Vemanti Group, Inc 8-K, filed Apr 5, 2024
Vemanti Group, Inc. (VMNT)
About this 8-K
Vemanti Group, Inc filed this 8-K on April 5, 2024, reporting on events of April 1, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.02: Unregistered sale of equity
- Item 5.01: Change in control
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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:
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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)) |
Securities registered pursuant to Section 12(b) of the Act:
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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.
Item 1.01 Entry Into a Material Definitive Agreement.
Share Exchange Agreement
On April 1, 2024, Vemanti Group, Inc., a Nevada corporation (the “Company”), entered into and consummated the transactions contemplated by a share exchange agreement (the “Share Exchange Agreement”) by and among the Company, Mr. Tan Tran, as the sole holder of the Company’s Series A Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”), VinHMS Pte. Ltd., a Singapore private company limited by shares (“VinHMS”), and Mr. Hoang Van Nguyen and Asian Star Trading & Investment Pte. Ltd. (“Asian Star”), the sole shareholders of VinHMS (the “Shareholders”).
VinHMS is a technology solutions provider specializing in digital transformation for the hospitality industry across Southeast Asia. VinHMS’s native cloud-based platforms focus on reducing overall costs, streamlining processes, enhancing operational efficiency, accelerating new innovations, improving guest experiences, and increasing financial performance for hotel operators utilizing artificial intelligence (AI), machine learning (ML), and proprietary advanced algorithms. In addition to its flagship hospitality management solution, CiHMS, VinHMS offers a suite of products, including asset management (CiAMS), theme park management (CiTMS), and a digital transformation solution for small hotels (CiTravel).
Pursuant to the terms of the Share Exchange Agreement, Mr. Tran contributed all of his shares of Series A Preferred Stock to the Company in exchange for eight hundred thousand (800,000) newly issued shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). The Shareholders transferred all the issued and outstanding shares of VinHMS to the Company in exchange for (i) the issuance of nine million two hundred thousand (9,200,000) newly issued shares of Series B Preferred Stock, which shares were issued pro rata to each Shareholder based on their VinHMS shareholdings, and (ii) the issuance to the Shareholders of all forty million (40,000,000) authorized shares of Series A Preferred Stock, which shares were issued pro rata to each Shareholder based on their VinHMS shareholdings.
The Series B Preferred Stock has a conversion rate of twenty-six (26) shares of the Company’s common stock, par value $0.0001 (“Common Stock”) to one (1) share of Series B Preferred Stock. Pursuant to the terms of the Certificate of Designation of the Series B Preferred Stock, the Company cannot take certain actions without the prior written consent of the holders of not less than two-thirds of the then total outstanding shares of Series B Preferred Stock, including issuing any indebtedness other than in the ordinary course of business, effecting a sale of assets of the Company in excess of 51% of the total assets of the Company or acquiring a company or assets in excess of 51% of the total assets of the Company. For the complete rights and preferences of the Series B Preferred Stock, reference is made to the Certificate of Designation filed as an exhibit to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on March 28, 2024.
As a result of these transactions, VinHMS is now a wholly-owned subsidiary of the Company and, due to the Shareholders’ collective ownership of (i) all of the issued and outstanding Series A Preferred Stock, each share of which carries ten (10) votes for each share of Common Stock outstanding, and (i) 92% of the issued and outstanding Series B Preferred Stock, each share of which carries twenty-six (26) votes for each share of Common Stock outstanding, the Shareholders now have beneficial control of the Company and have voting control over any shareholder vote.
Pursuant to the terms of the Share Exchange Agreement, Mr. Tran resigned as Chief Executive Officer and President of the Company and accepted an appointment as Chief Strategy Officer pursuant to the terms of the Tran Employment Agreement (defined below). Mr. Nguyen was appointed as Chief Executive Officer of the Company, pursuant to the terms of the Nguyen Employment Agreement (as defined below).
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Mr. Tran remains on the board of directors of the Company (the “Board”), Ms. Trinh Tuyet Mai Le was appointed to the Board effective April 1, 2024. Under the terms of the Share Exchange Agreement, Mr. Nguyen will also be appointed to the Board; however, he entered into an agreement with the Company (the “Board Agreement Letter”) to delay his appointment to the Board. Mr. Nguyen’s appointment as a director will become effective upon the expiration of all applicable waiting periods under Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 thereunder.
The Share Exchange Agreement contains covenants, representations and warranties that are customary for transactions of this type. The Share Exchange Agreement also contains certain covenants and agreements of the parties pertaining to post-closing matters, including, among others, covenants providing for (i) the repayment by the Company no later than thirty (30) days after April 1, 2024, of the amount of indebtedness, and all accrued but unpaid interest, due to Mr. Tran pursuant to that certain Loan Agreement, dated August 6, 2021, by and between the Company and Mr. Tran, (ii) an intercompany services agreement to be entered into between the Company and VinHMS no later than twenty-five (25) business days after April 1, 2024, and (iii) the transfer all of the equity interests of VoiceStep Telecom, LLC, a wholly-owned subsidiary of the Company (“VoiceStep”) to Mr. Tran effective as of April 2, 2024.
The Company, Mr. Tran and the Shareholders will indemnify each other for any indemnification claims brought within one (1) year from April 1, 2024, in relation to certain fundamental representations and warranties, including, among others, title and ownership of the securities exchanged pursuant to the transactions contemplated by the Share Exchange Agreement. This indemnification will be capped at one million dollars ($1,000,000), which amount is payable in Series B Preferred Stock or cash, at the election of the indemnifying party, and subject to a de minimus exclusion of claims under two thousand dollars ($2000) and a tipping basket of twenty thousand dollars ($20,000).
The preceding summary of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Share Exchange Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference. The preceding summary of the Board Agreement Letter does not purport to be complete and is qualified in its entirety by reference to the Board Agreement Letter, a copy of which is filed as Exhibit 10.14 hereto and is incorporated herein by reference.
Certain Related Agreements
Lock-Up Agreement
In connection with the Share Exchange Agreement, the Company entered into a lock-up agreement (the “Lock-Up Agreement”) with each of Mr. Tran and the Shareholders. The Lock-Up Agreement provides that the Series B Preferred Stock is subject to an twelve (12) month lock-up on transferring, selling or converting the Series B Preferred Stock into shares of Common Stock until April 1, 2025, subject to (i) early release upon the Company up-listing to a national securities exchange, and (ii) certain limited permitted transfers where the recipient takes the securities subject to the restrictions in the Lock-Up Agreement.
The preceding summary of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the Form Lock-Up Agreement, a copy of which is filed as Exhibit 4.2 hereto and is incorporated herein by reference.
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Registration Rights Agreement
In connection with the Share Exchange Agreement, the Company entered into a registration rights agreement (“Registration Rights Agreement”) with each of Mr. Tran and the Shareholders. Pursuant to the Registration Rights Agreement, the Company granted (a) the holders of a majority of the Registrable Securities three (3) demand registration rights and (b) each holder piggy-back registration rights, subject to customary exceptions. The holders also have the right at any time to request the Company to register their shares on a Form S-3 or similar short form registration statement that might be available. “Registrable Securities” are the (i) shares of Common Stock issuable upon conversion of the Series B Preferred Stock, (ii) any outstanding Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a holder as of the date of the Registration Rights Agreement, and (iii) any other equity security of the Company issued or issuable with respect to any such Common Stock by way of a share dividend or share split or in connection with the combination of shares, recapitalization, merger, consolidation or reorganization that are held by the parties thereto from time to time.
The obligations of the Company shall terminate upon the earlier of April 1, 2029, the date all the Registrable Securities have been sold or the holders are permitted to sell under Rule 144 without limitation as to the amount or manner of sale.
The preceding summary of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is filed as Exhibit 10.15 hereto and is incorporated herein by reference.
Pursuant to the terms of the Lock-up Agreement, which prevent the conversion of the Series B Preferred Stock until the expiration of the Lock-Up Period, effectively no registration rights can be exercised under the Registration Rights Agreement until the end of the Lock-Up Period.
LLC Transfer Agreement
In connection with the provisions of the Share Exchange Agreement, the Company and Mr. Tran entered into a LLC Membership Interest Transfer Agreement, dated April 1, 2024, pursuant to which the Company transferred all of the membership interests in VoiceStep to Mr. Tran, effective as of April 2, 2024, in exchange exchange for Mr. Tran’s services with regards to winding down the VoiceStep business and the potential dissolution of VoiceStep.
The preceding summary of the LLC Membership Interest Transfer Agreement does not purport to be complete and is qualified in its entirety by reference to the LLC Membership Interest Transfer Agreement, a copy of which is filed as Exhibit 10.16 hereto and is incorporated herein by reference.
Employment Agreements
In connection with the Share Exchange Agreement, on April 1, 2024, the Company and Mr. Nguyen entered into an employment agreement (the “Nguyen Employment Agreement”).
Pursuant to the terms of the Nguyen Employment Agreement, Mr. Nguyen will receive an annualized base salary of one hundred and twenty thousand dollars ($120,000) and will be eligible for an annual incentive bonus as determined by the Board. In the event of Mr. Nguyen’s termination without “cause” (as defined in the Nguyen Employment Agreement) he will be entitled to severance of two months of base salary continuation, payable in substantially equal monthly installments over a period of two (2) months following Mr. Nguyen’s termination.
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The description of the Nguyen Employment Agreement in this Item 1.01 is qualified in its entirety by reference to the terms of the Nguyen Employment Agreement, which is filed as Exhibit 10.17 hereto and is incorporated herein by reference.
On April 1, 2024, the Board appointed Mr. Tan Tran as Chief Strategy Officer of the Company. On April 1, 2024, the Company and Mr. Tran entered into an employment agreement (the “Tran Employment Agreement”).
Pursuant to the terms of the Tran Employment Agreement, Mr. Tran will receive a salary of $540,000 (the “Base Salary”) for a term of three (3) years, payable at the rate of $180,000 per year, and will be eligible for an annual incentive bonus as determined by the Board. In the event of Mr. Tran’s termination without “cause” (as defined in the Tran Employment Agreement) he will be entitled to receive the remaining unpaid portion of his Base Salary, if any, payable in a lump sum on the date of termination.
The description of the Tran Employment Agreement in this Item 1.01 is qualified in its entirety by reference to the terms of the Tran Employment Agreement, which is filed as Exhibit 10.18 hereto and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth under Item 1.01 above is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Items 1.01 above is incorporated herein by reference.
The issuance of the Series A Preferred Stock and the Series B Preferred Stock pursuant to the Stock Exchange Agreement was not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Regulation D promulgated by the SEC under that section. These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement and are subject to further contractual restrictions on transfer as described below.
Item 5.01 Changes In Control of Registrant.
The information set forth in Item 1.01 above is incorporated herein by reference.
As more fully described in Item 1.01 above, as consideration for all of the equity interests in VinHMS the Company issued (i) forty million (40,000,000) shares of Series A Preferred Stock in the aggregate to the Shareholders, consisting of fourteen million (14,000,000) shares to Mr. Nguyen and twenty-six million (26,000,000) shares to Asian Star; and (ii) nine million two hundred thousand (9,200,000) shares of Series B Preferred Stock to the Shareholders, with three million two hundred and twenty thousand (3,220,000) shares to Mr. Nguyen and five million nine hundred and eighty thousand (5,980,000) shares to Asian Star. Upon these issuances, Asian Star gained voting control over more than fifty-six percent (56%) of the Common Stock on an as-converted, fully diluted basis. As a result, Asian Star is able to unilaterally control the election of the Board, all matters upon which shareholder approval is required and, ultimately, the direction of the Company.
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The Shareholders and Mr. Tran may convert their shares of Series B Preferred Stock into Common Stock at any time after the expiration of the Lock-Up Agreement. Their ability to convert is restricted by the terms of the Series B Preferred Stock, in that the Company may refuse to convert any portion of Series B Preferred Stock to the extent that after giving effect to such conversion, any such holder, together with any affiliate thereof, would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, in excess of 9.99% of the number of shares of Common Stock outstanding, immediately after giving effect to such conversion.
In addition, once Mr. Nguyen’s appointment to the Board becomes effective, the Company will have changed more than fifty percent (50%) of the members of the Board as discussed in more detail in Item 1.01 above.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth in Item 1.01 above is incorporated herein by reference.
Mr. Nguyen, age 45, serves as the Chief Executive Officer of VinHMS Software Production and Trading Joint Stock Company (Vietnam), a software company that specializes in providing high-quality technology products for optimizing the business activities of enterprises, a position he has held form December of 2018 to the present. Before founding VinHMS (Vietnam), Hoang was the first Solution Architect of Amazon Web Services Vietnam, responsible for helping Vietnamese organizations of all shapes and sizes to architect advanced cloud-based solutions. Prior to AWS in 2017, he spent five (5) years as founder and CEO of Simple Solutions, the only ASEAN startup that was funded by Coca-Cola Founders, an entrepreneurship program designed by Coca-Cola to help founders build & scale startups. Prior to these roles, Hoang was the CTO/Founder of Sysnify in Houston, a startup that provided management solutions for United Supermarket, a supermarket chain with more than 90 stores in Texas. Hoang also spent close to 10 years in Houston building enterprise applications for Fortune 500 corporations such as BP, HP, American Airlines, NASCAR and Delhaize. Mr. Nguyen holds a B.S. degree from the University of Polytechnics in Vietnam and a M.S. degree from the University of Houston-Clear Lake.
Ms. Le has served as the Deputy Chief Executive Officer responsible for Information Technology at VinFAST Auto Ltd. since October 2022. She has also served as Chief Executive Officer of VIN3S Joint Stock Company since May 2021 and Chief Information Officer at Vingroup Joint Stock Company from November 2015 to May 2021. Prior to these roles, Ms. Le was Country Leader at Deloitte Consulting Vietnam from January 2011 to November 2015 and Senior Manager at Deloitte Consulting Southeast Asia from January 2005 to January 2011. She received her bachelor’s degree in English linguistics from Vietnam National University Ho Chi Minh City.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
As permitted by Item 9.01(a)(3) of Form 8-K, the financial statements required by Item 9.01(a) of Form 8-K will be filed by the registrant by an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
(b) Pro Forma Financial Information.
As permitted by Item 9.01(b)(2) of Form 8-K, the pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by the registrant by an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
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(d) Exhibits
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| Employment Agreement, dated April 1, 2024, by and between Vemanti Group, Inc. and Mr. Tan Tran. | |
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| Inline XBRL for the cover page of this Current Report on Form 8-K |
* Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2) or 601(a)(5), as applicable. The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.
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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 thereunto duly authorized.
| VEMANTI GROUP, INC. |
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Dated: April 5, 2024 | By: | /s/ Tan Tran |
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| Name: | Tan Tran |
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| Title: | Chief Strategy Officer |
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EXHIBIT 2.1
EXECUTION VERSION
SHARE EXCHANGE AGREEMENT
BY AND AMONG
VEMANTI GROUP, INC.,
MR. TAN TRAN,
VINHMS PTE. LTD.,
AND
THE SHAREHOLDERS OF VINHMS PTE. LTD.
Dated as of April 1, 2024
TABLE OF CONTENTS
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| ARTICLE I DEFINITIONS | 2 | ||
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| 1.1 | Certain Defined Terms | 2 |
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| 1.2 | Definitions | 7 |
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| 1.3 | Interpretation and Rules of Construction | 8 |
| ARTICLE II DESCRIPTION OF TRANSACTION | 9 | ||
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| 2.1 | The Transactions; Exchange of Shares | 10 |
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| 2.2 | Exemption from Registration; Rule 144 | 10 |
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| 2.3 | The Closing | 10 |
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| 2.4 | Actions at the Closing | 10 |
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| 2.5 | Effect of Exchange | 12 |
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER | 12 | ||
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| 3.1 | Due Organization and Good Standing | 12 |
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| 3.2 | Title to Securities; Capitalization | 13 |
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| 3.3 | Authorization | 14 |
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| 3.4 | Governmental Approvals | 14 |
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| 3.5 | No Conflict | 14 |
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| 3.6 | Financial Statements; Books and Records | 14 |
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| 3.7 | Absence of Certain Changes | 15 |
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| 3.8 | Absence of Undisclosed Liabilities | 15 |
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| 3.9 | Compliance with Laws | 16 |
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| 3.10 | Regulatory Agreements; Permits | 16 |
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| 3.11 | Litigation | 16 |
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| 3.12 | Restrictions on Business Activities | 16 |
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| 3.13 | Material Contracts | 17 |
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| 3.14 | Intellectual Property | 17 |
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| 3.15 | Data Privacy | 19 |
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| 3.16 | Employee Benefit Plans | 19 |
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| 3.17 | Employee Matters | 19 |
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| 3.18 | Taxes and Returns | 20 |
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| 3.19 | Title to Properties; Assets | 21 |
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| 3.20 | Transactions with Affiliates | 22 |
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| 3.21 | Insurance | 22 |
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| 3.22 | Accounts Receivable | 22 |
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| 3.23 | Investment Company Act | 22 |
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| 3.24 | Information Supplied | 22 |
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| 3.25 | Anti-Bribery; Anti-Corruption and Anti-Money Laundering | 23 |
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| 3.26 | Sanctions, Import, and Export Controls | 23 |
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| 3.27 | Finders and Brokers | 23 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 24 | ||
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| 4.1 | Organization and Qualification | 24 |
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| 4.2 | Title to Securities; Capitalization | 24 |
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| 4.3 | Authorization | 25 |
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| 4.4 | Governmental Approvals | 25 |
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| 4.5 | No Conflict | 26 |
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| 4.6 | No Litigation | 26 |
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| 4.7 | Absence of Certain Changes | 26 |
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| 4.8 | Absence of Undisclosed Liabilities | 26 |
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| 4.9 | Compliance with Laws | 26 |
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| 4.10 | Investment Company Act | 26 |
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| 4.11 | SEC Filings; Financial Statements | 27 |
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| 4.12 | Contracts | 27 |
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| 4.13 | Taxes | 28 |
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| 4.14 | Finders and Brokers | 29 |
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| 4.15 | Information | 29 |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS | 29 | ||
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| 5.1 | Seller Securities | 29 |
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| 5.2 | Power and Authority | 29 |
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| 5.3 | No Conflicts | 30 |
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| 5.4 | Purchase Entirely for Own Account | 30 |
| ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY PREFERRED SHAREHOLDER | 30 | ||
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| 6.1 | Series A Preferred Stock | 30 |
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| 6.2 | Power and Authority | 31 |
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| 6.3 | No Conflicts | 31 |
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| 6.4 | Purchase Entirely for Own Account | 31 |
| ARTICLE VII COVENANTS | 31 | ||
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| 7.1 | Tax Matters | 31 |
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| 7.2 | Regulatory Matters; Cooperation | 31 |
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| 7.3 | Sale of Subsidiary | 32 |
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| 7.4 | Repayment of Founder Debt | 32 |
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| 7.5 | Intercompany Services Agreement | 32 |
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| 7.6 | Further Assurances | 32 |
| ARTICLE VIII SURVIVAL AND INDEMNIFICATION | 32 | ||
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| 8.1 | Survival | 32 |
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| 8.2 | Indemnification | 33 |
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| 8.3 | Limits on Indemnification | 33 |
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| 8.4 | Notice of Loss; Third Party Claims | 34 |
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| 8.5 | Indemnification Payments | 34 |
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| 8.6 | Exclusive Remedy | 35 |
| ARTICLE IX MISCELLANEOUS | 35 | ||
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| 9.1 | Expenses | 35 |
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| 9.2 | Notices | 35 |
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| 9.3 | Severability | 36 |
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| 9.4 | Entire Agreement | 36 |
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| 9.5 | Assignment | 37 |
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| 9.6 | Amendment | 37 |
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| 9.7 | Waiver | 37 |
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| 9.8 | Third Parties | 37 |
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| 9.9 | Specific Performance | 37 |
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| 9.10 | Governing Law; Jurisdiction | 38 |
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| 9.11 | Waiver of Jury Trial | 38 |
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| 9.12 | Counterparts | 38 |
Schedules
Schedule A-1 – List of Shareholders and Number of Series B Preferred Stock and the Series A Preferred Stock to be Received.
Schedule 1.1(a) – Licensed Intellectual Property
Schedule 1.1(b) – Owned Intellectual Property
Schedule 1.1(c) – Key Personnel
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SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (this “Agreement”) is made and entered into as of April 1, 2024, by and among Vemanti Group, Inc., a Nevada corporation (the “Company”), Mr. Tan Tran, the sole holder of the Company’s Series A Preferred Stock (as defined herein) (the “Company Preferred Shareholder”), VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”), and the shareholders of the Seller listed on Schedule A-1 attached hereto (collectively, the “Shareholders”). The Company, the Company Shareholder, the Seller and the Shareholders are collectively referred to herein as the “Parties” and individually as a “Party.”
WHEREAS, the Company is a publicly reporting company organized under the laws of the State of Nevada;
WHEREAS, the Shareholders collectively own One Hundred Percent (100%) of the issued and outstanding equity securities of the Seller consisting of ordinary shares (the “Seller Securities”);
WHEREAS, the Company Preferred Shareholder owns One Hundred Percent (100%) of the shares of Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”);
WHEREAS, subject to the terms and conditions of this Agreement, the Company Preferred Shareholder and the Company desire to effect a transaction whereby the Company Preferred Shareholder contributes all of the shares of Series A Preferred Stock owned by him, and all of his rights with respect to such Series A Preferred Stock, to the Company for in exchange for that number of Series B Preferred Stock set forth in Section 2.1(c);
WHEREAS, subject to the terms and conditions of this Agreement, the Parties desire to effect a transaction whereby the Shareholders transfer, assign and deliver all of the Seller Securities owned by them, and all of their rights with respect to such Seller Securities, to the Company in exchange for (i) that number of Series B Preferred Stock set forth in Section 2.1(b) with the result of the Seller becoming a wholly-owned subsidiary of the Company and (ii) all of the shares of Series A Preferred Stock contributed by the Company Preferred Shareholder to the Company;
WHEREAS, the board of directors of the Company and the board of directors of the Seller, respectively, have approved this Agreement and each of them has determined that this Agreement, the Exchange and the other transactions contemplated hereby are advisable and in the respective best interests of each of the Company and the Seller and their respective shareholders;
WHEREAS, contemporaneously with the execution of, and as a condition and an inducement to the Parties to enter into this Agreement, the Company is entering into and delivering new employment agreements with the Key Personnel (the “Employment Agreements”), pursuant to which, among other things, the Company shall retain the services of the Key Personnel after the Closing (as defined herein); and
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WHEREAS, contemporaneously with the execution of, and as a condition and an inducement to the Parties to enter into this Agreement, the Company, the Shareholders and the Company Preferred Shareholders will enter into a lock-up agreement and a registration rights agreement related to the newly issued Series B Preferred Stock (the “Lock-Up Agreement” and the “Registration Rights Agreement”, respectively).
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the receipt and sufficiency of which the Parties hereby acknowledge, the Parties hereby agree as follow:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms.
For purposes of this Agreement, the following capitalized terms have the following meanings, unless otherwise specified herein:
“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.
“Affiliate,” means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.
“Base Exchange Ratio” means 26 shares of Common Stock to one (1) share of Series B Preferred Stock.
“Business Day” means any day (a) other than a Saturday or a Sunday, (b) on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or (c) in the case of determining a date when any payment is due, any day on which banks in New York, New York, the Republic of Singapore or the Socialist Republic of Vietnam are not required or authorized by Law to be closed for business.
“Code” means the Internal Revenue Code of 1986, as amended through the date hereof.
“Company Disclosure Letter” means the Disclosure Letter attached hereto, delivered by the Company to the Seller in connection with this Agreement.
“Common Stock” means the Company’s common stock, par value $0.0001 per share.
“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien (including environmental and tax liens), violation, charge, lease, license, encumbrance, servient easement, adverse claim, reversion, reverter, preferential arrangement, restrictive covenant, condition or restriction of any kind, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
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“Exchange Act” means the Exchange Act of 1934, as amended.
“Expenses” means all out-of-pocket expenses (including all fees and expenses of counsel, accountants, experts and consultants to a party) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, any other documents related to the transactions herein, any filing required by any Governmental Authority and all other matters related to the closing of the transactions contemplated by this Agreement.
“FINRA” means the Financial Industry Regulatory Authority.
“GAAP” means generally accepted accounting principles as in effect in the United States of America.
“Governmental Authority” means any federal, national, supranational, state, provincial, local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination, rules or regulations, or award entered by or with, or entered by, any Governmental Authority.
“IFRS” means international financial reporting standards, as adopted by the International Accounting Standards Board.
“Indebtedness” of any Person means (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (c) all obligations of such Person under leases that should be classified as capital leases in accordance with GAAP or IFRS (as applicable to such Person), (d) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (e) all obligations of such Person in respect of acceptances issued or created, (f) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (g) all obligations secured by an Encumbrance on any property of such Person and (h) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (h) all obligation described in clauses (a) through (g) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss; provided, however, that Indebtedness shall not include accounts payable to trade creditors that are not past due and accrued expenses arising in the ordinary course of business consistent with past practice.
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“Intellectual Property” means all intellectual property rights and related priority rights protected, created or arising under the Laws of any jurisdiction or under any international convention, including all (a) patents and patent applications, industrial designs and design patent rights, including any continuations, divisionals, continuations-in-part and provisional applications and statutory invention registrations, and any patents issuing on any of the foregoing and any revisions, reissues, reexaminations, substitutes, supplementary protection certificates, or extensions of any of the foregoing; (b) trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, Internet domain names, social media accounts, corporate names and other source or business identifiers, together with the goodwill associated with any of the foregoing, and all applications, registrations, extensions and renewals of any of the foregoing; (c) copyrights and works of authorship and computer software, database and design rights (whether patentable or unpatentable), and rights in data collections, mask work rights and moral rights, whether or not registered or published, and all registrations, applications, renewals, extensions and reversions of any of any of the foregoing; (d) trade secrets, know-how and confidential and proprietary information, whether or not patentable, including invention disclosures, inventions, formulae, designs, discoveries, processes, research and development information, technical information, methods, techniques, procedures, specifications, operating and maintenance manuals, methods, and engineering drawings (collectively, “Trade Secrets”); (e) any other intellectual or proprietary rights protectable, arising under or associated with any of the foregoing, including those protected by any Law (including under international treaties or conventions) anywhere in the world; and (f) rights to sue and recover damages for past, present, and future infringement, misappropriation, or other violation of any of the foregoing.
“Key Personnel” means those employees designated by the Company as key personnel of the Company and whose name and title are listed on Schedule 1.1(c).
“Law” means any federal, national, foreign, supranational, state, provincial, local or administrative statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law) or a legally binding directive of, or issued by, a Governmental Authority.
“Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP, IFRS or other applicable accounting standards), including Tax liabilities due or to become due.
“Licensed Intellectual Property” means Intellectual Property that is licensed from a third party to the Seller and identified on Schedule 1.1(a).
“Organizational Documents” means (a) with respect to any person that is a corporation, its articles or certificate of incorporation, memorandum and articles of association, as applicable, and bylaws, or comparable documents, (b) with respect to any person that is a partnership, its certificate of partnership and partnership agreement, or comparable documents, (c) with respect to any Person that is a limited liability company, its certificate of formation and limited liability company or operating agreement, or comparable documents, (d) with respect to any Person that is a trust or other entity, its declaration or agreement of trust or other constituent document or comparable documents, and (e) with respect to any other Person that is not an individual, its comparable organizational documents.
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“Owned Intellectual Property” means the registered or unregistered Intellectual Property identified on Schedule 1.1(b) that is owned by the Seller.
“Permitted Encumbrances” means (a) Encumbrances for water and sewer charges, Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent, or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto; (b) other Encumbrances imposed by operation of Law (including mechanics’, couriers’, workers’, repairers’, materialmen’s, warehousemen’s, landlord’s and other similar Encumbrances) arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Encumbrances incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security, (d) Encumbrances on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, (e) title of a lessor under a capital or operating lease and the terms and conditions of a lease creating any leasehold interest, or (f) Encumbrances arising under this Agreement.
“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
“Personal Information” means all information in any form or media that identifies or could be used to identify an individual person (including any current, prospective, or former customer, end user or employee), in addition to any definition for “personal information” or any similar term provided by applicable Law or by the Seller in any of its privacy policies, notices or contracts (e.g., “personal data,” “personally identifiable information” or “PII”).
“Privacy Laws” means applicable Laws, and self-regulatory guidelines relating to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security (technical, physical or administrative), disposal, destruction, disclosure or transfer (including cross-border) of any Personal Information, any and all applicable Laws relating to breach notification, the use of biometric identifiers, and the use of Personal Information for marketing purposes.
“Privacy Requirements” means (i) all applicable Privacy Laws and (ii) all of the Seller’s public-facing policies and notices, and contractual obligations to which the Seller is bound as of the date hereof, relating to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security (technical, physical and administrative), disposal, destruction, disclosure, or transfer (including cross-border) of Personal Information.
“Representatives” means a party’s officers, managers, directors, employees, accountants, consultants, legal counsel, financial advisors, agents or other representatives.
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“Seller Material Adverse Effect” means any fact, condition, occurrence, development, event, circumstance, or change in or effect on the Seller that, individually or in the aggregate with all other facts, conditions, occurrences, developments, events, circumstances, or changes in or effects on the Seller: (a) is or would reasonably be expected to be materially adverse to the business, operations, assets or Liabilities (including contingent Liabilities), employee or independent contractor relationships, customer or supplier relationships, prospects, results of operations or the condition (financial or otherwise) of the Seller, or materially diminish the value of the Seller Securities; (b) does or would reasonably be expected to materially impair or delay the ability of the Seller to perform its respective obligations under this Agreement, including but not limited to all agreements and covenants to be performed or complied by it under the Agreement, or to consummate the transactions contemplated hereby; or (c) would reasonably be expected to materially and adversely affect the ability of the Company to operate or conduct the Seller’s business in the manner in which it is currently, or contemplated to be, operated or conducted by the Seller; provided, however, that none of the following, either alone or in combination, shall be considered in determining whether there has been a “Seller Material Adverse Effect”: (i) events, circumstances, changes or effects that generally affect the industries in which the Seller operates the business (including legal and regulatory changes), except to the extent the Seller is disproportionately affected thereby, or (ii) changes arising from the consummation of the transactions in accordance with the terms of this Agreement or the announcement of the execution of this Agreement; provided, further, however, and notwithstanding anything to the contrary set forth in this “Seller Material Adverse Effect” definition, any epidemic, plague, pandemic, or other outbreak of illness or public health event, including COVID-19, and any governmental orders, lock-downs, legal and regulatory changes related to such epidemic, plague, pandemic or other outbreak of illness or public health event, including COVID-19, are specifically excluded from clause (i) above and shall be considered in determining whether a “Seller Material Adverse Effect” has occurred.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller Disclosure Letter” means the Disclosure Letter attached hereto, dated hereof, delivered by the Seller to the Company in connection with this Agreement.
“Series B Preferred Stock” means that series of preferred stock of the Company designated as Series B Convertible Preferred Stock.
“Singapore Companies Act” means the Singapore Companies Act of 1967.
“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company or other organization, whether incorporated or unincorporated, which, directly or indirectly, is controlled by such Person.
“Tangible Personal Property” means machinery, equipment, tools, supplies, furniture, fixtures, personalty, vehicles, rolling stock and other tangible personal property, including software.
“Tax” or “Taxes” shall mean any all, tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, imposed by any Governmental Authority (including any federal, state, local, foreign or provincial capital gain, income, windfall profits, severance, gross receipts, property, sales, use, net worth, premium, license, excise, franchise, employment, payroll, social security, workers compensation, unemployment compensation, alternative or added minimum, ad valorem, transfer or excise tax) together with any interest, addition or penalty imposed thereon.
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“Transfer Taxes” means all transfer, documentary, sales, use, stamp, recording, value added, registration and other similar Taxes and all conveyance fees, recording fees and other similar charges.
“VinHMS Software” means VinHMS Software Production and Trading Joint Stock Company, a company organized and existing under the laws of Vietnam pursuant to Business Registration Certificate No. 0315396330.
1.2 Definitions.
The following terms have the meanings set forth in the Sections set forth below:
| Definition |
| Location |
| “Affiliate Transaction” ......................... |
| 3.20 |
| “Closing”............................................... |
| 2.3 |
| “Company”............................................ |
| Preamble |
| “Company Indemnified Party”.............. |
| 8.2(a) |
| “Company Indemnifying Party”............ |
| 8.2(b) |
| “Company Preferred Shareholder”........ |
| Recitals |
| “Company Preferred Shareholder Indemnifying Party” ….. |
| Recitals |
| “Exchange”............................................ |
| 2.1(a) |
| “Form 10-K” ......................................... |
| 4.2(b) |
| “Indemnified Party” .............................. |
| 8.3 |
| “Indemnifying Party”............................. |
| 8.3 |
| “Loss”.................................................... |
| 8.2(a) |
| “Registered Intellectual Property” ........ |
| 3.14(a) |
| “SEC Reports” ...................................... |
| 4.8(a) |
| “Security Incident” ............................... |
| 3.15(c) |
| “Seller” ................................................. |
| Preamble |
| “Seller Audited Financials .................... |
| 3.7(a) |
| “Seller Financials”................................. |
| 3.6(a) |
| “Seller Material Contracts”.................... |
| 3.13 |
| “Seller Permits” .................................... |
| 3.10(b) |
| “Series A Preferred Exchange” ............ |
| 2.1(c) |
| “Shareholders”....................................... |
| Preamble |
| “Shareholders Indemnifying Party”....... |
| 8.2(a) |
| “Shareholders Indemnified Party”......... |
| 8.2(b) |
| “Surviving Company”........................... |
| Recitals |
| “Tax Returns” ....................................... |
| 3.18(a) |
| “Third Party Claim”............................... |
| 8.4(b) |
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1.3 Interpretation and Rules of Construction.
(a) In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
(i) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or a Schedule or Exhibit to, this Agreement unless otherwise indicated;
(ii) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
(iii) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
(iv) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
(v) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;
(vi) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
(vii) any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such Law or statute as from time to time amended, modified or supplemented, including by succession of comparable successor Laws;
(viii) references to a Person are also to its successors and permitted assigns;
(ix) the use of “or” is not intended to be exclusive unless expressly indicated otherwise;
(x) references to sums of money are expressed in lawful currency of the United States of America, and “$” refers to U.S. dollars; and
(xi) the phrases “furnished,” “provided,” “delivered” or “made available” to a Party, or similar formulations, when used with respect to information or documents means that such information or documents have been (i) physically or electronically delivered directly to a party's legal counsel or financial advisors prior to such time or available to such party (without material redactions) in the electronic data room hosted by the providing party in connection with the transactions contemplated herein, or (ii) are the Company's SEC Reports and have been made publicly available on the SEC's EDGAR website by the Company and, in each of clause (i) and (ii), not later than forty-eight (48) hours prior to the execution of this Agreement (and continuously available to such party and its legal counsel and financial advisors through the date hereof).
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Notwithstanding anything to the contrary contained in the Disclosure Letters, or in this Agreement, the information and disclosures contained in any Section of a Disclosure Letter shall be deemed to be disclosed and incorporated by reference in each other Section of such Disclosure Letter as though fully set forth in such other Section to the extent the relevance of such information to such other Section is reasonably apparent from reading the disclosure (without knowledge of any facts not set forth on the face of such disclosure). Certain items and matters are listed in the Disclosure Letters for informational purposes only and may not be required to be listed therein by the terms of this Agreement. In no event shall the listing of items or matters in a Disclosure Letter be deemed or interpreted to broaden, or otherwise expand the scope of, the representations and warranties or covenants contained in this Agreement. No reference to, or disclosure of, any item or matter in any Section of this Agreement, or any Section of a Disclosure Letter shall be construed as an admission or indication that such item or matter is material or that such item or matter is required to be referred to or disclosed in this Agreement or in such Disclosure Letter. Without limiting the foregoing, no such reference to or disclosure of a possible breach or violation of any contract or agreement, Law or Governmental Order shall be construed as an admission or indication that a breach or violation exists or has actually occurred.
ARTICLE II
DESCRIPTION OF TRANSACTION
2.1 The Transactions; Exchange of Shares.
(a) Upon the terms and subject to the conditions of this Agreement, and without any action on the part of the holder thereof, each Shareholder hereby irrevocably assigns, transfers and delivers to the Company, free and clear of all Encumbrances, each Seller Security held by such Shareholder as legal and beneficial owner as set forth opposite such Shareholders name on Schedule A-1 and any and all rights associated with such Seller Securities held by such Shareholder, in exchange for that number of newly issued, fully paid and non-assessable Series B Preferred Stock as determined in accordance with Section 2.1(b) (the “Exchange”).
(b) All Seller Securities issued and outstanding and held by the Shareholders as of immediately prior to the date hereof shall be automatically converted at the Closing into the right to receive ninety-two percent (92%) of Series B Preferred Stock with a conversion ratio equal to the Base Exchange Ratio with any fractional shares of Series B Preferred Stock rounded down to the nearest whole share for no additional consideration. Each Shareholder shall receive a pro rata portion of the such number of Series B Preferred Stock based upon the total number of Seller Securities held by such Shareholder and as set forth opposite their name on Schedule A-1.
(c) Upon the terms and subject to the conditions of this Agreement, and without any action on the part of the holder thereof, the Company Preferred Shareholder hereby irrevocably assigns, and transfers and delivers to the Company all shares of Series A Preferred Stock held by him as legal and beneficial owner and any and all rights associated with such Series A Preferred Stock held by him in exchange for the right to receive eight percent (8%) of Series B Preferred Stock with a conversion ratio equal to the Base Exchange Ratio with any fractional shares of Series B Preferred Stock rounded down to the nearest whole share for no additional consideration. (collectively, the “Series A Preferred Exchange”).
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(d) Upon the terms and subject to the conditions of this Agreement, immediately after the Series A Preferred Exchange is completed, the Company shall issue all of the authorized shares of Series A Preferred Stock to the Shareholders on pro rata basis as set forth opposite their name on Schedule A-1.
(e) From and after the Closing, the Shareholders shall be shareholders of the Company and shall have no rights or interest as a shareholder of the Seller.
2.2 Exemption from Registration; Rule 144.
(a) The Company, the Company Preferred Shareholder and the Shareholders intend that the Series B Preferred Stock and the Series A Preferred Stock will be issued in transactions exempt from registration under the Securities Act, by reason of Section 4(a)(2) of the Securities Act, and will be “restricted securities” within the meaning of Rule 144 under the Securities Act, and may not be offered, sold, pledged, assigned or otherwise transferred unless (i) a registration statement with respect thereto is effective under the Securities Act and any applicable state securities laws, or (ii) an exemption from such registration exists and if requested, the holder of such securities delivers an opinion of counsel to the Company, which counsel and opinion are satisfactory to the Company, that such securities may be offered, sold, pledged, assigned or transferred in the manner contemplated without an effective registration statement under the Securities Act or applicable state securities laws; and the certificates representing such shares will bear an appropriate legend restriction on the books of Company’s transfer agent to that effect.
2.3 The Closing.
Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place remotely, via electronic exchange of documents, or, if or to the extent such an exchange is not practicable, at a Closing, at the offices of Tilleke & Gibbins, in Ho Chi Minh City, Vietnam at Viettel Tower A, 25th Floor, Suite 2506, 285 Cach Mang Thang Tam, District 10, simultaneously with the execution of this Agreement.
2.4 Actions at the Closing.
Simultaneously with the execution of this Agreement or as with regard to the transfer of securities as soon thereafter as is practicable:
(a) The Seller shall deliver to the Company (i) a copy of a certificate of good standing (or similar documents applicable for such jurisdictions) for the Seller, certified as of a date no later than five (5) Business Days prior to the date hereof from the proper Governmental Authority of the Seller's jurisdiction of organization; and (ii) a certificate from the Seller’s secretary or director certifying as to the validity and effectiveness of, and confirming delivery of, (x) copies of the Seller’s Organizational Documents as in effect as of the date hereof, (y) copies of the resolutions of its board of directors and the Shareholders authorizing the execution, delivery and performance of this Agreement and each document to which they are a party or bound, and the consummation of the Exchange, the Series A Preferred Exchange and each of the transactions contemplated hereby, and (z) the incumbency of directors authorized to execute this Agreement or any other document to which the Seller is or is required to be a party or otherwise bound.
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(b) The Company shall deliver to the Seller (i) a copy of a certificate of good standing for the Company, certified as of a date no later than five (5) Business Days prior to the date hereof from the proper Governmental Authority of the Company’s jurisdiction of organization; and (ii) a certificate from the Company’s secretary or authorized officer certifying as to the validity and effectiveness of, and confirming delivery of, (x) copies of the Company’s Organizational Documents as in effect as of the date hereof, (y) copies of the resolutions of its board of directors authorizing the execution, delivery and performance of this Agreement and each document to which it is a party or bound, respectively, and the consummation of the Exchange, the Series A Preferred Exchange and each of the transactions contemplated hereby, including the appointment of the individuals nominated by the Seller as the directors and Mr. Hoang Nguyen as the Chief Executive Office of the Company with immediate effect at Closing, and (z) the incumbency of officers or directors authorized to execute this Agreement or any other document to which the Company is or is required to be a party or otherwise bound.
(c) Each of the Shareholders shall deliver to the Company the certificate(s) representing their Seller Securities owned by each such Shareholder, duly endorsed or accompanied by stock powers duly executed in blank and otherwise in a form acceptable for transfer on the books of the Company, such certificates may be delivered to the Company’s registrar or transfer agent.
(d) The Company shall deliver to the Shareholders a copy of the transfer agent instruction letter that instructs the Company’s stock transfer agent to issue the Series B Preferred Stock in book entry form to the Shareholders calculated in accordance with Section 2.1(b).
(e) The Company Preferred Shareholder shall deliver to the Company the cancellation request and executed agreements as needed for surrendering of all of the Series A Preferred Stock owned by him on the books of the Company, such cancellation request may be delivered to the Company’s transfer agent.
(f) The Company shall deliver to the Shareholders a copy of the transfer agent instruction letter that instructs the Company’s stock transfer agent to issue all authorized shares of the Series A Preferred Stock in book entry form to the Shareholders.
(g) The Company shall deliver to the Company Preferred Shareholder a copy of the transfer agent instruction letter that instructs the Company’s stock transfer agent to issue the Series B Preferred Stock in book entry form to the Company Preferred Shareholder calculated in accordance with Section 2.1(c).
(h) The Company shall deliver to the Seller a copy of the written resignation of Mr. Tan Tran from his position as Chief Executive Officer of the Company.
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(i) The Shareholders and the Company Preferred Shareholder shall deliver to the Company counterparts duly executed by them to the Lock-Up Agreement and the Registration Rights Agreement.
(j) The Company shall deliver to the Seller duly executed copies of the Employment Agreements.
(k) The Company and the Company Preferred Shareholder shall deliver validly executed transfer documents in accordance with Section 7.3 dated as of the date hereof and effective as of the next Business Day after the date hereof.
2.5 Effect of Exchange.
(a) The board of directors of the Company shall be expanded and consist of the following Persons: Mr. Hoang Nguyen, Mr. Tan Tran, Ms. Le Mai Tuyet Trinh effective as of the Closing.
(b) At the Closing, Mr. Tan Tran shall resign as Chief Executive Officer, and the Company Board shall appoint Mr. Hoang Nguyen as Chief Executive Officer effective as of the Closing.
(c) The Seller will continue to conduct its business as a wholly-owned subsidiary of the Company.
(d) The Organizational Documents of the Seller in effect at the Closing shall continue as the Organizational Documents of the Seller.
(e) From and after the Closing, the directors and the executive officers of the Seller immediately prior to the Closing shall continue to serve as the directors and the executive officers of the Seller until their successors are duly appointed or elected.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller and the Shareholders hereby represent and warrant to the Company and the Company Preferred Shareholder, subject to such exceptions as are disclosed in the Seller Disclosure Letter:
3.1 Due Organization and Good Standing.
(a) The Seller is a corporation duly incorporated, validly existing, and, the extent such concept is applicable, in good standing under the Laws of the Republic of Singapore. The Seller has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and, to the extent such concept is applicable, is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification.
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(b) The Seller has made available to the Company complete and correct copies of the Seller’s Organizational Documents, each in full force and effect as of immediately prior to the execution and delivery of this Agreement. The Seller is not in violation of any of its Organizational Documents in any material respect.
(c) The Seller has no Subsidiaries.
3.2 Title to Securities; Capitalization.
(a) The paid-in capital of the Seller is Ten Thousand dollars ($10,000). All of the outstanding Seller Securities are listed on Schedule A-1 and were duly authorized, validly issued, fully paid and nonassessable, and free of Encumbrances. None of the Seller Securities are subject to, or issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of applicable Law, any of the Seller’s Organizational Documents, or any contract to which the Seller is a party or by which the Seller is bound. There are no outstanding contractual obligations of the Seller to repurchase, redeem or otherwise acquire any of the Seller Securities or any capital equity of the Seller and there are no outstanding contractual obligations of the Seller to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. None of the outstanding Seller Securities has been issued in violation of any applicable securities Laws.
(b) There are no (i) outstanding options, puts, calls, convertible securities, preemptive or similar rights, outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Seller, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights, or (iii) except as expressly contemplated by this Agreement, subscriptions or other rights, agreements, arrangements, contracts or commitments of any character, relating to the issued or unissued capital equity of the Seller obligating the Seller to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options, equity securities or securities convertible into or exchangeable for such securities, or obligating the Seller to grant, extend or enter into any option, warrant, call, subscription or other right, agreement, arrangement or commitment for such securities.
(c) There are no registration rights and there is no voting trust, proxy, rights plan, shareholder’s agreement, anti-takeover plan or other contracts or understandings to which the Seller or any Shareholder is a party or by which the Seller or any Shareholder is bound with respect to any of the capital stock of the Seller. Except as set forth in this Agreement, as a result of the consummation of the Exchange and the Series A Preferred Exchange, no shares of capital stock, warrants, options or other securities of the Seller are issuable and no rights in connection with any shares, warrants, rights, options or other securities of the Seller accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
(d) The Seller has no Indebtedness.
(e) Since its formation, the Seller has not made, declared or paid any distribution or dividend and has not repurchased, redeemed or otherwise acquired any of its securities or equity interests, and its board of directors has not authorized any of the foregoing.
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3.3 Authorization.
The Seller has all necessary corporate power and to enter into this Agreement and any other transaction document to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Seller of this Agreement, and any other transaction document to which it is a party, the performance by the Seller of its obligations hereunder and thereunder, and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Seller. This Agreement, and any other transaction document to which it is a party, has been duly executed and delivered by the Seller, and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
3.4 Governmental Approvals.
No notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Authority necessary for the execution, delivery and performance by the Seller or the Shareholders of this Agreement or the consummation by the Seller or the Shareholders of the transactions contemplated by this Agreement.
3.5 No Conflict.
The execution and delivery by the Seller of this Agreement, the consummation by the Seller of the transactions contemplated hereby, and compliance by the Seller with any of the provisions hereof, will not, (i) conflict with or violate any provision of Seller’s Organizational Documents, (ii) require any consent, approval, waiver, or notice to, or result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, amendment or acceleration) under, any Seller Material Contract, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, a right acceleration under, give rise to any obligation to make payments or provide compensation under, or result (immediately or with the passage of time or otherwise) in the creation or imposition of any Encumbrances (as hereafter defined) upon any of the properties, rights or assets of the Seller, or (iv) subject to obtaining the consents from Governmental Authorities referred to in Section 3.4 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such consent, approval, authorization or waiver having been satisfied, conflict with or violate any Law or Governmental Order to which the Seller any of its assets or properties is subject.
3.6 Financial Statements; Books and Records.
(a) As used herein, the term “Seller Financials” means (i) the audited financial statements of the Seller, consisting of the statements of financial position of the Seller from its formation to December 31, 2023, and (ii) the audited financial statements of the Seller’s accounting predecessor, VinHMS Software, consisting of the statements of financial position of VinHMS Software as of December 31, 2022 and December 31, 2023. The Seller Financials (i) when delivered will have been prepared from and in accordance, in all material respects, with the Seller’s or VinHMS Software’s books and records, as applicable, as of the times and for the periods referred to therein, and (ii) were prepared in accordance with IFRS, methodologies applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), (iii) fairly present in all material respects the consolidated financial position of the Seller or VinHMS Software, as applicable, as of the respective dates thereof and the consolidated results of the Seller’s or VinHMS Software’s, as applicable, operations and cash flows for the periods indicated, and (iv) to the extent required for inclusion in the filings with the SEC, will comply as of the date hereof in all material respects with the Securities Act, Regulation S-X and the published general rules and regulations of the SEC.
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(b) The Seller maintains a system of internal accounting controls that are sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability; (iii) access to property is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(c) All of the financial books and records of the Seller are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws.
(d) Since the incorporation of the Seller, neither the Seller (including any director, officer or employee thereof) nor the Seller’s independent auditors has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by the Seller, or (ii) any fraud, whether or not material, that involves the Seller’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Seller, nor has any written complaint, allegation, assertion or claim regarding any of the foregoing or that the Seller has engaged in questionable accounting or auditing practices been received by the Seller.
3.7 Absence of Certain Changes.
Since December 31, 2023, the Seller has conducted its businesses in the ordinary course of business consistent with past practice and then has not been any fact, change, effect, occurrence, event, development or state of circumstances that has had or would reasonably be expected to have a Seller Material Adverse Effect.
3.8 Absence of Undisclosed Liabilities.
The Seller is not subject to any Liabilities or obligations that are not adequately reflected or reserved on or provided for in the Seller Financials, other than (i) Liabilities or obligations of the type that have been incurred in the ordinary course of business consistent with past practice, and (ii) Liabilities or obligations under the payment terms of Seller Material Contracts (but not including Liabilities for breaches or for indemnification obligations thereunder), or (iii) that would not, individually or in the aggregate, reasonably be expected to be material to the Seller.
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3.9 Compliance with Laws.
The Seller is not in conflict with, or in default or violation of, nor have any of them received, since its formation, any written notice of any conflict with, or default or violation of, (i) any applicable Law by which it or any property or asset of the Seller is bound or affected, including, without limitation, consumer protection, insurance or securities Laws, or (ii) any Seller Material Contract.
3.10 Regulatory Agreements; Permits.
(a) There are no material written agreements, memoranda of understanding, commitment letters, or Governmental Orders to which Seller is a party, on the one hand, and any Governmental Authority is a party or addressee, on the other hand.
(b) The Seller holds all material permits, licenses, franchises, grants, authorizations, consents, exceptions, variances, exemptions, orders and other authorizations of Governmental Authorities, certificates, consents and approvals necessary to lawfully conduct the Seller’s business as presently conducted, and to own, lease and operate the Seller’s assets and properties (collectively, the “Seller Permits”), except for any such permits, licenses, franchises, grants, authorizations, consents, exceptions, variances, exemptions, certificates and approvals, the failure of which to obtain would not be reasonably expected to result in a Seller Material Adverse Effect. The Seller has made available to the Company true, correct and complete copies of all material Seller Permits. All of the Seller Permits are in full force and effect, and no suspension or cancellation of any of Seller Permit is pending or, to the knowledge of the Seller, threatened. The Seller is not in violation in any material respect with the terms of any Seller Permit.
3.11 Litigation.
There is no material Action, or, to the knowledge of the Seller, threatened against the Seller or its properties, rights or assets or any of its managers, officers or directors (in their capacities as such). There is no Governmental Order binding against the Seller or any of its properties, rights or assets or any of its managers, officers or directors (in their capacities as such) that would prohibit, prevent, enjoin, restrict or alter or delay any of the transactions contemplated by this Agreement. The Seller is in compliance with all Governmental Orders. The Seller has no material Actions pending against other parties. There is no Action pending or, to the knowledge of the Seller, threatened against the Seller involving a claim against the Seller for false advertising with respect to any of the Seller’s products or services. Since the date of formation of the Seller, none of its current or former officers, managers or directors have been charged with, indicted for, arrested for, or convicted of any felony or any crime involving fraud.
3.12 Restrictions on Business Activities.
There is no Governmental Order binding upon the Seller that has or would reasonably be expected to have the effect of prohibiting, preventing, restricting or impairing in any respect, any business practice of the Seller as its business is currently conducted, any acquisition of property by the Seller, the conduct of business by the Seller as currently conducted, or the ability of the Seller to compete with other parties.
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3.13 Material Contracts.
(a) Section 3.13(a) of the Seller Disclosure Letter sets forth a true, correct and complete list of, and the Seller has made available to the Company, true, correct and complete copies of, each written contract, agreement, commitment, arrangement, lease, license, or plan and each other instrument in effect to which the Seller is a party or by which the Seller or any of its properties or assets are bound or affected (each, a “Seller Material Contract”).
(b) With respect to each Seller Material Contract: (i) such Seller Material Contract is valid and binding and enforceable in all respects against the Seller, and, to the knowledge of the Seller, the other party thereto, are in full force and effect; (ii) the consummation of the transactions contemplated by this Agreement will not affect the validity or enforceability of the Seller Material Contract against the Seller and, to knowledge of the Seller, the other party thereto; (iii) the Seller is not in breach or default in any respect, and no event has occurred that with the passage of time or giving of notice or both would constitute a breach or default by the Seller, or permit termination or acceleration by the other party thereto, under such Seller Material Contract; (iv) to the knowledge of the Seller, no other party to such Seller Material Contract is in breach or default in any respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Seller, under such Seller Material Contract, (v) no other party to such Seller Material Contract has notified the Seller in writing that it is terminating or considering terminating the handling of its business by the Seller or in respect of any particular product, project or service of the Seller, or is planning to materially reduce its future business with the Seller in any manner; and (vi) the Seller has not waived any rights under such Seller Material Contract.
3.14 Intellectual Property.
(a) Section 3.14(a) of the Seller Disclosure Letter sets forth a list of, as of the date hereof, all Owned Intellectual Property that is the subject of any registration, issuance, or application for registration or issuance, with any Governmental Authority or Internet domain name registrar (specifying for each such item (i) the record owner (and, if different from the record owner, the beneficial owner), (ii) the jurisdiction in which such item has been issued, registered or filed, (iii) the issuance, registration or application date and (iv) the issuance, registration or application number) (any Intellectual Property set forth or required to be set forth on Section 3.14(a) of the Seller Disclosure Letter, collectively, the “Registered Intellectual Property”).
(b) All Registered Intellectual Property that is material to the Seller’s business is subsisting, and, to the Knowledge of the Seller, valid and enforceable. To the knowledge of the Seller, none of the Registered Intellectual Property has been or is subject to any interference, derivation, reexamination, including ex parte reexamination, inter partes reexamination, inter partes review or post grant review, cancellation or opposition proceeding.
(c) The Seller solely and exclusively owns all rights, title and interest in and to the Owned Intellectual Property, in each case, free and clear of all Encumbrances (other than Permitted Encumbrances) and to the knowledge of the Seller, it has valid and enforceable rights to use and exploit, pursuant to a written contract, all other Intellectual Property (except for such other Intellectual Property in the public domain for which no license is necessary) used or practiced by the Seller’s business that is material to the Seller’s business. The Owned Intellectual Property and Licensed Intellectual Property constitutes all Intellectual Property (except for such other Intellectual Property in the public domain for which no license is necessary) used in, and necessary and sufficient for, the conduct and operation of the Seller’s business, as currently conducted; provided, that the foregoing representation shall not in any way be construed as a representation of non-infringement or other violation of the Intellectual Property rights of any Person.
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(d) To the knowledge of the Seller, since its formation the conduct of the Seller, the Seller’s business, or any Owned Intellectual Property has not infringed, misappropriated (or constituted or resulted from a misappropriation of), or otherwise violated, or is infringing, misappropriating (or constitutes or results from the misappropriation of), or otherwise violating any Intellectual Property of any Person. To the knowledge of the Seller, the Seller has not received from any Person since its formation any written notice charge, complaint, claim or other assertion: (i) of any infringement, misappropriation or other violation of any Intellectual Property of any Person or (ii) challenging the ownership, use, validity or enforceability of any Owned Intellectual Property, in each case of clauses (i) and (ii) that is material to the Seller’s business as currently conducted.
(e) To the knowledge of the Seller, no other Person has infringed, misappropriated, diluted or violated, or is infringing, misappropriating, diluting or violating, any Owned Intellectual Property or any Licensed Intellectual Property exclusively licensed to the Seller, in each case, that is material to the Seller’s business. No such claims have been made in writing or otherwise made against any Person by the Seller since its formation.
(f) The Seller has taken and currently takes reasonably adequate and commercially reasonable steps to maintain the secrecy and confidentiality of all Trade Secrets included in the Owned Intellectual Property and all Trade Secrets of any Person to whom, the Seller, has a confidentiality obligation with respect to such Trade Secrets. No Trade Secret material to the Seller’s business has been authorized by the Seller to be disclosed, or has been disclosed, to any Person other than (i) pursuant to a written agreement reasonably restricting the disclosure and use of such Trade Secret or (ii) to a Person who otherwise has a duty to protect such Trade Secret.
(g) Each of the past and present employees of, and individuals acting on a consultant or independent contractor basis for, the Seller who has been or is engaged in inventing, creating, conceiving or developing any Intellectual Property that is material to the Seller’s business as currently conducted, has executed and delivered to the Seller a written agreement, pursuant to which such Person (x) agreed to hold all confidential information of the Seller’s business in confidence both during and after such Person’s employment or retention, as applicable, and (y) assigned to the Seller all of such Person’s rights, title and interest in and to all Intellectual Property invented, created, conceived or developed in the course of such Person’s employment or engagement thereby (each, a “Personnel IP Contract”). To the knowledge of the Seller, there is no uncured breach by any such Person with respect to any Intellectual Property that is material to the Seller’s business as currently conducted under any such Personnel IP Contract.
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(h) Neither the execution of this Agreement nor the consummation of the transactions contemplated herein will result in the loss or impairment of, or any Encumbrance on, the payment of any additional consideration, or the reduction of any amount(s) payable in connection with, any material Intellectual Property of the Seller.
3.15 Data Privacy.
(a) The Seller is, and has been since its formation, in material compliance with all Privacy Requirements. Since its formation, the Seller has not received any written notice of any claims, charges, investigations, or regulatory inquiries related to or alleging the violation of any Privacy Requirements.
(b) The Seller has (i) implemented, and since its formation has maintained, commercially reasonable technical and organizational safeguards to protect Personal Information in its possession or under its control, and (ii) taken commercially reasonable steps to ensure that any third party with access to any Personal Information collected by or on behalf of the Seller has implemented and maintained commercially reasonable safeguards with respect to such third party’s processing of Personal Information.
(c) Since its formation, to the knowledge of the Seller: (i) there have been no material breaches, security incidents, misuse of or unauthorized access to or disclosure of any Personal Information (“Security Incident”) maintained by the Seller; nor (ii) has any Person processing Personal Information on behalf of the Seller experienced any Security Incidents with respect to such Personal Information. The Seller has implemented reasonable disaster recovery and business continuity plans.
(d) To the knowledge of the Seller, the transfer of Personal Information in connection with the transactions contemplated herein will not violate in any material respect any Privacy Requirements.
3.16 Employee Benefit Plans.
(a) The Seller has not entered into any bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and has no employment, termination, severance or other contracts or agreements, with respect to which the Seller has any obligation or which are maintained, contributed to or sponsored by the Seller for the benefit of any employee (other than statutory plans).
3.17 Employee Matters.
(a) The Seller has no employees.
(b) To the knowledge of the Seller, since the dates of formation of the Seller, there has been: (i) no labor union organizing or attempting to organize any employee of the Seller into one or more collective bargaining units with respect to their employment with the Seller; and (ii) no labor dispute, strike, work slowdown, work stoppage or lock out or other collective labor action by or with respect to any employees of the Seller pending with respect to their employment with the Seller or threatened against the Seller. The Seller is not a party to, or bound by, any collective bargaining agreement or other agreement with any labor organization applicable to the employees of the Seller and no such agreement is currently being negotiated.
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(c) Other than as set forth in Section 3.17(c) of the Seller Disclosure Letter, the Seller has not engaged any independent contractors (including consultants) under any written agreement or contract.
3.18 Taxes and Returns.
(a) The Seller has or will have timely filed, or caused to be timely filed, all material Tax returns and reports required to be filed by the Seller (taking into account all available extensions) (collectively, “Tax Returns”), which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Seller Financials have been established.
(b) Section 3.18(b) of the Seller Disclosure Letter sets forth each jurisdiction where the Seller files or is required to file a Tax Return.
(c) The Seller is not being audited by any taxing authority or has been notified by any Tax authority that any such audit is contemplated or pending.
(d) There are no material claims, assessments, audits, examinations, investigations or other proceedings pending against the Seller in respect of any Tax, and the Seller has not been notified in writing of any proposed Tax claims or assessments against the Seller (other than, in each case, claims or assessments for which adequate reserves in the Seller Financials have been established).
(e) There are no Encumbrances with respect to any Taxes upon any of the Seller’s assets, other than (i) Taxes, the payment of which is not yet due, or (ii) Taxes or charges being contested in good faith by appropriate proceedings and for which adequate reserves in the Seller Financials have been established.
(f) The Seller has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Seller for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(g) The Seller has not made any change in accounting method or received a ruling from, or signed an agreement with, any taxing authority that would reasonably be expected to have a material impact on Taxes following the date hereof.
(h) The Seller has no liability or potential liability for the Taxes of another Person (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract, indemnity or otherwise.
(i) The Seller is not a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice with respect to material Taxes (including advance pricing agreement, closing agreement or other agreement relating to Taxes with any taxing authority) that will be binding on the Seller with respect to any period following the date hereof.
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(j) The Seller has not requested or is the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any taxing authority with respect to any material Taxes, nor is any such request outstanding.
3.19 Title to Properties; Assets.
(a) The Seller does not own any real property.
(b) The Seller has not entered into any real property lease or sublease.
(c) Except for assets sold, consumed or disposed of in the ordinary course of business since November 1, 2023, the Seller owns good title to, or hold a valid leasehold interest in or license to all of the tangible assets shown to be owned or leased by it on the Seller Financials or acquired after the date thereof, free and clear of all Encumbrances, other than Permitted Encumbrances.
(d) All items of Tangible Personal Property which are owned, used or leased by the Seller are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items), and are suitable for their intended use in the business of the Seller. The operation of each of the Seller’s business as it is now conducted or presently proposed to be conducted is not dependent upon the right to use the Tangible Personal Property of Persons other than a member of the Seller, except for such Tangible Personal Property that is owned by, leased, licensed or otherwise contracted to such entity. Any leases related to Tangible Personal Property are valid, binding and enforceable in accordance with their terms and are in full force and effect. No event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of the Seller under any lease related to the Tangible Personal Property and the Seller has no knowledge of the occurrence of any event which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default by any other party under any such lease, and the Seller has not received notice of any such condition. The Seller has not waived any rights under any lease related to the Tangible Personal Property which would be in effect at or after the date hereof. No event has occurred which either entitles, or would, on notice or lapse of time or both, entitle the other party to any lease related to the Tangible Personal Property with the Seller to declare a default or to accelerate, or which does accelerate, the maturity of any obligations of the Seller under any such lease.
(e) The Seller has good, valid and marketable title to, or a valid leasehold interest in or right to use, all of its assets, free and clear of all Encumbrances other than Permitted Encumbrances. The assets (including Intellectual Property rights and contractual rights) of the Seller constitute all of the assets, rights and properties that are used in the operation of the businesses of the Seller as they are now conducted and presently proposed to be conducted or that are used or held by the Seller for use in the operation of the businesses of the Seller, and taken together, are adequate and sufficient for the operation of the businesses of the Seller as currently conducted and as presently proposed to be conducted.
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3.20 Transactions with Affiliates.
Except as set for the in Section 3.20 of the Seller Disclosure Letter, for employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business, no director, manager, officer or other Affiliate of the Seller, to the knowledge of the Seller, has or has had, directly or indirectly: (a) a material economic interest in any Person that has furnished or sold, or furnishes or sells, services or products that the Seller furnishes or sells, or proposes to furnish or sell; (b) a material economic interest in any Person that purchases from or sells or furnishes to, the Seller, any goods or services; (c) a material beneficial interest in any Material Contract of the Seller; or (d) any contractual or other arrangement with the Seller, other than customary indemnity arrangements (each, an “Affiliate Transaction”); provided, however, that ownership of no more than 5% of the outstanding voting stock of a publicly traded corporation shall not be deemed an “economic interest in any Person” for purposes of this Section 3.20.
3.21 Insurance.
The Seller had no insurance policies issued in favor of the Seller, or pursuant to which the Seller or any of its directors or officers are a named insured or otherwise a beneficiary.
3.22 Accounts Receivable.
All accounts, notes and other receivables, whether or not accrued, and whether or not billed, of the Seller, in accordance with the IFRS arose from sales actually made or services actually performed in the ordinary course of business and represent valid obligations to the Seller. None of the Seller’ accounts receivable are subject to any right of recourse, defense, deduction, return of goods, counterclaim, offset, or set off on the part of the obligor in excess of any amounts reserved therefore on the Seller Financials.
3.23 Investment Company Act.
The Seller is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
3.24 Information Supplied.
None of the information supplied or to be supplied by, and relating to, the Seller for inclusion, or included, in any documents to be filed with the SEC, any state securities commission or any other federal or state regulatory agency in connection with the transactions contemplated hereby will, at the respective times such information is supplied or such documents are filed or mailed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances in which they are made, not misleading. All documents which the Seller is responsible for filing with any regulatory agency in connection with the transactions contemplated hereby will comply as to form in all material respects with the provisions of applicable law.
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3.25 Anti-Bribery; Anti-Corruption and Anti-Money Laundering.
Neither Seller or, to the knowledge of the Seller, any of its directors, officers, employees, agents, or any other Person acting for or on behalf of the Seller has, directly or indirectly (a) made, offered, or promised to make or offer any payment, loan, or transfer of anything of value including any reward, advantage or benefit of any kind, to or for the benefit of any Government Official, candidate for public office, political party, or political campaign, for the purpose of (i) influencing any act or decision of such Government Official, candidate, party or campaign, (ii) inducing such Government Official, candidate, party or campaign to do or omit to do any act in violation of a lawful duty, (iii) obtaining or retaining business for or with any Person, (iv) expediting or securing the performance of official acts of a routine nature, or (v) otherwise securing any improper advantage; (b) paid, offered, or promised to pay or offer any bribe, payoff, influence payment, kickback, unlawful rebate, or other similar unlawful payment of any nature; (c) made, offered or promised to make or offer any contributions, gifts, entertainment, or other unlawful expenditures; (d) established or maintained any fund of corporate monies or other properties; (e) created or caused the creation of any false or inaccurate books and records of the Seller; or (f) otherwise violated any provision of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq., the Money Laundering Control Act, the Currency and Foreign Transactions Reporting Act, The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or any other Laws relating to corruption, bribery, or money laundering, in each case of clauses (a)-(e), in a manner that would result in a violation of any of the Laws described in clause (f). The Seller has not made any disclosure to any Governmental Authority relating to corruption, bribery, or money laundering Laws, been the subject of any investigation or inquiry regarding compliance with such Laws; or been assessed any fine or penalty under such Laws.
3.26 Sanctions, Import, and Export Controls.
Neither Seller or, to the knowledge of the Seller, any of its directors, officers, employees, agents, or any other Person acting for or on behalf of the Seller (a) is a Person with whom transactions are prohibited or limited under any economic sanctions Laws, including those administered by the U.S. government (including, without limitation, the Department of the Treasury’s Office of Foreign Assets Control, the Department of State, or the Department of Commerce), the United Nations Security Council, the European Union, or His Majesty’s Treasury, or (b) has violated any Laws relating to economic sanctions since its formation. Since its formation, the Seller has not violated any Laws related to or made any disclosure to any Governmental Authority relating to sanctions, customs, import, or export control Laws, has not been the subject of any investigation or inquiry regarding compliance with such Laws, or been assessed any fine or penalty under such Laws.
3.27 Finders and Brokers.
Neither the Seller nor any of its officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Seller and the Shareholders, subject to such exceptions as are disclosed in the Company Disclosure Letter:
4.1 Organization and Qualification.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite corporate, organizational power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
4.2 Title to Securities; Capitalization.
(a) The authorized capital stock of the Company consists of 500,000,000 shares of Common Stock and 50,000,000 shares of preferred stock. The shares of Common Stock are currently quoted on the OTC Markets and, to the knowledge of the Company, continues to meet the Standards for Continued Eligibility for OTCQB. As of the date of this Agreement, there are 72,465,503 shares of Common Stock issued and outstanding and 40,000,000 shares of Series A Preferred Stock issued and outstanding. All outstanding shares of Common Stock and Series A Preferred Stock are, and all shares of Series B Preferred Stock that may be issued as contemplated or permitted by this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to any pre-emptive rights. or any similar right under any provision of the relevant laws of the Nevada Revised Statutes, the Company’s Organizational Documents or any contract to which the Company is a party or by which the Company is bound.
(b) Except as set forth in the Company’s annual report on Form 10-K filed with the SEC on March 28, 2024 (the “Form 10-K”), there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights, or (iii) except as expressly contemplated by this Agreement, subscriptions or other rights, agreements, arrangements, contracts or commitments of any character, relating to the issued or unissued capital equity of Company or obligating the Company to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options, their respective capital stock or securities convertible into or exchangeable for such shares or interests, or obligating the Company to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such capital equity.
(c) Except as set forth in the Form 10-K, there are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other contracts or understandings to which the Company is a party or by which the Company is bound with respect to any of its capital stock. As a result of the consummation of the Exchange and the transactions contemplated herein, no shares of capital stock, warrants, options or other securities of the Company are issuable and no rights in connection with any shares, warrants, rights, options or other securities of the Company accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
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4.3 Authorization.
The Company has all requisite corporate power and authority to execute and deliver this Agreement and any other transactions document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement, and any other transaction documents to which it is a party, respectively, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary and proper corporate action by the Company, and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement, and any other transaction documents to which it is a party, or to consummate the transactions contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by the Company and assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally and subject to the effect of general principles of equity, and does not, and the consummation of the transactions contemplated hereby and thereby will not violate any provision of the Company’s Organizational Documents.
4.4 Governmental Approvals.
Other than the filings, notices, reports, consents, registrations, approvals, permits, clearances, expirations or terminations of waiting periods or authorizations (i) required to be made with or obtained from the SEC, and (ii) any state securities, takeover and “blue sky” Laws, the Securities Act, the Exchange Act, and FINRA no filings, notices, reports, consents, registrations, approvals, permits, clearances, expirations or terminations of waiting periods or authorizations are required to be made by the Company with, or obtained by the Company from, any Governmental Authority in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company.
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4.5 No Conflict.
The execution and delivery by the Company of this Agreement, the consummation by the Company of the transactions contemplated hereby, and compliance by the Company with any of the provisions hereof, will not, (i) conflict with or violate any provision of Company’s Organizational Documents, (ii) require any consent, approval, waiver, or notice to, or result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, amendment or acceleration) under, any indenture, mortgage, deed of trust, or other Company Material Contract; (iii) result in the termination, withdrawal, suspension, cancellation or modification of, a right acceleration under, give rise to any obligation to make payments or provide compensation under, or result (immediately or with the passage of time or otherwise) in the creation or imposition of any Encumbrances (as hereafter defined) upon any of the properties, rights or assets of the Seller, or (iv) subject to obtaining the consents from Governmental Authorities referred to in Section 4.4 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such consent, approval, authorization or waiver having been satisfied, conflict with or violate any Law or Governmental Order to which the Company any of its assets or properties is subject.
4.6 No Litigation.
Except as set forth in the Form 10-K, no Action by or against the Company is pending or, to the best knowledge of the Company, threatened, which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby.
4.7 Absence of Certain Changes.
Since December 31, 2023, as expressly contemplated by this Agreement, the Company has conducted its businesses in the ordinary course of business consistent with past practice and then has not been any fact, change, effect, occurrence, event, development or state of circumstances that has had or would reasonably be expected to have a material and adverse effect on the Company taken as a whole.
4.8 Absence of Undisclosed Liabilities.
Except for the Expenses, there is no liability, debt or obligation of or claim or judgment against the Company (whether direct or indirect, absolute or contingent, accrued or unaccrued, known or unknown, liquidated or unliquidated, or due or to become due), except for liabilities and obligations (i) reflected or reserved for on the financial statements or disclosed in the notes thereto included in the Form 10-K, (ii) that have arisen since the date of the most recent balance sheet included in the Form 10-K in the ordinary course of business of the Company, or (iii) which would not be, or would not reasonably be expected to be, material to the Company.
4.9 Compliance with Laws.
Except where the failure to be, or to have been, in compliance with such Laws has not or would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company or prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement the business of the Company is not conducted in violation of any applicable Law. The Company has not received any notice or communication of any material noncompliance with any Laws that has not been cured as of the date of this Agreement or is otherwise disclosed in the Form 10-K. To the knowledge of the Company, there is no default on its part with respect to any Governmental Order, or Governmental Authority or any circumstance which after reasonable investigation would result in the discovery of such default.
4.10 Investment Company Act.
The Company is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
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4.11 SEC Filings; Financial Statements.
(a) The Company has filed all SEC reports required to be filed by it under the Exchange Act or otherwise, including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials being collectively referred to herein as the “SEC Reports”). Each of the SEC Reports, (i) at the time of its filing or being furnished (or, if amended, as of the date of such amendment) complied, or if not yet filed or furnished, will comply, in all material respects with the applicable requirements of the Securities Act, the Exchange Act, as applicable, and the rules and regulations of the SEC thereunder applicable to the SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a 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. To the Company’s knowledge, the Company is in compliance in all material respects with all of the applicable rules of the OTC Markets. True, correct, and complete copies of all the SEC Reports are publicly available in the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database of the SEC.
(b) The financial statements (including any related notes thereto) included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments as permitted by the applicable rules and regulations of the SEC. The disclosure set forth in the SEC Reports, regarding the Company’s business is current and complete and accurately reflects the Company’s operations as it exists as of the date hereof.
(c) To the knowledge of the Company, as of the date hereof, there are no outstanding SEC comments from the SEC with respect to the SEC Reports. To the knowledge of the Company, none of the SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
4.12 Contracts.
All material contracts of the Company (“Company Material Contracts”) have been disclosed in, and filed with, the Form 10-K. Other than as disclosed in the Form 10-K and Section 4.12 of the Company Disclosure Letter, the Company is not a party to, and neither it nor any of its assets, products, technology and properties are bound by:
(a) any material contract, agreement, franchise, license, debt instrument, or other commitment;
(b) any judgment, order, writ, injunction, decree, or award; or
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(c) any written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of the Company.
4.13 Taxes
(a) Other than as would not have a material adverse effect on the Company taken as a whole, (i) all Tax Returns required to be filed by the Company have been timely filed (taking into account applicable extensions), (ii) all such Tax Returns are true, correct and complete, and (iii) all Taxes, whether or not shown as due on such Tax Returns, have been paid; in the case of each of clauses (i) through (iii), except to the extent adequate reserves therefor in accordance with GAAP have been provided on the Company’s financial statements.
(b) There are no material claims, assessments, audits, examinations, investigations or other proceedings pending against the Company in respect of any Tax, and the Company has not been notified in writing of any proposed Tax claims or assessments against the Company (other than, in each case, claims or assessments for which adequate reserves in the Company’s financial statements have been established).
(c) There are no Encumbrances with respect to any Taxes upon any of the Company’s assets, other than (i) Taxes, the payment of which is not yet due, or (ii) Taxes or charges being contested in good faith by appropriate proceedings and for which adequate reserves in the Company’s audited financial statements have been established.
(d) The Company has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(e) The Company has not made any change in accounting method or received a ruling from, or signed an agreement with, any taxing authority that would reasonably be expected to have a material impact on Taxes following the date hereof. The Company has not participated in, or sold, distributed or otherwise promoted, any “reportable transaction,” as defined in Treasury Regulation section 1.6011-4.
(f) The Company has no liability or potential liability for the Taxes of another Person (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract, indemnity or otherwise.
(g) The Company is not a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice with respect to material Taxes (including advance pricing agreement, closing agreement or other agreement relating to Taxes with any taxing authority) that will be binding on the Seller with respect to any period following the date hereof.
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(h) The Company has not requested or is the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any taxing authority with respect to any material Taxes, nor is any such request outstanding.
4.14 Finders and Brokers.
Neither the Company nor any of its officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement.
4.15 Information.
None of the information supplied or to be supplied by, and relating to, the Company for inclusion, or included, in any documents to be filed with the SEC, any state securities commission or any other federal or state regulatory agency in connection with the transactions contemplated hereby will, at the respective times such information is supplied or such documents are filed or mailed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances in which they are made, not misleading. All documents which the Company is responsible for filing with any regulatory agency in connection with the transactions contemplated hereby will comply as to form in all material respects with the provisions of applicable law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
As an inducement to the Company and the Company Preferred Shareholder to enter into this Agreement, each Shareholder, severally but not jointly, hereby represents and warrants to the Company and the Company Preferred Shareholder as follows.
5.1 Seller Securities.
The Seller Securities represent one hundred percent (100%) of the issued and outstanding capital stock of the Seller. Each Shareholder is the record owner, and has good, valid and marketable title to, the Seller Securities appearing next to such shareholder’s name on Schedule A-1 attached hereto. Each Shareholder has the right and authority to sell and deliver its Seller Securities, free and clear of all Encumbrances or adverse claims of any nature whatsoever. Upon delivery of any certificate or certificates duly assigned, representing the Seller Securities as herein contemplated or upon registering of the Company as the new owner of the Seller Securities in the share register of the Seller, the Company will receive good title to the Seller Securities owned by each such Shareholder.
5.2 Power and Authority.
Each Shareholder has the legal power, capacity and authority to execute and deliver this Agreement, to consummate the transactions contemplated by this Agreement, and to perform their respective obligations under this Agreement. This Agreement constitutes a legal, valid and binding obligation of each such Shareholder, enforceable against each such Shareholder in accordance with the terms hereof, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
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5.3 No Conflicts.
The execution and delivery of this Agreement by each such Shareholder and the performance by each such Shareholder of its obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or governmental entity under any Laws; (b) will not violate any Law applicable to such Shareholder; and (c) will not violate or breach any contractual obligation to which such Shareholder is a party.
5.4 Purchase Entirely for Own Account.
Each Shareholder is acquiring the Series B Preferred Stock and the Series A Preferred Stock for its own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution, or fractionalization thereof in whole or in part in any transactions that would be in violation of the Securities Act or any state securities or “blue-sky” laws. No other Person has a direct or indirect beneficial interest in, and such Shareholder does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third party, with respect to, the Series B Preferred Stock and the Series A Preferred Stock, or any part thereof that would be in violation of the Securities Act or any state securities or “blue sky” laws or other applicable Laws.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PREFERRED SHAREHOLDER
As an inducement to the Seller and the Shareholders to enter into this Agreement, the Company Preferred Shareholder hereby represents and warrants to the Seller and the Shareholders as follows.
6.1 Series A Preferred Stock.
The Series A Preferred Stock owned by the Company Preferred Shareholder represents one hundred percent (100%) of the issued and outstanding shares of Series A Preferred Stock. The Company Preferred Shareholder is the beneficial owner, and has good, valid and marketable title to, the Series A Preferred Stock and has the right and authority to sell and deliver the Series A Preferred Stock, free and clear of all Encumbrances or adverse claims of any nature whatsoever. Upon delivery of any certificate or certificates duly assigned, representing the Series A Preferred Stock as herein contemplated or upon registering of the Shareholders as the new owners of the Series A Preferred Stock in the share register of the Company, the Shareholders will receive good title to the Series A Preferred Stock owned by the Company Preferred Shareholder.
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6.2 Power and Authority.
The Company Preferred Shareholder has the legal power, capacity and authority to execute and deliver this Agreement, to consummate the transactions contemplated by this Agreement, and to perform his obligations under this Agreement. This Agreement constitutes a legal, valid and binding obligation of the Company Preferred Shareholder, enforceable against the Company Preferred Shareholder in accordance with the terms hereof, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles.
6.3 No Conflicts.
The execution and delivery of this Agreement by the Company Preferred Shareholder and the performance by him of his obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or governmental entity under any Laws; (b) will not violate any Law applicable to the Company Preferred Shareholder; and (c) will not violate or breach any contractual obligation to which the Company Preferred Shareholder is a party.
6.4 Purchase Entirely for Own Account.
The Company Preferred Shareholder is acquiring the Series B Preferred Stock pursuant to the Series A Preferred Exchange for his own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution, or fractionalization thereof in whole or in part in any transactions that would be in violation of the Securities Act or any state securities or “blue-sky” laws. No other Person has a direct or indirect beneficial interest in, and the Company Preferred Shareholder does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third party, with respect to, the Series B Preferred Stock or any part thereof that would be in violation of the Securities Act or any state securities or “blue sky” laws or other applicable Laws.
ARTICLE VII
COVENANTS
7.1 Tax Matters.
Notwithstanding anything to the contrary contained herein, the Shareholders shall pay all Transfer Taxes, if any, required to be paid by the Seller or the Shareholders incurred in connection with the Exchange. Any Party required by applicable Law to file any Tax Returns with respect to any such Transfer Taxes shall be responsible for the preparation and filing of such Tax Return, and the other Parties will join in the execution of any such Tax Returns if required by applicable Law.
7.2 Regulatory Matters; Cooperation.
(a) The Seller shall use its best efforts to prepare and deliver to the Company, as promptly as reasonably practicable and no later than April 30, 2024 the Seller Financials, prepared in accordance with IFRS and Regulation S-X (including any related notes thereto) and the related consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the fiscal years then ended.
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(b) From and after the date hereof, the Seller and the Company shall cooperate with each other to prepare pro forma financial statements that comply with the rules and regulations of the SEC to the extent required for SEC filings, including the requirements of Regulation S-X.
7.3 Sale of Subsidiary.
The Company and the Company Preferred Shareholder shall have entered into such documentation as is required prior to the Closing to transfer all of the equity interests of VoiceStep Telecom, LLC, a wholly-owned Subsidiary of the Company to the Company Preferred Shareholder effective on the day after the Closing. The Company Preferred Shareholder agrees that he shall use his reasonable best efforts to ensure that the closing of such transfer shall take place within three (3) months from the Closing. The disposition of VoiceStep Telecom, LLC to the Company Preferred Shareholder shall be on a cash-free, debt free basis. In the event the transfer of the membership interests of VoiceStep Telecom, LLC to the Company Preferred Shareholder results in any tax obligation or other expenses payable by the Company, such taxes and expenses shall be reimbursed to the Company by the Company Preferred Shareholder.
7.4 Repayment of Founder Debt.
No later than thirty (30) days after the Closing, the Company shall transfer by wire transfer in immediately available funds to the Company Preferred Shareholder an amount sufficient to repay the amount of indebtedness, and all accrued but unpaid interest, due to him pursuant to that certain Loan Agreement, dated August 6, 2021, by and between the Company and the Company Preferred Shareholder.
7.5 Intercompany Services Agreement
No later than twenty-five (25) Business Days after the Closing, the Company and the Seller shall enter into an intercompany services agreement on terms and conditions reasonably satisfactory to both Parties, that will provide, among other things, for the Seller to pay to the Company a monthly service fee of not less than Twenty-Five Thousand Dollars ($25,000) per month.
7.6 Further Assurances.
The Parties shall further cooperate with each other and use their respective reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the Exchange, the Series A Preferred Exchange and the other transactions contemplated by this Agreement.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 Survival.
Survival of Representations and Warranties. Except for the representations and warranties of the Parties made pursuant to Sections 3.1 (Due Organization and Good Standing), 3.2 (Title to Securities; Capitalization), 3.3 (Authorization), 3.14 (Intellectual Property), 3.15 (Data Privacy) and 3.27 (Finders and Brokers), Sections 5.1 (Seller Securities) and 5.2 (Power and Authority), and Sections 4.1 (Organization and Qualification), 4.2 (Title to Securities; Capitalization) and 4.3 (Authorization), Section 6.1 (Series A Preferred Stock) and 6.2 (Power and Authority) respectively, shall survive the Closing until the first (1st) anniversary of the date hereof, all other representations and warranties of the Parties shall terminate and expire upon the Closing; provided, however, that any representation or warranty the breach or violation of which is made the basis of a claim for indemnification will survive until such time as such claim is finally resolved in accordance with this Agreement.
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8.2 Indemnification.
(a) Indemnification by the Shareholders. Subject to the terms and conditions of this Article VIII, the Shareholders (the “Shareholders Indemnifying Parties”) shall indemnify and hold harmless the Company and its respective successors and permitted assigns and the Company Preferred Shareholder (each, a “Company Indemnified Party”) from and against any and all Liabilities, losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ and consultants’ fees and expenses) actually paid, suffered, incurred by, or imposed upon, them (including any Action brought or otherwise initiated by any of them) (any of the foregoing, a “Loss”) arising out of or resulting from (whether or not involving a Third Party Claim (as defined herein)), (a) any breach of any of the Seller’s or the Shareholders’ representations and warranties set forth in Section 8.1, or (b) any breach or nonperformance of any covenant or agreement made by the Seller or the Shareholders in this Agreement.
(b) Indemnification by the Company. Subject to the terms and conditions of this Article VIII, the Company (including its successors or assigns) (the “Company Indemnifying Parties”) shall indemnify and hold harmless the Shareholders and their respective successors and permitted assigns (each, a “Shareholders Indemnified Party”) from and against any and all Losses arising out of or resulting from (whether or not involving a Third Party Claim), (i) any breach of any of the Company’s representations and warranties set forth in Section 8.1, or (ii) any breach or nonperformance of any covenant or agreement made by Company in this Agreement.
(c) Indemnification by the Company Preferred Shareholder. Subject to the terms and conditions of this Article VIII, the Company Preferred Shareholder (the “Company Preferred Shareholder Indemnifying Party”) shall indemnify and hold harmless the Shareholders Indemnified Party from and against any and all Losses arising out of or resulting (whether or not involving a Third Party Claim) from any breach of any of the Company Preferred Shareholder’s representations and warranties set forth in Section 8.1 and his agreement set forth in Section 7.3 in respect of the transfer of all of the equity interests of VoiceStep Telecom, LLC, a wholly-owned Subsidiary of the Company, to the Company Preferred Shareholder.
8.3 Limits on Indemnification.
(a) The Shareholder Indemnifying Persons, the Company Indemnifying Parties and the Company Preferred Shareholder Indemnifying Party (each, an “Indemnifying Party”) shall not be liable for any claim for indemnification pursuant to Section 8.2(a). 8.2(b), or 8.2(c) respectively, (i) unless and until the aggregate amount of indemnifiable Losses which may be recovered from such Indemnifying Party equals or exceeds Twenty Thousand dollars ($20,000) whereupon the Shareholder Indemnified Persons, the Company Indemnified Parties and the Company Preferred Shareholder Indemnifying Party (each, an “Indemnified Party”), respectively, shall be entitled to indemnification for the full amount of such Losses, (ii) no Losses may be claimed under this Section 8.2(a). 8.2(b), or 8.2(c), respectively, or shall be reimbursable by or shall be included in calculating the aggregate losses set forth in clause (i) above other than Losses in excess of Two Thousand Dollars ($2000) resulting from a single claim or series of related claims arising out of the same facts, events or circumstances; and (iii) in no event shall the aggregate indemnification actually paid by an Indemnifying Party pursuant to Sections 8.2(a), 8.2(b) or 8.2(c), as applicable, taken together with all other indemnification actually paid by such Indemnifying Party pursuant to the causes set forth in Sections 8.2(a),8.2(b) or 8.2(c), as applicable, exceed One Million Dollars ($1,000,000). The shares of Series B Preferred Stock held by the Company Preferred Shareholder Indemnifying Party (or cash in lieu thereof, at the election of the Company Preferred Shareholder Indemnifying Party) shall be the sole source from which any Indemnified Party may be indemnified by the Company Preferred Shareholder Indemnifying Party under this Article VIII. The shares of Series B Preferred Stock held by each Shareholder (or cash in lieu thereof, at the election of the Shareholder) shall be the sole source from which any Indemnified Party may be indemnified by the Shareholder under this Article VIII.
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(b) In no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall Losses be deemed to include, any punitive, special, incidental, exemplary, consequential, indirect or exemplary damages, or for any diminution in value (including any changes measured as a multiple of earnings, revenue or by any other similar performance metric and any loss of future revenue or income, loss of business reputation or opportunity), except for any such damages to the extent actually awarded by a court of competent jurisdiction and paid to a third party in a Third Party Claim.
(c) No investigation by an Indemnified Party, or knowledge by an Indemnified Party or its representatives of a breach of a representation, warranty, covenant or agreement of an Indemnifying Party, conducted or arising at any time after the date of this Agreement, shall affect the recourse available to the Indemnified Party under this Article VIII.
(d) Any Losses recoverable hereunder shall be reduced in amount by insurance proceeds, indemnification payments, contribution payments or reimbursements actually received by any Indemnified Party in connection with such Losses, and the Indemnified Party shall use reasonable and diligent efforts to realize such benefits, proceeds, payments or reimbursements; provided, that nothing herein shall require any Indemnified Party to file any claim under any insurance policy.
(e) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the extent reasonably necessary to remedy the breach that gives rise to such Loss.
8.4 Notice of Loss; Third Party Claims.
(a) An Indemnified Party shall give the Indemnifying Party notice of any matter that an Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, within thirty (30) days of such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises.
(b) If an Indemnified Party shall receive notice of any Action, audit, demand or assessment (each, a “Third Party Claim”) against it or which may give rise to a claim for a Loss under this Article VIII, within thirty (30) days of the receipt of such notice, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article VIII except to the extent that the Indemnifying Party is materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or liability that it may have to any Indemnified Party otherwise than under this Article VIII. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnified Party within five (5) days of the receipt of notice from the Indemnified Party of such Third Party Claim; provided, however, that if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the judgment of the Indemnified Party in its sole and absolute discretion for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party determines counsel is required, at the expense of the Indemnifying Party. In the event that the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party’s expense, all such witnesses, records, materials and information in the Indemnifying Party’s possession or under the Indemnifying Party’s control relating thereto as is reasonably required by the Indemnified Party. No such Third Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnified Party.
8.5 Indemnification Payments.
Any indemnification obligations of an Indemnifying Party under this Article VIII may be settled through delivery to the Indemnified Party of shares Series B Preferred Stock that are equal in value to the finally determined amount of indemnification determined, with the value of such shares of Series B Preferred Stock being determined based on the dollar volume-weighted average price of Common Stock underlying the Series B Preferred Stock on the principal securities exchange or securities market on which such security is then traded during the fifteen (15) trading day period ending one (1) business day prior to the date of the finally determined indemnification amount, which delivery shall be required to be made within five (5) Business Days after the final determination of such obligation in accordance with this Article VIII.
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8.6 Exclusive Remedy.
From and after the Closing, except with respect claims seeking injunctions, specific performance or other equitable relief (including pursuant to Section 9.9), or claims under covenants and agreements contained herein that by their terms expressly require performance after the Closing but only with respect to that portion of such covenant or agreement that is expressly to be performed following the Closing, or claims under any other transaction document pursuant to the terms and provisions therein, indemnification pursuant to this Article VIII shall be the sole and exclusive remedy for the Indemnified Party with respect to matters arising under this Agreement of any kind or nature, including for any misrepresentation or breach of any warranty, covenant, or other provision contained in this Agreement or in any certificate or instrument delivered pursuant to this Agreement or otherwise relating to the subject matter of this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses.
Except as otherwise specified in this Agreement, all Expenses shall be paid by the party incurring such costs and expenses.
9.2 Notices.
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.2):
(a) if to the Company or the Company Preferred Stockholder, to:
7545 Irvine Center Dr.,
Ste 200, Irvine,
CA 92618
Attention: Tan Tran, Chief Executive Officer
E-mail: tan.tran@vemanti.com
with a copy to:
The Crone Law Group P.C.
420 Lexington Avenue, Suite 2446,
New York, NY 10170
Attention: Tammara Fort, Esq.
Email: tfort@cronelawgroup.com
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(b) if to Seller, to:
8 Burn Road
#05-02
Trivex
Singapore (369977)
Attention: Nguyen Van Hoang
Email: v.ceo@cloudhms.net
(c) If to the Shareholders to:
[redacted]
Attention: Nguyen Van Hoang
Email: v.ceo@cloudhms.net
120 Lower Delta Road
#02-05
Cendex Centre
Singapore (169208)
Attention: Nguyen Thi Van Trinh
Email: n.t.v.trinh@gmail.com
9.3 Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
9.4 Entire Agreement.
This Agreement, the Seller Disclosure Letter, and the Company Disclosure Letter constitute the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof and thereof.
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9.5 Assignment.
This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Company (which consent may be granted or withheld in the sole discretion of the Company) and any such assignment or attempted assignment without such consent shall be null and void.
9.6 Amendment.
This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Parties that expressly references the Section of this Agreement to be amended; or (b) by a waiver in accordance with Section 9.7.
9.7 Waiver.
Any party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other Parties; (b) waive any inaccuracies in the representations and warranties of the other Parties contained herein or in any document delivered by the other Parties pursuant to this Agreement; or (c) waive compliance with any of the agreements of the other Parties or conditions to such obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by any Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise of any other right hereunder. Any waiver of any term or condition hereof shall not be construed as a waiver of any subsequent breach or as a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.
9.8 Third Parties.
Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for, or the benefit of, any Person that is not a Party or thereto or a successor or permitted assign of such a party, unless otherwise specified herein. Except for the provisions of Article VII relating to Indemnified Parties, this Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any union or any employee or former employee of the Seller, any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.
9.9 Specific Performance.
The Parties acknowledge and agree that the Parties would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that any non-performance or breach of this Agreement by any Party could not be adequately compensated by monetary damages alone and that the Parties would not have any adequate remedy at law. Accordingly, in addition to any other right or remedy to which any Party may be entitled, at law or in equity (including monetary damages), such party shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement without posting any bond or other undertaking.
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9.10 Governing Law; Jurisdiction.
This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York applicable to contracts executed in and to be performed in that State without giving effect to any choice or conflict of law provision or rule. Each of the Parties hereby (a) submits to the exclusive jurisdiction of any federal or state court sitting in the State of New York for the purpose of any Action, directly or indirectly, arising out of, relating to, or in connection with this Agreement brought by any Party; (b) agrees that service of process will be validly effected by sending notice in accordance with Section 9.2; (c) irrevocably waives and releases, and agrees not to assert by way of motion, defense, or otherwise, in or with respect to any such Action, any claim, whether actual or potential, known or unknown, suspected or unsuspected, based upon past or future events, now existing or coming into existence in the future, that (i) such Action is not subject to the subject matter jurisdiction of at least one of the above-named courts; (ii) its property is exempt or immune from attachment or execution in the State of New York; (iii) such Action is brought in an inconvenient forum; (D) that the venue of such Action is improper; or (iv) this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts; and (d) agrees not to move to transfer any such Action to a court other than any of the above-named courts.
9.11 Waiver of Jury Trial.
Each of the Parties hereby irrevocably waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any Action directly or indirectly arising out of, relating to, or in connection with this Agreement or the transactions contemplated by this Agreement. Each of the Parties (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of any Action, seek to enforce that foregoing waiver; and (ii) acknowledges that it and the other Parties have been induced to enter into this Agreement and the transactions contemplated by this agreement, as applicable, by, among other things, the mutual waivers and certifications in this Section 9.11.
9.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile or other electronic transmission, such as by electronic mail in “pdf” form) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above.
| VEMANTI GROUP, INC. | |||
| By: | /s/ Tan Tran | ||
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| Name: | Tan Tran | |
| Title: | Chief Executive Officer | ||
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| By: | /s/ Tan Tran |
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| Name: | Tan Tran |
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| VINHMS PTE. LTD. |
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| By: | /s/ Nguyen Van Hoang |
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| Name: | Nguyen Van Hoang |
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| Title: | Director |
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| By: | /s/ Nguyen Van Hoang |
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| Name: | Nguyen Van Hoang |
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| ASIAN STAR TRADING & INVESTMENT PTE. LTD. |
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| By: | /s/ Nguyen Thi Van Trinh |
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| Name: | Nguyen Thi Van Trinh |
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| Title: | Director |
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[SIGNATURE PAGE TO SHARE EXCHANGE AGREEMENT]
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EXHIBIT 4.2
EXECUTION VERSION
VEMANTI GROUP, INC.
LOCK-UP AGREEMENT
This Lock-up Agreement (this “Agreement”) is dated as of April 1, 2024 by and among Vemanti Group Inc., a Nevada corporation (the “Company”), Mr. Tan Tran, the sole holder of the Company’s Series A Preferred Stock (the “Company Preferred Shareholder”), VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”), and the shareholders of VinHMS (the “Shareholders”). The Company, the Company Preferred Shareholder, and the Shareholders are collectively referred to herein as the “Parties”. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Share Exchange Agreement (as defined below).
BACKGROUND
WHEREAS, in connection with this Agreement, the Company, the Company Preferred Shareholder, the Seller and the Shareholders are entering into a Share Exchange Agreement (the “Share Exchange Agreement”), dated as of April 1, 2024, pursuant to which, among other things, the Company shall acquire all of the Seller’s Securities in exchange for shares of Series B Preferred Stock (as defined below) to be issued to the Shareholders;
WHEREAS, each Shareholder and the Company Preferred Shareholder are receiving Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series B Preferred Stock”) upon the Closing, pursuant to the Share Exchange Agreement; and
WHEREAS, as a condition of, and as a material inducement for, the Company, the Company Preferred Shareholder, the Seller and the Shareholders to enter into and consummate the transactions contemplated by the Share Exchange Agreement, the Parties have agreed to execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
AGREEMENT
1. Lock-Up.
(a) During the Lock-up Period (as defined below), each Shareholder and the Company Preferred Shareholder (each, a “Holder” and, collectively, the “Holders”) irrevocably agrees that it will not offer, sell, contract to sell, or otherwise dispose of, directly or indirectly, or convert or exchange in any manner, any of the Lock-up Shares (as defined below), enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares, whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise, publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any Short Sales (as defined below) with respect to any security of the Company (any of the foregoing, a “Prohibited Transfer”).
EXECUTION VERSION
(b) If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio, and the Company shall refuse to recognize any such purported transferee of the Lock-up Shares as one of its equity holders for any purpose. In furtherance of the foregoing, the Company will (i) place a stop order on all Lock-up Shares, including those which may be covered by a registration statement, such order revocable only in strict compliance with this Agreement, and (ii) notify the Company’s transfer agent in writing of the stop order and the restrictions on such Lock-up Shares under this Agreement and direct the Company’s transfer agent not to process any attempts by any Holder to resell or transfer any Lock-up Shares, except in compliance with this Agreement.
(c) For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.
(d) For the purposes of this Agreement, the “Lock-up Period” means with respect to the Lock-up Shares, the earlier of (A) the period commencing on the Closing and ending on the date that is twelve (12) months thereafter, and (B) the date on which the Company uplists its securities to NASDAQ, NYSE or another similar national exchange that results in all of the Holders having the right to convert their Series B Preferred Stock into Common Stock of the Company.
The restrictions set forth herein shall not apply to: (1) transfers or distributions to a Holder’s current or former general or limited partners, managers or members, stockholders, other equity holders or direct or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as amended) or to the estates of any of the foregoing; (2) transfers by bona fide gift to a member of a Holder’s immediate family or to a trust, the beneficiary of which is the Holder or a member of the Holder’s immediate family for estate planning purposes; (3) by virtue of the laws of descent and distribution upon the death of a Holder through will or intestacy; (4) by operation of law, including pursuant to an order of a court (including a qualified domestic relations order) or regulatory agency; (5) the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act; provided, however, that such plan does not provide for the transfer of Lock-up Shares during the Lock-Up Period and no filing under the Exchange Act or other public announcements shall be required or shall be voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan during the Lock-up Period (or, to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Shares may be made under such plan during the Lock-up Period),; (6) transfers to satisfy tax withholding obligations in connection with the exercise of options to purchase Common Stock or the vesting of share-based awards; or (7) transfers to the Company in payment on a “net exercise” or “cashless” basis of the exercise or purchase price with respect to the exercise of options to purchase Common Stock, in each case of (1) through (4) above, solely where any such transferee agrees in writing to be bound by the terms of this Agreement prior to such transfer.
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EXECUTION VERSION
2. Representations and Warranties. Each of the Parties, by their respective execution and delivery of this Agreement, hereby represents and warrants to the other Parties that (a) such Party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such Party and is the binding and enforceable obligation of such Party, enforceable against such Party in accordance with the terms of this Agreement (assuming that this Agreement constitutes a legal, valid and binding obligation of the other Parties), subject to the Remedies Exception, and (c) the execution, delivery and performance of such Party’s obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such Party is a party or to which the assets or securities of such Party are bound.
3. Beneficial Ownership. With the exception of the Common Stock currently held by the Preferred Company Shareholder, each Holder hereby represents and warrants that it does not beneficially own, directly or through its nominees (as determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder), any securities of the Company (of any class), or any economic interest in or derivative of such equity, other than those securities specified on Schedule A attached hereto. For purposes of this Agreement, the securities of the Company beneficially owned by the Holder as specified on Schedule A hereto are referred to as the “Lock-up Shares.”
4. No Additional Fees/Payment. Other than the consideration specifically referenced herein, the Parties agree that no fee, payment or additional consideration in any form has been or will be paid to any Holder in connection with this Agreement.
5. Termination of the Share Exchange Agreement. This Agreement shall be binding upon each Holder upon such Holder’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. Notwithstanding anything to the contrary contained herein, in the event that the Share Exchange Agreement is terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and become null and void, and the Parties shall not have any rights or obligations hereunder.
6. Controlling Agreement. To the extent the terms of this Agreement (as amended, supplemented, restated or otherwise modified from time to time) directly conflict with a provision in the Share Exchange Agreement, the terms of this Agreement shall control.
7. Miscellaneous. The “General Provisions” set forth in Article IX, specifically Sections 9.2 through 9.12 of the Share Exchange Agreement are hereby incorporated and made part hereof, mutatis mutandis; provided, however, that notice to any Holder should be made using the applicable address next to their name as set forth on Schedule A of this Agreement.
[Signature Page Follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of the date first written above.
| VEMANTI GROUP, INC. | |||
| By: | /s/ Tan Tran | ||
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| Name: | Tan Tran | |
| Title: | Chief Executive Officer | ||
| HOLDERS | |||
| By: | /s/ Tan Tran | ||
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| Name: | Tan Tran | |
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| By: | /s/ Nguyen Van Hoang |
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| Name: | Nguyen Van Hoang |
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| By: | /s/ Nguyen Thi Van Trinh |
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| Name: | Nguyen Thi Van Trinh, on behalf of Asian Star Trading & Investment PTE. LTD. |
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| Title: | Director |
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[Signature page to Lock-Up Agreement]
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EXECUTION VERSION
Schedule A
List of Shareholders and Number of Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company.
| Shareholder Name | No. of VMNT Series B Shares |
| Asian Star Trading & Investment Pte. Ltd. | 5,980,000 Series B |
| Nguyen Van Hoang | 3,220,000 Series B |
| Tan Tran | 800,000 Series B |
| Total | 10,000,000 Series B |
EXHIBIT 10.14
As of April 1, 2024
To: Vemanti Group Inc.,
c/o Tan Tran
7545 Irvine Center Dr.,
Ste 200, Irvine,
CA 92618
Dear Mr. Tran:
Notwithstanding anything to the contrary contained in that certain Share Exchange Agreement, dated as of April 1, 2024, by and among Vemanti Group Inc. (the “Company”), you, in your capacity as the Series A Preferred Stock holder of the Company, VinHMS Pte. Ltd., a Singapore private company limited by shares (“VinHMS”) and the shareholders of VinHMS (the “Share Exchange Agreement”), I hereby agree that my appointment to the board of directors of Vemanti pursuant to the terms of the Share Exchange Agreement shall not be effective until the tenth day following the Company’s mailing of a related Information Statement on Schedule 14f-1 to its shareholders.
Very truly yours,
| By: | /s/ Nguyễn Văn Hoàng | |
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| Nguyễn Văn Hoàng |
Acknowledged and Agreed:
Vemanti Group Inc.
| By: | /s/ Tan Tran | |
| Name: | Tan Tran | |
| Title: | Director |
EXHIBIT 10.15
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 1, 2024, is made and entered into by and among (i) Vemanti Group, Inc., a Nevada corporation, (the “Company”), (ii) Mr. Tan Tran, as the sole holder of the Company’s Series A Preferred Stock (the “Company Preferred Shareholder”), (iii) VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”) and (iv) the shareholders of VinHMS (the “Shareholders” and, together with the Company Preferred Shareholder and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, the “Holders” and individually, a “Holder”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Share Exchange Agreement (as defined below). The Company, the Company Preferred Shareholder, the Seller and the Shareholders are collectively referred to herein as the “Parties” and individually as a “Party.”
RECITALS
WHEREAS, the Parties are entering into a Share Exchange Agreement (the “Share Exchange Agreement”), dated as of April 1, 2024, pursuant to which, among other things, the Company shall acquire all of the Seller’s securities in exchange for a number of shares of Series B Preferred Stock (as defined below);
WHEREAS, each Shareholder and the Company Preferred Shareholder are receiving Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series B Preferred Stock”) upon the Closing, pursuant to the Share Exchange Agreement; and
WHEREAS, as a condition of, and as a material inducement for, the Parties to enter into and consummate the transactions contemplated by the Share Exchange Agreement, the Parties have agreed to execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Terms used, but not otherwise defined, shall have the meaning ascribed to them in the Share Exchange Agreement. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
EXECUTION VERSION
“Agreement” shall have the meaning given in the Preamble.
“Block Trade” shall mean an offering and/or sale of Registrable Securities by any Holder on a block trade or underwritten basis (whether firm commitment or otherwise) without substantial marketing efforts prior to pricing, including, without limitation, a same day trade, overnight trade or similar transaction.
“Board” shall mean the Board of Directors of the Company.
“Change in Control” shall mean any transfer (whether by tender offer, merger, stock purchase, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold more than 50% of outstanding voting securities of the Company (or surviving entity) or would otherwise have the power to control the Board or to direct the operations of the Company.
“Commission” shall mean the Securities and Exchange Commission.
“Common Stock” shall mean the common stock of the Company, par value $0.0001 per share.
“Company” shall have the meaning given in the Preamble.
“Demand Registration” shall have the meaning given in subsection 2.1.1.
“Demanding Holder” shall have the meaning given in subsection 2.1.1.
“EDGAR” shall have the meaning given in subsection 3.1.3.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1” shall have the meaning given in subsection 2.1.1.
“Form S-3” shall have the meaning given in subsection 2.3.
“Holder Information” shall have the meaning given in subsection 4.1.2.
“Holders” shall have the meaning given in the Preamble, for so long as such person or entity holds any Registrable Securities.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.4
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.
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EXECUTION VERSION
“Permitted Transferees” shall mean a person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the Lock-up Period under this Agreement, and any other applicable agreement between such Holder and the Company, and to any transferee thereafter.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Pro Rata” shall have the meaning given in subsection 2.1.4.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” or “Registrable Securities” shall mean (a) the shares of Common Stock issuable upon conversion of the Series B Preferred Stock, in accordance with its terms, (b) any outstanding Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement and (c) any other equity security of the Company issued or issuable with respect to any such Common Stock by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred (other than to a Permitted Transferee), new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Common Stock is then listed;
(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
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EXECUTION VERSION
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) in an Underwritten Offering, reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders (not to exceed $50,000 without prior written consent of the Company).
“Registration Statement” shall mean any registration statement filed by the Company with the Commission that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall have the meaning given in subsection 2.1.1.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf” shall mean the Form S-1 Shelf, the Form S-3 Shelf or any subsequent Shelf Registration.
“Shelf Registration” shall mean a shelf registration of securities pursuant to a Registration Statement on Form S-1 or Form S-3 filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Transfer” shall mean the (a) the sale or assignment of, offer to sell, contract or agreement to sell, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
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EXECUTION VERSION
ARTICLE II
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, the Holders of at least a majority in interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”) (for which the majority in such case is, for the avoidance of doubt, determined based on fully diluted, as-converted basis, inclusive of all of the then issued and outstanding Common Stock and all preferred shares of the Company) may make a written demand for Registration under the Securities Act of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than sixty (60) days immediately after the Company’s receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such Demand Registration. The Company agrees to keep the Registration effective for ninety (90) days from the effective date thereof, unless otherwise agreed to by the Parties.
2.1.2 Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, within six months after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective for purposes of counting Registrations under subsection 2.2.4, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days, of such election; and provided, further, that the Company shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
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EXECUTION VERSION
2.1.3 Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that the Company desires to sell and shares of Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Common Stock or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Demand Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration as provided in Section 3.3 prior to its withdrawal under this subsection 2.1.5. If withdrawn, a Demand Registration shall constitute a demand for an Underwritten Offering by the withdrawing Demanding Holder for purposes of Section 2.1.1.
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EXECUTION VERSION
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (v) for a dividend reinvestment plan, or (vi) for a Block Trade, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of the shares of Common Stock or other equity securities that the Company desires to sell, taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock or other equity securities, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:
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(a) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, the shares of Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw or abandon a Registration Statement filed with the Commission or Shelf takedown in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration as provided in Section 3.2 prior to its withdrawal under this subsection 2.2.3.
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EXECUTION VERSION
2.2.4 Limitations on Registration Rights. Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand Registration under Section 2.1 with respect to any or all Registrable Securities, provided that a Piggyback Registration under this Section 2.2 shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1.
2.3 Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than sixty (60) days after the Company’s initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if (i) a Form S-3 is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than $500,000.
2.4 Restrictions on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all commercially reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement. In such event, the Company shall have the right to defer such filing for a period of not more than ninety (90) days.
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EXECUTION VERSION
ARTICLE III
COMPANY PROCEDURES
3.1 General Procedures. If the Company is required to effect the Registration of Registrable Securities pursuant to this Agreement, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall:
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective for the period of time set forth in Section 2.1.1;
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective for the period of time set forth in Section 2.1.1;
3.1.3 not later than five (5) days prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such holders, provided, that the Company shall have no obligation to furnish any documents publicly filed or furnished with the Commission pursuant to the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”);
3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence reasonably satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
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EXECUTION VERSION
3.1.5 use its commercially reasonable efforts to cause all such Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority-in-interest of the Registrable Securities included in such registration;
3.1.6 provide a transfer agent as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.9 permit a representative of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.10 obtain a “comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Registration which the participating Holders may rely on, in customary form and covering such matters of the type customarily covered by “comfort” letters for transactions of its type as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.11 on the date the Registrable Securities are delivered for sale pursuant to such Registration, to the extent customary for a transaction of its type, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters;
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EXECUTION VERSION
3.1.12 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.13 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission), and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K or 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act;
3.1.14 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $25,000,000, use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and
3.1.15 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, consistent with the terms of this Agreement, in connection with such Registration.
Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter, broker, sales agent or placement agent if such Underwriter, broker, sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering or other offering involving a Registration as an Underwriter, broker, sales agent or placement agent, as applicable.
3.2 Registration Expenses. Except as otherwise provided herein, the Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that it is necessary or advisable to review such information prior to filing, or include such information in, the applicable Registration Statement or Prospectus and such Holder continues thereafter to withhold such information. In addition, no person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
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EXECUTION VERSION
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board such Registration, would be seriously detrimental to the Company and the majority of the Board concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time reasonably practicable, but in no event more than ninety (90) days, determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice and its contents. The Company shall as promptly as reasonably practicable notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to EDGAR shall be deemed to have been furnished or delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
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EXECUTION VERSION
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including actual, reasonable and documented attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and out-of-pocket expenses (including without limitation actual, reasonable and documented attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement is contained in (or not contained in, in the case of an omission) any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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EXECUTION VERSION
4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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EXECUTION VERSION
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as it is delivered to the addressee or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 7545 Irvine Center Dr., Ste 200, Irvine, California 92618, Attn: Vemanti Legal Department, Email: legal@vemanti.com, and, if to any Holder, at such Holder’s address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
5.2.2 Prior to the expiration of the Lock-up Period, no Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions set forth in this Agreement.
5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 hereof.
5.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK or, if under applicable Law, exclusive jurisdiction over such matter is vested in the federal courts, any federal court in the State of NEW YORK and any appellate court from any thereof.
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EXECUTION VERSION
5.5 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.6 Other Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.7 Term. This Agreement shall terminate upon the earlier of (i) the fifth (5th) anniversary of the date of this Agreement or (ii) the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted to sell the Registrable Securities under Rule 144 (or any similar provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale. The provisions of Section 3.5 and Article IV shall survive any termination.
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EXECUTION VERSION
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| COMPANY: | ||
| By: | /s/ Tan Tran | |
| Name: | Tan Tran | |
| Title: | Chief Executive Officer | |
| HOLDERS: | ||
| By: | /s/ Nguyen Van Hoang | |
| Name: | Nguyen Van Hoang | |
| By: | /s/ Nguyen Thi Van Trinh | |
| Name: | Nguyen Thi Van Trinh, on behalf of Asian Star Trading & Investment PTE. LTD. | |
| Title: | Director | |
[Signature Page to Registration Rights Agreement]
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EXECUTION VERSION
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| HOLDERS: | ||
| By: | /s/ Tan Tran | |
| Name: | Tan Tran | |
[Signature Page to Registration Rights Agreement- con’t]
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EXHIBIT 10.16
EXECUTION VERSION
LLC MEMBERSHIP INTEREST TRANSFER AGREEMENT
THIS LLC MEMBERSHIP INTEREST TRANSFER AGREEMENT (this “Agreement”) is entered into as of April 1, 2024, by and between Vemanti Group, Inc., a Nevada corporation (the “Company”) and Mr. Tan Tran, a resident of California. (“Mr. Tran”).
RECITALS
WHEREAS, the Company and Mr. Tran entered into that certain Contribution Agreement, dated as of April 3, 2014, between the Company and Mr. Tran, pursuant to which Mr. Tran contributed 100% of the issued and outstanding limited liability company membership interests (the “LLC Interests”) of VoiceStep Telecom LLC, organized under the laws of California (“VoiceStep”) to the Company;
WHEREAS, pursuant to that certain Share Exchange Agreement to be entered into as of even date herewith, by and among the Company, Mr. Tran, as the sole holder of the Company’s Series A Preferred Stock, VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”) and the shareholders of VinHMS, the Company shall acquire all of the equity of the Seller and intends to thereafter change its business focus from the business of VoiceStep to the business of the Seller;
WHEREAS, in the last three years, Voice Step’s average stand-alone EBITDA was $14,736.29 and the Company and Mr. Tran agree that the value of Voice Step as a going concern is $58,945.16; and
WHEREAS, the Company, as the sole member of VoiceStep, wishes to transfer and assign all of the LLC Interests to Mr. Tran in exchange for his assistance with winding down the VoiceStep business and Mr. Tran wishes to accept such LLC Interests and assist with the winding down and potential dissolution of VoiceStep.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
AGREEMENT
| 1) | Transfer of LLC Interests. |
(a) The Company shall transfer to Mr. Tran 100% of the LLC Interests in VoiceStep (the “Transferred Membership Interests”) effective as of April 2, 2024 (the “Effective Time”) in exchange for Mr. Tran’s services with regards to winding down the VoiceStep business and the potential dissolution of VoiceStep.
(b) Mr. Tran agrees and acknowledges that no certificate or certificates are necessary to evidence the Transferred Membership Interests that is being transferred by the Company to Mr. Tran hereunder; such transfer shall be deemed effective, without further notice or instruction from the Company, at the Effective Time.
| 2) | Representation and Warranties of the Company. The Company hereby represents and warrants to Mr. Tran that: |
EXECUTION VERSION
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada with full corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery, and performance by the Company of this Agreement have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement is legally binding upon the Company in accordance with its terms;
(b) The execution, delivery, and performance by the Company of this Agreement and the transactions contemplated thereby will not (i) violate the provisions of any order, judgment, or decree of any court or other governmental agency or any arbitrator applicable to the Company or the Certificate of Incorporation or Bylaws of the Company; or (ii) result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any contract or agreement to which the Company is a party or by which the Company is bound; and
(c) The Company is the sole beneficial and record holder of the Transferred Membership Interests, and upon consummation of the transactions contemplated by this Agreement, the Company shall have transferred to Mr. Tran and Mr. Tran shall have obtained from the Company all right, title and interest in the Transferred Membership Interests, free and clear of any and all liens, mortgages, hypothecations, collateral assignments, charges, encumbrances, title defects, security interests or claims (whether recorded or unrecorded) of any kind.
| 3) | Representations and Acknowledgments of Mr. Tran. Mr. Tran hereby represents and warrants to the Company that the execution, delivery, and performance by Mr. Tran of this Agreement and the transactions contemplated thereby will not (i) violate the provisions of any order, judgment, or decree of any court or other governmental agency or any arbitrator applicable to Mr. Tran; or (ii) result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any contract or agreement to which Mr. Tran is a party or by which Mr. Tran is bound. |
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| 4) | Revised Membership Interests. The member’s interest in the LLC Agreement in VoiceStep, adjusted to reflect the transfer of the Transferred Membership Interests by the Company to Mr. Tran hereunder, is set forth below: |
| Member |
| Percentage Interest in VoiceStep prior to the Effective Time |
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| Percentage Interest in VoiceStep following the Effective Time |
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| The Company |
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| 100 | % |
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| 0 | % |
| Mr. Tran |
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| 0 | % |
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| 100 | % |
| 5) | Resignation as Member; Amendment to LLC Agreement. The parties hereto agree that, effective upon the Effective Time, the Company will have no further rights as a member in VoiceStep. The parties hereto agree that upon the transfer of the Transferred Membership Interests pursuant to this Agreement, Mr. Tran shall be free to amend VoiceStep’s operating agreements, and to take any and all such other actions, and amend any and all such other documents, agreements, instruments or certificates, as may be necessary or appropriate to effectuate and carry out the purpose and intent of the foregoing and the transactions contemplated by this Agreement. |
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EXECUTION VERSION
| 6) | Notices. Any notice or other communication required or permitted hereunder shall be writing and shall be deemed to have been duly given on the date of service if served personally or five (5) days after mailing if mailed by first class United States mail, certified or registered with return receipt requested, postage prepaid, and addressed as follows: |
To the Company:
Vemanti Group, Inc.
7545 Irvine Center Dr.,
Ste 200, Irvine,
CA 92618
Attention: Chief Executive Officer
E-mail: tan.tran@vemanti.com
To Mr. Tran:
VoiceStep Telecom, LLC
7545 Irvine Center Dr.,
Ste 200, Irvine,
CA 92618
Attention: Tan Tran
E-mail: tan.tran@voicestep.com
| 7) | Binding Effect. This Agreement shall be binding upon the legal representatives and successors of the Company and Mr. Tan; provided, however, that the parties hereto may not assign any rights or obligations under this Agreement without the consent of the other party. |
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| 8) | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and to be performed entirely within the State of California by residents of the State of California. |
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| 9) | Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto pertaining to the transfer of the LLC Interests by the Company and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties hereto with respect to such transfer. |
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| 10) | Counterparts. This Agreement may be signed in counterparts with the same effect as if the signature on each such counterpart were on the same instrument, electronic signatures shall be deemed to be originals. |
[Signature Page Follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| VEMANTI GROUP, INC. | |||
| By: | /s/ Tan Tran | ||
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| Name: | Tan Tran | |
| Title: | Chief Executive Officer | ||
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| TAN TRAN |
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| By: | /s/ Tan Tran |
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[Signature Page to LLC Transfer Agreement]
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EXHIBIT 10.17
EXECUTION VERSION
VEMANTI GROUP, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is made and entered into as of April 1, 2024 (the “Effective Time”), by and between Mr. Nguyễn Văn Hoàng (the “Employee”) and Vemanti Group, Inc., a Nevada corporation (the “Company”).
WHEREAS, pursuant to that Share Exchange Agreement (the “Agreement”) dated as of the date hereof, by and among the Company, Mr. Tan Tran, as the sole holder of the Company’s Series A Preferred Stock, VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”) and the shareholders of VinHMS (the “Shareholders”), the Company shall acquire all of the Seller Securities in exchange for shares of Series B Preferred Stock. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement;
WHEREAS, the Employee is currently employed as the Chief Executive Officer of the Seller; and
WHEREAS, the Company desires to employ the Employee as its Chief Executive Officer subject to the terms and conditions set forth herein, and the Employee desires to accept employment on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto hereby agree as follows:
1. Employment and Duties. Subject to the terms and conditions hereof, the Employee shall serve as the Chief Executive Officer of the Company. The Employee shall perform all duties related to the Chief Executive Officer, together with additional responsibilities, duties, and reporting obligations commensurate with such position as may be specified from time to time by the board of directors of the Company responsibilities, duties, and reporting obligations commensurate with such position as may be specified from time to time by the board of directors of the Company (the “Board”). The Employee will be at-will, and shall work remotely.
2. ExclusiveServices. For so long as the Employee is employed by the Company, the Employee shall devote substantially all of his full business working time to his duties to the Company and its subsidiaries and affiliates (collectively, the “Company Group”) and shall use his best efforts to promote and serve the interests of the Company Group. Further, the Employee shall not, directly or indirectly, render material services to any person or organization outside of the Company Group without the consent of the Board or otherwise engage in activities that would interfere significantly with the performance of his duties to the Company Group.
3. Term. The Employee’s employment pursuant to this Agreement shall commence on the Effective Time and shall continue until the one (1) year anniversary of the Effective Time (the “Term”); provided that (i) the Term shall be renewed for additional one (1)-year periods on the expiration of the original Term of this Agreement and on each succeeding one (1) year anniversary thereof (each, a “Renewal Date”), unless the Company or the Employee gives written notice, at least sixty (60) days prior to a Renewal Date, of its or his intention not to so renew the Term, and (ii) the Term may be earlier terminated pursuant to Section 5 hereunder.
EXECUTION VERSION
4. Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Employee during the Term as compensation for services rendered hereunder:
a. Base Salary. The Company shall pay to the Employee an annual salary of $120,000 (the “Base Salary”), payable in substantially equal monthly installments at such intervals as may be determined by the Board in accordance with the Company’s ordinary payroll practices as established from time to time.
b. Bonus. The Employee shall be eligible to receive an annual incentive bonus as determined by, and within the sole discretion of, the Board.
c. Personal Time Off. The Employee shall be entitled to paid time off during each year of the Term, and any renewal periods pursuant to Section 3, prorated for partial years.
d. Benefit Plans. Upon satisfying all applicable eligibility requirements, the Employee shall be eligible to participate in all employee benefit plans, programs and policies of the Company, including, insurance and health benefits, as are generally available to the executive officers of the Company in accordance with the terms and conditions of such plans, programs and policies, as may be amended from time to time.
e. Expenses. The Company shall reimburse the Employee for reasonable travel and other business-related expenses incurred by him in the fulfillment of his duties hereunder upon presentation of written documentation thereof, and in accordance with the business expense reimbursement policies and procedures of the Company as in effect from time to time.
5. Termination of Employment. Subject to this Section 5, the Company shall have the right to terminate the Employee’s employment at any time, with or without Cause (as defined below); provided that, in the case of termination without Cause, the Company shall provide the Employee with sixty (60) days’ written notice prior to the termination. The Employee shall have the right to resign his employment at any time with or without Good Reason (as defined below); provided that the Employee shall: (i) provide the Company with sixty (60) days’ written notice prior to the resignation date; (ii) not make any public announcements concerning his resignation prior to the resignation date without the written consent of the Company; and (iii) continue to perform faithfully the duties assigned to him under this Agreement, or such other duties as the Board may assign to him, from the date of such notice until the date of his termination of employment.
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EXECUTION VERSION
a. Termination Due to Death or Disability. Unless otherwise terminated earlier pursuant to the terms of this Agreement, the Employee’s employment under this Agreement shall terminate upon the Employee’s death or may terminate upon the Employee’s Disability (as defined below) upon giving not less than thirty (30) days’ written notice to the Employee. In the event of the Employee’s death or Disability, the Company shall pay to the Employee (or his estate, as applicable) the Employee’s earned but unpaid Base Salary through and including the date of termination, and shall pay to the Employee (or his estate, as applicable) all reimbursement of expenses through to and including the date of termination, and any other amounts or benefits required to be paid or provided by law or under any plan, program, policy or practice of the Company (“Other Accrued Compensation and Benefits”), within thirty (30) days of the Employee’s separation from service by reason of death or Disability. For purposes of this Agreement, “Disability” means that the Employee, because of physical or mental disability or incapacity, is unable to perform the Employee’s duties hereunder for a period of ninety (90) days within any period of twelve (12) consecutive months during their employment with the Company.
b. Termination for Cause; Resignation without Good Reason. If, prior to the expiration of the Term, the Company terminates the Employee’s employment for Cause or the Employee resigns for any reason, the Employee shall only be entitled to payment of his Other Accrued Compensation and Benefits, payable in accordance with the Company’s policies and practices and in no event later than thirty (30) days after the Employee’s separation from service. The Employee shall have no further right to receive any other compensation or benefits after such termination or resignation of employment.
For purposes of this Agreement:
“Cause” shall mean:
(A) any commission of an illegal act, including the use of illegal drugs by the Employee;
(B) any abuse of alcohol by the Employee in a manner that interferes with the performance of his duties or responsibilities under this Agreement;
(C) any conduct of the Employee tending to bring the Company or any member of the Company Group into public disgrace or disrepute that causes injury to the business and operations of the Company or any such member of the Company Group;
(D) acts of dishonesty or fraud by the Employee against the Company or any member of the Company Group, or in connection with the performance of his duties hereunder;
(E) material breaches of this Agreement by the Employee or failure or refusal to comply with the provisions of this Agreement or to perform the Employee’s duties and obligations under this Agreement, in any material respect, after the Employee, being given written notice by the Company of such breach, failure or refusal, has failed to cure the same within thirty (30) calendar days of receipt of such notice;
(F) conviction by, or entering of a plea of guilty in, a court of competent jurisdiction for any crime involving moral turpitude or any felony punishable by imprisonment;
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EXECUTION VERSION
or
(G) commission of a willful act of gross negligence or gross misconduct.
“Good Reason” shall mean the occurrence of any of the following circumstances without the Employee’s prior written consent:
(A) (i) a substantial and material adverse change in the nature of Employee’s title, duties and/or responsibilities with the Company that represents a demotion from his title, duties or responsibilities as in effect immediately prior to such change, or (ii) the long-term, primary assignment to Employee of any duties materially inconsistent with Employee’s position, authority, duties and/or responsibilities as contemplated by Section 1 hereof;
(B) a material breach of this Agreement by the Company, including but not limited to failure of the Company to make any payment to Employee when due, unless the payment is not material and is being contested by the Company in good faith; and
(C) a liquidation, bankruptcy or appointment of a receivership of the Company.
c. Termination without Cause. From and after the first one (1)-year anniversary of the Effective Time, the Company may terminate the Employee’s employment without Cause upon sixty (60) days’ prior written notice. If, after such first (1st) anniversary and prior to the expiration of the Term, the Company terminates the Employee’s employment without Cause, the Employee shall receive the Other Accrued Compensation and Benefits and, subject to Section 5(e), shall be entitled to receive the Severance Benefits. For purposes of this Agreement, “Severance Benefits” mean a two (2)-month pro rata amount of the Base Salary, as determined based on a twelve (12)-month period, payable in substantially equal monthly installments over a period of two (2) months following the Employee’s termination of employment without Cause.
d. Termination for Good Reason. The Employee may terminate this Agreement at any time for Good Reason upon thirty (30) days’ prior written notice. If this Agreement is terminated by the Employee for Good Reason, the Employee shall receive the Other Accrued Compensation and Benefits and, subject to Section 5(e), the Severance Benefits.
e. Execution and Delivery of Release. The Company shall not be required to make the payments and furnish the benefits provided for under Section 5(c) or Section 5(d) unless the Employee executes and delivers to the Company within ten (10) days following the Employee’s termination without Cause or Employee terminating for Good Reason, a general waiver and release of claims in a form reasonably satisfactory to the Company and the release has become effective and irrevocable in its entirety. The Employee’s failure or refusal to sign the release (or the revocation of such release in accordance with applicable laws) shall result in the forfeiture of the payments and benefits under Section 5(c) and Section 5(d).
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EXECUTION VERSION
f. Notice of Termination. Any termination of employment by the Company or the Employee shall be communicated by a written “Notice of Termination” to the other party hereto given in accordance with Section 16 of this Agreement, except that the Company may waive the requirement for such Notice of Termination by the Employee. In the event of Employee’s resignation of employment for any reason, the Notice of Termination shall specify the date of termination.
6. Confidentiality. The Employee agrees that from and after the Effective Time and for a period of six (6) months following his separation from service for any reason (the “Restricted Period”), she will not at any time, except with the prior written consent of the Company Group or as required by law, directly or indirectly, reveal to any person, entity or other organization (other than any member of the Company Group or its respective employees, officers, directors, shareholders or agents) or use for the Employee’s own benefit any information reasonably deemed to be confidential by any member of the Company Group (“Confidential Information”) relating to the assets, liabilities, employees, goodwill, business or affairs of any member of the Company Group, including, any information concerning customers, business plans, marketing data, or other confidential information known to the Employee by reason of the Employee’s employment by, shareholdings in or other association with any member of the Company Group; provided that such Confidential Information does not include any information which (i) is available to the general public or is generally available within the relevant business or industry other than as a result of the Employee’s action or (ii) is or becomes available to the Employee from a third-party source provided that such third-party source is not bound by a confidentiality agreement or any other obligation of confidentiality to the Company Group. Confidential Information may be in any medium or form, including, physical documents, computer files or disks, videotapes, audiotapes, and oral communications.
7. Injunctive Relief. Without intending to limit the remedies available to the Company Group, the Employee agrees that a breach of any of the covenants contained in Section 6 of this Agreement may result in material and irreparable injury to the Company Group for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event that such a breach or threat thereof, any member of the Company Group shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining the Employee from engaging in activities prohibited by the covenants contained in Section 6 of this Agreement or such other relief as may be required specifically to enforce any of the covenants contained in this Agreement. Such injunctive relief in any court shall be available to the Company Group in lieu of, or prior to or pending determination in, any arbitration proceeding.
8. No Conflict. The Employee represents and warrants to the Company that he/she is not a party to or bound by agreement, understanding or arrangement with any other person or entity or any other agreement which would prevent or limit his ability to enter into this Agreement or perform his obligations hereunder.
9. Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made to assure payment. The Employee shall have no right, title or interest whatsoever in any investments which the Company Group may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
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EXECUTION VERSION
10. Non-Assignability; Successors. This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee. This Agreement is assignable by the Company to any member of the Company Group and shall inure to the benefit of and be binding upon the Company and its successors and assigns.
11. Withholding. Any payments made or benefits provided to the Employee under this Agreement shall be reduced by any applicable withholding taxes or other amounts required to be withheld by law or contract.
12. Other Severance Benefits. In consideration for the payments to be made to the Employee under this Agreement, the Employee agrees to waive any and all rights to any payments or benefits under any other severance plan, program or arrangement of the Company Group.
13. Survival of Certain Provisions. The rights and obligations set forth in the Agreement that by their terms extend beyond the Term shall survive the Term.
14. Arbitration. Any dispute or controversy arising under or in connection with this Agreement or otherwise in connection with the Employee’s employment hereunder that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration at a mutually convenient location within California in accordance with the commercial rules of the American Arbitration Association before one (1) arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual designated by the Company and one (1) individual to be selected by the Employee, or if such two (2) individuals cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration Association, and judgment upon the award rendered may be entered into any court having jurisdiction thereon.
15. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof.
16. Notices. Except as otherwise expressly provided herein, any notice, consent, waiver and other communication hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by e-mail, with confirmation of receipt, (iii) one (1) business day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) business days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 16):
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EXECUTION VERSION
a. if to the Employee:
Vemanti Group, Inc.
7545 Irvine Center Dr., Ste. 200
Irvine, CA 92618, USA
Attention: Nguyễn Văn Hoàng
Email: v.ceo@cloudhms.net
with a copy (which shall not constitute notice) to:
The Crone Law Group
Attention: Tammara Fort
Email: tfort@cronelawgroup.com
b. if to the Company:
Vemanti Group, Inc.
7545 Irvine Center Dr., Ste. 200
Irvine, CA 92618, USA
Attention: Vemanti Legal Department
Email: legal@vemanti.com
with a copy (which shall not constitute notice) to:
The Crone Law Group
Attention: Tammara Fort
Email: tfort@cronelawgroup.com
17. Interpretationand Rules of Construction. Except to the extent otherwise provided or that the context otherwise requires, the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement. When a reference is made in this Agreement to a Section, such reference is to a Section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. References to a Person are also to its successors and permitted assigns.
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EXECUTION VERSION
18. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof.
19. Amendment; Waiver. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the parties hereto. The waiver by either party of compliance by the other party with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
20. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“.pdf”)) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
[Signature page follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
| EMPLOYEE | |||
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| By: | /s/ Nguyễn Văn Hoàng | |
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| Name: | Nguyễn Văn Hoàng | |
| VEMANTI GROUP, INC. | |||
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| By: | /s/ Steve Jones | |
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| Name: | Steve Jones | |
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| Title: | Chief Financial Officer | |
[Signature Page to Employment Agreement]
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EXHIBIT 10.18
EXECUTION VERSION
VEMANTI GROUP, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is made and entered into as of April 1, 2024 (the “Effective Time”), by and between Mr. Tan Tran (the “Employee”) and Vemanti Group, Inc., a Nevada corporation (the “Company”).
WHEREAS, pursuant to that Share Exchange Agreement (the “Agreement”) dated as of the date hereof, by and among the Company, the Employee, as the sole holder of the Company’s Series A Preferred Stock, VinHMS Pte. Ltd., a Singapore private company limited by shares (the “Seller”) and the shareholders of VinHMS (the “Shareholders”), the Company shall acquire all of the Seller Securities in exchange for shares of Series B Preferred Stock. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement;
WHEREAS, the Employee is currently employed as the Chief Executive Officer of the Company; and
WHEREAS, the Company desires to employ the Employee as its Chief Strategy Officer subject to the terms and conditions set forth herein, and the Employee desires to accept employment on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto hereby agree as follows:
1. Employment and Duties. Subject to the terms and conditions hereof, the Employee shall serve as the Chief Strategy Officer of the Company. The Employee shall perform all duties related to the Chief Strategy Officer with primary responsibility for strategy formulation and management, including developing the corporate vision and strategy, overseeing strategic planning, and leading strategic initiatives, including M&A, transformation, partnerships, cost reduction, revenue growth, and capital markets expansion, utilizing investor relations expertise to create a supportive shareholder base and coordinating both private and public financing activities, facilitating engagement with institutional, family office and high-net-worth retails investors, and supporting the Board and Chief Executive Officer of the Company in matters such as public company compliance, such as the review and approval of financial statements and other forms and reports required to be filed with the Securities and Exchange Commission and OTC Markets as may be requested from time to time and such other responsibilities, duties, and reporting obligations commensurate with such position as may be specified from time to time by the board of directors of the Company (the “Board”). The Employee will be full-time, and their principal place of employment will be 7545 Irvine Center Dr., Ste 200, Irvine, CA 92618.
2. ExclusiveServices. For so long as the Employee is employed by the Company, the Employee shall devote substantially all of his full business working time to his duties to the Company and its subsidiaries and affiliates (collectively, the “Company Group”) and shall use his best efforts to promote and serve the interests of the Company Group. Further, the Employee shall not, directly or indirectly, render material services to any person or organization outside of the Company Group without the consent of the Board or otherwise engage in activities that would interfere significantly with the performance of his duties to the Company Group.
EXECUTION VERSION
3. Term. The Employee’s employment pursuant to this Agreement shall commence on the Effective Time and shall continue until the three (3) year anniversary of the Effective Time (the “Term”); provided that (i) the Term shall be renewed for additional one (1)-year periods on the expiration of the original Term of this Agreement and on each succeeding one (1) year anniversary thereof (each, a “Renewal Date”), unless the Company or the Employee gives written notice, at least sixty (60) days prior to a Renewal Date, of its or his intention not to so renew the Term, and (ii) the Term may be earlier terminated pursuant to Section 5 hereunder.
4. Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Employee during the Term as compensation for services rendered hereunder:
a. Base Salary. The Company shall pay to the Employee a salary of $540,000.00 (the “Base Salary”) for the Term, payable at the rate of $180,000.00 per year, in substantially equal monthly installments of $15,000, commencing on the first (1st) day of the Term. At the end of the Term, the Employee’s annual salary will be on par with, or as offered to, the Chief Executive Officer of the Company.
b. Bonus. The Employee shall be eligible to receive an annual incentive bonus as determined by, and within the sole discretion of, the Board.
c. Personal Time Off. The Employee shall be entitled to paid time off during each year of the Term, and any renewal periods pursuant to Section 3, prorated for partial years on par with, or as offered to, the Chief Executive Officer of the Company.
d. Benefit Plans. Upon satisfying all applicable eligibility requirements, the Employee shall be eligible to participate in allowances, benefit plans, programs and policies of the Company, including, insurance and health benefits, as are generally available to the Chief Executive Officer of the Company in accordance with the terms and conditions of such plans, programs and policies, as may be amended from time to time.
e. Expenses. The Company shall reimburse the Employee for reasonable travel and other business-related expenses incurred by him/her in the fulfillment of his duties hereunder upon presentation of written documentation thereof, and in accordance with the business expense reimbursement policies and procedures of the Company as in effect from time to time.
5. Termination of Employment. The Company shall have the right to terminate the Employee’s employment only in accordance with the terms of Section 5 hereunder; provided that, in the case of termination without Cause, the Company shall provide the Employee with sixty (60) days’ written notice prior to the termination. The Employee shall have the right to resign his employment at any time with or without Good Reason (as defined below); provided that the Employee shall: (i) provide the Company with sixty (60) days’ written notice prior to the resignation date; (ii) not make any public announcements concerning his resignation prior to the resignation date without the written consent of the Company; and (iii) continue to perform faithfully the duties assigned to him/her under this Agreement, or such other duties as the Board may assign to him/her, from the date of such notice until the date of his termination of employment.
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EXECUTION VERSION
a. Termination Due to Death or Disability. Unless otherwise terminated earlier pursuant to the terms of this Agreement, the Employee’s employment under this Agreement shall terminate upon the Employee’s death or may terminate upon the Employee’s Disability (as defined below) upon giving not less than thirty (30) days’ written notice to the Employee. In the event of the Employee’s death or Disability, the Company shall pay to the Employee (or his estate, as applicable) the Employee’s remaining but unpaid Base Salary no later than the date of termination, and shall pay to the Employee (or his estate, as applicable) all reimbursement of expenses through to and including the date of termination, and any other amounts or benefits required to be paid or provided by law or under any plan, program, policy or practice of the Company (“Other Accrued Compensation and Benefits”), within thirty (30) days of the Employee’s separation from service by reason of death or Disability. For purposes of this Agreement, “Disability” means that the Employee, because of physical or mental disability or incapacity, is unable to perform the Employee’s duties hereunder for a period of ninety (90) days within any period of twelve (12) consecutive months during their employment with the Company.
b. Termination for Cause;. If, prior to the expiration of the Term, the Company terminates the Employee’s employment for Cause, the Employee shall be entitled to the Employee’s remaining but unpaid Base Salary, such amount paid no later than the date of termination, and to payment of his Other Accrued Compensation and Benefits, payable in accordance with the Company’s policies and practices and in no event later than thirty (30) days after the Employee’s separation from service. The Employee shall have no further right to receive any other compensation or benefits after such termination of employment.
For purposes of this Agreement:
“Cause” shall mean:
(A) any commission of an illegal act, including the use of illegal drugs by the Employee;
(B) any abuse of alcohol by the Employee in a manner that interferes with the performance of his duties or responsibilities under this Agreement;
(C) any conduct of the Employee tending to bring the Company or any member of the Company Group into public disgrace or disrepute that causes injury to the business and operations of the Company or any such member of the Company Group;
(D) acts of dishonesty or fraud by the Employee against the Company or any member of the Company Group, or in connection with the performance of his duties hereunder;
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EXECUTION VERSION
(E) material breaches of this Agreement by the Employee or failure or refusal to comply with the provisions of this Agreement or to perform the Employee’s duties and obligations under this Agreement, in any material respect, after the Employee, being given written notice by the Company of such breach, failure or refusal, has failed to cure the same within thirty (30) calendar days of receipt of such notice;
(F) conviction by, or entering of a plea of guilty in, a court of competent jurisdiction for any crime involving moral turpitude or any felony punishable by imprisonment;
or
(G) commission of a willful act of gross negligence or gross misconduct.
“Good Reason” shall mean the occurrence of any of the following circumstances without the Employee’s prior written consent:
(A) (i) a substantial and material adverse change in the nature of Employee’s title, duties and/or responsibilities with the Company that represents a demotion from his title, duties or responsibilities as in effect immediately prior to such change, or (ii) the long-term, primary assignment to Employee of any duties materially inconsistent with Employee’s position, authority, duties and/or responsibilities as contemplated by Section 1 hereof;
(B) a material breach of this Agreement by the Company, including but not limited to failure of the Company to make any payment to Employee when due, unless the payment is not material and is being contested by the Company in good faith; and
(C) a liquidation, bankruptcy or appointment of a receivership of the Company.
c. Termination without Cause. From and after the three (3)-year anniversary of the Effective Time, the Company may terminate the Employee’s employment without Cause upon sixty (60) days’ prior written notice. If, after such first (1st) anniversary and prior to the expiration of the Term, the Company terminates the Employee’s employment without Cause, the Employee shall receive the Other Accrued Compensation and Benefits and, subject to Section 5(e), shall be entitled to receive the remaining unpaid portion of the Base Salary, if any, payable in a lump sum on the date of termination.
d. Termination for Good Reason. The Employee may terminate this Agreement at any time for Good Reason upon thirty (30) days’ prior written notice. If this Agreement is terminated by the Employee for Good Reason, the Employee shall receive the Other Accrued Compensation and Benefits and, subject to Section 5(e), the remaining unpaid portion of the Base Salary, if any, payable in a lump sum on the date of termination.
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EXECUTION VERSION
e. Resignation without Good Reason. The Employee hereby agrees not to resign without Good Reason during the Term, and in the event he does resign without Good Reason during the Term, then upon such resignation the Employee shall not be entitled to the Employee’s remaining but unpaid Base Salary, but will be entitled only to any earned but unpaid salary for the month of his resignation (such amount of earned but unpaid salary not to exceed $15,000 for the month of his resignation) and any Other Accrued Compensation and Benefits, payable in accordance with the Company’s policies and practices and in no event later than thirty (30) days after the Employee’s separation from service.
f. Execution and Delivery of Release. The Company shall not be required to make the payments and furnish the benefits provided for under Section 5(c) or Section 5(d) unless the Employee executes and delivers to the Company within ten (10) days following the Employee’s termination without Cause or Employee terminating for Good Reason, a general waiver and release of claims in a form reasonably satisfactory to the Company and the release has become effective and irrevocable in its entirety. The Employee’s failure or refusal to sign the release (or the revocation of such release in accordance with applicable laws) shall result in the forfeiture of the payments and benefits under Section 5(c).
g. Notice of Termination. Any termination of employment by the Company or the Employee shall be communicated by a written “Notice of Termination” to the other party hereto given in accordance with Section 16 of this Agreement, except that the Company may waive the requirement for such Notice of Termination by the Employee. In the event of Employee’s resignation of employment for any reason, the Notice of Termination shall specify the date of termination, which date shall not be less than sixty (60) days after giving such notice unless the Company agrees to waive any notice period by the Employee.
6. Confidentiality. The Employee agrees that from and after the Effective Time and for a period of six (6) months following his separation from service for any reason (the “Restricted Period”), she will not at any time, except with the prior written consent of the Company Group or as required by law, directly or indirectly, reveal to any person, entity or other organization (other than any member of the Company Group or its respective employees, officers, directors, shareholders or agents) or use for the Employee’s own benefit any information reasonably deemed to be confidential by any member of the Company Group (“Confidential Information”) relating to the assets, liabilities, employees, goodwill, business or affairs of any member of the Company Group, including, any information concerning customers, business plans, marketing data, or other confidential information known to the Employee by reason of the Employee’s employment by, shareholdings in or other association with any member of the Company Group; provided that such Confidential Information does not include any information which (i) is available to the general public or is generally available within the relevant business or industry other than as a result of the Employee’s action or (ii) is or becomes available to the Employee from a third-party source provided that such third-party source is not bound by a confidentiality agreement or any other obligation of confidentiality to the Company Group. Confidential Information may be in any medium or form, including, physical documents, computer files or disks, videotapes, audiotapes, and oral communications.
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EXECUTION VERSION
7. Injunctive Relief. Without intending to limit the remedies available to the Company Group, the Employee agrees that a breach of any of the covenants contained in Section 6 of this Agreement may result in material and irreparable injury to the Company Group for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event that such a breach or threat thereof, any member of the Company Group shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining the Employee from engaging in activities prohibited by the covenants contained in Section 6 of this Agreement or such other relief as may be required specifically to enforce any of the covenants contained in this Agreement. Such injunctive relief in any court shall be available to the Company Group in lieu of, or prior to or pending determination in, any arbitration proceeding.
8. No Conflict. The Employee represents and warrants to the Company that he/she is not a party to or bound by agreement, understanding or arrangement with any other person or entity or any other agreement which would prevent or limit his ability to enter into this Agreement or perform his obligations hereunder.
9. Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made to assure payment. The Employee shall have no right, title or interest whatsoever in any investments which the Company Group may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
10. Non-Assignability; Successors. This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee. This Agreement is assignable by the Company to any member of the Company Group and shall inure to the benefit of and be binding upon the Company and its successors and assigns.
11. Withholding. Any payments made or benefits provided to the Employee under this Agreement shall be reduced by any applicable withholding taxes or other amounts required to be withheld by law or contract.
12. Other Severance Benefits. In consideration for the payments to be made to the Employee under this Agreement, the Employee agrees to waive any and all rights to any payments or benefits under any other severance plan, program or arrangement of the Company Group.
13. Survival of Certain Provisions. The rights and obligations set forth in the Agreement that by their terms extend beyond the Term shall survive the Term.
14. Arbitration. Any dispute or controversy arising under or in connection with this Agreement or otherwise in connection with the Employee’s employment hereunder that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration at a mutually convenient location within California in accordance with the commercial rules of the American Arbitration Association before one (1) arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual designated by the Company and one (1) individual to be selected by the Employee, or if such two (2) individuals cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration Association, and judgment upon the award rendered may be entered into any court having jurisdiction thereon.
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EXECUTION VERSION
15. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof.
16. Notices. Except as otherwise expressly provided herein, any notice, consent, waiver and other communication hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by e-mail, with confirmation of receipt, (iii) one (1) business day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) business days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 16):
a. if to the Employee:
Vemanti Group, Inc.
7545 Irvine Center Dr., Ste. 200
Irvine, CA 92618, USA
Attention: Tan Tran
Email: tan.tran@vemanti.com
with a copy (which shall not constitute notice) to:
The Crone Law Group
Attention: Tammara Fort
Email: tfort@cronelawgroup.com
b. if to the Company:
Vemanti Group, Inc.
7545 Irvine Center Dr., Ste. 200
Irvine, CA 92618, USA
Attention: Vemanti Legal Department
Email: legal@vemanti.com
with a copy (which shall not constitute notice) to:
The Crone Law Group
Attention: Tammara Fort
Email: tfort@cronelawgroup.com
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EXECUTION VERSION
17. Interpretationand Rules of Construction. Except to the extent otherwise provided or that the context otherwise requires, the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement. When a reference is made in this Agreement to a Section, such reference is to a Section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. References to a Person are also to its successors and permitted assigns.
18. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof.
19. Amendment; Waiver. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the parties hereto. The waiver by either party of compliance by the other party with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
20. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“.pdf”)) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
| TAN TRAN | |||
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| By: | /s/ Tan Tran | |
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| Name: | Tan Tran | |
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| VEMANTI GROUP, INC. |
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| By: | /s/ Nguyen Van Hoang |
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| Name: | Nguyen Van Hoang |
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| Title: | Chief Executive Officer | |
[Signature Page to Employment Agreement]
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