granted to customers or other third parties in the ordinary course
of business; or (z) dispositions of assets which do not constitute Company Intellectual Property, and with respect to which the fair market value of all such assets does not exceed $500,000 in the aggregate;
(vi) except in the ordinary course of business consistent with past practice, (x) materially amend or terminate any Company Material Contract (other than terminations pursuant to the expiration of the existing term of any Company
Material Contract), (y) waive, release or assign any material rights under any Company Material Contract or (z) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Company Material
Contract;
(vii) make, or agree or
commit to make, any capital expenditure, except in accordance with the capital expenditure budget set forth in Section 5.1(b)(vii) of the Company Disclosure Letter, plus a 2.5%
variance for each principal category set forth in such capital expenditure budget;
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(viii) (A) make any loans, advances or capital contributions to, or investments in, any other Person (other than a Subsidiary of the Company or routine travel and business expense advances made to directors or
employees in the ordinary course of business consistent with past practice), (B) incur, redeem, repurchase, prepay, defease, or cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities
or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except for: (1) subject to Section 5.18, repayment of the amounts outstanding
under the Credit Facility when due in accordance with their terms; (2) borrowings in an aggregate principal amount outstanding at any time not to exceed $250,000 incurred in the ordinary course of business pursuant to existing credit
facilities or letters of credit, (3) any indebtedness among the Company and its Subsidiaries or among Subsidiaries of the Company (and guarantees by the Company or its Subsidiaries in respect thereof) and (4) purchase money financings and
capital leases entered into in the ordinary course of business in an aggregate amount not to exceed $250,000 at any time outstanding, (C) assume,
guarantee, endorse or otherwise become liable or responsible for the indebtedness or other obligations of another Person (other than a guaranty by the Company on behalf of its Subsidiaries) or (D) incur any Encumbrance on any of its
material property or assets, except Permitted Encumbrances;
(ix) except to the extent
required by applicable Law or any Company Plan in effect as of the date hereof, (A) increase or decrease the compensation or benefits of any director or any Company Employee (other than annual base salary increases for employees with annual
compensation less than $200,000 in the ordinary course of business consistent with past practice, and corresponding increases in target bonus compensation), (B) enter into, establish, amend, terminate or modify (including by exercising
discretion to accelerate vesting or the time of payment or funding) any Company Plan, or any arrangement that would be a Company Plan if in effect as of the date of this Agreement; (C) grant or increase any severance or termination pay or
termination or change in control payments or benefits, or any similar compensation, (D) hire or engage any individual as an employee or other individual service provider (except, with respect to any individual whose annual base compensation
does not exceed $200,000, to fill a vacancy); (E) terminate the employment of any Company Employee (other than for cause); or (F) enter into any Labor Agreement;
(x) implement or adopt
any material change in its methods of accounting, except as may be required to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(xi) adopt a plan of (A)
complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions
between or among direct or indirect wholly owned Subsidiaries of the Company;
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(xii) commence, compromise,
settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements in the ordinary course of business that
(A) involve only the payment of money damages (1) for an amount (in excess of insurance proceeds) for each such compromise or settlement that is, individually, less than $100,000 and for all such compromises or settlements that is, in the
aggregate, less than $500,000 or (2) consistent with the reserves reflected in the Company’s balance sheet at November 1, 2025, (B) do not impose any restriction on the Company’s business or the business of its Subsidiaries, (C) do not relate
to any litigation, claim, suit, action or proceeding by the Company’s shareholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any of its
Subsidiaries;
(xiii) waive, release, pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise) with value in excess of $250,000, except in the ordinary course of business consistent with past practice and in accordance with their
terms.
(xiv) (A) make, change or
revoke any material Tax election, (B) change or adopt any Tax accounting period or material method of Tax accounting, (C) amend or refile any material Tax Return, (D) settle or compromise any material liability for Taxes or any audit, claim
or other proceeding relating to a material amount of Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Law), (F) request any ruling from any Governmental
Entity relating to Taxes, (G) knowingly surrender any right to claim a material refund of Taxes, (H) other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material
amount of Taxes, or (I) initiate any voluntary disclosure, amnesty or similar program with respect to a material amount of Taxes;
(xv) sell, transfer, assign, license, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or grant a Lien on, covenant not to sue in respect of, mortgage, encumber or exchange any material
Intellectual Property owned or purported to be owned by, or exclusively licensed to, the Company or any Subsidiary of the Company;
(xvi) materially reduce the
amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xvii) (A) amend any Permits
in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Permits;
(xviii) enter into any Company Real Property Leases;
(xix) take any action (or knowingly omit to take any action) intended to or that would reasonably be expected to cause or result in a material breach of the Credit Facility; or
(xx) agree to take or
otherwise authorize, approve or enter into any agreement or make any commitment to take any of the actions described in Sections 5.1(b)(i) through (xix).
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Section 5.2 Conduct of
Business of Parent.
(a) Parent covenants and agrees that, during the period from the date hereof until the Effective Time, except (i) as expressly required by this Agreement, (ii) as disclosed in Section
5.1(a) of the Parent Disclosure Letter, (iii) as required by applicable Law or (iv) to the extent the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed),
Parent shall, and shall cause each of its Subsidiaries to, (w) conduct their respective business in the ordinary course of business and (x) use commercially reasonable efforts to preserve substantially intact their respective business
organizations and material assets, to keep available the services of its and its Subsidiaries’ current officers and key employees, to preserve their respective present relationships with material customers and material suppliers and comply
in all material respects with all applicable Laws.
(b) Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except (w) as expressly required by this Agreement, (x) as disclosed in Section
5.1(b) of the Parent Disclosure Letter, (y) as required by applicable Law or (z) to the extent the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Parent
shall not, and Parent shall cause each of its Subsidiaries not to:
(i) amend or otherwise change its Organizational Documents;
(ii) implement or adopt any material change in its methods of accounting, except as may be required to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(iii) adopt a plan of (A)
complete or partial liquidation of Parent or any Subsidiary of Parent or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or
among direct or indirect wholly owned Subsidiaries of Parent; or
(iv) agree to take or otherwise authorize, approve or enter into any agreement or make any commitment to take any of the actions described in Sections 5.1(b)(i) through
5.1(b)(iii).
Section 5.3 No Control of Other Party’s Business. Nothing contained in this Agreement (including anything in Section 5.1(b)) shall give Parent, directly or indirectly, the right to
control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct Parent’s or its
Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its
Subsidiaries’ respective operations.
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Section 5.4 No
Solicitation by the Company.
(a) Except as expressly
permitted by this Section 5.4, the Company agrees that it shall not, and shall cause its Subsidiaries and its and their respective directors, officers, employees, investment
bankers, attorneys, consultants, accountants and other advisors, agents or representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit,
knowingly assist, knowingly induce or knowingly encourage or facilitate (including by providing information) any inquiries, proposals or offers with respect to, or the making, submission, announcement or completion of, any proposal or offer
that constitutes, or would be reasonably expected to lead to, a Company Acquisition Proposal or (ii) engage in, continue or participate in any negotiations or discussions with any Persons (any such Person, a “Third Party”) other than Parent, Merger Sub and their respective Affiliates and Representatives to the extent acting on behalf of Parent or Merger Sub (other than to refer the inquiring Person to this Section 5.4) concerning any Company Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to any Company Acquisition Proposal, (iii) furnish or
provide or cause to be furnished or provided any non-public information or data relating to the Company or any of its Subsidiaries in connection with, or for the purpose of soliciting, initiating, encouraging or facilitating, or in response
to, any inquiry, proposal or offer that constitutes of would reasonably be expected to lead to a Company Acquisition Proposal, or (iv) resolve or agree to do any of the foregoing. The Company agrees that it will, and will cause its
Subsidiaries and its and their respective Representatives to, (x) immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Third Party conducted heretofore with respect to any Company
Acquisition Proposal, (y) deliver a written notice to any such Third Party explicitly stating that the Company is terminating all discussions and negotiations with such Third Party with respect to any Company Acquisition Proposal, and
requesting that such Third Party promptly return or destroy all confidential or proprietary information concerning the Company and its Subsidiaries, and (z) promptly terminate access of any such Third Party to any due diligence or electronic
or physical data room with respect to any Company Acquisition Proposal; provided, that nothing in this Agreement shall restrict the Company from permitting a Person to request the
waiver of a “standstill” or similar obligation or from granting such a waiver, in each case, solely to the extent necessary to allow the applicable counterparty thereof to make a Company Acquisition Proposal in accordance with this Agreement
and only after 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.
(b) Notwithstanding
anything to the contrary in Section 5.4(a), at any time prior to obtaining the Company Shareholder Approval, in response to an unsolicited bona fide written Company Acquisition
Proposal from a Third Party made after the date hereof that (x) did not result from a material breach of Section 5.4(a) or Section
5.4(c) by the Company, any of its Subsidiaries or any of its or their respective Representatives, and (y) the Company Board determines in good faith, after consultation with the Company’s outside legal counsel and its financial
advisor, constitutes or may reasonably be expected to lead to a Company Superior Proposal and that failure to engage in such discussions or negotiations, or provide such information, would reasonably be expected to be inconsistent with the
Company Board’s fiduciary duties to the Company and its shareholders under applicable Law, the Company and its Representatives may, following receipt of an executed customary confidentiality agreement with nondisclosure provisions that are at
least as restrictive of such Third Party as the Confidentiality Agreement (except for such changes specifically necessary in order for the Company to be able to comply with its obligations under this Agreement) and that does not prohibit
compliance by the Company with this Section 5.4: (i) furnish information with respect to the Company and its Subsidiaries to such Third Party making such Company Acquisition
Proposal and (ii) participate in discussions or negotiations with such Third Party and its Representatives regarding such Company Acquisition Proposal; provided, that the Company
shall promptly (following such time as it is provided or made available to such third party and in no event later than 24 hours) provide or make available to Parent any material non-public information concerning the Company or any of its
Subsidiaries to the Person making such Company Acquisition Proposal or its Representatives which was not previously provided or made available to Parent. If the Company receives a Company Acquisition Proposal or any inquiry or request for
information with respect to a Company Acquisition Proposal or that is reasonably likely to lead to a Company Acquisition Proposal, then the Company shall promptly (and in no event later than 24 hours after its receipt of such Company
Acquisition Proposal or request) notify Parent in writing of such Company Acquisition Proposal or request (which notification shall include the identity of the Person making or submitting such request or Company Acquisition Proposal and an
unredacted copy of any such written request or proposal (or, if not in writing, a written summary of the material terms and conditions thereof)), together with copies of any proposed transaction agreements, and the Company shall thereafter
keep Parent reasonably informed in writing, on a current basis (and, in any event, within 24 hours), of the status of such Company Acquisition Proposal or request, including informing Parent of any material change to the terms of such Company
Acquisition Proposal, and the status of any negotiations, including any change in its intentions as previously notified.
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(c) Subject to the
permitted actions contemplated by clauses (d) and (e) below, and Section
7.1(c)(ii), neither the Company Board nor any committee thereof shall (i) withdraw, change, qualify, withhold, amend or modify in a manner adverse to Parent or Merger Sub, or publicly propose to withdraw, change, qualify,
withhold, amend or modify in a manner adverse to Parent or Merger Sub, the Company Board Recommendation or make, or permit any director or executive officer to make, any public statement in connection with the Company Shareholders Meeting by
or on behalf of the Company Board or such committee that would reasonably be expected to have the same effect, (ii) adopt, approve, recommend, or publicly propose to adopt, approve or recommend, any Company Acquisition Proposal or Company
Alternative Acquisition Agreement, (iii) fail to include the Company Board Recommendation in the Proxy Statement, (iv) in the event a tender offer that constitutes a Company Acquisition Proposal subject to Regulation 14D under the Exchange
Act is commenced, fail to recommend against such Company Acquisition Proposal in any solicitation or recommendation statement made on Schedule 14D-9 within ten (10) Business Days of such commencement (and in no event later than one (1)
Business Day prior to the date of the Company Stockholder Meeting, as it may be postponed or adjourned pursuant to Section 5.5(b)), or (v) if requested by Parent, fail to issue,
within ten (10) Business Days after a Company Acquisition Proposal is publicly announced (and in no event later than one (1) Business Day prior to the date of the Company Stockholder Meeting, as it may be postponed or adjourned pursuant to Section 5.5(b)), a press release reaffirming the Company Board Recommendation (any of such action in clauses (i)-(v), an “Company Adverse
Recommendation Change”), (vi) cause or permit the Company or any of its Subsidiaries to enter into or agree to any letter of intent, memorandum of understanding or similar document, agreement in principle, acquisition
agreement, merger agreement, or other similar agreement or commitment (other than a confidentiality agreement referred to in Section 5.4(b) entered into in compliance with Section 5.4(b)) relating to any Company Acquisition Proposal (a “Company Alternative Acquisition Agreement”) or (vi) take any
action to make the provisions of any anti-takeover or similar statute or regulation inapplicable to any Company Acquisition Proposal or counterparty thereto; provided, that delivery
of a written notice to Parent as contemplated by clause (d) below, or public disclosure that such notice has been delivered to Parent, shall not be deemed to constitute an Company
Adverse Recommendation Change or otherwise a violation of this clause (c).
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(d) Notwithstanding
anything to the contrary set forth in this Section 5.4, following receipt of a written Company Acquisition Proposal by the Company after the date of this Agreement that did not
result from a breach of this Section 5.4 and has not been withdrawn the Company Board may, at any time prior to the Company Shareholders Meeting, make a Company Adverse
Recommendation Change and authorize the Company to terminate this Agreement to enter into a Company Alternative Acquisition Agreement with respect to such Company Superior Proposal in accordance with Section 7.1(c)(ii), or authorize, resolve, agree or propose publicly to take any such action, if all of the following conditions are met prior to making such Company Adverse Recommendation Change:
(i) the Company Board determines in good faith, after consultation with the Company’s outside legal counsel and its financial advisor, that such Company Acquisition Proposal constitutes a Company Superior Proposal and that failure to
take such action would reasonably be expected to be inconsistent with the Company Board’s fiduciary duties to its shareholders under applicable Law;
(ii) (A) the Company
shall have provided to Parent five (5) Business Days’ prior written notice (the “Company Superior Proposal Notice”), which shall state expressly (1) that it has received a written
Company Acquisition Proposal that constitutes a Company Superior Proposal, (2) an unredacted copy of such Company Acquisition Proposal (or, if not in writing, the material terms and conditions thereof, including the consideration offered
therein and the identity of the Person or group making the Company Acquisition Proposal) and shall have contemporaneously provided an unredacted copy of the Company Alternative Acquisition Agreement and all other documents (other than
immaterial documents) related to the Company Superior Proposal (it being understood and agreed that any amendment to the financial terms or any other material term or condition of such Company Superior Proposal shall require a new notice and
an additional three (3) Business Day period) and (3) that, subject to clause (iii) below, the Company Board has
determined to make a Company Adverse Recommendation Change or to terminate this Agreement in accordance with Section 7.1(c)(ii) in order to enter into the Company Alternative
Acquisition Agreement, as applicable and (B) prior to making such Company Adverse Recommendation Change or terminating this Agreement in accordance with Section 7.1(c)(ii), as
applicable, (x) the Company shall have used commercially reasonable efforts to engage in good faith with Parent (to the extent Parent wishes to engage) during such notice period commencing on the delivery of the Company Superior Proposal
Notice, to consider any adjustments proposed by Parent to the terms and conditions of this Agreement such that the Company Alternative Acquisition Agreement ceases to constitute a Company Superior Proposal and (y) in determining whether to
make an Company Adverse Recommendation Change or to effect a termination in accordance with Section 7.1(c)(ii), the Company Board shall have taken into account any changes to the
terms of this Agreement proposed by Parent and any other information provided by Parent in response to such notice; and
(iii) following the end of
such five (5) Business Day period (as such period may be extended in accordance with clause (ii) above), the Company Board shall have determined, in good faith, after consultation
with its financial advisors and outside legal counsel, that, in light of such Company Superior Proposal and taking into account any revised terms proposed by Parent, such Company Superior Proposal continues to constitute a Company Superior
Proposal and that the failure to make such Company Adverse Recommendation Change or to so terminate this Agreement in accordance with Section 7.1(c)(ii), as applicable, would
reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law.
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(e) Notwithstanding
anything to the contrary set forth in this Section 5.4, upon the occurrence of any Company Intervening Event, the Company Board may, at any time prior to the Company Shareholders
Meeting, make a Company Adverse Recommendation Change that is not related to a Company Acquisition Proposal if all of the following conditions are met:
(i) prior to making such Company Adverse Recommendation Change, (1) the Company Board determines in good faith, after consultation with its outside legal counsel and its financial advisor, that, in light of such Company
Intervening Event, a failure to effect a Company Adverse Recommendation Change would be reasonably expected to be inconsistent with the Company Board’s fiduciary duties to its shareholders under applicable Law, (2) the Company shall have
(A) provided to Parent five (5) Business Days’ prior written notice, which shall (1) set forth in reasonable detail information describing the Company Intervening Event and the rationale for the Company Adverse Recommendation Change and (2)
state expressly that, subject to clause (ii) below, the Company Board has determined to make an Company Adverse Recommendation Change and (B) prior to making such an Company
Adverse Recommendation Change, used commercially reasonable efforts to engage in good faith with Parent (to the extent Parent wishes to engage) during such five (5) Business Day period to consider any adjustments proposed by Parent to the
terms and conditions of this Agreement such that the failure of the Company Board to make an Company Adverse Recommendation Change in response to the Company Intervening Event in accordance with clause (ii) below would no longer reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law; and
(ii) following the end of
such five (5) Business Day period, the Company Board shall have determined in good faith, after consultation with its outside legal counsel, that in light of such Company Intervening Event and taking into account any revised terms proposed by
Parent, the failure to make a Company Adverse Recommendation Change would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law.
(f) The Company shall promptly (and in any event within twenty-four (24) hours) advise Parent orally and in writing of (i) any written or oral Company Acquisition Proposal, (ii) any request for non-public information relating to the
Company or its Subsidiaries, other than requests for information not reasonably expected to be related to a Company Acquisition Proposal and (iii) any inquiry or request for discussion or negotiation regarding a Company Acquisition
Proposal, including in each case the identity of the Person making any such Company Acquisition Proposal, inquiry or request and the material terms of such Company Acquisition Proposal, inquiry or request and thereafter shall keep Parent
informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations.
(g) Nothing set forth in this Agreement shall prevent the Company or the Company Board from (i) taking and disclosing to its shareholders a position contemplated by Rule 14e‑2(a), Rule 14d‑9 or Item 1012(a) of Regulation M-A promulgated
under the Exchange Act (or any similar communication to its shareholders in connection with the making or amendment of a tender offer or exchange offer) or from (ii) making any required disclosure to the Company’s shareholders if, in the
good faith judgment of the Company Board, after consultation with outside counsel, failure to disclose such information would reasonably be expected to violate its obligations under applicable Law; provided, however, that in the case of either clause (i) or clause (ii), no such communication or statement that would constitute a Company Adverse
Recommendation Change shall be permitted, made or taken except in accordance with Section 5.4(d).
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(h) Any breach of the restrictions contained in this Section 5.4 by any of the Company’s Subsidiaries, or any Representatives of the Company or any of its Subsidiaries, shall
be deemed to be a breach of this Section 5.4 by the Company.
(i) As used in this Agreement:
(i) “Company Acquisition Proposal” means any inquiry, proposal or offer from any Person or group of Persons other than Parent or one of its Subsidiaries for (A) a merger, reorganization,
consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving acquisition of the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 20% or
more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole) or (B) the acquisition in any manner, directly or indirectly, of over 20% of the Equity Interests, voting power or consolidated total assets
of the Company and its Subsidiaries, in each case other than the Merger and the other transactions contemplated by this Agreement.
(ii) “Company Intervening Event” means an Effect that arises following the date hereof that (A) (x) was not known to, or reasonably foreseeable by, the Company Board prior to the execution of
this Agreement (or if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable), which Effect becomes known to, or reasonably foreseeable by, the Company Board prior to the Company
Shareholders Meeting, and (y) is material to the Company and its Subsidiaries (taken as a whole), and (B) does not relate to (x) a Company Acquisition Proposal or a Company Superior Proposal or any inquiry or communications relating thereto,
any matter relating thereto or consequences thereof, and (y) in each case in and of itself, any changes in the market price or trading volume of Company Shares or the fact that the Company meets, fails to meet or exceeds any internal or
published projections, forecasts or estimates of its revenue, earnings or other financial performance or results of operations for any period (it being understood, however, that any underlying cause of any of the foregoing in this clause (y)
may be a Company Intervening Event if not otherwise falling into the foregoing clauses (x) and (y) of this definition ).
(iii) “Company Superior Proposal” means any bona fide written Company Acquisition Proposal (A) on terms which the Company Board determines in good faith, after consultation with the Company’s
outside legal counsel and financial advisors, to be more favorable from a financial point of view (including taking into account payment by the Company of the Company Termination Fee) to the holders of Company Shares than the Merger and the
other transactions contemplated by this Agreement (after giving effect to any revisions to the terms of the Agreement committed to in writing by Parent in response to such Company Acquisition Proposal pursuant to Section 5.4(d)), taking into account all the terms and conditions of such proposal, including the timing, likelihood of consummation, confidentiality, legal, financial, regulatory, financing and other
aspects of such Company Acquisition Proposal, and this Agreement and (B) that the Company Board believes in good faith, after consultation with the Company’s outside legal counsel and financial advisors, is reasonably capable of being
completed on the terms proposed, taking into account all financial, regulatory, legal and other aspects of such proposal; provided, that for purposes of the definition of “Company
Superior Proposal,” the references to “20%” in the definition of Company Acquisition Proposal shall be deemed to be references to “50%.”
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Section 5.5 Preparation
of Form S-4 and Proxy Statement; Company Shareholders Meeting.
(a) As promptly as practicable after the date of this Agreement (and in any event within thirty (30) calendar days after the date hereof), (i) the Company and Parent shall prepare the Form S-4 and a proxy statement in
preliminary form (as amended or supplemented from time to time, the “Proxy Statement”) to be sent to the shareholders of the Company relating to the special meeting of the Company’s shareholders (the “Company Shareholders Meeting” ) to be held to consider the adoption of this Agreement in accordance with the Company’s Organizational Documents, the TBCA and this Agreement, and (ii) Parent shall file with the
SEC, the Form S-4, in which the Proxy Statement will be included as a prospectus, in connection with the registration under the Securities Act of the shares of Parent Common Stock subject to the Parent Stock Issuance. The parties shall
consult each other in connection with setting a preliminary record date for the Company Shareholders Meeting and shall commence broker searches pursuant to Section 14a‑13 of the Exchange Act in connection therewith. Parent shall use its
commercially reasonable efforts to have the Form S‑4 declared effective under the Securities Act as promptly as practicable after such filing and to keep the Form S‑4 effective as long as is necessary to consummate the Merger and the other
transactions contemplated hereby. Parent shall also use its commercially reasonable efforts to take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified or filing a general consent to
service of process) required to be taken under any applicable state securities or “blue sky” laws in connection with the Parent Stock Issuance and the Company shall furnish all information concerning the Company and the holders of Company
Shares as may be reasonably requested in connection with any such action. The Company shall use commercially reasonable efforts to cause the Proxy Statement to be mailed to the Company’s shareholders as promptly as practicable after the Form S‑4 is declared effective under the Securities Act. No filing or mailing of, or amendment or supplement to, the Form S‑4 or the Proxy Statement, or any
substantive correspondence (including all responses to SEC correspondence) will be made by Parent or the Company, as applicable, without (i) providing the other party a reasonable opportunity to review and comment thereon (which comments
the receiving party will consider in good faith) and (ii) the other party’s prior approval (which shall not be unreasonably withheld). Parent or the Company, as applicable, will advise the other party promptly after it receives oral or
written notice thereof, of the time when the Form S‑4 has become effective or any amendment or supplement thereto has been filed, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable in the
Parent Stock Issuance for offering or sale in any jurisdiction or any oral or written request by the SEC or its staff for amendment of the Proxy Statement or the Form S‑4 or comments thereon and responses thereto or requests by the SEC or
its staff for additional information, and will promptly provide the other with copies of any written communication from the SEC or its staff or any state securities commission and a reasonable opportunity to participate in the responses
thereto. If at any time prior to the Effective Time the Company or Parent shall discover or become aware of any information relating to the Company or Parent, or any of their respective Affiliates, officers or directors that should be
disclosed in an amendment or supplement to either of the Form S‑4 or the Proxy Statement, so that any of such documents would not contain any misstatement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not false or misleading, then such party that discovers or becomes aware of such information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall promptly be filed with the SEC in accordance with this Section 5.5 and, to the extent required under applicable Law, disseminated to shareholders of the Company and Parent; provided that the delivery of such notice and the filing of any such amendment or supplement shall not affect or be deemed to modify any
representation or warranty made by any party hereunder or otherwise affect the remedies available hereunder to any party.
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(b) As promptly as practicable after the Form S‑4 has been declared effective or as the parties otherwise mutually determine to be appropriate, the Company shall cause the Company Shareholders Meeting to be held in accordance with applicable Law and the Company shall duly call, give notice of, convene and hold the Company Shareholders Meeting for the purpose of obtaining the
Company Shareholder Approval and, if applicable, the advisory vote required by Rule 14a‑21(c) under the Exchange Act in connection therewith. The Company may
postpone or adjourn the Company Shareholders Meeting solely (i) with the consent of Parent; (ii) if required by applicable Law or a request from the SEC, (iii) (A) due to the absence of a quorum necessary to conduct the business of the
Company Shareholders Meeting or (B) if the Company has not received proxies representing a sufficient number of Company Shares for the Company Shareholder Approval,
whether or not a quorum is present, to solicit additional proxies; or (iv) to the extent reasonably 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 Parent and outside legal counsel is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by the Company’s shareholders prior to the Company Shareholders Meeting; provided, without the prior written consent of Parent (not to be unreasonably withheld, in the cases of clauses (ii) and (iv)),
(x) no single adjournment or postponement permitted hereunder (including by the immediately following sentence) shall be for more than five (5) Business Days, except as may be required by Law, (y) all such adjournments and postponements
together shall not cause the date of the Company Stockholder Meeting to be more than twenty (20) Business Days after the date for which the Company Stockholder Meeting was originally scheduled or, in the case of clause (iii) above and the
immediately following sentence, less than five (5) Business Days prior to the Termination Date. In addition to the foregoing, the Company shall, at the request of Parent, to the extent permitted by Law, postpone or adjourn the Company
Shareholders Meeting to a date mutually agreed with Parent (subject to the limitations in the foregoing proviso, except as may be mutually agreed with Parent) for the absence of a quorum or if the Company has not received proxies
representing a sufficient number of Company Shares for the Company Shareholder Approval; provided, that no such adjournment shall be required to be for a
period exceeding ten (10) Business Days. Except in the case of a Company Adverse Recommendation Change specifically permitted by, and adopted pursuant to the procedures set forth in, Section 5.4, the Company, through the Company
Board, shall (i) recommend to its shareholders that they adopt this Agreement and the transactions contemplated hereby and (ii) include such recommendation
(including the Company Board Recommendation) in the Proxy Statement. Without limiting the generality of the foregoing, the Company agrees that, notwithstanding any Company Adverse Recommendation Change, unless this Agreement is terminated
in accordance with its terms, (x) the Company shall use its commercially reasonable efforts to solicit proxies to obtain the Company Shareholder Approval and (y)
the Company’s obligations pursuant to this Section 5.5(b) shall not be affected by the commencement, public proposal, public disclosure or communication to the Company or any other Person of any Company Acquisition Proposal or the
occurrence of any Company Adverse Recommendation Change. The Company shall, on a daily basis during the ten (10) Business Days prior to the date of the Company Stockholder Meeting, advise Parent as to the aggregate number of Company Shares
entitled to vote at the Company Stockholder Meeting for which proxies have been received by the Company with respect to the Company Shareholder Approval and the
number of such proxies authorizing the holder thereof to vote in favor of the Company Shareholder Approval.
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Section 5.6 Access to Information; Confidentiality. Upon reasonable prior notice, each party shall, and shall cause each of its Subsidiaries to, afford to the other parties and their respective
Representatives reasonable access during normal business hours, during the period prior to the Effective Time or the termination of this Agreement in accordance with its terms, to all their respective properties, assets, books, contracts,
commitments, personnel and records and, during such period, each party shall, and shall cause each of its Subsidiaries to, furnish as promptly as reasonably practicable to the other parties all other information concerning its business,
properties and personnel as the other parties may reasonably request for purposes of completing the Merger or for a bona fide business purpose (including Tax Returns filed and those in preparation and the work papers of its auditors); provided, however, that the foregoing shall not require any party to disclose any information (a) if providing such access
would unreasonably disrupt such party’s operations, (b) that is a trade secret of a third party, competitively sensitive information, information concerning the valuation of the Company or any of its Subsidiaries, on the one hand, or Parent
or any of its Subsidiaries, on the other hand, as applicable, or personal information that would expose the Company or Parent, as applicable, to the risk of liability (provided that in each such case the withholding party will inform the
other party of the nature of the information being withheld, and use its commercially reasonable efforts to make alternative arrangements that would allow access to such information), (c) would violate the terms of a confidentiality agreement
with a third party entered into prior to the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business (provided, however, that the withholding party shall use its commercially reasonable efforts to obtain the required consent of such third party to such access or disclosure), (c) the disclosure of
which would violate any Law applicable to such party or any of its Representatives (provided, however, that withholding
party shall use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure not in violation of any Law or duty), or (d) disclosure of which would jeopardize any attorney-client, attorney
work product or other legal privilege (provided, however, that withholding party shall use its commercially reasonable
efforts to allow for such access or disclosure to the maximum extent that does not result in a loss of any such attorney-client, attorney work product or other legal privilege, including by means of entry into a customary joint defense
agreement that would alleviate the loss of such privilege); provided, further, that the foregoing shall not require the
Company, Parent or any of their respective Subsidiaries to permit any environmental testing or sampling or subsurface investigations, including surface and subsurface soils and water, soil gas, air or building materials, on any of the
properties owned, leased or operated by it or any of its respective Subsidiaries. All such information shall be held confidential in accordance with the terms of the Agreement Regarding Mutual Disclosure of Information between Parent and the
Company, dated as of July 16, 2024 (the “Confidentiality Agreement”). No investigation pursuant to this Section 5.6 or
information provided, made available or delivered to a party pursuant to this Agreement shall affect any of the representations, warranties, covenants, rights or remedies, or the conditions to the obligations of, the parties hereunder.
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Section 5.7 Further Action; Efforts. The parties shall use their commercially reasonable efforts to take or cause to be taken all appropriate action, and to do, or cause to be done, all things necessary to consummate and make effective
the transactions contemplated hereby, including using their commercially reasonable efforts to obtain, or cause to be obtained, all waivers, permits, consents, approvals, authorizations, qualifications and orders of all Governmental Entities
and parties to Contracts with the Company, Parent or any of their respective Subsidiaries that may be or become necessary for the performance of obligations pursuant to this Agreement and the consummation of the transactions contemplated
hereby. The parties shall cooperate and assist one another in good faith (i) in connection with all actions to be taken pursuant to this Section 5.7, including the preparation and making of the filings referred to herein and, if
requested, amending or furnishing additional information thereunder, and (ii) in seeking, as promptly as reasonably practicable, to obtain all such waivers, permits, consents, approvals, authorizations, qualifications and orders.
Section 5.8 Company 401(k) Plan. Unless otherwise directed by Parent in a writing delivered to the Company following the date hereof and at least five (5) Business Days prior to the Closing Date, the Company
shall take all necessary action (including the adoption of resolutions and plan amendments and the delivery of any required notices) to terminate, effective as of no later than the day before the Effective Time, the Brand House Collective
401(k) Plan (the “Company 401(k) Plan”). The Company shall provide Parent with a copy of the resolutions, plan amendments, notices and other documents prepared
to effectuate the termination of the Company 401(k) Plan reasonably in advance and give Parent a reasonable opportunity to comment on such documents (which comments shall be considered in good faith), and prior to the Effective Time, the
Company shall provide Parent with the final documentation evidencing that the Company 401(k) Plan has been terminated.
Section 5.9 Takeover
Laws. If any Takeover Law is or becomes applicable to this Agreement, the Merger or any of the other transactions contemplated hereby, each of the Company and the Company Board shall take all action necessary to ensure that the Merger
and the other transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Law on this Agreement, the Merger and
the other transactions contemplated hereby.
Section 5.10 Stock Exchange Listing. Parent shall use its commercially reasonable efforts to cause the shares of Parent Common Stock to be issued in the Merger, and such other shares of Parent Common Stock
to be reserved for issuance in connection with the Merger, to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Effective Time.
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Section 5.11 Stock Exchange Delisting. To the extent requested by Parent, prior to the Closing Date, the Company shall cooperate with Parent and use its commercially reasonable efforts to take, or cause to
be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of Nasdaq to enable the delisting by the Surviving Corporation of the Company
Shares from Nasdaq as promptly as practicable after the Effective Time and the deregistration of the Company Shares under the Exchange Act at the Effective Time.
Section 5.12 Indemnification,
Exculpation and Insurance.
(a) Without limiting any
additional rights that any employee may have under any agreement or Company Plan, from the Effective Time through the sixth (6th) anniversary of the date on which the Effective Time occurs, Parent shall, or shall cause the Surviving
Corporation to, indemnify and hold harmless each present (as of the Effective Time) and former officer, director or employee of the Company and its Subsidiaries (the “Indemnified Parties”),
against all claims, losses, liabilities, damages, judgments, inquiries, fines, amounts paid in settlement and reasonable fees, costs and expenses, including attorneys’ fees and disbursements incurred in connection with any pending or
threatened Action, whether civil, criminal, administrative or investigative, arising out of, pertaining to or by reason of (i) the fact that the Indemnified Party is or was an officer, director, employee, fiduciary or agent of the Company or
any of its Subsidiaries or, while a director, officer or employee of the Company or its Subsidiaries, is or was serving at the request of the Company or any of its Subsidiaries as a director, officer, employee or agent of another corporation
or of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity or (ii) matters existing or occurring at or prior to the Effective Time (including this Agreement and the transactions and actions
contemplated hereby), whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under applicable Law and the Company Charter and Company Bylaws as in effect on the date hereof or (iii) in connection
with the enforcement of any Indemnified Party’s rights under this Section 5.12 by such Indemnified Party or his or her heirs or legal representatives. In the event of any such
pending or threatened Action, including any such Action to enforce any Indemnified Party’s rights under this Section 5.12, (A) each Indemnified Party shall be entitled to
advancement of expenses (including attorneys’ fees and expenses) incurred in connection with such Action from Parent and the Surviving Corporation to the fullest extent permitted under applicable Law and the Company Charter and Company Bylaws
as of the date hereof; provided, that any Person to whom expenses are advanced provides an undertaking, if and only to the extent required by applicable law, the Company Charter or
Company Bylaws, to repay such advances if it is ultimately determined that such Person is not entitled to indemnification under this Agreement or any Law, Contract or other source for which indemnification may be available, and (B) the
Surviving Corporation shall cooperate in the defense of any such matter.
(b) Except as may be
required by applicable Law, Parent and the Company agree that all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time and rights to advancement of expenses relating
thereto now existing in favor of any Indemnified Party as provided in the Organizational Documents of the Company and its Subsidiaries or in any indemnification agreement in effect as of the date hereof between such Indemnified Party and the
Company or any of its Subsidiaries (solely to the extent such agreement is set forth in Section 5.12(b) of the Company Disclosure Letter and a copy of which has been provided to
Parent) shall survive the Merger and continue in full force and effect, and shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified Party.
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(c) At the Company’s
option, the Company may purchase, prior to the Effective Time, a six (6)-year prepaid “tail policy” on terms and conditions (in both amount and scope) providing substantially equivalent benefits as the policies of directors’ and officers’
liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries in effect as of the date hereof with respect to matters arising on or before the Effective Time, covering without limitation the transactions
contemplated hereby; provided that the annual cost of such “tail policy” may not exceed the 300% of the last annual premium paid by the Company prior to the date hereof with respect
to the Company’s existing directors’ and officers’ liability insurance and fiduciary liability insurance policies (the “Maximum Annual Premium”). If such tail prepaid policy has been
obtained by the Company prior to the Effective Time, Parent shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the Surviving Corporation. If the Company
has not purchased such tail policy prior to the Effective Time, for a period of six (6) years from the Effective Time, Parent shall either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance
and fiduciary liability insurance maintained by the Company and its Subsidiaries or cause to be provided substitute policies or purchase or cause the Surviving Corporation to purchase, a “tail policy,” in either case of at least the same
coverage and amounts containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the Effective Time; provided,
that after the Effective Time, Parent shall not be required to pay with respect to such insurance policies in respect of any one (1) policy year annual premiums in excess of the Maximum Annual Premium in respect of the coverage required to be
obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably practicable for such amount; provided further,
that if the Surviving Corporation purchases a “tail policy” and the coverage thereunder costs more than the Maximum Annual Premium, the Surviving Corporation shall purchase the maximum amount of coverage that can be obtained for the Maximum
Annual Premium.
(d) Notwithstanding anything herein to the contrary, if any Action (whether arising before, at or after the Effective Time) is instituted against any Indemnified Party on or prior to the sixth (6th) anniversary of the Effective Time,
the provisions of this Section 5.12 shall continue in effect until the final disposition of such Action.
(e) The indemnification, exculpation and rights to advancement provided for herein shall not be deemed exclusive of any other rights to which an Indemnified Party is entitled, whether pursuant to Law, Contract or otherwise. The
provisions of this Section 5.12 shall survive the consummation of the Merger and, notwithstanding any other provision of this Agreement that may be to the contrary, expressly are
intended to benefit, and shall be enforceable by, each of the Indemnified Parties and their respective heirs and legal representatives (and following the Effective Time may not be amended without their prior written consent).
(f) In the event that the Surviving Corporation or Parent or any of their respective successors or assigns (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 or conveys all or a majority of its properties and assets to any Person (by merger, consolidation, division, operation of law or otherwise), then, and in each such case, proper provision shall be
made so that the successors and assigns of the Surviving Corporation or Parent, as the case may be, shall succeed to the obligations set forth in this Section 5.12.
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Section 5.13 Rule 16b-3.
Prior to the Closing Date, the Company and Parent shall, as applicable, take such steps as may be reasonably necessary or advisable to cause (i) dispositions of Company equity securities (including derivative securities with respect to such
equity securities) and warrants or (ii) acquisitions of Parent Common Stock pursuant to the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act to be
exempt under Rule 16b‑3 promulgated under the Exchange Act.
Section 5.14 Public
Announcements. The initial press release with respect to this Agreement and the transactions contemplated hereby shall be a joint release mutually agreed to by the Company and Parent. Thereafter, each of the Company and Parent agrees
that no public release, statement, announcement, or other disclosure concerning the Merger and the other transactions contemplated hereby that is inconsistent with initial press release (or other release, statement, announcement or other
disclosure made in accordance herewith) shall be issued by any party without (x) consulting with the other party prior to the issuance thereof and (y) providing the other party with the opportunity to review and comment upon such
communication, except (i) as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system, the rules or regulations of any
applicable United States securities exchange, or any Governmental Entity to which the relevant party is subject (in which case the party making such disclosure shall use its commercially reasonable efforts to provide the other party with a
meaningful opportunity to review and comment on such disclosure in advance, and shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent or the Company, as applicable), or (ii) by the Company
with respect to any Company Acquisition Proposal or Company Adverse Recommendation Change, in each case, in compliance with Section 5.4.
Section 5.15 Obligations of Merger Sub. Parent shall take all action necessary to cause Merger Sub and the Surviving Corporation to perform their respective obligations under this Agreement.
Section 5.16 Notices of Certain Events. Subject to applicable Law, the Company shall notify Parent and Merger Sub, and Parent and Merger Sub shall notify the Company, promptly of: (a) any notice or other
communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; (b) any notice or other communication from any Governmental Entity in connection
with the transactions contemplated by this Agreement; and (c) any event, change, or effect between the date of this Agreement and the Effective Time which individually or in the aggregate causes or is reasonably likely to cause or constitute:
(i) a material breach of any of its representations, warranties, or covenants contained herein, or (ii) the failure of any of the conditions set forth in Article VI of this
Agreement to be satisfied; provided, that any failure to give notice in accordance with the foregoing shall not be deemed to constitute a violation of this Section 5.16 or the failure of any condition set forth in Article VI to be satisfied, or otherwise constitute a breach of
this Agreement by the party failing to give such notice, in each case unless the underlying breach would independently result in a failure of the conditions set forth in Article VI
to be satisfied; and provided, further, that the delivery of any notice pursuant to this Section 5.16 shall not cure any breach of, or noncompliance with, any other provision of this Agreement or limit the remedies available to the party receiving such notice.
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Section 5.17 Stockholder Litigation. The Company shall promptly advise Parent in writing after becoming aware of, and provide copies of all pleadings and material correspondence relating to, any Action
commenced, or to the Company’s knowledge, threatened, against the Company or any of its directors by any stockholder of the Company (on their own behalf or on behalf of the Company) arising out of or relating to this Agreement or the
transactions contemplated hereby (including the Merger and the other transactions contemplated hereby) and shall keep Parent reasonably informed on a prompt and current basis regarding any such Action. The Company shall: (a) give Parent the
opportunity to participate in the defense and settlement or compromise of any such Action, (b) keep Parent reasonably apprised on a prompt and current basis of proposed strategy and other significant decisions with respect to any such Action,
and provide Parent with the opportunity to consult with the Company regarding the defense of any such Action, which advice the Company shall consider in good faith, and (c) not settle or compromise any such Action without the prior written
consent of Parent (which consent shall not be unreasonably withheld, delayed, or conditioned).
Section 5.18 Certain Tax Matters.
(a) Intended Tax Treatment.
(i) The parties hereto
(A) intend that the Merger qualifies for the Intended Tax Treatment and (B) adopt this Agreement as a “plan of reorganization” for purposes of Treasury Regulations Section 1.368-2(g) and 1.368-3(a) to which the Parent, Merger Sub and the
Company are parties under Section 368(b) of the Code.
(ii) Both prior to and following the Effective Time, Parent, Merger Sub and the Company shall use their respective commercially reasonable efforts, and shall cause their respective Subsidiaries to use their commercially reasonable
efforts, to take or cause to be taken any action necessary for the Merger to qualify for the Intended Tax Treatment, including (A) reasonably refraining from any action that such party knows, or is reasonably expected to know, is reasonably
likely to prevent the Intended Tax Treatment and (B) shall not take any Tax reporting position inconsistent with the Intended Tax Treatment for U.S. federal (and applicable state, local and non-U.S.) income Tax purposes, unless otherwise
required by a change in applicable Tax Law after the date of this Agreement or a “determination” within the meaning of Section 1313(a)(1) of the Code (or any similar or corresponding provision of state, local, or non-U.S. Law).
(b) Transfer Taxes. Each of Parent and the Company shall pay fifty percent (50%) of all stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes incurred in connection with the consummation of the Merger. The parties hereto shall reasonably cooperate in the preparation, execution and filing of all Tax Returns,
questionnaires or other documents with respect to such Taxes.
(c) FIRPTA Certificate. At the Closing, the Company shall deliver to Parent a certificate and notice prepared in accordance with the requirements of Treasury Regulations Section
1.897-2(h)(2) and 1.1445-2(c)(3) and dated as of the Closing Date, along with written authorization for Parent to deliver such certificate and notice to the IRS on behalf of the Company upon the Closing.
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Section 5.19 Revolver
Loan Credit Facility; Financing Assistance.
(a) At the election of
Parent (which election shall be made in writing delivered to the Company in accordance with Section 8.2 no later than fifteen (15) Business Days prior to the Effective Time), either
(i) the Parent shall repay, on behalf of the Company and its Subsidiaries, on or before the Effective Time all amounts necessary to discharge in full all of the obligations of the Company and its Subsidiaries arising under that certain Third
Amended and Restated Credit Agreement, dated as of March 31, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Facility”), by and among
Kirkland’s Stores, Inc. and Kirkland’s Texas, LLC, as borrowers, the Company and Kirkland’s DC, Inc., as guarantors, and Bank of America, N.A., as administrative agent and collateral agent (the “Agent”)
by wire transfer of immediately available funds to the accounts designated in the Payoff Letter (as defined below) and in connection therewith the Company shall have (A) delivered to Parent no less than three (3) Business Days prior to the
Effective Time a customary fully executed and enforceable payoff letter (the “Payoff Letter”) with respect to the Credit Facility setting forth the aggregate amount required to repay
in full all indebtedness evidenced thereunder, which Payoff Letter shall be in form and substance reasonably satisfactory to Parent and duly executed by the Agent, on behalf of the lenders party to the Credit Facility, and the Company and all
of its Subsidiaries that are party to the Credit Facility and (B) arranged for the Agent to deliver all related UCC-3 terminations, possessory collateral, DACA terminations, landlord waiver terminations, possessory collateral and other
documentation required to evidence the termination of all Liens securing the obligations arising under the Credit Facility to Parent as soon as practicable after the Effective Time (the transactions contemplated by this clause (i) in respect
of such election, the “Debt Payoff”) or (ii) each of Parent and the Company shall use commercially reasonable efforts to, on or prior to the Effective Time, enter into a fully
executed and enforceable amendment to the Credit Facility (the “Credit Facility Amendment”), in form and substance reasonably satisfactory to Parent and the Company duly executed by
Agent and each of the requisite lenders under the Credit Facility (such lenders, the “Required Lenders”) which Credit Facility Amendment shall permit the consummation of the Merger
and each of the other transactions contemplated by this Agreement. Notwithstanding the foregoing, all parties agree that it is Parent’s sole right, subject to reasonable consultation with the Company and its authorized representatives, to
devise the strategy for requesting and communications in connection with any Payoff Letter and/or consent to the Credit Facility Amendment and the substance thereof, including material communications and negotiations with the Required
Lenders. The Parties further acknowledge and agree, that notwithstanding anything herein to the contrary, Parent shall not be obligated by this Section 5.19 to accept any proposal,
modification, amendment, revision, restatement or term in connection with the Credit Facility Amendment that is in any manner more adverse than the terms of the Credit Facility in the aggregate to the Company or Parent in Parent’s reasonable
discretion or pay any commitment or other fee.
(b) Each of Parent and the
Company shall use commercially reasonable efforts to provide, and, in the case of the Company, shall cause each Subsidiary of the Company to use commercially reasonable efforts to provide, all cooperation that is reasonably necessary and
customary in connection with the arranging of the Debt Financing. In addition, prior to the Closing, the Company shall, and shall cause its Subsidiaries and their respective officers and employees to, and shall direct its Representatives to,
upon reasonable advance notice, use commercially reasonable efforts to:
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(i) as promptly as
practicable (A) furnish Parent with the Required Financial Information and (B) inform Parent if the chief executive officer, chief financial officer or controller of the Company or any member of the audit committee of the Company Board shall
have actual knowledge of any facts as a result of which a restatement of any financial statements (or portion thereof) included in or including the Required Financial Information is reasonably probable or required in order for such financial
statements (or portion thereof) to comply with GAAP;
(ii) designate a member
of senior management of the Company to execute customary authorization letters that authorize the distribution of information to prospective lenders, and identify any portion of such information that constitutes material, non-public
information regarding the Company or its Subsidiaries or their securities, and cause members of senior management of the Company to participate, during normal business hours and upon reasonable advance notice, in a reasonable number of
presentations, road shows, due diligence sessions, drafting sessions and sessions with ratings agencies in connection with the Debt Financing, which shall be telephonic or held by videoconference, including (A) direct contact between such
senior management of the Company and Debt Financing Sources and other potential lenders and investors in the financing, (B) otherwise cooperating with the marketing efforts for any of the Debt Financing and (C) assisting Parent and the Debt
Financing Sources with obtaining ratings as contemplated by the Debt Financing;
(iii) attend a reasonable
number of accounting due diligence sessions and drafting sessions, which sessions shall be telephonic or held by videoconference;
(iv) assist in the
preparation of, and execution and delivery of, definitive financing documents (including any guarantee, pledge and security documents, supplemental indentures, currency or interest rate hedging arrangement, other definitive financing
documents or other certificates or documents) as may be reasonably requested by Parent or the Debt Financing Sources and the schedules and exhibits thereto, in each case subject to the occurrence of the Closing;
(v) (A) facilitate the
pledging of collateral for the Debt Financing, including using commercially reasonable efforts to deliver any original stock certificates and related powers and any original promissory notes and related allonges and providing reasonable
assistance with any documents that involve a third party, including landlord waivers, deposit account control agreements, blocked account arrangements, lock box arrangements or subordination agreements, if applicable and in each case subject
to the occurrence of the Closing and (B) assist with obtaining release of the existing Liens and the delivery of any related possessory collateral; provided that such releases shall
be subject to the occurrence of the Closing;
(vi) furnish Parent and the
Debt Financing Sources with all documentation and other information required by Government Officials with respect to the Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations, including, without
limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended;
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(vii) assist Parent with
Parent’s preparation of pro forma financial information and pro forma financial statements to the extent reasonably requested by Parent or the Debt Financing Sources (provided, that
the Company and its Subsidiaries shall not be responsible for the preparation of any pro forma financial statements or pro forma adjustments thereto and, for the avoidance of doubt, shall not be obligated to provide pro forma financial
statements or any information regarding any post-Closing or pro forma cost savings, synergies, debt or equity capitalization, ownership or other post-Closing pro forma adjustments necessary or desired to be incorporated into such pro forma
financial statements);
(viii) take all corporate actions, subject to the occurrence of the Closing, reasonably requested by Parent to permit the consummation of the Debt Financing;
(ix) cooperate in satisfying the conditions precedent set forth in any definitive document relating to the Debt Financing to the extent the satisfaction of such condition requires the cooperation of, or is within the control of,
the Company and its Subsidiaries; and
(x) ensure that the Debt Financing Sources and their advisors and consultants shall have reasonable access to the Company and its Subsidiaries to evaluate the Company’s and its Subsidiaries’ current assets, inventory, cash management
and accounting systems, policies and procedures relating thereto for the purposes of establishing collateral arrangements as of the Closing, and assist with other collateral audits, collateral appraisals and due diligence examinations.
(c) Notwithstanding
anything to the contrary in this Section 5.19:
(i) nothing in this Section 5.19 will require any cooperation to the extent the same would (A) unreasonably interfere with the ongoing operations of the Company or its Subsidiaries, (B) cause any officer or
employee of the Company or any of its Subsidiaries or any of its or their Representatives to incur any personal liability, (C) without limiting the scope of its obligations pursuant to Sections 5.19(b)(ii) and (vi), require the Company or any of its
Subsidiaries to prepare pro forma financial statements or change any fiscal period, or (D) reasonably be expected to conflict with, violate, breach or otherwise contravene (I) any Law and/or (II) any Company Material Contract;
(ii) neither the Company
nor any of its Subsidiaries shall be required to (A) pay any commitment or other fee or have any liability or obligation, including any indemnification obligation, under any agreement or any document related to any Debt Financing prior to the
Closing Date, or (B) incur any cost or expense unless such cost or expense is promptly reimbursed by Parent to the Company or any designee of the Company (and in any event no later than the termination of this Agreement in accordance with Article VII); and
(iii) neither the Company
nor any of its Subsidiaries or any of their respective Representatives shall be required to execute, deliver or enter into, or perform any agreement, document or instrument, including any definitive financing document (except any
authorization letters delivered pursuant to Section 5.19(b)(ii) or any certificate, document, instrument or agreement
provided in accordance with Section 5.19(b)(ii)), with respect to the Debt Financing or adopt resolutions approving the agreements, documents and/or instruments pursuant to which
the Debt Financing is obtained or pledge any collateral with respect to the Debt Financing that is not contingent upon the Closing or that would be effective prior to the Closing.
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(d) The Company hereby consents, on behalf of itself and its Subsidiaries, to the use of the Company’s and its Subsidiaries’ logos in connection with any Debt Financing; provided, that such logos are used in a manner that is not
intended to or reasonably likely to harm or disparage the Company’s or its Subsidiaries’ reputation or goodwill.
(e) The Company shall, and shall cause its Subsidiaries, to periodically update any Required Financial Information provided to Parent as may be reasonably requested by any Debt Financing Source. For the avoidance of doubt, Parent may,
to most effectively access the financing markets, request the cooperation of the Company and its Subsidiaries under this Section 5.19 at any time, and from time to time and on
multiple occasions, between the date of this Agreement and the Closing.
(f) Parent shall keep the Company informed on a reasonably current basis of the status of its efforts to arrange the Debt Financing (including providing the Company with copies of all definitive agreements or arrangements related to the
Financing Transaction).
Section 5.20 Existing Agreements. The parties hereby acknowledge and agree that each of Parent and the Company are parties to, among other mutual agreements, that certain Amended and Restated Collaboration Agreement,
dated as of May 7, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “Collaboration Agreement”), that certain Trademark License Agreement, entered into as of October 21, 2024 (as amended, restated,
supplemented or otherwise modified from time to time, the “License Agreement”), and that certain Amended and Restated Term Loan Credit Agreement, dated as of May 7, 2025 (as amended, restated, supplemented or otherwise modified from
time to time, the “Term Loan Credit Facility”; and collectively with the Collaboration Agreement and the License Agreement, the “Mutual Agreements”). From and after the date hereof, until earlier of the Effective Time and the
valid termination of this Agreement in accordance with Section 7.1, each of Parent and the Company shall continue perform their respective obligations under the Mutual Agreements in all material respects and in a manner consistent
with past practice.
Section 5.21 Director
Resignations. Prior to the Closing Date, the Company shall cause to be delivered to Parent resignations, in form and substance reasonably satisfactory to Parent, executed by each director of the Company in office as of immediately prior
to the Effective Time, in each case, conditioned and effective upon the Effective Time.
Section 5.22 280G Analysis.
The Company shall deliver to Parent, within twenty (20) Business Days after the date of this Agreement, a preliminary analysis with respect to any and all potential “parachute payments” (as defined in Section 280G of the Code) to be made or
provided to each “disqualified individual” (as defined in Section 280G of the Code) in connection with the transactions contemplated by this Agreement, together with supporting calculations in reasonable detail (collectively, the “280G
Analysis”). The Company shall deliver an updated 280G Analysis no later than two (2) Business Days prior to the Closing Date.
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Section 5.23 Parent
Support Agreement.
(a) As of the date hereof, Parent is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act, which meaning will apply for all purposes of this Agreement whenever the terms “beneficial owner,” “beneficial
ownership” or “own beneficially” are used) of the number of Company Shares set forth on Schedule 5.23 hereto (with respect to Parent, the “Owned Shares”; the Owned Shares and any additional Company Shares or other voting securities of the Company of which Parent acquires record or beneficial ownership after the date hereof, the “Covered Shares”).
(b) Prior to the Termination Date, Parent, in its capacity as a shareholder of the Company, irrevocably and unconditionally agrees that at any Company Shareholders Meeting Parent shall (i) when such meeting is held, appear at such
meeting or otherwise cause the Covered Shares to be counted as present thereat for the purpose of establishing a quorum, if any and (ii) vote, or cause to be voted at such meeting, all Covered Shares owned as of the record date for such
meeting of the shareholders in favor of the Merger, the approval of this Agreement and the other transactions contemplated hereby.
(c) Parent hereby
represents, covenants and agrees that, except as contemplated by this Section 5.23, Parent (i) has not entered into, and shall not enter into at any time prior to the Termination
Date, any voting agreement or voting trust with respect to any Covered Shares and (ii) has not granted any currently effective proxy or power of attorney with respect to any Covered Shares, and shall not grant at any time prior to the
Termination Date any proxy or power of attorney with respect to any Covered Shares, in either case, which is inconsistent with Parent’s obligations under this Section 5.23, provided
that nothing herein shall restrict or otherwise prohibit Parent from selling or otherwise divesting the Covered Shares in Parent’s sole discretion at any time following the record date for the Company Stockholder Meeting and prior to the
Termination Date.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to
Each Party’s Obligation to Effect the Merger. The obligation of each party to effect the Merger and the transactions contemplated hereby is subject to the satisfaction or waiver (where permissible pursuant to applicable law) at or prior
to the Closing of the following conditions:
(a) Shareholder Approval. The Company Shareholder Approval shall have been obtained.
(b) No Injunctions or Legal Restraints; Illegality. No restraining order, injunction, or other judgment, order or decree issued by any court of competent jurisdiction shall be in effect, and
no Law shall have been enacted, entered, promulgated or enforced by any Governmental Entity that, in any case, remains in effect and prevents, prohibits or makes illegal the consummation of the Merger or the other transactions contemplated by
this Agreement (any such Law, order, injunction, judgment, order or decree, a “Relevant Legal Restraint”).
(c) Parent Stock Issuance. The Parent Common Stock to be issued in connection with the Merger shall have been approved for listing on the NYSE, subject to official notice of
issuance.
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(d) Effectiveness of Form S-4. The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order that remains in effect or any
proceedings (commenced or threatened in writing by the SEC) seeking a stop order that have not been withdrawn.
(e) Credit Facility Amendment or Payoff. Subject to Parent’s election pursuant to Section 5.19, (i) the parties
shall have entered into a validly executed Credit Facility Amendment, or (ii) the Debt Payoff shall have occurred.
Section 6.2 Conditions
to the Obligations of the Company. The obligation of the Company to effect the Merger is also subject to the satisfaction, or waiver by the Company, at or prior to the Closing of the following conditions:
(a) Representations and Warranties. (i) The representations and warranties of Parent and Merger Sub set forth in Section 4.1(a)-(b),
Section 4.2(b)-(d) Section 4.3, Section 4.4(a)(i) and Section 4.11 shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date (except to the extent such
representations and warranties expressly relate to an earlier date, in which case as of such earlier date), (ii) the representations and warranties of Parent and Merger Sub set forth in Section
4.2(a) shall be true and correct in all (other than de minimis inaccuracies) respects as of the date of this Agreement and as of the Closing Date as if
made as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date), (iii) the representation and warranty of Parent and Merger Sub set forth in Section 4.8 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date and (iv) the other representations and
warranties of Parent and Merger Sub set forth in this Agreement shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made as of the Closing Date (except to the extent such
representations and warranties expressly relate to an earlier date, in which case as of such earlier date), except in the case of this clause (iv) where the failure of such representations and warranties to be so true and correct that,
individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or result in, a Parent Material Adverse Effect; provided,
that, for purposes of determining the accuracy of the representations and warranties referenced in this Section 6.2(a) in connection with the satisfaction of the condition herein,
all materiality, “Parent Material Adverse Effect” and similar qualifiers set forth in such representations and warranties shall be disregarded and not given effect.
(b) Performance of Obligations of Parent and Merger Sub. Parent and Merger Sub shall have complied with performed in all material
respects all obligations and covenants required to be performed or complied with by them under this Agreement at or prior to the Closing.
(c) No Parent Material Adverse Effect. Since the date of this Agreement, there shall not have been any Effect that, individually or in the aggregate, together with all other Effects, has
constituted or resulted in, or would reasonably be expected to constitute or result in, a Parent Material Adverse Effect that is continuing.
(d) Officers’ Certificate. The Company shall have received a certificate signed by an executive officer of Parent certifying as to the matters set forth in Sections 6.2(a), 6.2(b) and 6.2(c).
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Section 6.3 Conditions to the Obligations of Parent and Merger Sub. The obligation of Parent and Merger Sub effect the Merger is also subject to the satisfaction, or waiver by Parent, at or prior to the
Closing of the following conditions:
(a) Representations and Warranties. (i) The representations and warranties of the Company set forth in Section 3.1(a)-(c), Section 3.3, Section 3.4(a)(i), and Section 3.23 shall be true
and correct in all material respects as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as
of such earlier date), (ii) the representations and warranties of the Company set forth in Section 3.2 shall be true and correct in all (other than de minimis inaccuracies) respects as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date (except to the extent such representations and warranties expressly
relate to an earlier date, in which case as of such earlier date), (iii) the representation and warranty of the Company set forth in Section 3.8(b) shall be true and correct in all
respects as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date, and (iv) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects as
of the date of this Agreement and as of the Closing Date as though made as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date) except in the
case of this clause (iv) where the failure of such representations and warranties to be so true and correct that, individually or in the aggregate, has not constituted or resulted in, and would not reasonably be expected to constitute or
result in, a Company Material Adverse Effect; provided, that, or purposes of determining the accuracy of the representations and warranties referenced in this Section 6.3(a) in connection with the satisfaction of the condition herein, all materiality, “Company Material Adverse Effect” and similar qualifiers set forth in such representations
and warranties shall be disregarded and not given effect.
(b) Performance of Obligations of the Company. The Company shall have complied with and performed in all material respects all obligations and covenants required to be performed or complied
with by it under this Agreement at or prior to the Effective Time.
(c) No Company Material Adverse Effect. Since the date of this Agreement, there shall not have been any Effect that, individually or in the aggregate, together with all other Effects, has
constituted or resulted in, or would reasonably be expected to constitute or result in, a Company Material Adverse Effect that is continuing.
(d) Officers’ Certificate. Parent shall have received a certificate signed by an executive officer of the Company certifying as to the matters set forth in Sections 6.3(a), 6.3(b) and 6.3(c).
Section 6.4 Frustration of Closing Conditions. None of Parent, Merger Sub or the Company may rely on the failure of any condition set
forth in this Article VI to be satisfied if such failure was principally caused by such party’s material breach of this Agreement, such party’s failure to act in good faith or such party’s failure to perform its obligations under Sections
5.19.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the Company Shareholder Approval has been
obtained except as noted below (with any termination by Parent also being an effective termination by Merger Sub):
(a) by mutual written
consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or before the date that is six (6) months after the date hereof (the “Termination
Date”); provided, further, that if the satisfaction of the last to be satisfied or waived of the conditions set forth in Article IV (other than those conditions that by their nature are to be satisfied at the
Closing, so long as such conditions are reasonably capable of being satisfied if the Closing were to occur on the Termination Date) occurs less than three (3) Business Days prior to the Termination Date, the Termination Date shall be deemed
extended to the extent necessary to permit the Closing to occur; provided, further, that neither party shall have the right to terminate this Agreement pursuant to this Section 7.1(b)(i) if any action of such party
or failure of such party to perform or comply with the covenants and agreements of such party set forth in this Agreement shall have primarily caused or resulted in the
failure of the Merger to be consummated by the Termination Date and such action or failure to perform constitutes a material breach of this Agreement;
(ii) if any Relevant
Legal Restraint permanently restraining, enjoining or otherwise prohibiting or making illegal any of the transactions contemplated by this Agreement shall have become final and nonappealable; provided,
that the party seeking to terminate this Agreement pursuant to this Section 7.1(b)(ii) shall have used commercially reasonable efforts to contest, appeal and remove such judgment,
order, injunction, rule, decree, ruling or other action in accordance with Section 5.7; and provided, further, that a party shall not be permitted to terminate this Agreement pursuant to this Section 7.1(b)(ii) if such party
has failed in any material respect to comply with any of such party’s obligations under Section 5.7; or
(iii) if the Company Shareholder Approval shall not have been obtained at the Company Shareholders Meeting duly convened therefor (as such
Company Shareholder Meeting may be adjourned or postponed from time to time in accordance with terms hereof) at which a vote on the adoption of this Agreement was taken;
(c) by the Company:
(i) if Parent or Merger
Sub shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform (A) would result in the failure of a condition set forth in Section 6.2(a) or (b) and (B) cannot be cured by the Termination Date; provided,
that the Company shall have given Parent written notice, delivered at least 30 days prior to such termination (or promptly, if such notice is given within 30 days of the Termination Date), stating the Company’s intention to terminate this
Agreement pursuant to this Section 7.1(c)(i) and the basis for such termination, and the Company may not terminate the Agreement pursuant to this Section 7.1(c)(i) unless such inaccuracy or breach shall remain uncured for the duration of such 30 day period; provided further, that the Company shall not have the right to terminate this Agreement pursuant to this Section 7.1(c)(i) if it is then in breach of any
of its covenants or agreements set forth in this Agreement which breach would give rise to the failure of a condition set forth in Section 6.3(a) or (b); or
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(ii) at any time prior to obtaining the Company Shareholder Approval if, (A) the Company Board authorizes the Company, to the extent
permitted by and subject to the Company’s compliance with the terms of Section 5.4, to enter into a Company Alternative Acquisition Agreement with respect to a Company Superior Proposal, (B) concurrently with the termination of this
Agreement, the Company, subject to complying with the terms of Section 5.4(d), enters into a Company Alternative Acquisition Agreement providing for a Company Superior Proposal, and (C) prior to or substantially concurrently with
such termination, the Company pays to Parent in immediately available funds any fees required to be paid pursuant to Section 7.3(b);
(d) by Parent:
(i) if the Company shall
have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform (A) would result in the failure of a condition set forth in 6.3(a) or (b) and (B) cannot be cured by the Termination Date; provided,
that Parent shall have given the Company written notice, delivered at least 30 days prior to such termination (or promptly, if such notice is given within 30 days of the Termination Date), stating Parent’s intention to terminate this
Agreement pursuant to this Section 7.1(d)(i) and the basis for such termination, and Parent may not terminate the Agreement pursuant to this Section 7.1(d)(i) unless such inaccuracy or breach shall remain uncured for the duration of such 30 day period; provided further, that Parent shall not have the right to terminate this Agreement pursuant to this Section 7.1(d)(i) if Parent or Merger Sub is then in breach
of any of its covenants or agreements set forth in this Agreement which breach would give rise to the failure of a condition set forth in Section 6.2(a) or (b); or
(ii) if prior to receipt of the Company Shareholder Approval, the Company Board shall have effected a Company Adverse Recommendation Change.
The party desiring to terminate this Agreement pursuant to this Section 7.1 (other
than pursuant to Section 7.1(a)) shall give written notice of such termination to the other party, specifying the provision of this Agreement pursuant to which such termination is
effected.
Section 7.2 Effect of Termination. In the event of termination of the Agreement, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Merger Sub or the Company or any of its Representatives, except that the Confidentiality Agreement and the penultimate sentence of Section 5.6, this Section 7.2, Section
7.3 (Fees and Expenses), and Article VIII of this
Agreement (and any related definitions contained in such Sections or provisions) shall survive the termination hereof; provided, that none of Parent, Merger Sub
or the Company shall be released from any liabilities or damages arising out of fraud or any Willful Breach of this Agreement.
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Section 7.3 Fees and
Expenses.
(a) Except as otherwise provided in this Section 7.3, all fees and expenses incurred in connection with this Agreement, the Merger and the other transactions contemplated
hereby shall be paid by the party incurring such fees or expenses, whether or not the Merger are consummated.
(b) In the event that:
(i) (A) this Agreement is
terminated (1) by Parent pursuant to Section 7.1(d)(i) (Company Breach) or (2) by the Company or Parent
pursuant to Section 7.1(b)(i) (Termination Date) at a time when this Agreement could have been terminated
pursuant to Section 7.1(b)(iii) or Section 7.1(d)(i), (B) at any time after the date of this Agreement and prior to the
taking of a vote to adopt this Agreement at the Company Shareholders Meeting or any adjournment or postponement thereof (in the case of a termination pursuant to Section 7.1(b)(iii))
or at or prior to the time of the applicable breach by the Company (in the case of a termination pursuant to Section 7.1(d)(i)), a Company Acquisition Proposal shall have been
communicated to the senior management of the Company or the Company Board or shall have been publicly disclosed or announced or publicly made known to the shareholders of the Company, or any Person shall have publicly announced an intention
to make a Company Acquisition Proposal, and in each case such Company Acquisition Proposal or intention to make a Company Acquisition Proposal is not publicly withdrawn without qualification prior to the date that is five (5) Business Days
prior to such vote to adopt this Agreement, and (C) within 12 months after such termination, the Company shall have consummated or entered into a definitive agreement with respect to any Company Acquisition Proposal (provided, that for purposes of this Section 7.3(b)(i), the references to “20% or more” in the definition of Company Acquisition Proposal shall be
deemed to be references to “more than 75%”);
(ii) this Agreement is
terminated by the Company pursuant to Section 7.1(c)(ii) (Superior Proposal); or
(iii) (A) this Agreement is
terminated by Parent pursuant to Section 7.1(d)(ii) (Adverse Recommendation Change) or (B) by either Parent
or the Company pursuant to Section 7.1(b)(i) (Termination Date) or Section 7.1(b)(iii) (Failure to Obtain Stockholder Approval), in each case, at a time when this Agreement could have been terminated pursuant to
Section 7.1(d)(ii), then, in any such case, the Company shall pay Parent a termination fee of $1,025,300 (the “Company Termination
Fee”), it being understood that in no event shall the Company be required to pay the Company Termination Fee on more than one occasion.
(c) If either Parent or
the Company terminates this Agreement pursuant to Section 7.1(b)(iii) (Failure to Obtain Stockholder Approval),
then the Company shall pay to Parent $341,800 (the “Parent Expense Reimbursement”) to the account or accounts designated by Parent no later than two (2) Business Days following such
termination; provided, that the payment by the Company of the Parent Expense Reimbursement pursuant to this Section 7.3(c)
shall not relieve the Company of any subsequent obligation to pay the Company Termination Fee (less any Parent Expense Reimbursement previously paid to Parent by the Company).
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(d) Payment of the Company
Termination Fee, if applicable, shall be made by wire transfer of immediately available funds to the account or accounts designated by Parent (i) on the earlier of (A) the consummation of any transaction contemplated by a Company Acquisition
Proposal and (B) the entry into a definitive agreement with respect to a Company Acquisition Proposal payable pursuant to Section 7.3(b)(i), (ii) concurrently with, or prior to,
termination, in the case of a Company Termination Fee payable pursuant to Section 7.3(b)(ii) or (iii) as promptly as reasonably practicable (and in any event within two (2) Business
Days) after termination, in the case of a Company Termination Fee payable pursuant to Section 7.3(b)(iii). In the event that Parent or its designee shall receive full payment
pursuant to Section 7.3(b), as applicable, the receipt of the Company Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred
by Parent, Merger Sub, any of their respective Affiliates or any other Person in connection with this Agreement (and the termination hereof), the transactions herein (and the abandonment thereof) or any matter forming the basis for such
termination, and none of Parent or Merger Sub, any of their respective Affiliates or any other Person shall be entitled to bring or maintain any claim, action or proceeding against the Company or any of its Affiliates arising out of or in
connection with this Agreement, any of the transactions contemplated herein or any matters forming the basis for such termination; provided, that nothing contained herein shall
relieve any party from liability for any fraud.
(e) The Company and Parent each acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, the Company, Parent, and Merger Sub would not enter into this Agreement; accordingly, if the Company fails to timely pay any amounts due pursuant to this Section
7.3, and, in order to obtain such payment, Parent commences a suit that results in a judgment against the Company for the amounts set forth in this Section 7.3, the
Company shall pay to Parent its costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts due pursuant to this Section
7.3 from the date such payment was required to be made until the date of payment at the prime lending rate as published in The Wall Street Journal in effect on the date such payment was required to be made (which interest
shall be payable in connection with any late payment, regardless of whether any such suit is brought). The parties acknowledge and agree that the right to receive the Company Termination Fee under this Agreement shall not limit or otherwise
affect any party’s right to specific performance as provided in Section 8.10, but for the avoidance of doubt, under no circumstances shall Parent, directly or indirectly, be
permitted or entitled to receive both a grant of specific performance that results in the Closing, on the one hand, and the payment of the Company Termination Fee, or any other damages, on the other hand; provided, that nothing contained herein shall relieve any party from liability for any fraud or Willful Breach.
Section 7.4 Amendment or
Supplement. This Agreement may be amended, modified or supplemented by the parties prior to the Effective Time by written agreement signed by each of the parties hereto, whether before or after the Company Shareholder Approval has been
obtained; provided, that after the Company Shareholder Approval has been obtained, no amendment may be made that pursuant to applicable Law requires further approval or adoption by the shareholders of the Company without such further
approval or adoption. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of
each of the parties in interest at the time of the amendment.
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Section 7.5 Extension
of Time; Waiver. At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or acts of the other parties, (b) waive any inaccuracies in the representations and warranties
of the other parties set forth in this Agreement or any document delivered pursuant hereto or (c) unless prohibited by applicable Law, waive compliance with any of the agreements or conditions of the other parties contained herein; provided,
that after the Company Shareholder Approval has been obtained, no waiver may be made that pursuant to applicable Law requires further approval or adoption by the shareholders of the Company without such further approval or adoption. Any
agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party. No failure or delay of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of
conduct, preclude any other or further exercise thereof or the exercise of any other right or power.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Nonsurvival
of Representations and Warranties and Pre-Closing Covenants. None of the representations, warranties, covenants, obligations or agreements of the parties in this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations, warranties, covenants, obligations or agreements shall survive the Effective Time, other than those covenants or agreements of the parties contained in this Article VIII
and those otherwise contained herein which by their terms apply, or are to be performed in whole or in part, after the Effective Time.
Section 8.2 Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly given on (a) the date of delivery if delivered personally, or if by e‑mail, on the date of transmittal (provided that the transmission of the email is
promptly confirmed by telephone or response email), (b) the second (2nd) Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) upon confirmed receipt if delivered by
registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive
such notice:
|
(i)
|
if to Parent or Merger Sub, to:
|
Bed Bath & Beyond, Inc.
433 W Ascension Way, Suite 300,
Murray, UT 84123
Attention: Adrianne Lee; Legal Department
E-mail: [***], [***]
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with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
330 N Wabash Ave, Ste 2800
Chicago, Illinois 60611
Attention: Zachary Judd; Jack DeMeulenaere
Email: [***], [***]
|
(ii)
|
if to the Company, to:
|
The Brand House Collective, Inc.
5310 Maryland Way
Brentwood, Tennessee 37027
Attention: Michael W. Sheridan,
SVP, General Counsel & Corporate Secretary
E-mail: [***]
with a copy (which shall not constitute notice) to:
Bass, Berry & Sims PLC
21 Platform Way South, Suite 3500
Nashville, Tennessee 37203
Attention: Mitch Walker; John Fuller
Email: [***], [***]
Section 8.3 Certain
Definitions. For purposes of this Agreement:
(a) “Affiliate” of any Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first
Person;
(b) “Business Day” means any day other than a Saturday, a Sunday or a day on which the SEC or banks in New York, New York are authorized or required by applicable Law to be closed;
(c) “Company Closing Price” means the closing price per share of the Company’s common stock on the trading day immediately prior to the Closing Date, unless otherwise agreed by Parent and the
Company in writing;
(d) “Company Intellectual Property” means the Intellectual Property owned by or licensed to the Company and its Subsidiaries;
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(e) “Company Material Adverse Effect” means any state of facts, circumstance, condition, event, change, development, occurrence, result, effect, action or omission (each an “Effect”) that, individually or in the aggregate with any one or more other Effects, (x) that has had, would reasonably be expected to have or results in a material adverse effect on
the business, properties, assets, liabilities, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole, or (y) does or would reasonably be expected to prevent, materially impair,
materially impede or materially delay the consummation of the Merger and the other transactions contemplated hereby on a timely basis and in any event on or before the Termination Date; provided,
that with respect to clause (x) only, no Effect to the extent arising out of or related to the following, shall, to such extent, be deemed (individually or in the aggregate) to constitute, or be taken into account in determining whether
there has been or would or could be, a Company Material Adverse Effect: (1) general economic or business conditions or in the financial, debt, banking, capital, credit or securities markets, or in interest or exchange rates, in each case,
generally affecting any of the industries in which the Company or its Subsidiaries operate, (2) any adoption, implementation, modification, repeal, interpretation, proposal of or other changes after the date hereof in any applicable Laws or
any changes after the date hereof in GAAP or other applicable accounting regulations or principles, or in interpretations of any of the foregoing, (3) any change in the price or trading volume of the Company Shares, in and of itself (provided, that the facts or occurrences giving rise to or contributing to such change that are not otherwise excluded from the definition of “Company Material Adverse Effect” may be
taken into account in determining whether there has been a Company Material Adverse Effect), (4) any failure by the Company to meet internal or published projections, forecasts or revenue or earnings predictions, in and of itself (provided, that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of “Company Material Adverse Effect” may be
taken into account in determining whether there has been a Company Material Adverse Effect), (5) political, geopolitical, social, legislative, or regulatory conditions, including any outbreak, continuation or escalation of any military
conflict, declared or undeclared war, armed hostilities, civil unrest, government shutdown, public demonstrations or acts of foreign or domestic terrorism or sabotage (including hacking, ransomware or any other electronic attack), trade
wars or tariffs, securities, credit, financial, debt or other capital market conditions, or any escalation or worsening of any such conditions, (6) any natural or manmade disasters or calamities, weather conditions including hurricanes,
floods, tornados, tsunamis, earthquakes and wild fires, cyber outages, or other force majeure events, or any escalation or worsening of such conditions, (7) any epidemic, pandemic or outbreak of disease, or any escalation or worsening of
such conditions, (8) the announcement of this Agreement and the transactions contemplated hereby, including any termination of, reduction in or similar negative impact on relationships, contractual or otherwise, with any customers,
suppliers, distributors, partners or employees of the Company and its Subsidiaries due to the announcement and consummation of the transactions contemplated hereby or the identity of the parties to this Agreement, or the consummation of the
transactions contemplated hereby (provided that this clause (8) shall be disregarded for purposes of the definition of Company Material Adverse Effect as used in (x) any
representation or warranty in Section 3.4 to the extent that the purpose of such representation or warranty is to address the consequences resulting from the execution and
delivery of this Agreement or the consummation of the Merger, (y) to the extent related to such representations and warranties identified in the preceding clause (x), the condition set forth in Section
6.3(a), and (z) any action or omission by the Company, any Subsidiary of the Company or their respective Representatives in order to comply with the Company’s obligations under Section
5.1), (9) any action taken by the Company, or which the Company causes to be taken by any of its Subsidiaries, in each case which is expressly required by this Agreement or which is otherwise expressly disclosed in the
Company Disclosure Letter, (10) any actions taken (or omitted to be taken) at the express written request of Parent, (11)(A) any action taken by Parent, Merger Sub or any of their controlled Affiliates that results in a breach of or default
by Parent or Merger Sub under this Agreement or (B) the omission of an action that was required to be taken by Parent, Merger Sub or any of their respective Affiliates pursuant to this Agreement; provided, that in the case of clauses (1), (2), (5), (6), and (7), to the extent the impact of such Effect is not disproportionately adverse to the Company and its Subsidiaries, taken as a whole, as compared to
other companies operating in the industry in which the Company and its Subsidiaries conduct business (and provided further,
that in such event, only the incremental disproportionate adverse impact shall be taken into account when determining whether there has been a “Company Material Adverse Effect”);
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(f) “Company Owned Intellectual Property” means the Intellectual Property owned by the Company and its Subsidiaries;
(g) “Company Shareholder Approval” means (i) the adoption and approval of this Agreement by the affirmative vote of holders of at least a majority in combined voting power of the Company
Shares issued and outstanding on the record date for the Company Stockholder Meeting and entitled to vote on the proposal to adopt this Agreement, and (ii) the affirmative vote of a majority of the votes cast by Disinterested Shareholders at
the Company Stockholder Meeting;
(h) “control” (including the terms “controlled,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise;
(i) “Disinterested Shareholder” means shareholders of the Company other than Parent, any Affiliate of Parent, or any director, officer or employee of Parent or its
Subsidiaries; provided that, for the avoidance of doubt, the Company shall not be deemed to be an Affiliate of Parent for purposes of this definition;
(j) “Debt Financing” means either (i) the replacement debt financing in respect of the Credit Facility arranged and entered into by Parent in connection with the transactions
contemplated by this agreement or (ii) the Credit Facility Amendment with the consent of the Required Lenders;
(k) “Debt Financing Sources” means any financial institution or Person that provides any Debt Financing;
(l) “Encumbrance” means any charge, claim, mortgage, hypothec, lien, option, pledge, imperfection of title, encroachment, lease, license, easement, servitude, right-of-way,
covenant, condition, restriction, adverse claim, other encumbrance or lien, security interest or other restriction of any kind;
(m) “Equity Interest” means any share, capital stock, partnership, member, membership, limited liability company or similar interest in any Person, and any option, warrant, right or security
(including debt securities) convertible, exchangeable or exercisable thereto or therefor;
(n) “Exchange Ratio” means 0.1993;
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(o) “Intellectual Property” means all intellectual property rights worldwide, including (i) trademarks, service marks, trade names, business marks, brand names, certification
marks, trade dress, logos, corporate names, trade styles, and other indications of origin, and the goodwill associated with the foregoing (“Trademarks”), (ii) domain names, (iii)
patents and patent applications (including any national or multinational statutory invention registrations, utility models, and certificates of invention) and all substitutions, divisionals, continuations, continuations-in-part, reissues,
extensions, and reexaminations thereof, (iv) copyrights and other intellectual property rights in literary, pictorial and graphic works, software, and other works of authorship, (v) trade secrets and other intellectual rights in
confidential or proprietary information, including know-how, data, and databases, and (vii) registrations and applications for the registration or issuance of any of the foregoing;
(p) “knowledge of Parent” means the actual knowledge, after reasonable inquiry, of the individuals listed on Section 8.3(p) of the
Parent Disclosure Letter;
(q) “knowledge of the Company” means the actual knowledge, after reasonable inquiry, of the individuals listed on Section 8.3(q) of the Company Disclosure Letter;
(r) “Organizational Documents” shall mean, with respect to any Person that is not a natural person: (a) if such Person is a corporation, such Person’s certificate or articles of
incorporation, by-laws and similar organizational documents, as amended; (b) if such Person is a limited liability company, such Person’s certificate or articles of formation and operating agreement, as amended; and (c) if such Person is a
limited partnership, such Person’s certificate or articles of formation and limited partnership agreement, as amended;
(s) “Parent Closing Price” means the closing price per share of Parent Common Stock on the trading day immediately prior to the Closing Date, unless otherwise agreed by Parent and the Company
in writing;
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(t) “Parent Material Adverse Effect” means any Effect that, individually or in the aggregate with any one or more other Effects, (x) results in a material adverse effect on the
business, condition (financial or otherwise) or results of operations of Parent and its Subsidiaries, taken as a whole or (y) prevents, materially impairs, materially impedes or materially delays the consummation of the Merger and the other
transactions contemplated hereby on a timely basis and in any event on or before the Termination Date; provided, that with respect to clause (x) only, no Effect to the extent
arising out of the following, shall, to such extent, be deemed to constitute, or be taken into account in determining whether there has been or would or could be, a Parent Material Adverse Effect: (1) general economic or business conditions
or in the financial, debt, banking, capital, credit or securities markets, or in interest or exchange rates, in each case, generally affecting any of the industries in which Parent or its Subsidiaries operate, (2) any adoption,
implementation, modification, repeal, interpretation, proposal of or other changes after the date hereof in any applicable Laws or any changes after the date hereof in applicable accounting regulations or principles, or in interpretations
of any of the foregoing, (3) any change in the price or trading volume of Parent’s stock, in and of itself (provided, that the facts or occurrences giving rise to or contributing
to such change that are not otherwise excluded from the definition of “Parent Material Adverse Effect” may be taken into account in determining whether there has been a Parent Material Adverse Effect), (4) any failure by Parent to meet
internal or published projections, forecasts or revenue or earnings predictions, in and of itself (provided, that the facts or occurrences giving rise to or contributing to such
failure that are not otherwise excluded from the definition of “Parent Material Adverse Effect” may be taken into account in determining whether there has been a Parent Material Adverse Effect), (5) political, geopolitical, social or
regulatory conditions, including any outbreak, continuation or escalation of any military conflict, declared or undeclared war, armed hostilities, civil unrest, public demonstrations or acts of foreign or domestic terrorism or sabotage
(including hacking, ransomware or any other electronic attack), or any escalation or worsening of any such conditions, (6) any natural or manmade disasters or calamities, weather conditions including hurricanes, floods, tornados, tsunamis,
earthquakes and wild fires, cyber outages, or other force majeure events, or any escalation or worsening of such conditions, (7) any epidemic, pandemic or outbreak of disease, or any escalation or worsening of such conditions, (8) the
announcement of this Agreement and the transactions contemplated hereby, including any termination of, reduction in or similar negative impact on relationships, contractual or otherwise, with any customers, suppliers, distributors, partners
or employees of Parent and its Subsidiaries due to the announcement and consummation of the transactions contemplated hereby or the identity of the parties to this Agreement, or the consummation of the transactions contemplated hereby (provided that this clause (8) shall be disregarded for purposes of the definition of Parent Material Adverse Effect as used in (y) any representation or warranty in Section 4.4 to the extent that the purpose of such representation or warranty is to address the consequences resulting from the execution and delivery of this Agreement or the
consummation of the Merger, and (z) to the extent related to such representations and warranties identified in the preceding clause (y), the condition set forth in Section 6.2(a)),
(9) any action taken by Parent, or which Parent causes to be taken by any of its Subsidiaries, in each case which is expressly required by this Agreement, (10) any actions taken (or omitted to be taken) at the express written request of the
Company, (11)(A) any action taken by the Company, its Subsidiaries or any of their controlled Affiliates that results in a breach of or default by the Company or its Subsidiaries under this Agreement or (B) the omission of an action that
was required to be by the Company, its Subsidiaries or any of their controlled Affiliates pursuant to this Agreement; provided, that in the case of clauses (1), (2), (5), (6), and
(7), to the extent the impact of such Effect is not disproportionately adverse to Parent and its Subsidiaries, taken as a whole, as compared to other companies operating in the industry in which Parent and its Subsidiaries conduct business
(and provided further, that in such event, only the incremental disproportionate adverse impact shall be taken into
account when determining whether there has been a “Parent Material Adverse Effect”);
(u) “Permitted Encumbrance” means (i) liens for current Taxes not yet due or payable or the validity or amount of which is being contested in good faith by appropriate proceedings and for
which appropriate reserves have been established in accordance with GAAP, (ii) mechanics’, materialmen’s, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business for amounts that are not
yet delinquent, or the validity or amount of which is being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP, (iii) zoning, entitlement, building, conservation
restriction and other land use and environmental regulations promulgated by Governmental Entities; (iv) all exceptions, restrictions, covenants, conditions, encroachments, easements, imperfections of title, charges, rights-of-way, existing
utility access or other easements or other matter matters of record affecting the Company Leased Real Property that do not or would not materially interfere with the present use, occupancy or value of such Company Real Property; (v)
non-exclusive licenses of Intellectual Property entered into in the ordinary course of business; (vi) other Encumbrances that do not or would not materially interfere with the present use, occupancy or value of such asset of the Company and
its Subsidiaries; (vii) any matter that would be disclosed by an accurate survey or physical inspection of the Company Leased Real Property or any part thereof that does not or would not materially interfere with the present use, occupancy or
value of such Company Real Property; (viii) with respect to the Company Leased Real Property, Encumbrances which encumber only the fee interest in such property; and (ix) any Encumbrance pursuant to the Credit Facility in existence as of the
date hereof;
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(v) “Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including any Governmental Entity;
(w) “Personal Information” means information in any form that (i) is by itself, or in combination with other information, capable, directly or indirectly, of being associated with, related to
or linked to, or used to identify, describe, contact or locate, a natural Person; or (ii) is considered “personally identifiable information,” “personal information,” “personal data,” or any similar term by any applicable Laws and/or Privacy
Requirements;
(x) “Privacy Laws” means, in each case, to the extent applicable to the Company or any of its Subsidiaries, all Laws, guidance, guidelines and standards relating to privacy, data security,
the Processing of Personal Information, data breach notification, website and mobile application privacy policies and practices regarding Personal Information, consumer protection, the Processing and security of payment card information
(including the Payment Card Industry Data Security Standard and other applicable card association rules), restrictions on access to Personal Information or other protected information, wiretapping, the interception of electronic
communications, the tracking or monitoring of online activity, data- or web-scraping, advertising or marketing, and email, text message, or telephone communications;
(y) “Process”, “Processed”, or “Processing” means any operation or set
of operations which is performed on information, including Personal Information, such as the use, collection, processing, storage, recording, organization, adaption, alteration, transfer, retrieval, consultation, disclosure, dissemination,
combination or disposal of such information, and/or is considered “processing” by any applicable Privacy Requirements;
(z) “Prohibited Person” means any (x) Person who is identified on the U.S. Treasury Department’s Office of Foreign Assets Control’s (“OFAC”)
List of Specially Designated Nationals and Blocked Persons or any other applicable list of sanctioned persons administered by OFAC, (y) any legal entity that is 50%-or-more owned by one or more Persons identified in the foregoing clause or
(z) the government of any country or region that itself is the subject or target of a comprehensive embargo under export controls (currently, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, and the so-called Donetsk People’s
Republic and Luhansk People’s Republic regions of Ukraine);
(aa) “Required Financial Information” means (i) all financial statements, financial data, audit reports and other information regarding the Company and its Subsidiaries of the
type and form that is customarily provided in debt financings and (ii) such other pertinent and customary information regarding the Company and its Subsidiaries as may be reasonably requested by Parent (or any Debt Financing Sources);
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(bb) “Security Incident” means any (i) accidental, unlawful or unauthorized access, use, loss, exfiltration, disclosure, alteration, destruction, encryption, compromise, or other Processing of
Personal Information and/or confidential information; (ii) accidental, unlawful or unauthorized occurrence or series of related occurrences on or conducted through the Company’s IT Systems that jeopardizes or impacts the confidentiality,
integrity, or availability of the Company’s IT Systems or any Personal Information or confidential information stored or otherwise Processed therein; or (iii) occurrence that constitutes a “data breach,” “security breach,” “personal data
breach,” “security incident,” “cybersecurity incident,” or any similar term under any applicable Law;
(cc) “Subsidiary” means, with respect to any Person, any other Person of which stock or other equity interests having ordinary voting power to elect more than 50% of the board
of directors or other governing body are owned, directly or indirectly, by such first Person (and notwithstanding anything to the contrary herein, the Company makes no representation, warranty, covenant or agreement in this Agreement with
respect to any third party equity holder of any joint venture or any securities held by such Person); and
(dd) “Willful Breach” means willful and intentional breach of this Agreement.
Section 8.4 Interpretation. When a reference is made in this Agreement to a Section, Article, Exhibit or Schedule such reference shall be to a Section, Article, Exhibit or Schedule of this Agreement unless
otherwise indicated. The table of contents and headings contained in this Agreement or in any Exhibit or Schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as
defined in this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in
this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to
any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” The phrase “ordinary course of business” means an action taken, or
omitted to be taken, in the ordinary course of business, consistent with past practice. References to days mean calendar days unless otherwise specified. If the last day of a period by which an act is to be done under this Agreement is a
non-Business Day, the period in question shall end on the next succeeding Business Day. Any document or item will be deemed “delivered”, “provided” or “made available” within the meaning of this Agreement if such document or item (a) is included in the electronic data room to which the receiving party has access and is available to such party, or (b) actually delivered or provided to the receiving
party or its representatives, in each case, at least two (2) days prior to the date hereof or the Closing, as applicable.
Section 8.5 Entire
Agreement. This Agreement (including the Exhibits hereto), the Company Disclosure Letter, the Parent Disclosure Letter and the Confidentiality Agreement constitute the entire agreement, and supersede all prior written agreements,
arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter hereof and thereof.
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Section 8.6 Parties in
Interest. This Agreement is not intended to, and shall not, confer upon any other Person other than the parties and their respective successors and permitted assigns any rights or remedies hereunder, except (a) with respect to Section
5.12 which shall inure to the benefit of the Persons benefiting therefrom who are intended to be third party beneficiaries thereof and (b) if the Effective Time occurs, the right of the Company shareholders to receive the Merger
Consideration, any dividends or other distributions payable pursuant to Section 2.2(i) and cash in lieu of any fractional shares payable pursuant to (a), in accordance with the terms and conditions of this Agreement. The
representations and warranties in this Agreement are the product of negotiations among the parties hereto. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks
associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement or the characterization of
actual facts or circumstances as of the date of this Agreement or as of any other date.
Section 8.7 Governing
Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of
Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.
Section 8.8 Submission
to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought
and determined in the Court of Chancery of the State of Delaware; provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any
federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and
unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby, including the Merger. Each of the parties agrees not to commence any action, suit or
proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each
of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and
unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, including the
Merger, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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Section 8.9 Assignment;
Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party without the prior written consent
of the other parties, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
Section 8.10 Specific Performance. The parties acknowledge and agree that irreparable damage would occur and that the parties would not have any adequate remedy at law (i) for any actual or threatened breach of
the provisions of this Agreement or (ii) in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. Accordingly, each of the Company (on behalf of itself and on behalf of the
holders of Company Shares as third party beneficiaries under Section 8.6), Parent and Merger Sub agrees that each such party shall be entitled to specific
performance of the terms hereof, including an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement, this being in
addition to any other remedy to which such party is entitled at law or in equity, and that such relief may be granted without the requirement that the party seeking such relief offer proof of actual damages. Each of the parties hereby
further irrevocably waives (a) any defense in any action for specific performance that a remedy at law would be adequate (and agrees that it shall not oppose the granting of such relief by reason of there being an adequate remedy at law)
and (b) any requirement under any Law to post security as a prerequisite to obtaining equitable relief. The Company’s or Parent’s pursuit of specific performance at any time will not be deemed an election of remedies or waiver of the right
to pursue any other right or remedy to which such party may be entitled, including the right to pursue remedies for liabilities or damages incurred or suffered by the other party in the case of a Willful Breach.
Section 8.11 Currency. All references to “dollars” or “$” or “US$” in this Agreement refer to United States dollars, which is the currency
used for all purposes in this Agreement.
Section 8.12 Severability.
Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held
to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such
jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
Section 8.13 Waiver of
Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL
ACTION; (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.13.
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Section 8.14 Counterparts.
This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the
other parties.
Section 8.15 Facsimile or
.pdf Signature. This Agreement may be executed by facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records
Act or other applicable law, e.g., www.docusign.com) or .pdf signature, and any signature so delivered shall be deemed to have been duly and validly delivered and be valid and effective, and constitute an original, for all purposes.
Section 8.16 No Presumption Against Drafting Party. Each of Parent, Merger Sub and the Company acknowledges that each party to this
Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities
in this Agreement against the drafting party has no application and is expressly waived.
Section 8.17 Non-Recourse. Each party hereto agrees, on behalf of itself and its former, current and future holders of any equity, controlling persons, directors, officers, employees, agents, attorneys,
controlled Affiliates, members, managers, general or limited partners, stockholders and assignees of it and its controlled Affiliates, that all Action, claims, obligations, liabilities, or causes of action (whether in contract or in tort, in
law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership, limited liability company or other entity veil or any other theory or doctrine, including alter
ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to: (a) this Agreement or any other agreement referenced herein or contemplated hereby or the transactions
contemplated hereunder or thereunder, (b) the negotiation, execution or performance of this Agreement or any other agreement referenced herein or contemplated hereby (including any representation or warranty made in, in connection with, or as
an inducement to, this Agreement or such other agreement), and (c) any breach or violation of this Agreement or any other agreement referenced herein or contemplated hereby, in each case, may be made only against (and are those solely of) the
Persons that are expressly identified as parties in the preamble to this Agreement (or any other agreement referenced herein or contemplated hereby, as applicable) and in accordance with, and subject to the terms of, this Agreement (or any
other agreement referenced herein or contemplated hereby, in each case as applicable).
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective duly authorized
signatories.
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THE BRAND HOUSE COLLECTIVE, INC.
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By: | /s/ Amy Sullivan | |
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Name: Amy Sullivan |
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Title: Chief Executive Officer |
[Signature Page to Agreement and Plan of Merger]
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BED BATH & BEYOND, INC.
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By: | /s/ Marcus Lemonis |
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Name: | Marcus Lemonis |
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Title: | Executive Chairman |
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KNIGHT MERGER SUB II, INC.
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By: | /s/ Adrianne
Lee |
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Name: | Adrianne Lee |
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Title: | President & Treasurer |
[Signature Page to Agreement and Plan of Merger]
Exhibit A
Form of Certificate of Merger
Exhibit B
Form of Articles of Merger
AMENDMENT NO. 2 TO
AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT
This AMENDMENT NO. 2 TO AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT (this “Amendment”), dated as of November 24, 2025 (the “Amendment Date”), is entered into by and among
KIRKLAND’S STORES, INC., a Tennessee corporation (“Lead Borrower), the other Loan Parties party hereto, the lenders party hereto (the “Lenders”) and BED BATH & BEYOND, INC., a Delaware corporation (f/k/a Beyond, Inc., a
Delaware corporation), as the Administrative Agent and Collateral Agent (in such capacities, the “Agent”). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the
Amended Credit Agreement (as defined below).
RECITALS
A. Lead Borrower, the other Loan Parties party thereto, the Lenders party thereto and the Agent are party to that certain Amended and Restated Term Loan Credit Agreement, dated as of
May 7, 2025 (as amended by that certain Amendment No. 1 to Amended and Restated Term Loan Credit Agreement, dated as of September 15, 2025 and as further amended, restated, supplemented or otherwise modified in writing prior to the date
hereof, the “Credit Agreement”).
B. The Loan Parties have requested that the Agent and the Lenders amend, and the Agent and the Lenders have agreed to amend, the Credit Agreement on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendments to Credit Agreement. Subject to the satisfaction of the conditions
precedent set forth in Section 3 below, and in reliance on the representations, warranties, covenants and other agreements of the Loan Parties contained herein, the Loan Parties, Agent and the Lenders party hereto agree that the Credit
Agreement is hereby amended as follows (the Credit Agreement as so amended, the “Amended Credit Agreement”):
(a) The recitals of the Credit Agreement shall be amended by amending and restating the third recital in its entirety as set forth below:
“WHEREAS, the Borrowers have requested and the Lenders have agreed to, (i) on the Amendment No. 1 Effective Date, amend this Agreement to establish Delayed Draw Term Loan Commitments (as
defined below) in an aggregate principal amount of $20,000,000 (the term loans made in satisfaction of the Delayed Draw Term Loan Commitments, the “Delayed Draw Term Loans”; and the Delayed Draw Term Loans, together with the Existing Term
Loans (as hereinafter defined) and the Additional Term Loans, collectively, the “Term Loans” and each individually, a “Term Loan”), subject to the satisfaction of certain conditions set forth in Amendment No. 1 and herein and (ii) on the
Amendment No. 2 Effective Date, amend this Agreement to increase the Delayed Draw Term Loan Commitments to an aggregate principal amount of $30,000,000, subject to the satisfaction of certain conditions set forth in Amendment No. 2 and
herein; and”;
(b) Section 1.01 of the Credit Agreement shall be amended by adding the following definitions in the correct alphabetical order:
““Amendment No. 2” means that certain Amendment No. 2 to Amended and Restated Term Loan Credit Agreement, dated as of November 24, 2025, by and among the Lead Borrower, the other Loan
Parties party thereto, the Lenders party thereto and the Agent.”
““Amendment No. 2 Effective Date” shall mean the “Effective Date” as defined in Amendment No. 2.”;
(c) Section 1.01 of the Credit Agreement shall be amended by amending and restating the definition of “Delayed Draw Term Loan Commitments” in its entirety as set forth below:
““Delayed Draw Term Loan Commitments” means the commitment of each Lender to make a Delayed Draw Term Loan to the Borrower pursuant to Section 2.01(e) of this Agreement in an amount equal
to the amount set forth opposite the name of such Lender on Schedule 2.01 attached hereto, and in an aggregate amount for all of the Lenders of $30,000,000.”; and
(d) Schedule 2.01 of the Credit Agreement shall be amended and restated and replaced with Exhibit A hereto.
SECTION 2. Representations and Warranties of the Loan Parties. In order to induce the Agent and the Lenders to enter into this
Amendment, each of the Loan Parties represent and warrant that:
(a) Each Loan Party (a) is a corporation, limited liability company, partnership or limited partnership, duly incorporated, organized or formed, validly existing and, where
applicable, in good standing under the Laws of the jurisdiction of its incorporation, organization or formation, (b) has all requisite power and authority and all requisite governmental licenses, permits, authorizations, consents and
approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under this Amendment and to perform its obligations under the Amended Credit Agreement, and (c) is duly qualified and
is licensed and, where applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case
referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance of this Amendment and the performance of the Amended Credit Agreement by each Loan Party has been duly authorized by all necessary
corporate or other organizational action, and does not and will not (a) contravene the terms of any of such Loan Party’s Organization Documents; (b) conflict with or result in any breach, termination, or contravention of, or constitute a
default under, or require any payment to be made under (i) any Material Contract or any Material Indebtedness to which such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or any of its Subsidiaries
or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Loan Party or its property is subject; (c) result in or require the creation of any Lien upon any asset of any Loan Party (other
than Liens in favor of the Agent under the Security Documents); or (d) violate any Law.
(c) No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Amendment or the Amended Credit Agreement (as the case may be), except for such as have been obtained or made and are in full force
and effect.
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(d) This Amendment has been duly executed and delivered by each Loan Party that is party hereto. This Amendment and the Amended Credit Agreement each constitutes a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(e) All of the representations and warranties of the Loan Parties under this Amendment and the other Loan Documents are true and correct in all material respects (in each case,
without duplication of any materiality qualifier contained herein or therein, as applicable) as of the date hereof (or if, any such representation or warranty relates to an earlier date, such earlier date), immediately before and
immediately after giving effect to this Amendment, the Amended Credit Agreement and the transactions contemplated herein and therein.
(f) There shall not exist any Default or Event of Default, in each case immediately before and after giving effect to this Amendment, the Amended Credit Agreement and the transactions
contemplated herein and therein.
(g) Since February 1, 2025, there has occurred no event which has had or would reasonably be expected to have a Material Adverse Effect.
SECTION 3. Effectiveness. This Amendment shall be effective at the time that each of the
conditions precedent set forth in this Section 3 shall have been met (such date, the “Effective Date”):
(a) Amendment. The Agent shall have received duly executed counterparts of this Amendment signed by the Loan Parties and the Lenders.
(b) Payment of Legal Fees and Expenses. The Loan Parties shall have paid all reasonable and documented out-of-pocket costs and expenses of the Agent and its professional
advisors (including, without limitation, Latham & Watkins LLP) incurred in connection with this Amendment and the other documents related thereto.
(c) Representations and Warranties. The representations and warranties contained herein shall be true, correct and complete in all respects.
(d) No Default, Event of Default. There shall exist no Default or Event of Default, in each case, immediately before and after giving effect to this Amendment, the Amended
Credit Agreement and the transactions contemplated herein and therein.
(e) Closing/Solvency Certificate. The Agent shall have received a certificate of a Responsible Officer of the Lead Borrower certifying as to (i) the satisfaction of the
conditions precedent set forth in Sections 3(c) and (d) of this Amendment, (ii) the Solvency of the Loan Parties as of the Effective Date after giving effect to the Amendment, the Amended Credit Agreement and the
transactions contemplated herein and therein, and (iii) either that (A) no consents, licenses or approvals are required in connection with the execution, delivery and performance of this Amendment and the performance of the Amended Credit
Agreement by such Loan Party and the enforceability against such Loan Party of the Amendment and the Amended Credit Agreement, or (B) that all such consents, licenses and approvals have been obtained and are in full force and effect.
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(f) Secretary’s Certificate. The Agent shall have received such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Agent may require certifying (i) the authority of such Loan Party to enter into this Amendment and to perform its obligations hereunder and under the Amended Credit Agreement, (ii) the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and the Amended Credit Agreement, (iii) (A) that attached thereto are true, correct and complete copies of such
Loan Party’s Organization Documents and that such Organization Documents are in full force and effect as of the Effective Date or (B) that there have been no changes to the Organizational Documents of such Loan Party since true, correct and
complete copies of the same were delivered to the Agent on the Original Closing Date (as defined in the Amended Credit Agreement), and (iv) that such Loan Party is validly existing, in good standing and qualified to engage in business in
each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to so qualify in such jurisdiction could not reasonably be expected to
have a Material Adverse Effect (as evidenced by Certificates of Good Standing (or equivalent documents) issued on a recent date by the Secretary of State (or equivalent Person) in the jurisdiction of formation of such Loan Party.
(g) Notice of Borrowing. The Agent shall have received a Notice of Borrowing/Continuation/Conversion for a borrowing of $10,000,000 of Delayed Draw Term Loans, in accordance
with the requirements of Sections 2.02(a)(i) and 4.02 of the Credit Agreement.
(h) Merger Agreement. The Agent shall have received the executed and effective Agreement and Plan of Merger, dated as of the date hereof, by and among Bed Bath & Beyond,
Inc., a Delaware corporation, Knight Merger Sub II, Inc., a Delaware corporation and a wholly-owned subsidiary of Bed Bath & Beyond, Inc., and The Brand House Collective, Inc., a Tennessee corporation (the “Merger Agreement”),
and all material documents entered into in connection therewith.
(i) Opinion. The Agent shall have received a favorable opinion of Bass, Berry & Sims PLC, counsel to the Loan Parties, addressed to the Agent and each Lender and
addressing such matters concerning the Loan Parties, the Amendment and the Amended Credit Agreement as the Agent may reasonably request.
(j) Intercreditor Agreement Amendment. The Agent shall have received an amendment to the ABL Intercreditor Agreement (which, for the avoidance of doubt includes a consent to
this Amendment), in form and substance acceptable to the Agent and duly executed by the persons party thereto.
(k) ABL Credit Agreement Amendment. The Agent shall have received an amendment to the ABL Credit Agreement, in form and substance acceptable to the Agent and duly executed by
the persons party thereto.
(l) ABL Credit Agreement Waiver Letter. The Agent shall have received a waiver letter with respect to the ABL Credit Agreement, which includes a consent to entry into the
Merger Agreement, in form and substance acceptable to the Agent and duly executed by the persons party thereto.
SECTION 4. Reference to and Effect upon the Loan Documents.
(a) Except as expressly modified hereby, all terms, conditions, covenants, representations and warranties contained in the Amended Credit Agreement and the other Loan Documents, and
all rights of the Lenders and all of the Obligations, shall remain in full force and effect. Each of the Loan Parties hereby confirms that the Amended Credit Agreement and the other Loan Documents are in full force and effect and that, as
of the Effective Date, no Loan Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any of the Obligations, the Amended Credit Agreement or any other Loan Document.
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(b) The execution, delivery and effectiveness of this Amendment shall not directly or indirectly (i) constitute a consent or waiver of any past, present or future violations of any
provisions of the Amended Credit Agreement, this Amendment or any other Loan Document or (ii) except as expressly provided herein, amend, modify or operate as a waiver of any provision of the Amended Credit Agreement or any other Loan
Documents or any right, power or remedy of any of the Lenders.
(c) From and after the Effective Date, (i) the term “Agreement” in the Amended Credit Agreement, and all references to the Credit Agreement in any Loan Document, shall mean the
Amended Credit Agreement and (ii) the term “Loan Documents” in the Amended Credit Agreement and the other Loan Documents shall include, without limitation, this Amendment and any agreements, instruments and other documents executed and/or
delivered in connection herewith.
(d) Neither the Agent nor any other Lender has waived, is by this Amendment waiving or has any intention of waiving (regardless of any delay in exercising such rights and remedies)
any Default or Event of Default which may be continuing on the Effective Date or any Default or Event of Default which may occur after the Effective Date, and neither the Agent nor any Lender has agreed to forbear with respect to any of its
rights or remedies concerning any Defaults or Events of Default, which may have occurred or are continuing as of the Effective Date, or which may occur after the Effective Date.
(e) This Amendment shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of the Amended Credit Agreement or any other Loan Document.
SECTION 5. Construction. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this Agreement
SECTION 6. Costs and Expenses. As provided in Section 10.04 of the Amended Credit
Agreement, the Loan Parties agree to reimburse the Agent for all reasonable out-of-pocket costs and expenses, including the reasonable fees and disbursements of counsel, incurred by the Agent in connection with this Amendment.
SECTION 7. Governing Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Actions Commenced
by Loan Parties.. Section 10.14 of the Amended Credit Agreement is incorporated herein by reference as if separately set forth in full herein.
SECTION 8. Headings. Headings used in this Amendment are for convenience only and shall not
affect the interpretation of any provision hereof.
SECTION 9. Loan Document. This Amendment shall constitute a Loan Document. For the avoidance of
doubt, any breach of the representations, warranties and covenants contained in this Amendment shall be an Event of Default under the Amended Credit Agreement.
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SECTION 10. Reaffirmation. Each of the Loan Parties as debtor, grantor, pledgor, guarantor,
assignor, or in other any other similar capacity in which such Loan Party grants liens or security interests in its property, proxy rights with respect to its owned or issued equity or otherwise acts as accommodation party, indemnitor or
guarantor, as the case may be, hereby (i) acknowledges, ratifies and reaffirms that all Obligations constitute valid and existing “Obligations” under the Amended Credit Agreement (including all of its payment and performance obligations,
contingent or otherwise, under each of the Loan Documents to which it is a party (after giving effect hereto)) and (ii) to the extent such Loan Party pledged, granted liens on or security interests in (or any other similar rights) any of
its property pursuant to any such Loan Document as security for or otherwise guaranteed the Borrowers’ Obligations under or with respect to the Loan Documents, acknowledges, ratifies and reaffirms such guarantee and grant of security
interests and liens and confirms and agrees that such pledges, security interests, liens and other similar rights remain in full force and effect notwithstanding the effectiveness of this Amendment to secure all of the Obligations arising
under or pursuant to and as defined in the Amended Credit Agreement. Without limiting the generality of the foregoing, each Loan Party further agrees (A) that any reference to “Obligations” contained in any Loan Documents shall include,
without limitation, the “Obligations” as such term is defined in the Amended Credit Agreement and (B) that the related guarantees and grants of security contained in such Loan Documents shall include and extend to such Obligations. Each of
the Loan Parties hereby consents to this Amendment and acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and reaffirmed. The execution of this Amendment shall not operate as a waiver of any
right, power or remedy of the Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations.
SECTION 11. Severability. Section 10.12 of the Amended Credit Agreement is incorporated herein
by reference as if separately set forth in full herein.
SECTION 12. Counterparts; Integration; Effectiveness. Section 10.10 of the Amended Credit
Agreement is incorporated herein by reference as if separately set forth in full herein.
SECTION 13. Release of Claims. In consideration of the Lenders’ agreements contained in this
Amendment, each Loan Party signatory hereby irrevocably releases and forever discharges the Lenders and the Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys
(each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common
law of any kind or character, known or unknown, which any such Loan Party ever had or now has against the Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of any Agent, any
Lender or any other Released Person relating to the Amended Credit Agreement or any other Loan Document on or prior to the date hereof.
SECTION 14. Assignments; No Third Party Beneficiaries. This Amendment shall be binding upon and
inure to the benefit of the Agent, the Borrowers, the other Loan Parties, each Lender and their respective successors and permitted assigns. No Person other than the Borrowers, the other Loan Parties, the Lenders and in the case of Section
13, the Released Persons, shall have any rights hereunder or be entitled to rely on this Amendment and all third-party beneficiary rights (other than the rights of the Released Persons under Section 13 hereof) are hereby
expressly disclaimed.
[Signature pages to follow]
6
IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be duly executed and delivered as of the date first above written.
|
|
BORROWERS:
|
|
|
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KIRKLAND’S STORES, INC., as Lead Borrower and as a Borrower
|
|
|
|
|
|
|
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By: | /s/ Andrea K. Courtois |
|
|
|
Name: Andrea K. Courtois |
|
|
|
Title: Senior Vice President and Chief Financial Officer |
|
KIRKLAND’S TEXAS, LLC, as a Borrower
|
||
| By: | /s/ Andrea K. Courtois | |
|
Name: Andrea K. Courtois
|
||
| Title: Senior Vice President and Chief Financial Officer | ||
|
OTHER LOAN PARTIES
|
||
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THE BRAND HOUSE COLLECTIVE, INC. (f/k/a Kirkland’s, Inc.), as Parent and as a Guarantor
|
||
| By: | /s/ Andrea K. Courtois | |
|
Name: Andrea K. Courtois
|
||
|
Title: Senior Vice President and Chief Financial Officer
|
||
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KIRKLAND’S DC, INC., as a Guarantor
|
||
| By: | /s/ Andrea K. Courtois |
|
|
Name: Andrea K. Courtois
|
||
| Title: Senior Vice President and Chief Financial Officer | ||
|
BED BATH & BEYOND, INC. (f/k/a Beyond Inc.), as Administrative Agent, Collateral Agent and a Lender
|
||
| By: | /s/ Marcus Lemonis | |
|
Name: Marcus Lemonis
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||
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Title: Executive Chairman
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Exhibit A
Schedule 2.01
COMMITMENTS AND APPLICABLE PERCENTAGES
|
Lender
|
Existing Term
Loan
Commitment
|
Additional Term
Loan
Commitment
|
Applicable
Percentage of
Convertible Term
Loan
Commitment
|
Applicable
Percentage of
Non-Convertible
Term Loan
Commitment
|
||||||||||||
|
Bed Bath & Beyond, Inc., f/k/a Beyond, Inc.
|
$
|
8,500,000.00
|
$
|
5,232,405.54
|
100.000000000
|
%
|
100.000000000
|
%
|
||||||||
|
TOTAL
|
$
|
8,500,000.00
|
$
|
5,232,405.54
|
100
|
%
|
100
|
%
|
||||||||
|
Lender
|
Delayed Draw Term
Loan Commitment
|
Applicable Percentage of Delayed
Draw Term Loan Commitments
|
||||||
|
Bed Bath & Beyond, Inc., f/k/a Beyond, Inc.
|
$
|
30,000,000
|
100.000000000
|
%
|
||||
|
Total
|
$
|
30,000,000
|
100.000000000
|
%
|
||||