Form 8-K
8-K — AtlasClear Holdings, Inc.
Accession: 0001493152-26-047157
Filed: 2026-10-15
Period: 2026-10-14
CIK: 0001963088
SIC: 6199 (FINANCE SERVICES)
Item: Entry into a Material Definitive Agreement
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Unregistered Sales of Equity Securities
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — form8-k.htm (Primary)
EX-2.1 (ex2-1.htm)
EX-10.1 (ex10-1.htm)
EX-10.2 (ex10-2.htm)
EX-99.1 (ex99-1.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
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2026-10-14
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): October
14, 2026
AtlasClear
Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-41956
92-2303797
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
4350
West Cypress Street, Suite
270
Tampa,
FL
33607
(Address of principal executive offices)
(Zip Code)
(727)
446-6660
(Registrant’s telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
☐
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
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:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Common
Stock, par value $0.0001 per share
ATCH
NYSE
American LLC
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 Definitive Material Agreement.
On
October 14, 2026 (the “Signing Date”), AtlasClear Holdings, Inc. (the “Company”) entered into a business combination
agreement (the “Acquisition Agreement”) with Ark Financial Services, Inc., a Delaware corporation (“Ark”), AC
Ark Subco 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), AC Ark Subco 2, LLC,
a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub II” and together with Merger
Sub, the “Merger Subs”), The Robert D. Keyser, Jr. Revocable Trust, a Florida revocable trust and the majority stockholder
of Ark (the “Trust”), and Robert D. Keyser, Jr., an individual. Ark is the sole owner of Dawson James Securities, Inc. (“Dawson
James”), an investment bank and registered broker-dealer. Robert D. Keyser, Jr., the trustee of the Trust, is also an officer and
director of Ark and a director of the Company. Pursuant to the terms of the Acquisition Agreement, on the Signing Date the Company purchased
24.9% of the issued and outstanding equity securities of Ark from the Trust (the “Initial Equity Purchase”), and the Company
will, subject to the satisfaction of certain conditions, acquire the remaining equity securities of Ark at a subsequent closing (the
“Closing”) by means of the merger of Merger Sub with and into Ark, immediately followed by the merger of the surviving company
with and into Merger Sub II.
The
purchase price for the Initial Equity Purchase on the Signing Date consisted of $2,500,000 in cash and the issuance to the Trust of a
promissory note in the original principal amount of $2,500,000 (the “Seller Note”). The Seller Note bears interest at the
rate of 5% per annum and is payable in full on the earliest to occur of 90 days from the Signing Date, the date of the closing of a
Qualified Financing (as defined in the Seller Note), and the Closing. Pursuant to the terms of the Acquisition Agreement, the purchase
price payable by the Company at the Closing for the remining equity securities of Ark will consist of $2,437,500 in cash and a number
of shares of the Company’s common stock (“Common Stock”) calculated as $13,812,500 divided by the average volume weighted
average price (“VWAP”) of the Common Stock over the five trading day period ending on the date of the Closing. In addition,
the Company may pay up to an additional $812,500 in cash and a number of additional shares of Common Stock calculated as $2,437,500 divided
by the average VWAP of the Common Stock immediately prior to issuance (collectively, the “Deferred Consideration”) based
on the revenue of Ark and its subsidiaries exceeding $21,250,000 in the years ending December 31, 2026 and 2027 (with up to 50% of the
Deferred Consideration payable on account of each such year). A portion of the cash and shares of Common Stock payable at Closing is
to be held in an escrow account for up to 18 months following the Closing as security for the Company’s indemnification rights
under the Acquisition Agreement.
The
obligations of each of the parties under the Acquisition Agreement are subject to specified conditions, including, among other things:
(i) the receipt of all required regulatory approvals, including the consent of FINRA, (ii) the Company’s stockholders having approved
the issuance of the shares of Common Stock pursuant to the Acquisition Agreement, if such stockholder approval is required pursuant to
the listing rules of the NYSE American (the “Company Stockholder Approval”), (iii) the absence of any material adverse effect
with respect to the other parties, and (iv) the absence of any injunctions being entered into or law being adopted that would make the
consummation of the transactions at the Closing illegal.
The
Acquisition Agreement contains customary representations and warranties of the parties. It also contains customary covenants, including
(i) covenants providing for each of the parties to use best efforts to satisfy all conditions to Closing, (ii) covenants providing for
Ark to carry on its business in the ordinary course of business, and to refrain from taking certain actions, during the period between
the Signing Date and the Closing, and (iii) covenants regarding efforts to obtain all required regulatory approvals and the Company Stockholder
Approval. Ark and the Trust have also agreed not to solicit, initiate, induce, encourage or otherwise facilitate the making of any proposal
or offer relating to alternate transactions or, engage in any discussions or negotiations with respect to certain alternate transactions.
The
Acquisition Agreement contains termination rights for each of Ark and
the Company, including, without limitation, in the event that (i) any governmental entity issues a non-appealable final order denying
approval of the transactions contemplated by the Acquisition Agreement; (ii)
the Closing does not occur within
one year of
the Signing Date; or
(iii) the other party breaches its representations, warranties or covenants under the Acquisition Agreement which would give rise to
the failure of a closing condition and such breach is not cured with 30-days of receipt of written notice of such breach.
Also
on the Signing Date and in connection with the execution of the Acquisition Agreement, the Company and the Trust entered into a registration
rights and lock-up agreement (the “RRA”), which will become effective at the Closing. Pursuant to the terms of the RRA, the
Company granted the Trust certain registration rights with respect to the shares of Common Stock issuable pursuant to the terms of the
Acquisition Agreement, and the Trust agreed not to transfer any of such shares for a period of six months following the Closing, subject
to certain exceptions. Among other things, the Company agreed to file a resale shelf registration statement within six months following
the Closing.
The
foregoing descriptions of the Acquisition Agreement, the Seller Note and the RRA do not purport to be complete and are qualified in their
entireties by reference to the full text of such agreements, copies of which are filed as Exhibits 2.1, 10. 1 and 10.2, respectively,
to this Current Report on Form 8-K and are incorporated herein by reference.
The
Acquisition Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended
to provide any other factual information about the Company, Ark or any of their respective subsidiaries or affiliates. The representations,
warranties and covenants contained in the Acquisition Agreement were made by the parties thereto only for purposes of that agreement
and as of specific dates; were solely for the benefit of the parties to the Acquisition Agreement; may be subject to limitations agreed
upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual
risk between the parties to the Acquisition Agreement instead of establishing these matters as facts; and may be subject to standards
of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries
under the Acquisition Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations
of the actual state of facts or condition of the Company, Ark or any of their respective subsidiaries or affiliates. Additionally, the
representations, warranties, covenants, conditions and other terms of the Acquisition Agreement may be subject to subsequent waiver or
modification. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the
date of the Acquisition Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference in its entirety.
Item
3.02 Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the shares of Common Stock to be issued pursuant
to the terms of the Acquisition Agreement is incorporated herein by reference. The shares of Common Stoc to be issued pursuant to the
Acquisition Agreements have been offered and sold pursuant to exemptions from the registration requirements of the Securities Act afforded
by Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder, for the sale of securities not involving a public offering.
Item
8.01 Other Events.
On
October 15, 2026, the Company issued a press release announcing, among other things, the transactions described above. A copy of the
press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
Exhibit
Description
of Exhibit
2.1*
Business Combination Agreement, dated as of October 14, 2026, by and among AtlasClear Holdings, Inc., Ark Financial Services, Inc. and the other parties thereto.
10.1
Unsecured Promissory Note, dated October 14, 2026.
10.2
Registration Rights and Lock-Up Agreement, dated as of October 14, 2026, by and between AtlasClear Holdings, Inc. and the Trust,
99.1
Press release dated October 15, 2026.
104
Cover page interactive data file (embedded
within the Inline XBRL document).
*
Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies
of any of the omitted schedules upon request by the SEC. In addition, certain portions of this agreement have been redacted pursuant
to Item 601(b)(10)(iv) of Regulation S-K. An unredacted copy of the agreement will be furnished to the SEC upon request.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ATLASCLEAR
HOLDINGS, INC.
Date:
October 15, 2026
/s/
Sandip I. Patel
Name:
Sandip
I. Patel
Title:
Chief
Financial Officer
EX-2.1
EX-2.1
Filename: ex2-1.htm · Sequence: 2
Exhibit
2.1
CERTAIN
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT
TREATS AS PRIVATE OR CONFIDENTIAL.
Execution
Version
BUSINESS
COMBINATION AGREEMENT
by
and among
AtlasClear
Holdings,
AC
Ark Subco 1, Inc.
AC
Ark Subco 2, LLC,
Ark
Financial Services, Inc.,
The
Robert D. Keyser, Jr. Revocable Trust
and
Robert
D. Keyser, Jr.
dated
as of October 14, 2026
TABLE
OF CONTENTS
Article I
CERTAIN DEFINITIONS
2
Section
1.1
Definitions
2
Article II MERGER
16
Section
2.1
Transactions
16
Section
2.2
Closing
of the Mergers
19
Section
2.3
Allocation
Schedule
19
Section
2.4
Deliverables
19
Section
2.5
Deferred
Consideration
20
Section
2.6
Withholding
21
Section
2.7
Excess
Net Capital
22
Article III
REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP COMPANIES
23
Section
3.1
Organization
and Qualification
23
Section
3.2
Capitalization
of the Group Companies
23
Section
3.3
Authority
25
Section
3.4
Financial
Statements; Undisclosed Liabilities
25
Section
3.5
Consents
and Requisite Governmental Approvals; No Violations
26
Section
3.6
Permits
26
Section
3.7
Material
Contracts
27
Section
3.8
Absence
of Changes
29
Section
3.9
Litigation
29
Section
3.10
Compliance
with Applicable Law
29
Section
3.11
Employee
Plans
29
Section
3.12
Environmental
Matters
31
Section
3.13
Intellectual
Property
31
Section
3.14
Labor
Matters
33
Section
3.15
Insurance
34
Section
3.16
Tax
Matters
34
Section
3.17
Brokers
35
Section
3.18
Real
and Personal Property
35
Section
3.19
Transactions
with Affiliates
36
Section
3.20
Data
Privacy and Security
36
Section
3.21
Compliance
with International Trade & Anti-Corruption Laws
38
Section
3.22
Broker-Dealer
Matters
38
Section
3.23
Investigation;
No Other Representations
39
Section
3.24
EXCLUSIVITY
OF REPRESENTATIONS AND WARRANTIES
40
i
Article IV REPRESENTATIONS
AND WARRANTIES OF THE MAJORITY STOCKHOLDER
40
Section
4.1
Authorization
41
Section
4.2
Binding
Agreement
41
Section
4.3
Ownership
41
Section
4.4
No
Breach
42
Section
4.5
Compliance
with Laws; Claims
42
Section
4.6
Representation
by Counsel
42
Section
4.7
Tax
Matters.
42
Article V REPRESENTATIONS
AND WARRANTIES RELATING TO THE ATLASCLEAR PARTIES
43
Section
5.1
Organization
and Qualification
43
Section
5.2
Authority
43
Section
5.3
Consents
and Requisite Governmental Approvals; No Violations
43
Section
5.4
Brokers
44
Section
5.5
Tax
Matters
44
Section
5.6
Investigation;
No Other Representations
45
Section
5.7
Capitalization
46
Section
5.8
Valid
Issuance of AtlasClear Shares
46
Section
5.9
SEC
Reports; Financial Statements
46
Section
5.10
Absence
of Certain Changes
46
Section
5.11
Listing
and Maintenance Requirements
47
Section
5.12
Investment
Company
47
Section
5.13
EXCLUSIVITY
OF REPRESENTATIONS AND WARRANTIES
47
Article VI COVENANTS
48
Section
6.1
Conduct
of Business of the Company
48
Section
6.2
Efforts
to Consummate; Litigation
49
Section
6.3
Confidentiality
and Access to Information
50
Section
6.4
Public
Announcements
50
Section
6.5
Tax
Matters
51
Section
6.6
Exclusive
Dealing
52
Section
6.7
Regulatory
Approval
52
Section
6.8
Merger
Sub and Merger Sub II Equityholder Approval
53
Section
6.9
FIRPTA
Certificates
53
Section
6.10
AtlasClear
Stockholder Approval
53
Article VII
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS
53
Section
7.1
Conditions
to the Obligations of the Parties
53
Section
7.2
Other
Conditions to the Obligations of the AtlasClear Parties
54
Section
7.3
Other
Conditions to the Obligations of the Company
56
Section
7.4
Frustration
of Closing Conditions
56
Article VIII
TERMINATION
57
Section
8.1
Termination
57
Section
8.2
Effect
of Termination
58
Article IX INDEMNIFICATION.
58
Section
9.1
Survival
of Representations, Warranties and Covenants; Reliance
58
Section
9.2
Indemnification
by AtlasClear
58
Section
9.3
Indemnification
by the Majority Stockholder
59
ii
Section
9.4
Certain
Limitations on Indemnification Obligations
59
Section
9.5
Defense
of Claims
60
Section
9.6
Non-Third
Party Claims
61
Section
9.7
Tax
Treatment
61
Section
9.8
No
Right of Contribution
61
Section
9.9
Set-off
61
Section
9.10
Exclusive
Remedy
61
Section
9.11
No
Waiver
62
Section
9.12
Distribution
of Indemnity Escrow Account
62
Section
9.13
Calculation
of Losses
62
Article X MISCELLANEOUS
62
Section
10.1
Entire
Agreement; Assignment
62
Section
10.2
Amendment
62
Section
10.3
Notices
63
Section
10.4
Governing
Law
63
Section
10.5
Fees
and Expenses
63
Section
10.6
Construction;
Interpretation
64
Section
10.7
Exhibits
and Schedules
64
Section
10.8
Parties
in Interest
64
Section
10.9
Severability
64
Section
10.10
Counterparts;
Electronic Signatures
65
Section
10.11
Knowledge
of Company; Knowledge of AtlasClear
65
Section
10.12
No
Recourse
65
Section
10.13
Extension;
Waiver
65
Section
10.14
Waiver
of Jury Trial
66
Section
10.15
Submission
to Jurisdiction
66
Section
10.16
Remedies
67
Section
10.17
Guaranty.
67
EXHIBITS
Exhibit
A
Form
of Registration Rights and Lock-up Agreement
Exhibit
B
Form
of Initial Seller Note
Exhibit
C
Sample
Revenue Calculation
Exhibit
D
Warrants
and Economic Participations to be Distributed
Exhibit
E
Form
of Employment Agreement
Exhibit
F
Form
of Release
Exhibit
G
Special
Indemnities
iii
BUSINESS
COMBINATION AGREEMENT
This
BUSINESS COMBINATION AGREEMENT (this “Agreement”), dated as of October 14, 2026, is made by and among AtlasClear Holdings,
Inc., a Delaware corporation (“AtlasClear”), AC Ark Subco 1, Inc., a Delaware corporation (“Merger Sub”),
AC Ark Subco 2, LLC, a Delaware limited liability company (“Merger Sub II” and together with Merger Sub, the “Merger
Subs”), Ark Financial Services, Inc., a Delaware corporation (the “Company”), the Robert D. Keyser, Jr.
Revocable Trust, a Florida revocable trust (the “Trust”), and Robert D. Keyser, Jr., an individual (the “Beneficial
Owner”; and collectively with the Trust, the “Majority Stockholder”). Except to the extent expressly set
forth herein, the Trust and the Beneficial Owner shall be responsible, jointly and severally, for all obligations of the Majority Stockholder
hereunder and all actions taken (or not taken) shall be deemed taken (or not taken) by the Trust and the Beneficial Owner jointly and
severally. AtlasClear, the Merger Subs, the Company and the Majority Stockholder shall be referred to herein from time to time collectively
as the “Parties.” Capitalized terms used but not otherwise defined herein have the meanings set forth in Section
1.1.
WHEREAS,
AtlasClear is a technology enabled financial services platform and the Merger Subs are, as of the date of this Agreement and will be
as of the Closing Date, wholly-owned direct Subsidiaries of AtlasClear that were formed for purposes of consummating the Transactions
and the Ancillary Documents;
WHEREAS,
on the date hereof and simultaneously with the execution hereof, AtlasClear shall purchase 24.9% of the issued and outstanding equity
of the Company from the Majority Stockholder (the “Purchased Shares”) in exchange for the Initial Purchase Price;
WHEREAS,
on the Closing Date, (a) Merger Sub will merge with and into the Company (the “First Merger”), with the Company as
the surviving company in the First Merger and, after giving effect to the First Merger, the Company will be a wholly-owned Subsidiary
of AtlasClear (the Company, in its capacity as the surviving corporation of the First Merger, is sometimes referred to as the “Surviving
Company”), (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the
Surviving Company will merge with and into Merger Sub II (the “Second Merger”, together with the First Merger, the
“Mergers” and collectively with the other transactions contemplated by this Agreement and the Ancillary Documents
(as defined below), the “Transactions”), with Merger Sub II being the surviving entity of the Second Merger (Merger
Sub II, in its capacity as the surviving entity of the Second Merger, is sometimes referred to as the “Surviving Entity”)
and (c) each Company Share will be automatically converted as of the First Effective Time into the right to receive a portion of the
Stage 2 Transaction Consideration, in each case, on the terms and subject to the conditions set forth in this Agreement;
WHEREAS,
simultaneously with the execution of this Agreement, AtlasClear, certain shareholders of AtlasClear (the “AtlasClear Shareholders”)
and the Majority Stockholder will enter into a Registration Rights and Lock-up Agreement, substantially in the form attached hereto as
Exhibit A (the “Registration Rights and Lock-up Agreement”), pursuant to which, among other things, the parties
will (a) be granted certain registration rights with respect to their respective AtlasClear Shares, and (b) for the designated period
specified therein, shall not transfer their AtlasClear Shares, in each case, subject to the terms and upon the conditions set forth in
the Registration Rights and Lock-up Agreement;
WHEREAS,
each of the Parties intends for U.S. federal income tax purposes that (a) this Agreement constitute a “plan of reorganization”
within the meaning of Section 368 of the Code and Treasury Regulations promulgated thereunder, and (b) the Mergers constitute a single
integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code (clauses (a)
and (b), the “Intended Tax Treatment”).
1
NOW,
THEREFORE, in consideration of the premises and the mutual promises set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows:
Article
I
CERTAIN
DEFINITIONS
Section
1.1 Definitions. As used in this Agreement, the following terms have the respective meanings set forth below.
“Affiliate”
means, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto.
“Agreement”
has the meaning set forth in the introductory paragraph to this Agreement.
“Allocation
Schedule” has the meaning set forth in Section 2.3.
“Ancillary
Documents” means the Registration Rights and Lock-up Agreement and each other agreement, document, instrument and/or certificate
contemplated by this Agreement executed or to be executed in connection with the Transactions.
“Anti-Corruption
Laws” means, collectively, the U.S. Foreign Corrupt Practices Act of 1977, as amended (FCPA) and any other applicable anti-bribery
or anti-corruption Laws related to combatting bribery, corruption and money laundering.
“Appraiser”
has the meaning set forth in Section 2.7(c).
“AtlasClear”
has the meaning set forth in the introductory paragraph to this Agreement.
“AtlasClear
Disclosure Schedules” means the disclosure schedules to this Agreement delivered to the Company by AtlasClear on the date of
this Agreement.
“AtlasClear
Fundamental Representations” means the representations and warranties set forth in Section 5.1 (Organization and Qualification),
Section 5.2 (Authority), Section 5.4 (Brokers), Section 5.7 (Capitalization) and Section 5.8 (Valid Issuance
of AtlasClear Shares).
“AtlasClear
Indemnified Parties” has the meaning set forth in Section 9.3.
2
“AtlasClear
Material Adverse Effect” means any change, event, effect or occurrence that, individually or in the aggregate with any other
change, event, effect or occurrence, has had or would reasonably be expected to have a material adverse effect on the ability of any
AtlasClear Party to consummate the Mergers in accordance with the terms of this Agreement; provided, however, that none of the following
shall be taken into account in determining whether an AtlasClear Material Adverse Effect has occurred or is reasonably likely to occur:
any adverse change, event, effect or occurrence arising after the date of this Agreement from or related to (i) general business or economic
conditions in or affecting the United States, or changes therein, or the global economy generally, (ii) any national or international
political or social conditions in the United States or any other country, including the engagement by the United States or any other
country in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence in any place of
any military or terrorist attack, sabotage or cyberterrorism, (iii) changes in conditions of the financial, banking, capital or securities
markets generally in the United States or any other country or region in the world, or changes therein, including changes in interest
rates in the United States or any other country and changes in exchange rates for the currencies of any countries, (iv) changes in any
applicable Laws, (v) any change, event, effect or occurrence that is generally applicable to the industries or markets in which any AtlasClear
Party operates, or (vi) the execution or public announcement of this Agreement or the pendency or consummation of the Transactions, including
the impact thereof on the relationships, contractual or otherwise, of any AtlasClear Party with investors, contractors, lenders, suppliers,
vendors, partners, licensors, licensees, payors or other third parties related thereto (provided that the exception in this clause (vi)
shall not apply to the representations and warranties set forth in Section 5.3(b) to the extent that its purpose is to address
the consequences resulting from the public announcement or pendency or consummation of the Transactions or the condition set forth in
Section 7.2(a) to the extent it relates to such representations and warranties); provided, however, that any change, event, effect
or occurrence resulting from a matter described in any of the foregoing clauses (i) through (v) may be taken into account in determining
whether an AtlasClear Material Adverse Effect has occurred or is reasonably likely to occur to the extent such change, event, effect
or occurrence has had or would reasonably be expected to have a disproportionate adverse effect on AtlasClear relative to other similarly
situated companies operating in the industries or markets in which AtlasClear operates.
“AtlasClear
Non-Party Affiliates” means, collectively, each of the former, current or future Affiliates, Representatives, successors or
permitted assigns of any AtlasClear Party (other than, for the avoidance of doubt, any AtlasClear Party).
“AtlasClear
Parties” means, collectively, AtlasClear and the Merger Subs (and each, individually, a “AtlasClear Party”).
“AtlasClear
Shareholders” has the meaning set forth in the recitals to this Agreement.
“AtlasClear
Shares” means shares of AtlasClear common stock.
“AtlasClear
Stockholder Approval” has the meaning set forth in Section 6.10.
“Basket
Amount” has the meaning set forth in Section 9.4(a).
“Beneficial
Owner” has the meaning set forth in the preamble of this Agreement.
“Business”
means the business of the Company.
“Business
Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for the general
transaction of business.
“Calculation
Date” has the meaning set forth in Section 2.5(a)(i).
“Cap”
has the meaning set forth in Section 9.4(b).
“Certificates”
has the meaning set forth in Section 2.1(b)(viii).
“Change
of Control Payment” means (a) any success, change of control, retention, transaction bonus or other similar payment or amount
to any Person as a result of this Agreement, any Ancillary Document or the Transactions or (b) any payments made or required to be made
pursuant to or in connection with or upon termination of, and any fees, expenses or other payments owing or that will become owing in
respect of, any Company Related Party Transaction (in the case of this clause (b), regardless of whether paid or payable prior to, at
or after the Closing or in connection with or otherwise related to this Agreement or any Ancillary Document or one or more circumstances,
matters, transactions or events unrelated to this Agreement or the Ancillary Documents). Notwithstanding the foregoing or anything to
the contrary herein, Change of Control Payments shall not include (i) the AtlasClear Shares to be issued pursuant hereto, (ii) any payments
made in the ordinary course of business consistent with past practice, (iii) any payments required under existing Contracts entered into
prior to the date of this Agreement in the ordinary course of business and not in contemplation of the transactions contemplated hereby,
and (iv) any severance payments made pursuant to existing severance policies or agreements in effect prior to the date of this Agreement
that are triggered by a termination of employment without cause or resignation for good reason (and not solely by the consummation of
the transactions contemplated hereby).
3
“Claim”
means any claim, action, litigation, inquiry, proceeding (arbitral, administrative, legal or otherwise, including any informal proceeding),
cause of action, audit, suit, settlement, stipulation, hearing, investigation, charge, complaint, demand or similar matter.
“Closing”
has the meaning set forth in Section 2.2.
“Closing
Date” has the meaning set forth in Section 2.2.
“Closing
Filing” has the meaning set forth in Section 6.4(b).
“Closing
Net Capital Amount” has the meaning set forth in Section 2.7(a).
“Closing
Press Release” has the meaning set forth in Section 6.4(b).
“CMA”
has the meaning set forth in Section 6.7.
“COBRA”
means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code and any similar state Law.
“Code”
means the U.S. Internal Revenue Code of 1986, as amended.
“Company”
has the meaning set forth in the introductory paragraph to this Agreement.
“Company
Acquisition Proposal” means (a) any transaction or series of related transactions under which any Person(s), directly or indirectly,
(i) acquires or otherwise purchases the Company and its controlled Affiliates, taken as a whole, or a majority of the voting power of
Equity Securities of the Company, or (ii) acquires, is granted, leased or licensed or otherwise purchases all or substantially all of
assets, properties or businesses of the Company and its controlled Affiliates, taken as a whole (in the case of each of clause (i) and
(ii), whether by merger, consolidation, liquidation, dissolution, recapitalization, reorganization, amalgamation, scheme of arrangement,
purchase of assets, share exchange, business combination, purchase or issuance of Equity Securities, tender offer or otherwise), or (b)
any issuance, sale or acquisition of any portion of the Equity Securities or voting power or similar investment in the Company or any
of its Subsidiaries. Notwithstanding the foregoing or anything to the contrary herein, none of this Agreement, the Ancillary Documents
or the Transactions shall constitute a Company Acquisition Proposal.
“Company
Board” means the board of directors of the Company.
“Company
Disclosure Schedules” means the disclosure schedules to this Agreement delivered to AtlasClear by the Company on the date of
this Agreement.
“Company
Dissenting Shares” has the meaning set forth in Section 2.1(b)(xi).
“Company
Dissenting Stockholders” has the meaning set forth in Section 2.1(b)(xi).
“Company
Fundamental Representations” means the representations and warranties set forth in Section 3.1(a) and Section 3.1(b)
(Organization and Qualification), Section 3.2(a), Section 3.2(c) and Section 3.2(g) (Capitalization of the Group
Companies), Section 3.3 (Authority), Section 3.8 (Absence of Changes), Section 3.17 (Brokers), Section 3.22
(Broker-Dealer Matters) and Article IV.
“Company
Intellectual Property” means collectively, Company Owned Intellectual Property and Company Licensed Intellectual Property.
4
“Company
IT Systems” means all computer systems, computer software and hardware, communication systems, servers, network equipment and
related documentation, in each case, owned, licensed or leased by a Group Company.
“Company
Licensed Intellectual Property” means Intellectual Property Rights owned by any Person (other than a Group Company) that is
licensed to any Group Company.
“Company
Material Adverse Effect” means any event, circumstance, effect or occurrence that, individually or in the aggregate with any
other event, circumstance, effect or occurrence, that could reasonably be expected to give rise to (or has given rise to) the occurrence
of any of the following: (a) a material adverse effect on the business, results of operations or financial condition of the Group Companies,
taken as a whole or, the ability of the Company to consummate the Mergers in accordance with the terms of this Agreement; (b) any material
FINRA or SEC enforcement action, investigation, examination, deficiency, or wells notice issued against the Company or its Subsidiaries,
or any of their respective registered principals, (c) any suspension, restriction, or revocation of the Company or its Subsidiaries’
respective FINRA membership or any other material regulatory license, (d) any material change in the Company or its Subsidiaries’
respective net capital requirements or regulatory status, (e) any decline in annualized revenue of the Company and its Subsidiaries of
twenty percent (20%) or more as compared to the same period in the prior year, (f) the commencement or threat of any litigation, arbitration,
or regulatory proceeding against the Company or its Subsidiaries that could reasonably be expected to result in liability in excess of
$500,000 individually or $1,000,000 in the aggregate, (g) any failure of Dawson James to have Net Capital in an amount greater than or
equal to the Required Net Capital Amount at any time for any reason, and (h) any early warning notification triggered under FINRA or
SEC rules; provided, however, that, in the case of clause (a), the occurrence of any of the following after the date of this Agreement
shall not be taken into account: (i) general business or economic conditions in or affecting the United States, or changes therein, or
the global economy generally, (ii) any national or international political or social conditions in the United States or any other country,
including the engagement by the United States or any other country in hostilities, whether or not pursuant to the declaration of a national
emergency or war, or the occurrence in any place of any military or terrorist attack, sabotage or cyberterrorism, (iii) changes in conditions
of the financial, banking, capital or securities markets generally in the United States or any other country or region in the world,
or changes therein, including changes in interest rates in the United States or any other country and changes in exchange rates for the
currencies of any countries, (iv) changes in any applicable Laws or the interpretation or enforcement thereof by any Governmental Entity,
(v) any change, event, effect or occurrence that is generally applicable to the industries or markets in which any Group Company operates,
(vi) the execution or public announcement of this Agreement or the pendency or consummation of the Transactions, including the impact
thereof on the relationships, contractual or otherwise, of any Group Company with employees, customers, investors, contractors, lenders,
suppliers, vendors, partners, licensors, licensees, payors or other third parties related thereto (provided that the exception in this
clause (vi) shall not apply to the representations and warranties set forth in Section 3.5(b) to the extent that its purpose is
to address the consequences resulting from the public announcement or pendency or consummation of the Transactions or the condition set
forth in Section 7.2(a) to the extent it relates to such representations and warranties), (vii) any failure by any Group Company
to meet, or changes to, any internal or published budgets, projections, forecasts, estimates or predictions (although the underlying
facts and circumstances resulting in such failure may be taken into account to the extent not otherwise excluded from this definition
pursuant to clauses (i) through (vi) or (viii) through (x)), or (viii) any hurricane, tornado, flood, earthquake, tsunami, natural disaster,
mudslides, wild fires, epidemics, pandemics or quarantines, acts of God or other natural disasters or comparable events in the United
States or any other country or region in the world, or any escalation of the foregoing, (ix) any actions taken or omitted to be taken
by any Group Companies at the written request or with the written consent of AtlasClear, (x) any changes in GAAP or other applicable
accounting standards or the interpretation thereof, (xi) any loss of employees, customers, suppliers, distributors, licensors, licensees
or other business partners to the extent resulting from the public announcement or pendency of the Transactions, or (xii) any litigation
arising from or relating to this Agreement or the transactions contemplated hereby; provided, however, that any change,
event, effect or occurrence resulting from a matter described in any of the foregoing clauses (i) through (v) or (viii) through (xii)
may be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably likely to occur to the
extent such change, event, effect or occurrence has had or would reasonably be expected to have a disproportionate adverse effect on
the Group Companies, taken as a whole, relative to other participants operating in the industries or markets in which the Group Companies
operate.
5
“Company
Net Capital” has the meaning set forth in Section 2.7(a).
“Company
Non-Party Affiliates” means, collectively, each Company Related Party and each former, current or future Affiliates, Representatives,
successors or permitted assigns of any Company Related Party (other than, for the avoidance of doubt, the Company).
“Company
Owned Intellectual Property” means all Intellectual Property Rights owned or purported to be owned by a Group Company.
“Company
Personal Information” has the meaning set forth in Section 3.20(b).
“Company
Product” means any products or services, developed, owned, performed, offered, marketed, out-licensed, sold, distributed or
otherwise made available by or on behalf of any Group Company, from which any Group Company has derived in the three (3) years prior
to the date of this Agreement, is currently deriving, or is scheduled to derive, revenue from the sale, license or provision thereof,
including products or services under development.
“Company
Registered Intellectual Property” means all Registered Intellectual Property owned or purported to be owned by, or filed in
the name of any Group Company.
“Company
Related Party” has the meaning set forth in Section 3.19.
“Company
Related Party Transactions” has the meaning set forth in Section 3.19.
“Company
Shares” means, collectively, the issued and outstanding Equity Securities of the Company.
“Company
Stockholder” means each holder of Company Shares, and “Company Stockholders” means all such holders, collectively.
6
“Confidentiality
Agreement” means that certain Mutual Non-Disclosure Agreement, dated as of June 18, 2025, by and between Dawson James and AtlasClear.
“Consent”
means any notice, authorization, qualification, registration, filing, notification, waiver, order, consent or approval to be obtained
from, filed with or delivered to, a Governmental Entity or other Person.
“Contract”
or “Contracts” means any written agreement, contract, license, lease, obligation, undertaking or other commitment
or arrangement that is legally binding upon a Person or any of his, her or its properties or assets.
“Data
Privacy Commitments” has the meaning set forth in Section 3.20(b).
“Dawson
James” means Dawson James Securities, Inc., a Florida corporation and wholly-owned Subsidiary of the Company.
“Deferred
Consideration Cap” has the meaning set forth in Section 2.5(a)(ii).
“Deferred
Consideration Objection Notice” has the meaning set forth in Section 2.5(c).
“Deferred
Consideration Payment Amount” has the meaning set forth in Section 2.5(b).
“Deferred
Consideration Period” has the meaning set forth in Section 2.5(a)(iii).
“Deferred
Consideration Statement” has the meaning set forth in Section 2.5(c).
“DGCL”
means the General Corporation Law of the State of Delaware.
“DLLCA”
means the Delaware Limited Liability Company Act.
“Employee
Benefit Plan” means each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA, whether
or not subject to ERISA) and each other benefit or compensatory plan, program, policy or Contract that any Group Company maintains, sponsors
or contributes to, or under or with respect to which any Group Company has any Liability, other than any plan sponsored or maintained
by a Governmental Entity.
“Environmental
Laws” means any Law relating to (a) the protection of the environment or natural resources; (b) the protection of employee
health or safety (to the extent relating to exposure to Hazardous Substances); or (c) the manufacture, handling, transport, use, treatment,
storage, disposal, or release or threatened release of Hazardous Substances, including the following: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (including as amended by the Superfund Amendments and Reauthorization Act of 1986),
42 U.S.C. § 9601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Solid Waste Disposal Act (including as amended by the Resource Conservation
and Recovery Act (including Subtitle I relating to underground storage tanks)), 42 U.S.C. § 6901 et seq.; the Federal Water Pollution
Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C.
§ 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Occupational Safety and Health Act, 29 U.S.C. §
651 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Endangered Species Act, 16 U.S.C.
§ 1531 et seq.; the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; and the River and Harbors Appropriation Act,
33 U.S.C. § 403 et seq.
7
“Equity
Securities” means any share, share capital, capital stock, partnership, membership, joint venture or similar interest in any
Person (including any stock appreciation, phantom stock, profit participation or similar rights), and any option, warrant, right or security
(including debt securities) convertible, exchangeable or exercisable therefor.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate” means any entity that together with any Group Company would be deemed a “single employer” for purposes
of Section 4001(b)(1) of ERISA and/or Sections 414(b), (c) and/or (m) of the Code.
“Escrow
Agent” means Dynamic Stock Transfer, Inc. or such other escrow and transfer agent as mutually agreed by AtlasClear and the
Majority Stockholder.
“Escrow
Agreement” means that certain escrow agreement, to be entered into at Closing by and among AtlasClear, the Majority Stockholder
and the Escrow Agent pursuant to which AtlasClear shall deliver the Indemnity Escrow Amount to the Escrow Agent.
“Estimated
Net Capital Statement” has the meaning set forth in Section 2.7(b).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Excess
Net Capital Amount” has the meaning set forth in Section 2.7(d)(ii).
“Federal
Securities Laws” means the Exchange Act, the Securities Act and the other U.S. federal securities laws and the rules and regulations
of the SEC promulgated thereunder or otherwise.
“Final
Determination Date” has the meaning set forth in Section 2.5(a)(iv).
“Financial
Statements” has the meaning set forth in Section 3.4(a).
“FINRA”
means the Financial Industry Regulatory Authority, Inc.
“First
Certificate of Merger” has the meaning set forth in Section 2.1(b)(i).
“First
Effective Time” has the meaning set forth in Section 2.1(b)(i).
“First
Merger” has the meaning set forth in the recitals to this Agreement.
“FOCUS
Reports” means all Financial and Operational Combined Uniform Single Reports on Form X-17A-5, including all applicable parts,
schedules, attachments, amendments and supplements thereto, filed by Dawson James with the SEC, FINRA or any other applicable Governmental
Entity pursuant to Rule 17a-5 under the Exchange Act or any successor form, rule or requirement.
“Foreign
Benefit Plan” means each Employee Benefit Plan maintained by any of the Group Companies for its current or former employees,
officers, directors or other individual service providers located outside of the United States.
8
“Fraud”
means an act or omission by a Party, and requires: (a) a false or incorrect representation or warranty expressly set forth in this Agreement,
(b) with actual knowledge (as opposed to constructive, imputed or implied knowledge) by the Party making such representation or warranty
that such representation or warranty expressly set forth in this Agreement is false or incorrect, (c) an intention to deceive another
Party, to induce such Party to enter into this Agreement, (d) such other Party’s justifiable or reasonable reliance upon such false
or incorrect representation or warranty expressly set forth in this Agreement, causing such Party to enter into this Agreement, and (e)
such other Party suffering damage by reason of such reliance. For the avoidance of doubt, “Fraud” does not include
any Claim for equitable fraud, promissory fraud, unfair dealings fraud or any torts (including a Claim for fraud or alleged fraud) based
on negligence or recklessness.
“Fundamental
Representations” means the Company Fundamental Representations and the AtlasClear Fundamental Representations.
“GAAP”
means United States generally accepted accounting principles.
“Governing
Documents” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which
govern its internal affairs, including any stockholder agreements, voting agreements, governance agreements or similar agreements providing
for or restricting the management of the Company or the exercise of rights of stockholders. For example, the “Governing Documents”
of a U.S. corporation are its certificate or articles of incorporation and by-laws, the “Governing Documents” of a
U.S. limited partnership are its limited partnership agreement and certificate of limited partnership, the “Governing Documents”
of a U.S. limited liability company are its operating or limited liability company agreement and certificate of formation.
“Governmental
Entity” means any United States or non-United States (a) federal, state, local, municipal or other government, (b) governmental
entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal) or
(c) body entitled under applicable Law to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature, including any arbitral tribunal (public or private).
“Group
Company” and “Group Companies” means, collectively, the Company and its Subsidiaries.
“Hazardous
Substance” means any (i) substance, material or waste that is listed, classified or defined as “hazardous,” “toxic,”
a “pollutant,” a “contaminant” or words of similar meaning or regulatory effect under any Environmental Law;
(ii) petroleum and petroleum products and their refined or derived products (including waste or used oil, gasoline, heating oil, kerosene
or any other petroleum products or substances or materials derived from or commingled with any petroleum products); (iii) lead, lead-based
paint, toxic mold, radon, polychlorinated biphenyls, radioactive materials, per- and polyfluoroalkyl substances (PFAS), urea formaldehyde
or asbestos or asbestos containing materials.
“In-bound
License” has the meaning set forth in Section 3.13(b).
“Indebtedness”
means, as of any time, without duplication, with respect to any Person, the outstanding principal amount of, accrued and unpaid interest
on, fees and expenses arising under or in respect of (a) indebtedness for borrowed money, (b) other obligations evidenced by any note,
bond, debenture or other debt security, (c) obligations for the deferred purchase price of property or assets, including “earn-outs”
and “seller notes” (but excluding any trade payables arising in the ordinary course of business), (d) reimbursement
and other obligations with respect to letters of credit, bank guarantees, bankers’ acceptances or other similar instruments, in
each case, solely to the extent drawn, (e) leases required to be capitalized under GAAP, (f) derivative, hedging, swap, foreign exchange
or similar arrangements, including swaps, caps, collars, hedges or similar arrangements, (g) any amounts owed to current or former equityholders,
including any declared and unpaid dividends or distributions and any unpaid amounts owed by the Company or any Company Stockholder in
connection with the transfer, redemption or repurchase of any capital stock or other equity or securities of the Company, and (h) any
of the obligations of any other Person of the type referred to in clauses (a) through (h) above directly or indirectly guaranteed by
such Person or secured by any assets of such Person, whether or not such amount has been assumed by such Person, and (i) all break-fees,
prepayment penalties, premiums, costs and other amounts payable in connection with the prepayment or repayment of any of the items described
in clauses (a) through (h).
9
“Indemnity
Escrow Amount” means a portion of the Stage 2 Transaction Consideration equal to $1,650,000, of which $825,000 shall be in
the form of cash and the remaining $825,000 shall be in the form of a number of Stage 2 Shares determined by dividing $825,000 by the
per-share price used to calculate the total number of Stage 2 Shares.
“Initial
Cash Purchase Price” has the meaning set forth in Section 2.1(a).
“Initial
Purchase Price” means (i) the Initial Cash Purchase Price and (ii) the principal amount of the Initial Seller Note.
“Initial
Seller Note” has the meaning set forth in Section 2.1(a).
“Intellectual
Property Rights” means all intellectual property rights and related priority rights protected, created or arising under the
Laws of the United States or any other 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 reissues, reexaminations, substitutes,
supplementary protection certificates, extensions of any of the foregoing (collectively, “Patents”); (b) trademarks,
service marks, trade names, service names, brand names, trade dress rights, logos, 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 (collectively, “Marks”); (c) copyrights and works of authorship, database and design rights, mask
work rights and moral rights, whether or not registered or published, and all registrations, applications, renewals, extensions and reversions
of any of the foregoing (collectively, “Copyrights”); (d) trade secrets, know-how and confidential and proprietary
information, including invention disclosures, inventions and formulae, whether patentable or not; (e) Internet domain names and applications
and registrations therefor, (f) rights in or to Software or other technology; (g) any other intellectual or similar proprietary rights
protectable, arising under or associated with any of the foregoing, including those protected by any Law anywhere in the world; and (h)
all legal rights arising from items (a) through (g), including the right to prosecute, enforce and perfect such interests and rights
to sue, oppose, cancel, interfere, enjoin and collect damages based upon such interests, including such rights based on past infringement,
if any, in connection with any of the foregoing.
“Intended
Tax Treatment” has the meaning set forth in the recitals to this Agreement.
“Investment
Company Act” means the Investment Company Act of 1940, as amended.
“JOBS
Act” means the Jumpstart Our Business Startups Act of 2012.
“Latest
Balance Sheet” means the consolidated balance sheet of the Group Companies as of August 31, 2026.
“Law”
means any federal, state, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance, treaty,
rule, code, regulation or other legally binding directive or guidance issued, promulgated or enforced by a Governmental Entity having
jurisdiction over a given matter.
10
“Leased
Real Property” has the meaning set forth in Section 3.18(b).
“Letter
of Transmittal” has the meaning set forth in Section 7.2(f)(iii).
“Liability”
or “liability” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent,
known or unknown, matured or unmatured or determined or determinable, including those arising under any Law (including any Environmental
Law), Proceeding or Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.
“Lien”
means any mortgage, pledge, security interest, encumbrance, lien, license or sub-license, charge, or other similar encumbrance or interest
(including, in the case of any Equity Securities, any voting, transfer or similar restrictions).
“Lookback
Date” means December 31, 2022.
“Loss”
means any and all losses, damages, dues, penalties, interest, fines, costs, amounts paid in settlement, judgments, Liabilities, Taxes,
costs of investigation, expenses and fees (including court costs and reasonable attorneys’ or other professionals’ fees and
expenses): provided, that Losses shall only include punitive damages (sometimes referred to as exemplary damages) to the extent such
punitive damages result from a third party Claim.
“Majority
Stockholder” has the meaning set forth in the introductory paragraph to this Agreement. Robert D. Keyser, Jr. is the settlor
and sole initial trustee of the Trust.
“Malicious
Code” has the meaning set forth in Section 3.20(g).
“Material
Contracts” has the meaning set forth in Section 3.7(a).
“Material
Permits” has the meaning set forth in Section 3.6.
“Mergers”
has the meaning set forth in the recitals to this Agreement.
“Merger
Sub” has the meaning set forth in the introductory paragraph to this Agreement.
“Merger
Sub II” has the meaning set forth in the introductory paragraph to this Agreement.
“Merger
Subs” has the meaning set forth in the introductory paragraph to this Agreement.
“Multiemployer
Plan” has the meaning set forth in Section 3(37) or Section 4001(a)(3) of ERISA.
“Net
Capital” means the net capital of the applicable Person determined in accordance with Rule 15c3-1 under the Exchange Act with
all securities and other assets valued at current market value (and not at any contractual floor, true-up, make-whole or other guaranteed
value).
“Net
Capital Shortfall” has the meaning set forth in Section 2.7(d)(i).
“Non-Party
Affiliate” has the meaning set forth in Section 10.12.
“Off-the-Shelf
Software” means any Software that is made generally and widely available to the public on a commercial basis and is licensed
to any of the Group Companies on a non-exclusive basis under standard terms and conditions.
11
“Order”
means any outstanding writ, order, judgment, injunction, decision, determination, award, ruling, subpoena, verdict or decree entered,
issued or rendered by any Governmental Entity.
“Out-bound
License” has the meaning set forth in Section 3.13(b).
“Owned
Real Property” has the meaning set forth in Section 3.18(a).
“Parties”
has the meaning set forth in the introductory paragraph to this Agreement.
“Permits”
means any approvals, authorizations, clearances, declarations of conformity, licenses, registrations, permits or certificates of a Governmental
Entity.
“Permitted
Liens” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and other similar statutory Liens
arising or incurred in the ordinary course of business for amounts that are not yet due and payable or are being contested in good faith
by appropriate proceedings and for which sufficient reserves have been established in accordance with GAAP, (b) Liens for Taxes, assessments
or other governmental charges not yet due and payable as of the Closing Date or which are being contested in good faith by appropriate
proceedings and for which sufficient reserves have been established in accordance with GAAP, (c) encumbrances and restrictions on real
property (including easements, covenants, conditions, rights of way and similar restrictions) that do not prohibit or materially interfere
with any of the Group Companies’ use or occupancy of such real property, (d) zoning, building codes and other land use Laws regulating
the use or occupancy of real property or the activities conducted thereon which are imposed by any Governmental Entity having jurisdiction
over such real property and which are not violated by the use or occupancy of such real property or the operation of the businesses of
the Group Company and do not prohibit or materially interfere with any of the Group Companies’ use or occupancy of such real property,
(e) cash deposits or cash pledges to secure the payment of workers’ compensation, unemployment insurance, social security benefits
or obligations arising under similar Laws or to secure the performance of public or statutory obligations, surety or appeal bonds, and
other obligations of a like nature, in each case in the ordinary course of business and which are not yet due and payable, (f) grants
by any Group Company of non-exclusive rights in Intellectual Property Rights in the ordinary course of business consistent with past
practice and (g) other Liens that do not materially and adversely affect the value, use or operation of the asset subject thereto.
“Person”
means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association,
trust, joint venture or other similar entity, whether or not a legal entity or Governmental Entity.
“Personal
Information” means any information that is defined in any applicable Privacy Law as “personal information,” “personal
data,” “personally identifiable information,” “sensitive information,” or a substantially similar term.
“Privacy
and Data Security Policies” has the meaning set forth in Section 3.20(a).
“Privacy
Laws” means all Laws relating to the Processing or protection of Personal Information, data breach and notification, website
and mobile application privacy policies and practices, Social Security number protection, Processing and security of payment card information
(including, to the extent applicable, Payment Card Industry Security Standards), and email, text message, or telephone communications
that apply to the Group Companies.
12
“Pro
Rata Share” means with respect to each Company Stockholder, a fraction expressed as a percentage equal to (i) the total number
of shares of Company Shares beneficially owned by such Company Stockholder immediately prior to the First Effective Time, divided
by (ii) the aggregate number of Company Shares outstanding as of immediately prior to the First Effective Time. For the avoidance
of doubt, the foregoing shall be calculated without regard to the Purchased Shares which shall be excluded from both the numerator and
denominator.
“Proceeding”
means any lawsuit, litigation, action, audit, investigation, examination, Claim, complaint, charge, proceeding, suit or arbitration (in
each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise involving any Governmental
Entity.
“Process”
(or “Processing” or “Processes”) means the collection, use, storage, processing, recording, distribution,
transfer, import, export, protection (including security measures), disposal or disclosure or other activity regarding data (whether
electronically or in any other form or medium).
“Public
Software” means any Software that contains, includes, incorporates, or has instantiated therein, or is derived in any manner
(in whole or in part) from, any Software that is licensed pursuant to: (a) any license that is a license approved by the Open Source
Initiative and listed at http://www.opensource.org/licenses, which licenses include all versions of the GNU General Public License (GPL),
the GNU Lesser General Public License (LGPL), the GNU Affero GPL, the MIT license, the Eclipse Public License, the Common Public License,
the CDDL, the Mozilla Public License (MPL), the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL),
and the Sun Industry Standards License (SISL); (b) any license to Software that is considered “free” or “open source
software” by the Open Source foundation or the Free Software Foundation or (c) any similar licensing or distribution models, including
under any terms or conditions that impose any requirement that any Software using, linked with, incorporating, distributed with or derived
from such Public Software (i) be made available or distributed in source code form; (ii) be licensed for purposes of making derivative
works; or (iii) be redistributable at no, or a nominal, charge.
“Purchase
Price” means the Initial Purchase Price and the Stage 2 Transaction Consideration.
“Purchased
Shares” has the meaning set forth in the recitals to this Agreement.
“Real
Property Leases” means all leases, sub-leases, licenses or other agreements, in each case, pursuant to which any Group Company
leases or sub-leases any real property.
“Registered
Intellectual Property” means all issued Patents, pending Patent applications, registered Marks, pending applications for registration
of Marks, registered Copyrights, pending applications for registration of Copyrights and Internet domain name registrations.
“Registration
Rights and Lock-up Agreement” has the meaning set forth in the recitals to this Agreement.
“Representatives”
means with respect to any Person, such Person’s Affiliates and its and such Affiliates’ respective directors, managers, officers,
employees, accountants, consultants, advisors, attorneys, agents and other representatives.
“Required
Net Capital Amount” means $1,000,000; provided that notwithstanding any provision to the contrary in this Agreement, if any
Indebtedness of the Group Companies has not been paid in full prior to the Closing Date, the foregoing shall be increased by the amount
required to pay such Indebtedness in full following Closing and receipt of any consents and approvals required with respect thereto.
“Revenue”
has the meaning set forth in Section 2.5(a)(v).
13
“Revenue
Threshold” has the meaning set forth in Section 2.5(a)(vi).
“Sanctioned
Countries” has the meaning set forth in Section 3.21(a).
“Sanctions
and Export Control Laws” means any applicable Law related to (a) import and export controls, including the U.S. Export Administration
Regulations, (b) economic sanctions, including those administered by the Office of Foreign Assets Control of the U.S. Department of the
Treasury, the U.S. Department of State, the European Union, any European Union Member State, the United Nations, and His Majesty’s
Treasury of the United Kingdom or (c) anti-boycott measures.
“Sarbanes-Oxley
Act” means the Sarbanes-Oxley Act of 2002.
“Schedules”
means, collectively, the Company Disclosure Schedules and the AtlasClear Disclosure Schedules.
“SEC”
means the U.S. Securities and Exchange Commission.
“SEC
Reports” has the meaning set forth in Section 5.9.
“Second
Certificate of Merger” has the meaning set forth in Section 2.1(b)(i).
“Second
Effective Time” has the meaning set forth in Section 2.1(b)(i).
“Second
Merger” has the meaning set forth in the recitals to this Agreement.
“Securities
Act” means the U.S. Securities Act of 1933, as amended.
“Securities
Laws” means Federal Securities Laws and other applicable foreign and domestic securities or similar Laws.
“Security
Incident” has the meaning set forth in Section 3.20(e).
“Signing
Filing” has the meaning set forth in Section 6.4(b).
“Signing
Press Release” has the meaning set forth in Section 6.4(b).
“Software”
shall mean any and all (a) computer programs, including any and all software implementations of algorithms, models and methodologies,
whether in source code or object code; (b) databases and compilations, including any and all data and collections of data, whether machine
readable or otherwise; (c) descriptions, flowcharts and other work product used to design, plan, organize and develop any of the foregoing,
screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons; and (d) all documentation,
including user manuals and other training documentation, related to any of the foregoing.
“Stage
2 Cash Consideration Amount” means $2,437,500.
“Stage
2 Share Consideration Amount” means $13,812,500.
“Stage
2 Shares” means a number of AtlasClear Shares equal to the Stage 2 Share Consideration Amount (as adjusted pursuant to Section
2.7) divided by the average VWAP of the AtlasClear Shares over the five (5) trading day period ending on (and including) the Closing
Date.
14
“Stage
2 Transaction Consideration” means (i) the Stage 2 Cash Consideration Amount and the Stage 2 Shares, as adjusted in accordance
with Section 2.7, and (ii) any Deferred Consideration Payment Amount actually payable pursuant to Section 2.5.
“Statutory
Representations” means the representations and warranties made in Section 3.16 (Tax Matters) and Section 3.11
(Employee Plans).
“Stockholder
Approval Filing” has the meaning set forth in Section 6.10.
“Stockholder
Indemnified Parties” has the meaning set forth in Section 9.2.
“Stockholder
Release” has the meaning set forth in Section 7.2(f)(iv).
“Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership or other legal entity of which (a) if a corporation,
a majority of the total voting power of Equity Securities entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of such Person or a combination thereof, or (b) if a limited liability company, partnership, association
or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof
and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such
Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be a, or control any, managing
director or general partner of such business entity (other than a corporation). The term “Subsidiary” shall include
all Subsidiaries of such Subsidiary.
“Surviving
Company” has the meaning set forth in the recitals to this Agreement.
“Surviving
Company Share” has the meaning set forth in Section 2.1(b)(vi).
“Tax”
means any federal, state, local or non-United States income, gross receipts, franchise, estimated, alternative minimum, sales, use, transfer,
value added, excise, stamp, customs, duties, ad valorem, real property, personal property (tangible and intangible), capital stock, social
security, unemployment, payroll, wage, employment, severance, occupation, registration, environmental, communication, mortgage, profits,
license, lease, service, goods and services, withholding, premium, turnover, windfall profits or other taxes of any kind whatever that
are imposed by a Governmental Entity, whether computed on a separate or combined, unitary or consolidated basis or in any other manner,
together with any interest, deficiencies, penalties, additions to tax, or additional amounts imposed by any Governmental Entity with
respect thereto, whether disputed or not.
“Tax
Authority” means any Governmental Entity responsible for the collection or administration of Taxes or Tax Returns.
“Tax
Return” means returns, information returns, statements, declarations, Claims for refund, schedules, attachments and reports
relating to Taxes required to be filed with any Governmental Entity.
“Termination
Date” has the meaning set forth in Section 8.1(d).
15
“Trading
Market” means any of the following markets or exchanges on which the AtlasClear Shares are listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the
New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Litigation” has the meaning set forth in Section 6.2(b).
“Transfer
Taxes” has the meaning set forth in Section 6.5(c).
“Trust”
has the meaning set forth in the preamble of this Agreement.
“Trustee”
has the meaning set forth in Section 4.1.
“Trust
Agreement” has the meaning set forth in Section 4.1.
“VWAP”
means, for any trading day, the volume-weighted average price of the AtlasClear Shares as reported on the Trading Market for such trading
day (or, if not reported on the Trading Market, as reported by Bloomberg L.P. or, if not so reported, as reasonably determined by AtlasClear),
calculated in a manner consistent with customary practice for similar capital markets transactions.
“WARN”
means the Worker Adjustment Retraining and Notification Act of 1988, as well as analogous applicable foreign, state or local Laws.
“Willful
Breach” means a material breach of this Agreement by a Party that is a consequence of an act undertaken or a failure to act
by the breaching Party with the knowledge that the taking of such act or such failure to act would, or would reasonably be expected to,
constitute or result in a breach of this Agreement.
Article
II
MERGER
Section
2.1 Transactions. On the terms and subject to the conditions set forth in this Agreement, the following transactions
shall occur in the order set forth in this Section 2.1:
(a)
Initial Equity Purchase and Sale. Simultaneously with the execution and delivery of this Agreement, the Majority Stockholder hereby
sells, transfers, assigns and conveys to AtlasClear, the Purchased Shares, free and clear of all Liens. In full payment for the Purchased
Shares and in consideration of the covenants and agreements in this Agreement, no later than three (3) Business Days following the execution
hereof, AtlasClear shall: (i) pay to the Majority Stockholder an amount equal to $2,500,000 in cash by wire transfer of immediately available
funds to an account designated in writing thereby (the “Initial Cash Purchase Price”) and (ii) issue to the Majority
Stockholder a promissory note in the principal amount of $2,500,000 in substantially the form attached hereto as Exhibit B (the
“Initial Seller Note”). The Parties shall, promptly following the execution hereof, use reasonable best efforts to
execute all documents and take all actions reasonably necessary to effectuate the transactions contemplated by this Section 2.1(a).
(b)
The Mergers.
(i)
At the Closing, the Parties hereto shall cause the First Merger to be consummated by filing with the Secretary of State of the State
of Delaware in form reasonably satisfactory to the Company and AtlasClear (the “First Certificate of Merger”), to
be executed and filed in accordance with the relevant provisions of the DGCL. The First Merger shall become effective on the date and
time at which the First Certificate of Merger is accepted for filing by the Secretary of State of the State of Delaware or at such later
date and/or time as is agreed by AtlasClear and the Company and specified in the First Certificate of Merger (the time the First Merger
becomes effective being referred to herein as the “First Effective Time”). As soon as practicable following the First
Effective Time and in any case on the same day as the First Effective Time, the Surviving Company and Merger Sub II shall cause the Second
Merger to be consummated by filing with the Secretary of State of the State of Delaware, in a form reasonably satisfactory to the Company
and AtlasClear (the “Second Certificate of Merger”), to be executed and filed in accordance with the relevant provisions
of the DGCL and the DLLCA, as applicable (the time of such filing, or such later time as may be agreed in writing by the Company and
AtlasClear and specified in the Second Certificate of Merger, being the “Second Effective Time”).
16
(ii)
On the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL on the Closing Date, Merger Sub
shall merge with and into the Company at the First Effective Time. Following the First Effective Time, and as a result of the First Merger,
the separate existence of Merger Sub shall cease and the Company shall continue as Surviving Company. At the Second Effective Time, upon
the terms and subject to the conditions of this Agreement and in accordance with the DGCL and the DLLCA, the Surviving Company shall
be merged with and into Merger Sub II, following which the separate corporate existence of the Surviving Company shall cease and Merger
Sub II shall continue as the Surviving Entity after the Second Merger (provided, that references to the Company or the Surviving Company
for periods after the Second Effective Time shall include the Surviving Entity) as a direct wholly-owned Subsidiary of, and an entity
disregarded as separate for U.S. federal income tax purposes from, AtlasClear.
(iii)
The First Merger shall have the effects set forth in the DGCL and the Second Merger shall have the effects set forth in the DGCL and
the DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Second Effective Time, all of the assets, properties,
rights, privileges, powers and franchises of the Surviving Company and Merger Sub II shall vest in the Surviving Entity and all debts,
liabilities, obligations, restrictions, disabilities and duties of each of the Surviving Company and Merger Sub II shall become the debts,
liabilities, obligations and duties of the Surviving Entity.
(iv)
At the First Effective Time, the Governing Documents of Merger Sub shall be the Governing Documents of the Surviving Company, in each
case, until thereafter changed or amended as provided therein or by applicable Law. At the Second Effective Time, the Governing Documents
of the Surviving Entity shall be the Governing Documents of Merger Sub II, in each case, until thereafter changed or amended as provided
therein or by applicable Law.
(v)
At the First Effective Time, the directors and officers of the Merger Sub shall be the officers and directors of the Surviving Company,
each to hold office in accordance with the Governing Documents of the Surviving Company until such director’s or officer’s
successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal. At the Second Effective
Time, the directors and officers of the Merger Sub II shall be the directors and officers of the Surviving Entity, each to hold office
in accordance with the Governing Documents of the Surviving Entity until such director’s or officer’s successor is duly elected
or appointed and qualified, or until the earlier of their death, resignation or removal.
(vi)
At the First Effective Time, by virtue of the First Merger and without any action on the part of any Party or any other Person, each
share of capital stock of Merger Sub issued and outstanding immediately prior to the First Effective Time shall be automatically cancelled
and extinguished and converted into one share of common stock, par value $0.0001, of the Surviving Company (each such share, a “Surviving
Company Share”). At the Second Effective Time, by virtue of the Second Merger and without any action on the part of any Party
or any other Person, each share of capital stock of the Surviving Company issued and outstanding immediately prior to the Second Effective
Time shall be automatically cancelled and extinguished.
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(vii)
At the First Effective Time, by virtue of the First Merger and without any action on the part of any Party or any other Person, each
Company Share issued and outstanding as of immediately prior to the First Effective Time shall be automatically canceled and extinguished
and converted into the right to receive the Stage 2 Transaction Consideration.
(viii)
From and after the First Effective Time, each Company Stockholder’s certificates (the “Certificates”), if any,
evidencing ownership of the Company Shares and the Company Shares held in book-entry form issued and outstanding immediately prior to
the First Effective Time shall each cease to have any rights with respect to such Company Shares except as otherwise expressly provided
for herein or under applicable Law.
(ix)
At the First Effective Time, by virtue of the First Merger and without any action on the part of any Party or any other Person, each
Company Share held immediately prior to the First Effective Time by the Company as treasury stock shall be automatically canceled and
extinguished, and no consideration shall be paid with respect thereto.
(x)
If, between the date of this Agreement and the Closing, the outstanding AtlasClear Shares shall have been changed into a different number
of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination
or exchange of shares, or any similar event shall have occurred, then any number, value (including dollar value) or amount contained
herein which is based upon the number of AtlasClear Shares will be appropriately adjusted to provide to the holders of Company Shares
the same economic effect as contemplated by this Agreement; provided that, for purposes of this Section 2.1(b)(x), “same
economic effect” means entitlement to receive AtlasClear Shares (as adjusted) having an aggregate dollar value equal to the Stage
2 Share Consideration Amount (or other applicable dollar amount), and not entitlement to any particular number of AtlasClear Shares;
provided, further, that this Section 2.1(b)(x) shall not be construed to permit AtlasClear, the Merger Subs or the
Company to take any action with respect to their respective securities that is prohibited by the terms and conditions of this Agreement.
(xi)
Notwithstanding anything to the contrary herein, any Company Shares for which a Company Stockholder (a) has not voted in favor of the
Mergers or consented to it in writing and (b) has demanded the appraisal of such Company Shares in accordance with, and has complied
in all respects with, Section 262 of the DGCL (collectively, such stockholders, the “Company Dissenting Stockholders”,
and such shares, the “Company Dissenting Shares”) shall not be subject to Section 2.1(b)(vii) unless otherwise
expressly set forth in this Section 2.1(b)(xi). From and after the First Effective Time, (A) the Company Dissenting Shares shall
be cancelled and extinguished and shall cease to exist and (B) the Company Dissenting Stockholders shall be entitled only to such rights
as may be granted to them under Section 262 of the DGCL and shall not be entitled to exercise any of the voting rights or other rights
of a stockholder of AtlasClear, the Surviving Company or any of its Affiliates (including AtlasClear); provided that if any Company
Dissenting Stockholder effectively withdraws or loses such appraisal rights (whether through failure to perfect such appraisal rights
or otherwise), then the Company Shares held by such Company Dissenting Stockholder (1) shall no longer be deemed to be Company Dissenting
Shares and (2) shall be treated as if they had been subject to Section 2.1(b)(vii) as of the First Effective Time. Each Company
Dissenting Stockholder who becomes entitled to payment for his, her or its Company Dissenting Shares pursuant to the DGCL shall receive
payment thereof from the Company in accordance with the DGCL. The Company shall give AtlasClear prompt notice of any written demands
for appraisal of any Company Share, attempted withdrawals of such demands and any other documents or instruments served pursuant to the
DGCL and received by the Company relating to stockholders’ rights of appraisal in accordance with the provisions of Section 262
of the DGCL, and AtlasClear shall have the opportunity to participate in and direct, all negotiations and proceedings with respect to
all such demands. The Company shall not, except with the prior written consent of AtlasClear (which consent shall not be unreasonably
withheld, conditioned, or delayed), settle, or make any payment, or deliver any consideration, with respect to, any such demand.
18
Section
2.2 Closing of the Mergers. The closing of the Mergers contemplated by this Agreement (the “Closing”)
shall take place, electronically by exchange of the closing deliverables by the means provided in Section 10.10, as promptly
as reasonably practicable, but in no event later than the third (3rd) Business Day, following the satisfaction (or, to the
extent permitted by applicable Law, waiver) of the conditions set forth in Article VII (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions). The date on which the Closing actually
occurs, which shall be the same date as the First Effective Time, is referred to herein as the “Closing Date,” unless
AtlasClear and the Company agree in writing to another place, date and/or time.
Section
2.3 Allocation Schedule. At least five (5) Business Days prior to the Closing Date, the Company shall deliver to
AtlasClear an allocation schedule (the “Allocation Schedule”) setting forth (i) the number of Company Shares held
by each Company Stockholder, (ii) each Company Stockholder’s Pro Rata Share of the Stage 2 Share Consideration Amount and Stage
2 Cash Consideration Amount, in each case less such Company Stockholders’ Pro Rata Share of the Indemnity Escrow Amount, (iii)
each Company Stockholder’s Pro Rata Share of the Indemnity Escrow Amount, (iv) each Company Stockholder’s Pro Rata Share
of any Deferred Consideration Payment Amount due and payable at Closing and specifying the amount thereof to be paid to such Company
Stockholder in cash and the amount to be paid in the form of AtlasClear Shares and the number of AtlasClear Shares to be issued thereto,
and (v) a certification, duly executed by an authorized officer of the Company, that (a) the information and calculations are, and will
be as of immediately prior to the First Effective Time, true and correct in all respects and (b) the Company has performed, or otherwise
complied with, as applicable, its covenants and agreements set forth in this Agreement. The Company will review any comments to the Allocation
Schedule provided by AtlasClear or any of its Representatives and consider in good faith and incorporate any reasonable comments proposed
by AtlasClear or any of its Representatives. Notwithstanding the foregoing or anything to the contrary herein, (A) the aggregate number
of AtlasClear Shares that each Company Stockholder will have a right to receive pursuant to Section 2.1(b)(vii) will be rounded
down to the nearest whole share, (B) in no event shall the Allocation Schedule (or the calculations or determinations therein) breach,
as applicable, any applicable Law, the Governing Documents or any other Contract to which the Company is a party or bound, and (C) the
AtlasClear Parties will be entitled to rely upon the Allocation Schedule for purposes of allocating the Stage 2 Transaction Consideration
to the Company Stockholders under this Agreement.
Section
2.4 Deliverables. At the First Effective Time, AtlasClear shall pay to each Company Stockholder such Company Stockholder’s
respective Pro Rata Share of the Stage 2 Cash Consideration Amount and Stage 2 Shares (as adjusted pursuant to Section 2.7), less
each Company Stockholder’s respective Pro Rata Share of the Indemnity Escrow Amount (which Pro Rata Share of the Indemnity Escrow
Amount shall be delivered to the Escrow Agent in accordance with the Escrow Agreement), plus each Company Stockholder’s respective
Pro Rata Share of any Deferred Consideration Payment Amount payable at Closing pursuant to Section 2.5, in exchange for the cancellation
of the Company Shares outstanding immediately prior to the First Effective Time. Each Company Stockholder holding a Certificate whose
Company Shares are subject to Section 2.1(b)(vii) shall be entitled to receive the portion of the Stage 2 Transaction Consideration
to which he, she or it is entitled only upon the surrender to AtlasClear of such Certificate (or affidavit of loss in lieu thereof).
No interest will be paid or accrued on the Stage 2 Transaction Consideration (or any portion thereof). Notwithstanding anything herein
to the contrary, the Stage 2 Shares shall be delivered to the Company Stockholders (or the Escrow Agent, as applicable) within three
(3) Business Days following the Closing Date. At the First Effective Time, the stock transfer books of the Company shall be closed and
there shall be no transfers of Company Shares that were outstanding immediately prior to the First Effective Time. Notwithstanding the
foregoing, no Company Stockholder shall be entitled to receive, and AtlasClear shall not be required to make, any payment of any amounts
to any Company Stockholder unless and until such Company Stockholder has delivered to AtlasClear a properly completed and duly executed
Letter of Transmittal.
19
Section
2.5 Deferred Consideration.
(a)
The following definitions shall apply to this Section 2.5.
(i)
“Calculation Date” means each of (A) December 31, 2026 and (B) December 31, 2027.
(ii)
“Deferred Consideration Cap” means for each Deferred Consideration Period, an aggregate amount equal to $1,625,000.
(iii)
“Deferred Consideration Period” means the twelve-month period preceding the applicable Calculation Date.
(iv)
“Final Determination Date” means the date on which the Deferred Consideration Amount is finally agreed or otherwise
determined by the independent accountant pursuant to Section 2.5(c).
(v)
“Revenue” means gross revenue calculated in a manner consistent with the sample calculation attached hereto as Exhibit
C.
(vi)
“Revenue Threshold” means an amount equal to $21,250,000.
(b)
Deferred Consideration Payment. Subject to and contingent on the occurrence of the Closing and satisfaction of the conditions
set forth herein, for each Deferred Consideration Period, AtlasClear shall pay to the Company Stockholders (to an account or accounts
designated by the Majority Stockholder) an amount (the “Deferred Consideration Payment Amount”) calculated as follows:
(i) if the Group Companies achieve Revenue equal to or greater than the Revenue Threshold during the applicable Deferred Consideration
Period, the Deferred Consideration Payment Amount shall equal the Deferred Consideration Cap for such period; or (ii) if the Group Companies
achieve Revenue less than the Revenue Threshold during the applicable Deferred Consideration Period, the Deferred Consideration Payment
Amount shall equal the product of (A) the Deferred Consideration Cap for such period, multiplied by (B) a fraction, the numerator of
which is actual Revenue for such period and the denominator of which is the Revenue Threshold. For the avoidance of doubt, in no event
shall any Deferred Consideration Payment Amount individually exceed the Deferred Consideration Cap for the applicable Deferred Consideration
Period or, together with all Deferred Consideration Payment Amounts previously paid, exceed $3,250,000 in the aggregate. Each Deferred
Consideration Payment Amount, if any, shall be paid 25% in cash and 75% in AtlasClear Shares valued at the average VWAP of the AtlasClear
Shares over the five (5) trading day period ending on (and including) the trading day immediately preceding the date that is the later
of the Closing Date or the Final Determination Date. If the applicable Final Determination Date occurs after the Closing Date, then no
later than ten (10) Business Days following the Final Determination Date, (i) the Majority Stockholder shall deliver to AtlasClear and
the Escrow Agent an allocation statement setting forth each Company Stockholder’s respective Pro Rata Share of each Deferred Consideration
Payment Amount, including the cash and equity portion thereof, (ii) AtlasClear shall deliver the Deferred Consideration Payment Amount
to the Escrow Agent for further distribution to the applicable Company Stockholders, and (iii) the Majority Stockholder shall direct
the Escrow Agent to distribute the applicable Deferred Consideration Payment Amount to each Company Stockholder in accordance with their
respective Pro Rata Shares and the applicable allocation statement. If the Final Determination Date is prior to the Closing Date, then
the applicable Deferred Consideration Payment Amount(s) shall be paid by AtlasClear at the Closing in accordance with Section 2.4.
For the avoidance of doubt, no payments shall be deemed earned or payable if this Agreement is terminated pursuant to Article VIII for
any reason.
20
(c)
No later than forty-five (45) days following the date that audited financials of the Company for the applicable year ended on such Calculation
Date are delivered to AtlasClear by the auditor , AtlasClear will prepare and deliver (or cause to be prepared and delivered) to the
Majority Stockholder a statement which shall provide the Revenue and Deferred Consideration Payment Amount for the applicable Deferred
Consideration Period, along with reasonable support for the calculations contained therein (each a “Deferred Consideration Statement”).
If the Majority Stockholder does not object to the Deferred Consideration Statement by written notice (a “Deferred Consideration
Objection Notice”) delivered to AtlasClear within thirty (30) days after delivery to the Majority Stockholder of the Deferred
Consideration Statement, then such Deferred Consideration Statement shall be deemed final and binding. Any Deferred Consideration Objection
Notice shall set forth in reasonable detail the Majority Stockholder’s alternative calculations (if any), together with reasonable
supporting details with respect to the calculation and components thereof. If the Majority Stockholder delivers a Deferred Consideration
Objection Notice to AtlasClear, then any dispute in connection with the Deferred Consideration Statement, and the determination of the
applicable Deferred Consideration Payment Amount shall be resolved as follows: (i) AtlasClear and the Majority Stockholder shall negotiate
in good faith to resolve the dispute set forth in the Deferred Consideration Objection Notice and (ii) if AtlasClear and the Majority
Stockholder have not agreed in writing as to the settlement of the dispute within forty-five (45) days (or such longer period as they
may agree in writing) after the Majority Stockholder delivers the Deferred Consideration Objection Notice to AtlasClear, either the Majority
Stockholder or AtlasClear may submit the dispute to an independent accountant mutually agreed by the Parties for resolution thereof which
such resolution shall be made based solely on presentations by the Majority Stockholder and AtlasClear and the terms of this Agreement
and not on independent review by such accountants. The fees of such independent accountant shall be borne proportionately by AtlasClear
and the Majority Stockholder (on behalf of all Company Stockholders).
(d)
From the Closing Date through the final Calculation Date, AtlasClear shall (i) not take any actions in bad faith with the primary purpose
of avoiding or reducing any Deferred Consideration Payment Amount, (ii) maintain the Company and its business as a separate Subsidiary
and business unit of AtlasClear with separate complete books and records that are accurate in all material respects, substantially consistent
with the Company’s past practices prior to Closing, and (iii) permit the Majority Stockholder reasonable access to the FOCUS Reports
of the Company Group filed with FINRA; provided that such access shall not unreasonably interfere with the normal business operations
of the Group Companies. Subject to the foregoing, AtlasClear and the Group Companies shall have the right to operate and conduct the
business of the Group Companies in their sole discretion. The Parties acknowledge and agree that (A) any Deferred Consideration Payment
Amount is subject to factors outside the control of the Group Companies or AtlasClear, (B) there is no assurance that any Deferred Consideration
Payment Amount will be achieved and none of AtlasClear nor any of its Affiliates or Representatives have promised or projected any Deferred
Consideration Payment Amount becoming payable, and (C) the Parties solely intend the express provisions of this Agreement to govern their
contractual relationship.
Section
2.6 Withholding. AtlasClear and the Group Companies shall be entitled to deduct and withhold (or cause to be deducted
and withheld) from any consideration payable pursuant to this Agreement such amounts as are required to be deducted and withheld under
applicable Tax Law. To the extent that amounts are so withheld and timely remitted to the applicable Governmental Entity, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and
withholding was made.
21
Section
2.7 Excess Net Capital.
(a)
Definitions. For purposes of this Section 2.7, the following terms shall have the following meanings:
(i)
“Closing Net Capital Amount” means the Company Net Capital as agreed by the Majority Stockholder and AtlasClear in
writing or determined by the Appraiser in each case in accordance with this Section 2.7.
(ii)
“Company Net Capital” means the Net Capital of Dawson James immediately prior to First Effective Time.
(b)
Estimated Net Capital Statement. No later than ten (10) days prior to the anticipated Closing Date, the Majority Stockholder shall
deliver to AtlasClear a written statement (the “Estimated Net Capital Statement”) setting forth the Majority Stockholder’s
good faith calculation of Company Net Capital, together with reasonable supporting documentation for such calculation. AtlasClear shall
have five (5) Business Days following receipt of the Estimated Net Capital Statement to review the calculations contained within the
Estimated Net Capital Statement and shall notify the Majority Stockholder in writing (email being sufficient) whether AtlasClear (i)
accepts the determination of Company Net Capital set forth in the Estimated Net Capital Statement, or (ii) disagrees with the determination
of Company Net Capital contained in the Estimated Net Capital Statement and the reason(s) for such disagreement. The Majority Stockholder
shall, and shall cause the Company and its subsidiaries to, provide AtlasClear and its Representatives with reasonable access to any
books, records, work papers and personnel as reasonably necessary to permit AtlasClear to assess the financial condition of the Company
and its Subsidiaries for the purpose of properly and accurately determining Company Net Capital in accordance with this Section 2.7.
(c)
Dispute Resolution. AtlasClear and the Majority Stockholder shall, and shall cause their respective Affiliates to, cooperate in
good faith to promptly resolve any disagreements with the Estimated Net Capital Statement identified by AtlasClear and revise the calculation
of Company Net Capital to their respective mutual satisfaction; provided that if AtlasClear and the Majority Stockholder are unable to
resolve any disputes and mutually agree on the amount of Company Net Capital, the parties shall promptly engage Baumann Moreau (or such
other independent third party with experience with such matters as may be mutually agreed by AtlasClear and the Majority Stockholder)
(such Person, the “Appraiser”), which such determination, absent manifest error, shall be deemed final and binding
on AtlasClear and the Company Stockholders. The Majority Stockholder shall, and shall cause the Company and its subsidiaries to, at their
sole cost and expense, provide the Appraiser with full and complete access to any books, records, work papers and personnel as reasonably
necessary to permit the Appraiser to calculate Company Net Capital in accordance with this Section 2.7. The fees and expenses
of the Appraiser shall be paid fifty percent (50%) by the Majority Stockholder and fifty percent (50%) by AtlasClear.
(d)
Net Capital Adjustment. The Stage 2 Cash Consideration Amount and Stage 2 Share Consideration Amount shall be adjusted at Closing
as follows:
(i)
if the Closing Net Capital Amount as finally determined in accordance with this Section 2.7 is less than the Required Net Capital
Amount (the amount of such difference, the “Net Capital Shortfall”), the Stage 2 Cash Consideration Amount shall be
reduced by sixty percent (60%) of the amount of such Net Capital Shortfall and the Stage 2 Share Consideration Amount shall be reduced
by forty percent (40%) of such Net Capital Shortfall; provided that notwithstanding the foregoing, in the event of a Net Capital Shortfall,
AtlasClear shall have the right in its sole discretion to elect to terminate this Agreement by written notice to the Majority Stockholder
no later than three (3) Business Days following the final determination of the Closing Net Capital Amount in accordance with this Section
2.7, which such termination shall be effective immediately upon delivery of such termination notice.
(ii)
if the Closing Net Capital Amount as finally determined in accordance with this Section 2.7 is greater than the Required Net Capital
Amount (the amount of such excess, the “Excess Net Capital Amount”), the Stage 2 Cash Consideration Amount and the
Stage 2 Share Consideration Amount shall be increased, in the aggregate, by the Excess Net Capital Amount, allocated between the Stage
2 Cash Consideration Amount and the Stage 2 Share Consideration Amount as determined by the Majority Stockholder.
22
Article
III
REPRESENTATIONS
AND WARRANTIES RELATING TO THE GROUP COMPANIES
Subject
to Section 10.7, except as set forth in the Company Disclosure Schedules, the Company hereby represents and warrants to the AtlasClear
Parties, in each case, as of the date of this Agreement and as of the Closing Date, as follows:
Section
3.1 Organization and Qualification.
(a)
Each Group Company is a corporation, limited liability company or other applicable business entity duly organized, incorporated or formed,
as applicable, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions
that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of organization, incorporation
or formation (as applicable) and in each jurisdiction in which the property and assets owned, leased or operated by it, or the nature
of the business conducted by it, makes such qualification or licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not reasonably be expected to result in a Company Material Adverse Effect. Section 3.1(a)
of the Company Disclosure Schedules sets forth the jurisdiction of organization, incorporation or formation (as applicable) for each
Group Company. Each Group Company has the requisite corporate, limited liability company or other applicable business entity power and
authority to own, lease and operate its properties and to carry on its businesses as presently conducted, except where the failure to
have such power or authority would not reasonably be expected to result in a Company Material Adverse Effect.
(b)
True and complete copies of the Governing Documents of the Group Companies have been made available to AtlasClear, in each case, as amended
and in effect as of the date of this Agreement. The Governing Documents of the Group Companies are in full force and effect, and the
Group Companies are not in breach or violation of any provision set forth in its Governing Document, as applicable, except where such
breach or violation would not reasonably be expected to be material to the Group Companies, taken as a whole.
Section
3.2 Capitalization of the Group Companies.
(a)
Section 3.2(a) of the Company Disclosure Schedules sets forth a true and complete statement as of the date of this Agreement of
(i) the number and class or series (as applicable) of all of the Equity Securities of the Company issued and outstanding, and (ii) the
identity of the Persons that are the record and beneficial owners thereof. All of the Equity Securities of the Company have been duly
authorized and validly issued. All of the outstanding Company Shares are fully paid and non-assessable. The Equity Securities of the
Company (1) were not issued in violation of the Governing Documents of the Company or any other Contract to which the Company is party
or bound, (2) were not issued in violation of any preemptive rights, call option, right of first refusal or first offer, subscription
rights, transfer restrictions or similar rights of any Person and (3) have been offered, sold and issued in compliance with applicable
Law, including Securities Laws, in all material respects. The Company has no outstanding (x) equity appreciation, phantom equity or profit
participation rights or (y) options, restricted stock units, phantom stock, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require the Company to issue,
sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into
or exchangeable for Equity Securities of the Company.
23
(b)
The Equity Securities of the Company are free and clear of all Liens (other than transfer restrictions under applicable Securities Law
or under the Governing Documents of the Company). There are no voting trusts, proxies or other Contracts to which the Company is a party
with respect to the voting or transfer of the Company’s Equity Securities.
(c)
Section 3.2(c) of the Company Disclosure Schedules sets forth a true and complete statement of (i) the number and class or series
(as applicable) of all of the Equity Securities of each Subsidiary of the Company issued and outstanding and (ii) the identity of the
Persons that are the record and beneficial owners thereof. There are no outstanding (A) equity appreciation, phantom equity or profit
participation rights or (B) options, restricted stock, restricted stock units, phantom stock, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require
any Subsidiary of the Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity
Securities or securities convertible into or exchangeable for Equity Securities of the Subsidiaries of the Company. There are no voting
trusts, proxies or other Contracts with respect to the voting or transfer of any Equity Securities of any Subsidiary of the Company.
There are no outstanding bonds, debentures, notes or other Indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matter for which holders of Company Shares may vote.
(d)
Except as set forth on Section 3.2(d) of the Company Disclosure Schedules, there are no voting trusts, proxies or other Contracts
with respect to the voting or transfer of the Company’s Equity Securities between the Company and any other Person.
(e)
Except as set forth on Section 3.2(e) of the Company Disclosure Schedules, none of the Group Companies owns or holds (of record,
beneficially, legally or otherwise), directly or indirectly, any Equity Securities in any other Person or the right to acquire any such
Equity Security, and none of the Group Companies are a partner or member of any partnership, limited liability company or joint venture.
(f)
Section 3.2(f) of the Company Disclosure Schedules sets forth a list of all Indebtedness of the Group Companies as of the date
of this Agreement, including the principal amount of such Indebtedness, the outstanding balance as of the date of this Agreement, and
the debtor and the creditor thereof.
(g)
Section 3.2(g) of the Company Disclosure Schedules sets forth a list of all Change of Control Payments of the Group Companies.
(h)
There are no debt instruments outstanding convertible into or otherwise entitling the holder thereof to any of the Company’s Equity
Securities.
24
Section
3.3 Authority.
(a)
The Company has the requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which
it is or will be 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, the Ancillary Documents to which the Company is or will be a party, the performance
of the Company’s obligations hereby and thereby and the consummation of the transactions contemplated hereby and thereby have been
(or, in the case of any Ancillary Document entered into after the date of this Agreement, will be upon execution thereof) duly authorized
by all necessary corporate (or other similar) action on the part of the Company. This Agreement and each Ancillary Document to which
the Company is or is contemplated to be a party has been or will be, upon execution thereof, as applicable, duly and validly executed
and delivered by the Company and constitutes or will constitute, upon execution and delivery thereof, as applicable, a valid, legal and
binding agreement of the Company (assuming that this Agreement and the Ancillary Documents to which the Company is or will be a party
are or will be upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto), enforceable
against the Company in accordance with their respective terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
(b)
The Company Board has duly adopted resolutions (i) determining that entry into this Agreement and the other Ancillary Documents to which
the Company is party, and the consummation of the transactions contemplated hereby and thereby, including the Mergers, are advisable
and fair to, and in the best interest of, the Company and its stockholders, (ii) approving this Agreement, such other Ancillary Documents
and the consummation of the transactions contemplated hereby and thereby, including the Mergers, and (iii) directing that this Agreement
be submitted to the Company Stockholders entitled to vote thereon for adoption thereby and resolving to make a recommendation that the
Company Stockholders approve this Agreement and the transactions contemplated hereby which resolutions have not been subsequently withdrawn
or modified in a manner adverse to AtlasClear or the Merger Subs.
Section
3.4 Financial Statements; Undisclosed Liabilities.
(a)
The Company has made available to AtlasClear a true and complete copy of the following financial statements, which are attached as Section
3.4(a) of the Company Disclosure Schedules: (i) the audited financial statements for Dawson James Securities, Inc. for the fiscal
year ended December 31, 2025, (ii) the audited financial statements and (iii) the unaudited consolidated balance sheet and statements
of income of the Company and its Subsidiaries as of and for the fiscal years ended December 31, 2024 and December 31, 2025 and as of
and for the eight-month period ended August 31, 2026 (the “Financial Statements”). Each of the Financial Statements
(including the notes thereto) (A) was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto) and (B) are true, correct, and complete in all material respects and fairly present
the financial position, results of operations and cash flows of the Group Companies as at the date thereof and for the period indicated
therein, except as otherwise specifically noted therein.
(b)
Except (i) as set forth on the face of the Latest Balance Sheet, (ii) for Liabilities incurred in the ordinary course of business since
the date of the Latest Balance Sheet (none of which are Liabilities directly or indirectly related to a breach of Contract, breach of
warranty, tort, infringement, Proceeding or violation of, or non-compliance with, Law) and (iii) for Liabilities incurred in connection
with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of their respective covenants
or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions, no Group Company has any Liabilities
of the type required to be set forth on a balance sheet in accordance with GAAP.
25
(c)
The Group Companies have established and maintain systems of internal accounting controls that are designed to provide, in all material
respects, reasonable assurance (i) that all transactions are executed in accordance with management’s authorization, (ii) that
all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP
and to maintain accountability for the Group Companies’ assets, and (iii) regarding prevention or timely detection of the unauthorized
acquisition, use or disposition of the Group Company’s properties or assets. The Group Companies maintain and, for all periods
covered by the Financial Statements, have maintained books and records of the Group Companies in the ordinary course of business that
are accurate and complete and reflect the revenues, expenses, assets and liabilities of the Group Companies in all material respects.
(d)
Except as set forth in Section 3.4(d) of the Company Disclosure Schedules, since the Lookback Date, no Group Company has received
any written complaint, allegation, assertion or Claim that there is (i) “significant deficiency” in the internal controls
over financial reporting of the Group Companies, (ii) a “material weakness” in the internal controls over financial reporting
of the Group Companies or (iii) fraud, whether or not material, that involves management or other employees of the Group Companies who
have a significant role in the internal controls over financial reporting of the Group Companies.
Section
3.5 Consents and Requisite Governmental Approvals; No Violations.
(a)
Except as set forth on Section 3.5(a) of the Company Disclosure Schedules, no consent, approval or authorization of, or designation,
declaration or filing with, any Governmental Entity is required on the part of the Company with respect to the Company’s execution,
delivery or performance of its obligations under this Agreement or the Ancillary Documents to which the Company is or will be party or
the consummation of the Transactions, except for the filing of the First Certificates of Merger and Second Certificates of Merger.
(b)
None of the execution or delivery by the Company of this Agreement or any Ancillary Documents to which it is or will be a party, the
performance by the Company of its obligations hereunder or thereunder, or the consummation of the Transactions will, directly or indirectly
(with or without due notice or lapse of time or both) (i) result in a violation or breach of any provision of the Company’s Governing
Documents, (ii) result in a violation or breach of, or constitute a default or give rise to any right of termination, Consent, cancellation,
amendment, modification, suspension, revocation or acceleration under, any of the terms, conditions or provisions of (A) any Material
Contract to which any Group Company is a party or (B) any Material Permits, (iii) violate, or constitute a breach under, any Order or
applicable Law to which any Group Company or any of its properties or assets are subject or bound or (iv) result in the creation of any
Lien upon any of the assets or properties (other than any Permitted Liens) or Equity Securities of any Group Company, except, in the
case of any of clauses (ii) through (iv) above, as would not reasonably be expected to result in a Company Material Adverse Effect.
Section
3.6 Permits. Each of the Group Companies has all Permits that are required to own, lease or operate its properties and assets and
to conduct its business as currently conducted, except where the failure to hold the same would not reasonably be expected to result
in a Company Material Adverse Effect (the “Material Permits”). Except as is not, and would not reasonably be expected
to be, material to the Group Companies, taken as a whole, (i) each Material Permit is in full force and effect in accordance with its
terms and (ii) there are no Proceedings pending or, to the knowledge of the Group Companies, threatened, that seek the suspension, revocation,
cancellation, adverse modification or termination of any Material Permit. Each of the Group Companies is (and since the Lookback Date
has been) in material compliance with the applicable Material Permits.
26
Section
3.7 Material Contracts.
(a)
Section 3.7(a) of the Company Disclosure Schedules sets forth a list of the following Contracts to which a Group Company is a
party as of the date of this Agreement, excluding any Employee Benefit Plan (each Contract required to be set forth on Section 3.7(a)
of the Company Disclosure Schedules, together with each of the Contracts entered into after the date of this Agreement that would be
required to be set forth on Section 3.7(a) of the Company Disclosure Schedules if entered into prior to the execution and delivery
of this Agreement, collectively, the “Material Contracts”):
(i)
any Contract relating to Indebtedness for borrowed money of any Group Company or to the placing of a Lien (other than any Permitted Lien)
on any material assets or properties of any Group Company;
(ii)
any Contract under which any Group Company is lessee of or holds or operates, in each case, any tangible property (other than real property),
owned by any other Person, except for any lease or agreement under which the aggregate annual rental payments do not exceed $100,000;
(iii)
any Contract under which any Group Company is lessor of or permits any third party to hold or operate, in each case, any tangible property
(other than real property), owned or controlled by such Group Company, except for any lease or agreement under which the aggregate annual
rental payments do not exceed $100,000;
(iv)
any joint venture, profit-sharing, partnership, collaboration, co-promotion, commercialization or research or development Contract, in
each case, which requires, or would reasonably be expected to require (based on any occurrence, development, activity or event contemplated
by such Contract), aggregate payments to or from any Group Company in excess of $500,000 over the life of the Contract;
(v)
any (A) In-bound License or (B) Out-bound License required to be listed in Section 3.13(b) of the Company Disclosure Schedules;
(vi)
any Contract that (A) limits or purports to limit, in any material respect, the freedom of any Group Company to engage or compete in
any line of business or with any Person or in any area or that would so limit or purport to limit, in any material respect, the operations
of AtlasClear or any of its Affiliates after the Closing, (B) contains any exclusivity, “most favored nation” or similar
provisions, obligations or restrictions or (C) contains any other provisions restricting or purporting to restrict the ability of any
Group Company to sell, develop, or commercialize products, directly or indirectly through third parties, or to solicit any potential
employee or customer, in each case, in any material respect or that would so limit or purports to limit in any material respect, AtlasClear
or any of its Affiliates after the Closing;
(vii)
any Contract requiring any future capital commitment or capital expenditure (or series of capital expenditures) by any Group Company
in an amount in excess of (A) $100,000 annually or (B) $250,000 over the life of the agreement;
(viii)
any Contract requiring any Group Company to guarantee the Liabilities of any Person (other than the Company or a Subsidiary) or pursuant
to which any Person (other than the Company or a Subsidiary) has guaranteed the Liabilities of a Group Company, in each case in excess
of $100,000;
27
(ix)
any Contract, entered into since the Lookback Date, under which any Group Company has, directly or indirectly, made or agreed to make
any loan, advance, or assignment of payment to any Person or made any capital contribution to, or other investment in, any Person;
(x)
any Contract required to be disclosed on Section 3.19 of the Company Disclosure Schedules;
(xi)
any Contract with any Person (A) pursuant to which any Group Company (or AtlasClear or any of its Affiliates after the Closing) may be
required to pay milestones, royalties or other contingent payments based on any sale, distribution or other similar occurrences, developments,
activities or events or (B) under which any Group Company grants to any Person any right of first refusal, right of first negotiation,
option to purchase, option to license or any other similar rights with respect to any Company Product or any Company Owned Intellectual
Property;
(xii)
any Contract governing the terms of the employment, engagement or services of any current director, manager, officer, employee, individual
independent contractor or other service provider of a Group Company that provides for an annual base salary (or, in the case of an independent
contractor, annual base compensation) in excess of $100,000;
(xiii)
any Contract for the disposition of any portion of the assets or business of any Group Company or for the acquisition by any Group Company
of the assets or business of any other Person (other than acquisitions or dispositions made in the ordinary course of business), or under
which any Group Company has any continuing obligation with respect to an “earn-out”, contingent purchase price or other contingent
or deferred payment obligation;
(xiv)
any settlement, conciliation or similar Contract (A) the performance of which would be reasonably likely to involve any payments after
the date of this Agreement, (B) with a Governmental Entity or (C) that imposes or is reasonably likely to impose, at any time in the
future, any material, non-monetary obligations on any Group Company (or AtlasClear or any of its Affiliates after the Closing); and
(xv)
any other Contract the performance of which requires either (A) annual payments to or from any Group Company in excess of $100,000 or
(B) aggregate payments to or from any Group Company in excess of $250,000 over the life of the agreement and, in each case, that is not
terminable by the applicable Group Company without penalty upon less than thirty (30) days’ prior written notice; and
(xvi)
any other Contract material to any Group Company individually, or the Group Companies collectively.
(b)
(i) Each Material Contract is valid and binding on the applicable Group Company and, to the knowledge of the Company, the counterparties
thereto, and is in full force and effect and enforceable in accordance with its terms against such Group Company and, to the knowledge
of the Company, the counterparties thereto, (ii) the applicable Group Company and, to the knowledge of the Company, the counterparties
thereto are not in material breach of, or default under, any Material Contract and (iii) no event has occurred that (with or without
due notice or lapse of time or both) would result in a material breach of, or default under, any Material Contract by the applicable
Group Company or, to the knowledge of the Company, the counterparties thereto. The Company has made available to AtlasClear true and
complete copies of all Material Contracts in effect as of the date hereof (other than purchase orders, invoices, and similar confirmatory
or administrative documents that are ancillary to the main contractual relationship between the parties to a particular Contract or group
of Contracts and that, in each case, do not contain any material executory or continuing terms, conditions, obligations or rights).
28
Section
3.8 Absence of Changes. Except as set forth in Section 3.8 of the Company Disclosure Schedules, during the
period beginning on January 1, 2026 and ending on the date of this Agreement, (i) no Company Material Adverse Effect has occurred and
(ii) except as expressly contemplated by this Agreement, any Ancillary Document or in connection with the transactions contemplated hereby
and thereby, the Company has conducted its business in the ordinary course in all material respects.
Section
3.9 Litigation. There is (and since the Lookback Date there has been) no Proceeding pending or, to the Company’s
knowledge, threatened in writing against any Group Company that, if adversely decided or resolved, would reasonably be expected to result
in a Liability in excess of $100,000. Neither the Group Companies nor any of their respective properties or assets is subject to any
Order that is, or would reasonably be expected to be, material to the Group Companies, taken as a whole. As of the date hereof, there
are no material Proceedings by a Group Company pending against any other Person.
Section
3.10 Compliance with Applicable Law. Each Group Company (a) conducts (and since the Lookback Date has conducted)
its business in accordance with all Laws and Orders applicable to such Group Company and is not in violation of any such Law or Order
and (b) has not received any written communications from a Governmental Entity that alleges that such Group Company is not in compliance
with any Law or Order, except in each case of clauses (a) and (b), as would not reasonably be expected to result in a Company Material
Adverse Effect.
Section
3.11 Employee Plans.
(a)
Section 3.11(a) of the Company Disclosure Schedules sets forth a true and complete list of all material Employee Benefit Plans
(including, for each such Employee Benefit Plan, its jurisdiction). With respect to each material Employee Benefit Plan, the Group Companies
have provided AtlasClear with true and complete copies of the material documents pursuant to which the plan is maintained, funded and
administered. Notwithstanding the foregoing, Section 3.11(a) of the Company Disclosure Schedules need not identify an employment
agreement or offer letter if such employment agreement or offer letter relates to an employee whose base salary does not exceed $300,000
or does not provide any severance, or a notice period, in excess of thirty (30) days or such longer period as may be required by applicable
Laws.
(b)
No Employee Benefit Plan is or was within the past six (6) years, nor does any Group Company or any of its ERISA Affiliates have or had
within the past six (6) years any material Liability with respect to or under: (i) a Multiemployer Plan; (ii) a “defined benefit
plan” (as defined in Section 3(35) of ERISA, whether or not subject to ERISA) or a plan that is or was subject to Title IV of ERISA
or Section 412 of the Code; (iii) a “multiple employer plan” within the meaning of Section 413(c) of the Code or Section
210 of ERISA; or (iv) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA. No Group Company has
any material Liabilities to provide any retiree or post-termination health or life insurance or other welfare-type benefits to any Person
other than health continuation coverage pursuant to COBRA or similar Law and for which the recipient pays the full cost of coverage or
for a limited period of time following a termination of employment pursuant to the terms of an Employee Benefit Plan as set forth on
Section 3.11(a). No Group Company has any material Liabilities by reason of at any time being considered a single employer under
Section 414 of the Code with any other Person.
(c)
Each Employee Benefit Plan is in compliance, in all material respects, with its terms and the requirements of all applicable Laws including,
without limitation, ERISA and the Code. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code
has timely received a favorable determination or opinion or advisory letter from the Internal Revenue Service that the Employee Benefit
Plan is so qualified and, to the Company’s knowledge, no fact or event has occurred since the date of such determination or opinion
letter or letters from the IRS that would reasonably be expected to result in the loss of the qualified status of any such Employee Benefit
Plan. None of the Group Companies has incurred (whether or not assessed) any material penalty or Tax under Section 4980H, 4980B, 4980D,
6721 or 6722 of the Code.
29
(d)
Except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, as a whole, as of
the date of this Agreement, there are no pending or, to the Company’s knowledge, threatened in writing Claims or Proceedings with
respect to any Employee Benefit Plan (other than routine Claims for benefits). There have been no non-exempt “prohibited transactions”
within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and no breaches of fiduciary duty (as determined under
ERISA) with respect to any Employee Benefit Plan, except as is not and would not reasonably be expected to be, individually or in the
aggregate, material to the Group Companies, taken as a whole. With respect to each Employee Benefit Plan, since the Lookback Date, all
contributions, distributions, reimbursements and premium payments that are due have been timely made, except as is not and would not
reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole.
(e)
The execution and delivery of this Agreement and the consummation of the Transactions will not (i) result in any material payment or
benefit becoming due to or result in the forgiveness of any indebtedness of any current or former director, manager, officer, employee,
individual independent contractor or other service providers of any of the Group Companies, (ii) materially increase the amount of any
compensation or benefits payable to any current or former director, manager, officer, employee, individual independent contractor or
other service providers of any of the Group Companies or (iii) result in the acceleration of the time of payment or vesting, or trigger
any payment or funding of any material compensation or benefits to any current or former director, manager, officer, employee, individual
independent contractor or other service providers of any of the Group Companies.
(f)
No amount that could be received (whether in cash or property or the vesting of property) by any “disqualified individual”
of any of the Group Companies under any Employee Benefit Plan or otherwise as a result of the consummation of the Transactions could,
separately or in the aggregate, be nondeductible under Section 280G of the Code or subjected to an excise tax under Section 4999 of the
Code.
(g)
Each Employee Benefit Plan or Contract (or any other agreement, program, policy or arrangement by or to which any of the Group Companies
is a party, is bound or is otherwise liable) that provides “nonqualified deferred compensation” as defined in Section 409A
of the Code (or any corresponding provision of state, local or foreign Tax Law) is and has been in compliance in all material respects
with Section 409A of the Code and all applicable guidance from the Internal Revenue Service. The Group Companies have no material obligation
to make a “gross-up” or similar payment in respect of any taxes that may become payable under Section 4999 or 409A of the
Code.
(h)
Except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, as a whole, each
Foreign Benefit Plan that is required to be registered or intended to be tax exempt has been registered (and, where applicable, accepted
for registration), is tax exempt and has been maintained in good standing, in each case, to the extent applicable, with each Governmental
Entity. No Foreign Benefit Plan is a “defined benefit plan” (as defined in ERISA, whether or not subject to ERISA) or has
any material unfunded or underfunded Liabilities. Since the Lookback Date, all material contributions required to have been made by or
on behalf of the Group Companies with respect to plans or arrangements maintained or sponsored a Governmental Entity (including severance,
termination indemnities or other similar benefits maintained for employees outside of the U.S.) have been timely made or fully accrued.
30
Section
3.12 Environmental Matters.
(a)
None of the Group Companies have received any written notice from any Governmental Entity or any other Person alleging that a Group Company
is not in material compliance with, or is in material violation of, any Environmental Laws, in each case, that remains pending or unresolved.
(b)
The Group Companies are and have been since the Lookback Date in compliance in all material respects with all applicable Environmental
Laws, and there is (and since the Lookback Date there has been) no Proceeding pending or, to the Company’s knowledge, threatened
in writing against any Group Company alleging liability for (i) a release or threatened release of any Hazardous Substance or (ii) a
material violation of Environmental Laws.
(c)
None of the Group Companies has manufactured, released, treated, stored, disposed of, arranged for the disposal of, transported, or handled
or exposed any Person to, any Hazardous Substances at any Owned Real Property, Leased Real Property, or at any property formerly owned
or leased by any Group Company in a manner or concentration that has resulted or could reasonably be expected to result in a material
liability of any Group Company under Environmental Law.
(d)
None of the Group Companies have assumed, by contract or, to the Company’s knowledge, by operation of Law, any material liability
under any Environmental Law, or is an indemnitor in connection with any threatened or asserted Claim by any third-party indemnitee for
any material liability under any Environmental Law.
(e)
The Group Companies do not own or operate, and to the Company’s knowledge, none of the following are present at, on, in, or under
any Owned Real Property or Leased Real Property: (i) underground storage tanks, (ii) dumps or landfills, (iii) surface impoundments,
or (iv) other units for the treatment, storage or disposal of Hazardous Substances, except in compliance in all material respects with
Environmental Law.
(f)
The Group Companies have made available to AtlasClear copies of all environmental assessments, audits and reports and all other material
environmental, health and safety documents that are in any Group Company’s possession or control relating to the current or former
operations, properties or facilities of the Group Companies.
Section
3.13 Intellectual Property.
(a)
Except as set forth on Section 3.13(a) of the Company Disclosure Schedules, the Company has no Company Registered Intellectual
Property.
31
(b)
Section 3.13(b) of the Company Disclosure Schedules sets forth a list of all current Contracts pursuant to which a Group Company
(i) is granted a license, covenant not to sue, assert, or enforce, option, right of purchase or first or last refusal, or other right
in or to any Company Licensed Intellectual Property (each, an “In-bound License”) or (ii) grants to any third party
a license, covenant not to sue, assert, or enforce, option, right of purchase or first or last refusal, or other right in or to or under
any Company Owned Intellectual Property or Company Licensed Intellectual Property (each, an “Out-bound License”),
provided that, (x) Section 3.13(b)(i) of the Company Disclosure Schedules may, with respect to In-Bound Licenses, exclude
(A) licenses to Off-the-Shelf Software with aggregate annual license and maintenance fees of less than $100,000, (B) licenses to Public
Software, (C) non-disclosure agreements, (D) Contracts under which licenses are granted by customers of the Company Products in the ordinary
course of business based on the Group Companies’ standard terms and conditions made available to AtlasClear, (E) backup licenses
from employees and contractors granted in connection with providing services to any Group Company and entered in the ordinary course
of business, (F) Contracts under which licenses are granted solely for the purpose of enabling a Group Company to provide services to
the licensor and (G) Contracts under which a non-exclusive license is granted to a Group Company that is incidental to the receipt of
services or deliverables and (y) Section 3.13(b)(ii) of the Company Disclosure Schedules may, with respect to Out-bound Licenses,
exclude (A) Contracts under which a Group Company grants non-exclusive licenses of Company Products to customers in the ordinary course
of business, (B) Contracts under which a Group Company grants non-exclusive licenses to a service provider solely for the purpose of
allowing such service provider to provide services to a Group Company, and (C) Contracts under which a Group Company grants non-exclusive
licenses of Company Owned Intellectual Property that is incidental to the receipt of services or deliverables. The Company Owned Intellectual
Property is valid, subsisting and, to the knowledge of the Company, enforceable. No third person has ownership rights in any derivative
works created by or on behalf of such third person of the Company Owned Intellectual Property.
(c)
Each Group Company has taken reasonable steps to safeguard and maintain the secrecy of any trade secrets, know-how and other confidential
information owned by each Group Company or by any Person to which any Group Company has an obligation of confidentiality. Without limiting
the foregoing, each Group Company has not disclosed any trade secrets, know-how or confidential information to any other Person unless
such disclosure was under an appropriate written non-disclosure agreement containing appropriate limitations on use, reproduction and
disclosure. To the Company’s knowledge, there has been no violation or unauthorized access to or disclosure of any trade secrets,
know-how or confidential information of or in the possession or control of each Group Company, or of any written obligations with respect
to such. All Persons who have contributed, developed or conceived any Company Products or any other material Company Owned Intellectual
Property have executed valid and enforceable written agreements with a Group Company pursuant to which such persons assigned to a Group
Company all of their entire right, title, and interest in and to any Intellectual Property Rights created, conceived or otherwise developed
by such Person in the course of and related to his, her or its relationship with such Group Company.
1)
No
loss or expiration of any of the material Company Owned Intellectual Property is threatened in writing or pending. None of the Company
Registered Intellectual Property and, to the Company’s knowledge, none of the Company Licensed Intellectual Property is subject
to any outstanding Order that restricts in any manner the use, sale, transfer, licensing or exploitation thereof by the Group Companies
or affects the validity, use or enforceability of any such Company Registered Intellectual Property.
(d)
Neither the conduct of the business of the Group Companies nor any of the Company Products infringes, misappropriates or otherwise violates,
or has, in the past six (6) years, infringed, misappropriated, or otherwise violated any Intellectual Property Rights of any other Person,
except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken
as a whole. In the past six (6) years, there is no Proceeding pending nor has any Group Company received any written communications (i)
alleging that a Group Company has infringed, misappropriated or otherwise violated any Intellectual Property Rights of any other Person,
(ii) challenging the validity, enforceability, use or exclusive ownership of any Company Registered Intellectual Property or (iii) inviting
any Group Company to take a license under any Patent or consider the applicability of any Patents to any products or services of the
Group Companies or to the conduct of the business of the Group Companies. To the Company’s knowledge, no Person is infringing,
misappropriating, misusing, diluting or violating any Company Registered Intellectual Property in any material respect. In the past six
(6) years, no Group Company has made any written Claim against any Person alleging any infringement, misappropriation or other violation
of any Company Registered Intellectual Property in any material respect.
32
(e)
Each Group Company has obtained, possesses and is in compliance with valid licenses to use all of the Software present on the computers
and other Software-enabled electronic devices that it owns or leases or that is otherwise used by such Group Company and/or its employees
in connection with the Group Company business, except as is not and would not reasonably be expected to be, individually or in the aggregate,
material to the Group Companies, taken as whole. No Group Company has disclosed or delivered to any escrow agent or any other Person,
other than employees or contractors who are subject to confidentiality obligations, any of the source code to any Company Products, and
no other Person has the right, contingent or otherwise, to obtain access to or use any such source code. To the Company’s knowledge,
no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) will, or would
reasonably be expected to, result in the delivery, license or disclosure of any source code to any Company Product to any Person who
is not, as of the date the event occurs or circumstance or condition comes into existence, a current employee or contractor of a Group
Company subject to confidentiality obligations with respect thereto. The Company does not have or use any proprietary Software.
Section
3.14 Labor Matters.
(a)
The Company is in material compliance with all applicable Laws respecting employment, employment practices, terms and conditions of employment,
worker classification, prohibited discrimination, equal employment opportunities, fair employment practices, meal and rest periods, immigration
status, employee safety and health, wages and hours (including overtime wages), compensation and hours of work. Except as set forth in
Section 3.14 of the Company Disclosure Schedules, the services provided by each current employee are terminable at the will of
the Company. The Company has no material Liability, or to the knowledge of the Company, threats or Claims of material liability, with
respect to any misclassification of: (1) any independent contractor rather than as an employee, (2) any employee leased from another
employer, or (3) any employee currently or formerly classified as exempt from overtime wages.
(b)
Since the Lookback Date, there has been no “mass layoff” or “plant closing” as defined by WARN related to any
Group Company, and the Group Companies have not incurred any material Liability under WARN nor will they incur any Liability under WARN
as a result of the Transactions.
(c)
No Group Company is, or has been since the Lookback Date, a party to or bound by any collective bargaining agreements or other similar
labor-related agreements with any labor organization, labor union or works council, or other similar employee collective group nor to
the knowledge of the Company is there any active duty on the part of any Group Company to bargain with any labor union, labor organization,
works council, or other similar employee collective group. Since the Lookback Date, there has been no actual or, to the Company’s
knowledge, threatened unfair labor practice charges, material union related grievances, material labor related arbitrations, strikes,
lockouts, concerted work stoppages or slowdowns, picketing, hand billing or other material union related disputes against or affecting
any Group Company. To the Company’s knowledge, since the Lookback Date, there have been no labor organizing activities with respect
to any employees of any Group Company.
(d)
Since the Lookback Date, no allegations of discrimination, sexual harassment, sexual misconduct or retaliation while employed by, or
providing services to, the Company have been made to human resources personnel at the Company against any senior management employee
of the Company (in their capacity as such), and the Company has not entered into any settlement agreement or conducted any investigation
related to any such allegations of discrimination, sexual harassment, sexual misconduct or retaliation by or regarding any such employee
(in their capacity as such).
33
Section
3.15 Insurance. Section 3.15 of the Company Disclosure Schedules sets forth a list of all material policies
of fire, liability, workers’ compensation, property, casualty and other forms of insurance owned or held by any Group Company as
of the date of this Agreement. Except as set forth on Section 3.15 of the Company Disclosure Schedules, to the knowledge of the
Company, all such policies are in full force and effect, all premiums due and payable thereon as of the date of this Agreement have been
paid in full as of the date of this Agreement, and true and complete copies of all such policies have been made available to AtlasClear.
As of the date of this Agreement, no written Claim by any Group Company is pending under any such policies as to which coverage has been
denied or disputed, or rights reserved to do so, by the underwriters thereof, except as would not reasonably be expected to result in
a Company Material Adverse Effect.
Section
3.16 Tax Matters.
(a)
Each Group Company has prepared and filed all income and other material Tax Returns required to have been filed by it, all such Tax Returns
are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Orders,
and each Group Company has paid all material Taxes required to have been paid by it regardless of whether shown on a Tax Return.
(b)
Each Group Company has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld
and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity
interest holder or other third party.
(c)
No Group Company is currently the subject of a Tax audit or examination with respect to material Taxes. No Group Company has been informed
in writing of the commencement or anticipated commencement of any Tax audit or examination that has not been resolved or completed in
each case with respect to material Taxes.
(d)
No Group Company has consented to extend or waive the time in which any material Tax may be assessed or collected by any Tax Authority,
other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in
the ordinary course of business.
(e)
No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local
or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into
or issued by any Tax Authority with respect to a Group Company which agreement or ruling would be effective after the Closing Date.
(f)
No Group Company is or has been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury
Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. income Tax Law).
(g)
There are no Liens for material Taxes on any assets of the Group Companies other than Permitted Liens.
(h)
During the two (2)-year period ending on the date of this Agreement, no Group Company was a distributing corporation or a controlled
corporation in a transaction purported or intended to be governed by Section 355 of the Code.
34
(i)
No Group Company (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the
common parent of which was a Group Company or any of its current Affiliates) or (ii) has any material Liability for the Taxes of any
Person (other than a Group Company or any of its current Affiliates) under Section 1.1502-6 of the Treasury Regulations (or any similar
provision of state, local or non-United States Law), as a transferee or successor or by Contract (other than any Contract the principal
purpose of which does not relate to Taxes).
(j)
For the past three years, no written Claims have ever been made by any Tax Authority in a jurisdiction where a Group Company does not
file Tax Returns that such Group Company is or may be subject to taxation by that jurisdiction, which Claims have not been resolved or
withdrawn.
(k)
No Group Company is a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than one that is included
in a transactional Contract or a Contract entered into in the ordinary course of business that is not primarily related to Taxes).
(l)
No Group Company has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place
of business in a country other than the country in which it is organized.
(m)
No Group Company has taken or agreed to take any action not contemplated by this Agreement and/or any Ancillary Document that could reasonably
be expected to prevent the Mergers from qualifying for the Intended Tax Treatment. To the knowledge of the Company, no facts or circumstances
exist, other than any facts or circumstances to the extent that such facts or circumstances exist or arise as a result of or related
to any act or omission occurring after the signing date of any AtlasClear Party or any of their respective Affiliates not contemplated
by this Agreement and/or any of the Ancillary Documents, that could reasonably be expected to prevent the Mergers from qualifying for
the Intended Tax Treatment.
Section
3.17 Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on
Section 3.17 of the Company Disclosure Schedules (which fees shall be the sole responsibility of the Company, except as otherwise
provided in Section 10.5), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’
fee or other commission in connection with the Transactions based upon arrangements made by or on behalf of the Company Stockholders,
the Company or any of their respective Affiliates for which any of the Group Companies has any obligation.
Section
3.18 Real and Personal Property.
(a)
Section 3.18(a) of the Company Disclosure Schedule sets forth a true and complete list of all real property owned by the Group
Companies (“Owned Real Property”).
(b)
Section 3.18(b) of the Company Disclosure Schedules sets forth a true and complete list (including street addresses) of all real
property leased by any of the Group Companies (the “Leased Real Property”) and all Real Property Leases pursuant to
which any Group Company is a tenant or landlord as of the date of this Agreement. True and complete copies of all such Real Property
Leases have been made available to AtlasClear. Each Real Property Lease is in full force and effect and is a valid, legal and binding
obligation of the applicable Group Company party thereto, enforceable in accordance with its terms against such Group Company and, to
the knowledge of the Company, each other party thereto (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity). There is no material
breach or default by any Group Company or, to the knowledge of the Company, any third party under any Real Property Lease, and, to the
knowledge of the Company, no event has occurred which (with or without notice or lapse of time or both) would constitute a material breach
or default under any Real Property Lease or would permit termination of, or a material modification or acceleration thereof, by any counterparty
to any Real Property Lease. The Group Companies’ possession and quiet enjoyment of the Leased Real Property under any Real Property
Lease has not been materially disturbed, and to the Company’s knowledge there are no material disputes with respect to any Real
Property Lease. Except as set forth in Section 3.18(b) of the Company Disclosure Schedules, as of the date hereof, no Group Company
has (i) subleased, licensed or otherwise granted any Person the right to use or occupy the Leased Real Property or any portion thereof;
or (ii) collaterally assigned or granted any other security interest in any Real Property Lease or any interest therein.
35
(c)
Each Group Company has good, marketable and indefeasible title to, or a valid leasehold interest in or license or right to use, all of
the material assets and properties of the Group Companies reflected in the Financial Statements or thereafter acquired by the Group Companies,
free and clear of all Liens (other than Permitted Liens), except for assets disposed of in the ordinary course of business and except
as would not reasonably be expected to result in a Company Material Adverse Effect.
(d)
As of the date hereof and immediately after the First Effective Time, the assets (which, for the avoidance of doubt, shall include any
assets held pursuant to valid leasehold interest, license or other similar interests or right to use any assets) of the Group Companies
will constitute all of the assets necessary to conduct the Business in materially the same manner (for the Group Companies, taken as
a whole) as it is conducted on the date of this Agreement, except as would not reasonably be expected to result in a Company Material
Adverse Effect.
Section
3.19 Transactions with Affiliates. Section 3.19 of the Company Disclosure Schedules sets forth all Contracts
between (a) any Group Company, on the one hand, and (b) any officer, director, employee, partner, member, manager, direct or indirect
equityholder or Affiliate of any Group Company (other than, for the avoidance of doubt, any other Group Company) or any family member
of the foregoing Persons, on the other hand (each Person identified in this clause (b), a “Company Related Party”),
other than (i) Contracts with respect to a Company Related Party’s employment or services with (including benefit plans, indemnification
arrangements and other ordinary course compensation) any of the Group Companies entered into in the ordinary course of business, (ii)
Contracts with respect to a Company Stockholder’s status as a holder of Equity Securities of the Company, and (iii) Contracts entered
into in the ordinary course of business and with fair and reasonable terms that are consistent with market practice and that have been
agreed in comparable transactions between parties that are independent and not related parties of, or otherwise affiliated with, each
other under comparable circumstances. No Company Related Party (A) owns any interest in any material asset used in any Group Company’s
business, or (B) possesses, directly or indirectly, any material financial interest in, or is a director or executive officer of, any
Person which is a supplier, vendor, partner, customer, lessor or other material business relation of any Group Company, (C) is a supplier
or vendor, or (D) owes any material amount to, or is owed any material amount by, any Group Company (other than compensatory payments,
employee benefits, employee or director expense reimbursement, in each case, in the ordinary course of business). All Contracts that
are required to be disclosed pursuant to this Section 3.19 are referred to herein as “Company Related Party Transactions”.
Section
3.20 Data Privacy and Security.
(a)
Each Group Company has implemented commercially reasonable, written policies relating to the Processing of Personal Information (“Privacy
and Data Security Policies”).
36
(b)
Each Group Company and, to the knowledge of Company, all vendors and processors with authorization to access Personal Information on
behalf of any Group Company (“Company Personal Information”) in the course of their respective performance of services
to any Group Company, comply and, since the Lookback Date, have complied with (i) all Privacy Laws, (ii) all applicable Privacy and Data
Security Policies, and (iii) all contractual commitments that any Group Company has entered into with respect to the Processing of Personal
Information (collectively, the “Data Privacy Commitments”), except as is not and would not reasonably be expected
to be, individually or in the aggregate, material to the Group Companies, taken as a whole. To the extent required by Privacy Laws, each
Group Company has in place written agreements with all of their customers regarding the Processing of any Personal Information on behalf
of such customers except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group
Companies, taken as a whole.
(c)
Except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken
as a whole, to the knowledge of Company, the execution, delivery, and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not: (i) conflict with or result in a violation or breach of any Data Privacy Commitments; (ii) give
rise to any right of termination or other right to impair or limit AtlasClear’s rights to own and Process any Company Personal
Information used in or necessary for the operation of the business of the Group Companies; or (iii) otherwise prohibit the transfer of
Personal Information in the possession or control of a Group Company as contemplated by the transactions hereunder.
1)
Since
the Lookback Date, no Group Company has received notice of any pending Proceedings, nor have there been any Proceedings against any
Group Company initiated by (i) any Person; (ii) the United States Federal Trade Commission, any state attorney general or similar
state official; or (iii) any other Governmental Entity, in each case, alleging that any Processing of Personal Information by or
on behalf of a Group Company is in violation of any Data Privacy Commitments, except, in the case of clauses (i) through (iii), as
would not have a Company Material Adverse Effect.
(d)
The Group Companies have implemented and, since the Lookback Date, maintained, and required all vendors and processors authorized to
Process Personal Information for or on behalf of any Group Company to implement and maintain commercially reasonable security measures
(including a written information security program with respect to the Group Companies), to (i) protect Personal Information which is
processed by or on behalf of the Group Companies against unauthorized access, use, loss, disclosure, alteration, destruction, compromise,
or other unauthorized Processing (a “Security Incident”); (ii) implement and maintain administrative, technical, and
physical safeguards to protect Company IT Systems and such Personal Information; and (iii) provide notification in compliance with Privacy
Laws in the case of any Security Incident. The employees of Group Companies receive commercially reasonable training on information security
issues.
1)
Since
the Lookback Date, (i) there has been no actual or reasonably suspected unauthorized access, use or disclosure of Personal Information
Processed by or on behalf of the Group Companies; and (ii) there have been no security breaches, including unauthorized intrusions
or breaches of security into any Company IT Systems, except, in the case of clauses (i) and (ii), as would not have a Company Material
Adverse Effect.
(e)
To the knowledge of the Company, no Software of the Company contains any “back door,” “drop dead device,” “time
bomb,” “Trojan horse,” “virus,” “worm,” “malware,” “vulnerability,”
“spyware” or “adware” (as such terms are commonly understood in the software industry) or any other code designed
or intended to have any of the following functions: (i) disrupting, disabling, harming, or otherwise impeding in any manner the operation
of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii)
compromising the privacy or security of any data or damaging or destroying any data or file without consent (collectively, “Malicious
Code”). Each Group Company implements industry standard measures designed to prevent the introduction of Malicious Code into
Software, including firewall protections and regular virus scans.
37
(f)
Each Group Company owns or has a license or other legal right to use the Company IT Systems as necessary to operate the business of each
Group Company as currently conducted, and such Company IT Systems are sufficient for the current needs of the business of the Group Companies
as currently conducted. The Group Companies maintain commercially reasonable disaster recovery, business continuity and risk assessment
plans, procedures and facilities and each Group Company has taken reasonable steps and implemented reasonable procedures to ensure the
Company IT Systems under its control are free from Malicious Code. There has not been any material failure with respect to any of the
Company IT Systems that has not been remedied or replaced in all material respects.
Section
3.21 Compliance with International Trade & Anti-Corruption Laws.
(a)
None of the Group Companies, any of their respective officers, directors, or employees or, to the knowledge of the Company, any of their
other Representatives, or any other Persons acting for or on behalf of any of the foregoing, is or has been, since July 15, 2025, (i)
a Person named on any Sanctions and Export Control Laws-related list of designated Persons maintained by a Governmental Entity; (ii)
located, organized or ordinary resident in a country or territory which is itself the subject of or target of any Sanctions and Export
Control Laws (at the time of this Agreement, Cuba, Iran, North Korea, and the Crimea, the so-called Donetsk People’s Republic,
and the so-called Luhansk People’s Republic regions of Ukraine, collectively, “Sanctioned Countries”); (iii)
an entity 50% or more owned, directly or indirectly, by one or more Persons described in clause (i) or (ii); or (iv) otherwise engaging
in dealings with or for the benefit of any Person described in clauses (i) - (iii) or any Sanctioned Country in violation of Sanctions
and Export Control Laws.
(b)
In the past five (5) years, none of the Group Companies, any of their respective officers, directors, or employees or, to the Company’s
knowledge, any of their other Representatives, or any other Persons in each case, while acting for or on behalf of any of the foregoing,
has directly or indirectly, (i) made, offered, promised, paid or received any unlawful bribes, kickbacks or other similar payments to
or from any Person, (ii) made or paid any unlawful contributions to a domestic or foreign political party or candidate or (iii) made,
offered, received, authorized, promised or paid any improper payment under any Anti-Corruption Law.
Section
3.22 Broker-Dealer Matters. Except as set forth on Section 3.22 of the Company Disclosure Schedules:
(a)
Dawson James is current in all material filings required by the SEC or any other Governmental Entity. Dawson James is a member in good
standing of FINRA. As of the date hereof, other than through Dawson James, no Company Stockholder is engaged in activities that would
require any such Company Stockholder to be registered as a broker-dealer with the SEC or any other Governmental Entity.
(b)
None of Dawson James or, to the Company’s knowledge, any “associated person” (within the meaning of the Exchange Act)
of Dawson James, is ineligible from registration as a broker-dealer or as an “associated person” of a registered broker-dealer
(within the meaning the Exchange Act), as applicable, pursuant to Section 15(b) of the Exchange Act. As of the date hereof, there is
no proceeding, investigation, inquiry or other action pending or, to the Company’s knowledge, threatened in writing that would
reasonably be expected to result in Dawson James or any “associated person” (within the meaning of the Exchange Act) thereof
becoming ineligible to act in such capacity. Dawson James is, and at all times required by applicable Law since on or about June 1, 2024
has been, duly registered (i) with the SEC as a broker-dealer under the Exchange Act, and (ii) in each state or any other jurisdiction
where the conduct of its business required such registration, licensing or qualification. Each such registration or license is in full
force and effect. Dawson James is in compliance in all material respects with the applicable provisions of the Exchange Act. In the last
five (5) years, each associated person of Dawson James, including any director, officer and employee of Dawson James who is required
to be registered as a broker-dealer, principal, registered representative, or salesperson in connection with his, her or its activities
for or with Dawson James with any Governmental Entity has been duly licensed or registered.
38
(c)
In the last five (5) years, Dawson James has timely filed any amendments to Form BD. Dawson James has provided or made available to AtlasClear
accurate copies of all Form BD, including the most recently amended and filed with the SEC. The information contained in such form was
materially accurate at the time of filing and Dawson James has made all amendments to such form as it is required to make under any applicable
Law.
(d)
Except as set forth on Section 3.22 of the Company Disclosure Schedules, Dawson James currently maintains, and at all times for
the last five years has maintained, “net capital” (as such term is defined in Rule 15c3-1 under the Exchange Act): (i) equal
to or in excess of the minimum “net capital” required to be maintained by it under the Exchange Act and such additional amounts,
if any, required by FINRA and any other Governmental Entity and (ii) in an amount sufficient to ensure that it has not been required
to file notice under Rule 17a-11 under the Exchange Act.
(e)
Dawson James has in effect, and at all times required by applicable law in the last five (5) years has had in effect, written policies
and procedures necessary to comply with applicable Law (including FINRA Rule 3120, the federal securities laws and regulations, anti-money
laundering laws, including a written customer identification program), complete and correct copies of which have been provided to AtlasClear
and the Group Companies and, to Company’s knowledge, all Dawson James employees have complied in all material respects with such
policies and procedures.
(f)
As of the date hereof, Dawson James is not required to be registered, licensed, or qualified as a bank, trust company, commodity trading
advisor, commodity broker-dealer, commodity pool operator, futures commission merchant, transfer agent, real estate broker, or municipal
advisor. Dawson James has not received written notice of any proceeding instituted by a Governmental Entity concerning any failure to
obtain any such registration, license or qualification.
Section
3.23 Investigation; No Other Representations.
(a)
The Company, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i) it has conducted
its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets,
condition, operations and prospects of, the AtlasClear Parties and (ii) it has been furnished with or given access to such documents
and information about the AtlasClear Parties and their respective businesses and operations as it and its Representatives have deemed
necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary
Documents and the transactions contemplated hereby and thereby.
(b)
In entering into this Agreement and the Ancillary Documents to which it is or will be a party, the Company has relied solely on its own
investigation and analysis and the representations and warranties expressly set forth in Article V and in the Ancillary Documents
to which it is or will be a party and no other representations or warranties of any AtlasClear Party, any AtlasClear Non-Party Affiliate
or any other Person, either express or implied, and the Company, on its own behalf and on behalf of its Representatives, acknowledges,
represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article V and in the
Ancillary Documents to which it is or will be a party, none of the AtlasClear Parties, any AtlasClear Non-Party Affiliate or any other
Person makes or has made any representation or warranty, either express or implied, in connection with or related to this Agreement,
the Ancillary Documents or the Transactions.
39
Section
3.24 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO ANY AtlasClear
PARTY OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER
SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS Article III OR THE ANCILLARY DOCUMENTS OR IN THE CASE OF FRAUD,
NEITHER THE COMPANY NOR ANY OTHER PERSON MAKES, AND THE COMPANY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR ANY OF THE TRANSACTIONS, INCLUDING AS TO THE
MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF THE GROUP COMPANIES THAT HAVE BEEN MADE AVAILABLE TO ANY AtlasClear
PARTY OR ANY OF THEIR REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF THE GROUP COMPANIES BY THE MANAGEMENT OF
THE COMPANY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED
IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED
TO BE RELIED UPON BY ANY AtlasClear PARTY IN EXECUTING, DELIVERING AND PERFORMING THIS
AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS, EXCEPT IN THE CASE OF FRAUD. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY
SET FORTH IN THIS Article III OR THE ANCILLARY DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS,
ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING ANY OFFERING MEMORANDUM OR SIMILAR
MATERIALS MADE AVAILABLE BY OR ON BEHALF OF ANY GROUP COMPANY ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR
WARRANTIES OF THE COMPANY OR ANY OTHER PERSON, AND ARE NOT AND SHALL NOT BE DEEMED TO BE RELIED UPON BY ANY ATLASCLEAR PARTY IN EXECUTING,
DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS, EXCEPT IN THE CASE OF FRAUD.
Article
IV
REPRESENTATIONS
AND WARRANTIES OF THE MAJORITY STOCKHOLDER
As
a material inducement to the AtlasClear Parties to enter into this Agreement and consummate the Transactions, each of the Trust and the
Beneficial Owner, jointly and severally, represents and warrants to the AtlasClear Parties, as of the date of this Agreement and as of
the Closing Date, as follows. For purposes of this Article IV, each reference to the “Majority Stockholder” shall be deemed
to refer to the Trust and the Beneficial Owner, individually and collectively, as the context requires.
40
Section
4.1 Authorization. The Trust is a revocable trust duly created and validly existing under the laws of the State
of Florida pursuant to the Robert D. Keyser, Jr. Declaration of Trust dated April 3, 2024 (the “Trust Agreement”).
The Trust Agreement is in full force and effect, has not been amended except as disclosed in writing to AtlasClear, and the copy delivered
to AtlasClear is true, correct and complete. Robert D. Keyser, Jr. is the settlor, sole beneficiary, duly appointed and acting trustee
of the Trust (in such capacity, the “Trustee”), and the Beneficial Owner has full legal capacity and individual power
and authority to execute and deliver this Agreement and each Ancillary Document to which he is or will be a party and to perform his
obligations hereunder and thereunder. The Trustee has full power and authority under the Trust Agreement to execute and deliver this
Agreement and the Ancillary Documents to which the Majority Stockholder is or will be a party, to perform the Majority Stockholder’s
obligations hereunder and thereunder and to consummate the Transactions, including the power to sell, transfer, assign and convey the
Company Shares held by the Trust. The Trust is revocable only by the Beneficial Owner, and no beneficiary, co-trustee, trust protector,
spouse, court, Governmental Entity or other Person has any approval, consent, veto, withdrawal, distribution or similar right that could
impair the execution, delivery or performance of this Agreement or any Ancillary Document or the consummation of the Transactions. Neither
the Trust nor the Beneficial Owner has taken or omitted to take any action that limits the Trustee’s authority. The execution,
delivery and performance of this Agreement and the Ancillary Documents to which the Majority Stockholder is or will be a party, and the
consummation of the Transactions, have been duly authorized by all requisite action, and no other action or Consent is required. If a
successor trustee is appointed before all obligations of the Majority Stockholder under this Agreement and the Ancillary Documents have
been fully discharged, the Majority Stockholder shall cause such successor trustee, as a condition to appointment, to execute a written
joinder agreeing to be bound by such obligations.
Section
4.2 Binding Agreement. This Agreement has been duly executed and delivered by the Trustee on behalf of the Trust
and by the Beneficial Owner in his individual capacity and, assuming due authorization, execution and delivery by the other Parties,
constitutes a legal, valid and binding obligation of each of the Trust and the Beneficial Owner, enforceable jointly and severally against
the Trust, the trust estate and the Beneficial Owner in accordance with its terms. Upon execution and delivery of each Ancillary Document
to which the Majority Stockholder is or will be a party, such Ancillary Document will constitute a legal, valid and binding obligation
of each of the Trust and the Beneficial Owner, enforceable jointly and severally against the Trust, the trust estate and the Beneficial
Owner in accordance with its terms. No provision of the Trust Agreement limits or otherwise impairs any recourse expressly available
to an AtlasClear Party under this Agreement or any Ancillary Document. The foregoing is subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other Laws affecting creditors’ rights generally and to general principles of equity; provided that
no such qualification shall qualify any representation or warranty concerning authority, ownership, title or absence of conflicts.
Section
4.3 Ownership. The Trust owns, beneficially and of record, the Company Shares set forth opposite the Trust’s
name on Section 3.2(a) of the Company Disclosure Schedules, free and clear of all Liens, and has sole voting and dispositive power
over such Company Shares. Such Company Shares are duly authorized, validly issued, fully paid and nonassessable and are held by the Trustee
as part of the trust estate. No option, warrant, proxy, voting agreement, transfer restriction, right of first refusal, right of first
offer, repurchase right, marital or community-property claim or other adverse interest applies to such Company Shares. Upon consummation
of the Transactions, AtlasClear will acquire good and valid title to the Purchased Shares, free and clear of all Liens. Section 3.2(a)
of the Company Disclosure Schedules accurately and completely states the record and beneficial ownership of all Company Shares owned
directly or indirectly by the Trust and the Beneficial Owner. Except as set forth on Section 3.2(a) of the Company Disclosure
Schedules, neither the Trust nor the Beneficial Owner owns, or has any right to acquire, any other Equity Securities of the Company or
any securities, instruments, options, warrants or other rights convertible into or exercisable or exchangeable for Equity Securities
of the Company.
41
Section
4.4 No Breach. The execution, delivery and performance of this Agreement and the Ancillary Documents to which the
Majority Stockholder is or will be a party, the consummation of the Transactions and the performance by each of the Trust and the Beneficial
Owner of its or his obligations hereunder and thereunder do not and will not (i) violate or conflict with the Trust Agreement or any
Law or Order applicable to the Trust, the Beneficial Owner, the Trustee or the Company Shares; (ii) with or without notice or lapse of
time or both, breach or conflict with, constitute a default under, give rise to any right of termination, cancellation, amendment or
acceleration under, result in the loss of any material benefit under, or give rise to any payment or other obligation under, any Contract,
voting agreement, side letter, marital or domestic-relations arrangement, estate-planning instrument, financing or pledge arrangement
or restrictive covenant binding on the Trust, the Beneficial Owner, the Trustee or the Company Shares; (iii) result in the imposition
of any Lien on the Company Shares; or (iv) require any filing with, notice to or Consent of any Governmental Entity, beneficiary, spouse,
lender, contractual counterparty or other Person.
Section
4.5 Compliance with Laws; Claims. Each of the Trust and the Beneficial Owner has complied in all material respects
with all Laws and Orders applicable to the Trust, the Beneficial Owner, the Trustee, the trust estate or the Company Shares. There is
no Claim pending or threatened in writing or, to the knowledge of the Majority Stockholder, otherwise threatened, and no fact or circumstance
exists that would reasonably be expected to result in any Claim, in each case, that affects or would reasonably be expected to affect
title to the Company Shares, the authority or capacity of the Trust, the Beneficial Owner or the Trustee, the enforceability of this
Agreement or any Ancillary Document, the consummation of the Transactions or the ability of the Majority Stockholder to satisfy its indemnification
or other obligations. Neither the Trust, the Beneficial Owner, the Trustee, the trust estate nor the Company Shares is subject to any
Order affecting any such matter. No bankruptcy, insolvency, receivership, guardianship, incapacity, probate, divorce or similar proceeding
is pending or, to the knowledge of the Majority Stockholder, threatened with respect to the Trust, the Beneficial Owner, the Trustee
or the trust estate, and no governmental or regulatory inquiry is pending or, to the knowledge of the Majority Stockholder, threatened
concerning the ownership or transfer of the Company Shares. Neither the Trust, the Beneficial Owner nor any Affiliate or related Person
has any Claim, right of contribution, reimbursement, indemnification, advancement, compensation, distribution, loan, accrued payment
or other amount due from any Group Company, except as expressly disclosed on Section 4.5 of the Company Disclosure Schedules,
and each such disclosed right or Claim shall be released at Closing pursuant to the Stockholder Release.
Section
4.6 Representation by Counsel. Each of the Trustee, on behalf of the Trust, and the Beneficial Owner, individually:
(i) has been represented by independent counsel or has had the opportunity to consult with independent counsel and knowingly declined
to do so; (ii) has had the full right and opportunity to consult with legal, tax and other advisors; (iii) has carefully read and understands
this Agreement and the Ancillary Documents; (iv) understands the joint and several obligations of the Trust and the Beneficial Owner,
the indemnification provisions, escrow arrangements, releases, restrictions on transfer and other restrictive provisions, and the potential
issuance of AtlasClear Shares contemplated hereby; (v) is fully aware of the contents, meaning, intent and legal effect of this Agreement
and the Ancillary Documents; and (vi) is competent to execute and deliver this Agreement and the Ancillary Documents and has done so
free from coercion, duress or undue influence.
Section
4.7 Tax Matters. The Majority Stockholder has consulted with its own legal and tax advisors regarding the Tax consequences
of the Transactions and is not relying on any AtlasClear Party, Group Company or their respective Representatives for Tax advice; provided
that nothing in this Section 4.7 limits or modifies the covenants or agreements of the Parties concerning the Intended Tax Treatment.
42
Article
V
REPRESENTATIONS
AND WARRANTIES RELATING TO THE ATLASCLEAR PARTIES
Subject
to Section 10.7, except (a) as set forth on the AtlasClear Disclosure Schedules, or (b) except as set forth in any Exchange Act
filings (excluding any disclosures in any “risk factors” section that do not constitute statements of fact, disclosures
in any forward-looking statements disclaimers and other disclosures that are generally cautionary, predictive or forward-looking in nature),
each AtlasClear Party, jointly and severally, hereby represents and warrants to the Company, in each case, as of the date of this Agreement
and as of the Closing Date, as follows:
Section
5.1 Organization and Qualification. Each AtlasClear Party is a corporation, limited liability company or other
applicable business entity duly organized, incorporated or formed, as applicable, validly existing and in good standing (or the equivalent
thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent
thereof) under the Laws of its jurisdiction of organization, incorporation or formation (as applicable).
Section
5.2 Authority.
(a)
Each AtlasClear Party has the requisite corporate, limited liability company or other similar power and authority to execute and deliver
this Agreement and each of the Ancillary Documents to which it is or will be a party and to consummate the transactions contemplated
hereby and thereby. Subject to the receipt of the approvals and consents to be obtained by the Merger Subs pursuant to Section 6.8,
the execution and delivery of this Agreement, the Ancillary Documents to which an AtlasClear Party is or will be a party and the consummation
of the transactions contemplated hereby and thereby have been (or, in the case of any Ancillary Document entered into after the date
of this Agreement, will be upon execution thereof) duly authorized by all necessary, corporate, limited liability company or other similar
action on the part of such AtlasClear Party. This Agreement has been and each Ancillary Document to which an AtlasClear Party is or will
be a party will be, upon execution thereof, duly and validly executed and delivered by such AtlasClear Party and constitutes or will
constitute, upon execution thereof, as applicable, a valid, legal and binding agreement of such AtlasClear Party (assuming this Agreement
has been and the Ancillary Documents to which such AtlasClear Party is or will be a party are or will be, upon execution thereof, as
applicable, duly authorized, executed and delivered by the other Persons party hereto or thereto, as applicable), enforceable against
such AtlasClear Party in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
Section
5.3 Consents and Requisite Governmental Approvals; No Violations.
(a)
Except as set forth on Section 5.3(a) of the AtlasClear Disclosure Schedules, no consent, approval or authorization of, or designation,
declaration or filing with, any Governmental Entity is required on the part of an AtlasClear Party with respect to such AtlasClear Party’s
execution, delivery or performance of its obligations under this Agreement or the Ancillary Documents to which it is or will be party
or the consummation of the transactions contemplated hereby or thereby, except for the filing of the First Certificate of Merger and
Second Certificate of Merger, or any other consents, approvals, authorizations, designations, declarations, waivers or filings, the absence
of which would not be, individually or in the aggregate, material to each AtlasClear Party.
(b)
Neither the execution nor the delivery by an AtlasClear Party of this Agreement or any Ancillary Document to which it is or will be a
party, the performance by an AtlasClear Party of its obligations hereunder or thereunder or the consummation by an AtlasClear Party of
the Transactions will, directly or indirectly (with or without due notice or lapse of time or both) (i) result in a violation or breach
of any provision of the Governing Documents of an AtlasClear Party, (ii) result in a violation or breach of, or constitute a default
or give rise to any right of termination, cancellation, amendment, modification, suspension, revocation or acceleration under, any of
the terms, conditions or provisions of any Contract to which an AtlasClear Party is a party, (iii) violate, or constitute a breach under,
any Order or applicable Law to which any such AtlasClear Party or any of its properties or assets are subject or bound or (iv) result
in the creation of any Lien upon any of the assets or properties (other than any Permitted Liens) or Equity Securities of an AtlasClear
Party, except in the case of any of clauses (ii) through (iv) above, as would not be, individually or in the aggregate, material to each
AtlasClear Party.
43
Section
5.4 Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on Section
5.4 of the AtlasClear Disclosure Schedules (which fees shall be the sole responsibility of AtlasClear, except as otherwise provided
in Section 10.5), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or
other commission in connection with the Transactions based upon arrangements made by or on behalf of any AtlasClear Party or any of its
Affiliates for which an AtlasClear Party has any obligation.
Section
5.5 Tax Matters
(a)
Each of AtlasClear and its Subsidiaries has prepared and filed all income and other material Tax Returns required to have been filed
by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all
applicable Laws and Orders, and each of AtlasClear and its Subsidiaries has paid all material Taxes required to have been paid by it
regardless of whether shown on a Tax Return.
(b)
Each of AtlasClear and its Subsidiaries has timely withheld and paid to the appropriate Tax Authority all material amounts required to
have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service
providers, equity interest holder or other third party.
(c)
Neither AtlasClear nor any of its Subsidiaries is currently the subject of a Tax audit or examination with respect to material Taxes.
Neither AtlasClear nor any of its Subsidiaries has been informed in writing of the commencement or anticipated commencement of any Tax
audit or examination that has not been resolved or completed in each case with respect to material Taxes.
(d)
Neither AtlasClear nor any of its Subsidiaries has consented to extend or waive the time in which any material Tax may be assessed or
collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time
to file Tax Returns obtained in the ordinary course of business.
(e)
No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local
or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into
or issued by any Tax Authority with respect to AtlasClear or any of its Subsidiaries which agreement or ruling would be effective after
the Closing Date.
(f)
Neither AtlasClear nor any of its Subsidiaries is or has been a party to any “listed transaction” as defined in Section 6707A
of the Code and Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. income Tax
Law).
(g)
There are no Liens for material Taxes on any assets of AtlasClear or its Subsidiaries other than Permitted Liens.
(h)
To the knowledge of AtlasClear, during the two (2)-year period ending on the date of this Agreement, neither AtlasClear nor any of its
Subsidiaries was a distributing corporation or a controlled corporation in a transaction purported or intended to be governed by Section
355 of the Code.
44
(i)
Neither AtlasClear nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was AtlasClear or any of its current Affiliates) or (ii) has any material Liability
for the Taxes of any Person (other than AtlasClear or any of its current Affiliates) under Section 1.1502-6 of the Treasury Regulations
(or any similar provision of state, local or non-United States Law), as a transferee or successor or by Contract (other than any Contract
the principal purpose of which does not relate to Taxes).
(j)
For the past three years, no written Claims have ever been made by any Tax Authority in a jurisdiction where AtlasClear or any of its
Subsidiaries does not file Tax Returns that AtlasClear or such Subsidiary is or may be subject to taxation by that jurisdiction, which
Claims have not been resolved or withdrawn.
(k)
Neither AtlasClear nor any of its Subsidiaries is a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other
than one that is included in a transactional Contract or a Contract entered into in the ordinary course of business that is not primarily
related to Taxes).
(l)
Neither AtlasClear nor any of its Subsidiaries has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise
has an office or fixed place of business in a country other than the country in which it is organized.
(m)
To the knowledge of AtlasClear, neither AtlasClear nor any of its Subsidiaries has taken or agreed to take any action not contemplated
by this Agreement and/or any Ancillary Document that could reasonably be expected to prevent the Mergers from qualifying for the Intended
Tax Treatment. To the knowledge of AtlasClear, no facts or circumstances exist, other than any facts or circumstances to the extent that
such facts or circumstances exist or arise as a result of or related to any act or omission occurring after the signing date of any AtlasClear
Party or any of their respective Affiliates not contemplated by this Agreement and/or any of the Ancillary Documents, that could reasonably
be expected to prevent the Mergers from qualifying for the Intended Tax Treatment.
Section
5.6 Investigation; No Other Representations.
(a)
Each AtlasClear Party, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i)
it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business,
assets, condition, operations and prospects, of the Group Companies and (ii) it has been furnished with or given access to such documents
and information about the Group Companies and their respective businesses and operations as it and its Representatives have deemed necessary
to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary Documents
and the transactions contemplated hereby and thereby.
(b)
In entering into this Agreement and the Ancillary Documents to which it is or will be a party, each AtlasClear Party has relied solely
on its own investigation and analysis and the representations and warranties expressly set forth in Article III and in the Ancillary
Documents to which it is or will be a party and no other representations or warranties of the Company, any Company Non-Party Affiliate,
or any other Person, either express or implied, and each AtlasClear Party, on its own behalf and on behalf of its Representatives, acknowledges,
represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article III and in
the Ancillary Documents to which it is or will be a party (and other than in the case of Fraud), none of the Company, any Company Non-Party
Affiliate, nor any other Person makes or has made any representation or warranty, either express or implied, in connection with or related
to this Agreement, the Ancillary Documents or the Transactions.
45
Section
5.7 Capitalization.
(a)
As of the date hereof, (i) the authorized capital stock of AtlasClear is as set forth in AtlasClear’s SEC Reports, (ii) AtlasClear
has 151,838,744 shares of common stock and no shares of preferred stock outstanding and (iii) AtlasClear has outstanding Common Stock
equivalents as set forth in AtlasClear’s SEC Reports. All of the outstanding Equity Securities of AtlasClear are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state securities Laws, and
none of such outstanding Equity Securities was issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities.
(b)
Except as contemplated by this Agreement, there are no stockholders’ agreements, voting agreements or other similar agreements
with respect to AtlasClear’s Equity Securities to which AtlasClear is a party or, to the knowledge of AtlasClear, between or among
any of AtlasClear’s stockholders, other than those filed with the SEC as exhibits to AtlasClear’s SEC Reports.
Section
5.8 Valid Issuance of AtlasClear Shares. The AtlasClear Shares issuable to the Company Stockholders pursuant to
this Agreement are duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer under applicable securities Laws
and the Registration Rights and Lock-up Agreement. AtlasClear has reserved from its duly authorized capital stock a sufficient number
of AtlasClear Shares to satisfy its obligations to issue AtlasClear Shares to the Company Stockholders pursuant to this Agreement, including
the Stage 2 Shares.
Section
5.9 SEC Reports; Financial Statements. AtlasClear has filed all reports, schedules, forms, statements and other
documents required to be filed by AtlasClear under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two (2) years preceding the date hereof (or such shorter period as AtlasClear was required by Law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
any materials filed by AtlasClear on a voluntary basis, being collectively referred to herein as the “SEC Reports”).
As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Except as set forth on Section 5.9 of the AtlasClear Disclosure Schedules, the financial
statements of AtlasClear 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 during 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 AtlasClear and its consolidated Subsidiaries 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.
Section
5.10 Absence of Certain Changes. Since the date of the latest audited financial statements included within the
SEC Reports, (a) there has been no AtlasClear Material Adverse Effect, (b) AtlasClear has not incurred any material liabilities (contingent
or otherwise) other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (ii) liabilities not required to be reflected in AtlasClear’s financial statements pursuant to GAAP or disclosed in filings
made with the SEC, (c) AtlasClear has not altered its method of accounting in any material respect, (d) AtlasClear has not declared or
made any dividend or distribution of cash or other property to its stockholders (other than dividends or distributions to wholly-owned
Subsidiaries), and (e) except as publicly disclosed in the SEC Reports prior to the date hereof, AtlasClear has not issued any Equity
Securities to any officer, director or Affiliate, other than pursuant to existing AtlasClear equity incentive plans or stock option plans.
46
Section
5.11 Listing and Maintenance Requirements. The AtlasClear Shares are registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, and AtlasClear has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the AtlasClear Shares under the Exchange Act nor has AtlasClear received any notification that the SEC is contemplating
terminating such registration. Except as set forth on Section 5.11 of the AtlasClear Disclosure Schedules, AtlasClear has not,
in the twelve (12) months preceding the date hereof, received notice from any Trading Market on which the AtlasClear Shares are or have
been listed or quoted to the effect that AtlasClear is not in compliance with the listing or maintenance requirements of such Trading
Market. The AtlasClear Shares are currently eligible for electronic transfer through the Depository Trust Company or another established
clearing corporation and AtlasClear is current in payment of the fees to the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.
Section
5.12 Investment Company. AtlasClear is not, and is not an Affiliate of, and immediately after the Closing, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act. AtlasClear shall
conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment
Company Act.
Section
5.13 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE COMPANY OR
ANY OF ITS REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA),
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS Article V AND THE ANCILLARY DOCUMENTS, NONE OF THE AtlasClear
PARTIES NOR ANY OTHER PERSON MAKES, AND EACH AtlasClear PARTY EXPRESSLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR
ANY OF THE TRANSACTIONS, INCLUDING AS TO THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF ANY AtlasClear
PARTY THAT HAVE BEEN MADE AVAILABLE TO THE COMPANY OR ANY OF ITS REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF
ANY AtlasClear PARTY BY OR ON BEHALF OF THE MANAGEMENT OF SUCH AtlasClear
PARTY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED IN
ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED
TO BE RELIED UPON BY THE COMPANY OR ANY OF ITS REPRESENTATIVES IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY
DOCUMENTS OR THE TRANSACTIONS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS Article V OR THE ANCILLARY
DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA
OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING, BUT NOT LIMITED TO, ANY OFFERING MEMORANDUM OR SIMILAR MATERIALS MADE AVAILABLE BY
OR ON BEHALF OF ANY AtlasClear PARTY ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE
REPRESENTATIONS OR WARRANTIES OF ANY AtlasClear PARTY NOR ANY OTHER PERSON, AND ARE NOT
AND SHALL NOT BE DEEMED TO BE RELIED UPON BY THE COMPANY OR ANY OF ITS REPRESENTATIVES IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT,
THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS.
47
Article
VI
COVENANTS
Section
6.1 Conduct of Business of the Company.
(a)
During the period from the date of this Agreement to the Closing (or such earlier date on which this Agreement is terminated), except
as consented to in writing in advance by AtlasClear or as otherwise expressly required by this Agreement, the Company shall carry on
its business as presently conducted in the ordinary course of business and in compliance in all material respects with all applicable
Law and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organizations, Permits
and FINRA membership and keep available the services of its current officers, employees and consultants and preserve its relationships
with customers, suppliers, licensors, licensees, landlords, distributors and others having business dealings with it, in each case, with
the intention that its goodwill and ongoing business shall be unimpaired at the Closing.
(b)
In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Closing
(or such earlier date on which this Agreement is terminated), except as otherwise expressly required by the terms of this Agreement:
(i)
The Company and the Company Stockholders shall not declare or pay any dividend, distribution, or return of capital to the Company Stockholders
that would cause Dawson James to have Net Capital in an amount less than the Required Net Capital Amount;
(ii)
The Company shall not, and the Company Stockholders shall cause the Company not to, enter into, materially amend, or terminate any material
contract (including clearing agreements, technology agreements, office leases, or vendor contracts with annual value exceeding $100,000)
without AtlasClear’s prior written consent, which shall not be unreasonably withheld;
(iii)
The Company shall not, and the Company Stockholders shall cause the Company not to, take any action that would reduce the Net Capital
of Dawson James to be less than the Required Net Capital Amount.
(c)
From the date of this Agreement through the Closing Date (or the earlier termination of this Agreement, if applicable), AtlasClear shall
have the right to appoint one (1) non-voting observer to attend all meetings of the Company and/or its Subsidiaries board of directors
(or equivalent governing body) and to receive copies of all materials distributed to directors, subject to customary confidentiality
restrictions.
(d)
From the date of this Agreement through the Closing Date (or the earlier termination of this Agreement if applicable), the Company and
its Subsidiaries shall provide AtlasClear with monthly financial statements (within fifteen (15) Business Days of month-end), copies
of all Focus Reports, and prompt notice of any material regulatory inquiries, examinations, or deficiency notices and, promptly upon
receipt and in any event no later than November 15, 2026, the audited consolidated financial statements of the Company and its Subsidiaries
for the fiscal year ended December 31, 2025, which upon delivery shall be deemed included in the Financial Statements for all purposes
of this Agreement (including Section 3.4).
48
(e)
Notwithstanding anything to the contrary in this Agreement, including the consent rights and information rights set forth in this Section
6.1, nothing in this Agreement shall be construed to grant AtlasClear, directly or indirectly, the right to control or direct the
day-to-day business operations of the Company or any of its Subsidiaries prior to the Closing Date. The consent rights, observer rights,
information rights and other protective covenants set forth in this Agreement are intended solely to protect AtlasClear’s legitimate
interest as a stockholder and prospective acquiror and do not constitute, and shall not be deemed to constitute, control of the Company
or any of its Subsidiaries for purposes of FINRA Rules, the Exchange Act, or any other applicable Law.
Section
6.2 Efforts to Consummate; Litigation.
(a)
From and after the date of this Agreement, the Parties shall use best efforts to satisfy all conditions to Closing hereunder. From and
after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms, the
AtlasClear Parties, on the one hand, and the Company, on the other hand, shall give counsel for the Company (in the case of any AtlasClear
Party) or AtlasClear (in the case of the Company), a reasonable opportunity to review in advance, and consider in good faith the views
of the other in connection with, any proposed written communication to any Governmental Entity relating to the Transactions or the Ancillary
Documents; provided that documents and information provided to the other Party pursuant to this paragraph (i) may be redacted (A) to
remove references to valuation of the Company, (B) to comply with contractual arrangements or (C) to preserve legal privilege and/or
(ii) may be designated as “outside counsel only,” in which case such documents and information shall be provided only to
outside counsel and consultants retained by such counsel. Each of the Parties agrees not to participate in any substantive meeting or
discussion, either in person or by telephone with any Governmental Entity in connection with the Transactions unless it consults with,
in the case of any AtlasClear Party, the Company, or, in the case of the Company, AtlasClear in advance and, to the extent not prohibited
by such Governmental Entity, gives, in the case of any AtlasClear Party, the Company, or, in the case of the Company, AtlasClear, the
opportunity to attend and participate in such meeting or discussion.
(b)
From and after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms,
AtlasClear, on the one hand, and the Company, on the other hand, shall each notify the other in writing promptly after learning of any
shareholder demands or other shareholder Proceedings (including derivative Claims) relating to this Agreement, any Ancillary Document
or any matters relating thereto (collectively, the “Transaction Litigation”) commenced against, in the case of AtlasClear,
any of the AtlasClear Parties or any of their respective Representatives (in their capacity as a representative of an AtlasClear Party)
or the Company or any of its Representatives (in their capacity as a representative of the Company). AtlasClear and the Company shall
each (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own
cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with
the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith
the other’s advice with respect to any such Transaction Litigation and (iv) reasonably cooperate with each other. Notwithstanding
the foregoing, the Company shall, subject to and without limiting the covenants and agreements, and the rights of AtlasClear, set forth
in the immediately preceding sentence, control the negotiation, defense and settlement of any such Transaction Litigation; provided however,
that in no event shall the Company, any other Group Company or any of their respective Representatives settle or compromise any Transaction
Litigation without the prior written consent of AtlasClear (not to be unreasonably withheld, conditioned or delayed, provided that it
shall be deemed to be reasonable for AtlasClear to withhold, condition or delay its consent if any such settlement or compromise (A)
does not provide for a legally binding, full, unconditional and irrevocable release of each AtlasClear Party and Representative that
is the subject of such Transaction Litigation, (B) provides for (x) the payment of cash any portion of which is payable by any AtlasClear
Party or Representative thereof or would otherwise constitute an Liability of AtlasClear or (y) any non-monetary, injunctive, equitable
or similar relief against any AtlasClear Party or (C) contains an admission of wrongdoing or Liability by an AtlasClear Party or any
of its Representatives). Without limiting the generality of the foregoing, in no event shall AtlasClear, any of the AtlasClear Parties
or any of their respective Representatives settle or compromise any such Transaction Litigation without the prior written consent of
the Company (not to be unreasonably withheld, conditioned or delayed).
49
Section
6.3 Confidentiality and Access to Information.
(a)
The Parties hereby acknowledge and agree that the information being provided in connection with this Agreement and the consummation of
the transactions contemplated hereby is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein
by reference. Notwithstanding the foregoing or anything to the contrary in this Agreement, in the event that this Section 6.3(a)
or the Confidentiality Agreement conflicts with any other covenant or agreement contained herein or any Ancillary Document that contemplates
the disclosure, use or provision of information or otherwise, then such other covenant or agreement contained in this Agreement or such
Ancillary Document, as applicable, shall govern and control to the extent of such conflict.
(b)
From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with
its terms, upon reasonable advance written notice, the Company shall provide, or cause to be provided, to AtlasClear and its Representatives
during normal business hours reasonable access to the directors, officers, books and records and properties of the Group Companies (in
a manner so as to not interfere with the normal business operations of the Group Companies) for the purpose of consummating the Mergers.
Notwithstanding the foregoing, none of the Group Companies shall be required to provide, or cause to be provided, to AtlasClear or its
Representatives any information (i) if and to the extent doing so would (A) violate any Law to which any Group Company is subject, (B)
result in the disclosure of any trade secrets of third parties in breach of any Contract with such third party, (C) violate any legally
binding obligation of any Group Company with respect to confidentiality, non-disclosure or privacy or (D) jeopardize protections afforded
to any Group Company under the attorney-client privilege or the attorney work product doctrine (provided that, in case of each of clauses
(A) through (D), the Company shall, and shall cause the other Group Companies to, use commercially reasonable efforts to (x) provide
such access as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) without violating
such privilege, doctrine, Contract, obligation or Law and (y) provide such information in a manner without violating such privilege,
doctrine, Contract, obligation or Law), or (ii) if any Group Company, on the one hand, and any AtlasClear Party, any AtlasClear Non-Party
Affiliate or any of their respect Representatives on the other hand, are adverse parties in a litigation or other Proceeding and such
information is reasonably pertinent thereto; provided that the Company shall, in the case of clause (i) or (ii), provide prompt written
notice of the withholding of access or information on any such basis unless such written notice is prohibited by applicable Law or Order.
Section
6.4 Public Announcements.
(a)
Subject to Section 6.4(b) and Section 6.7, none of the Parties or any of their respective Representatives shall issue any
press releases or make any public announcements with respect to this Agreement or the transactions contemplated hereby without the prior
written consent of, prior to the Closing, the Company and AtlasClear or, after the Closing, AtlasClear; provided, however,
that each Party and their respective Representatives may make any such announcement or other communication (i) if such press release,
announcement or other communication is required by applicable Law, in which case (A) prior to the Closing, the disclosing Person shall,
to the extent permitted by applicable Law use reasonable best efforts to consult with the Company, if the disclosing Person is an AtlasClear
Party or AtlasClear, if the disclosing party is the Company or any of its Representatives, and give the Company or AtlasClear, as applicable,
the opportunity to review such announcement or communication and comment thereon and the disclosing Person shall consider such comments
in good faith, or (B) after the Closing, the disclosing Person and/or its Representatives, as applicable, shall, to the extent permitted
by applicable Law, use reasonable best efforts to consult with AtlasClear and give AtlasClear the opportunity to review such announcement
or communication and comment thereon and the disclosing Person shall consider such comments in good faith, (ii) to the extent such press
release, announcement or other communication contains only information previously disclosed in a public statement, press release or other
communication previously approved in accordance with this Section 6.4 and (iii) to Governmental Entities in connection with any
Consents required to be made under this Agreement, the Ancillary Documents or in connection with the Transactions. Notwithstanding anything
to the contrary in this Section 6.4 or otherwise in this Agreement, the Parties agree that the AtlasClear Shareholders and their
respective Representatives may provide general information about the subject matter of this Agreement and the transactions contemplated
hereby to any direct or indirect current or prospective investor or in connection with normal fund raising or related marketing or informational
or reporting activities.
50
(b)
The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release in the form
agreed by the Company and AtlasClear prior to the execution of this Agreement and such initial press release (the “Signing Press
Release”) shall be released as promptly as reasonably practicable after the execution of this Agreement. Promptly after the
execution of this Agreement, AtlasClear shall file a current report on Form 8-K (the “Signing Filing”) with the Signing
Press Release and a description of this Agreement as required by, and in compliance with, the Securities Laws, which the Company shall
have the opportunity to review and comment upon prior to filing and AtlasClear shall consider such comments in good faith. The Company,
on the one hand, and AtlasClear, on the other hand, shall mutually agree upon (such agreement not to be unreasonably withheld, conditioned
or delayed by either the Company or AtlasClear, as applicable) a press release announcing the consummation of the Transactions (the “Closing
Press Release”) prior to the Closing, and, on the Closing Date (or such other date as may be mutually agreed to in writing
by the Company and AtlasClear prior to the Closing), the Parties shall cause the Closing Press Release to be released. Promptly after
the Closing (but in any event within four (4) Business Days after the Closing), AtlasClear shall file a current report on Form 8-K (the
“Closing Filing”) with the Closing Press Release and a description of the Closing as required by Securities Laws,
which Closing Filing shall be mutually agreed upon by the Company and AtlasClear prior to the Closing (such agreement not to be unreasonably
withheld, conditioned or delayed by either the Company or AtlasClear, as applicable). In connection with the preparation of each of the
Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing, each Party shall, upon written request by
any other Party, furnish such other Party with all information concerning itself, its directors, officers and equityholders, and such
other matters as may be reasonably necessary for such press release or filing.
Section
6.5 Tax Matters.
(a)
Tax Treatment.
(i)
The Parties intend that the Mergers constitute a single integrated transaction that qualifies as a “reorganization” within
the meaning of Section 368(a) of the Code, and each Party shall, and shall cause its respective Affiliates to, use reasonable best efforts
to cause the Mergers to so qualify. To the greatest extent permitted under applicable Law, the Parties shall file all Tax Returns consistent
with, and take no position inconsistent with (whether in audits, Tax Returns or otherwise), the treatment described in this Section
6.5(a)(i).
(ii)
AtlasClear and the Company hereby adopt this Agreement as a “plan of reorganization” within the meaning of Treasury Regulations
Sections 1.368-2(g) and 1.368-3(a). From the date hereof through the Closing, and following the Closing, the Parties shall not, and shall
not permit or cause their respective Affiliates to, take any action, or knowingly fail to take any action, which action or failure to
act prevents or impedes, or would reasonably be expected to prevent or impede, the Mergers qualifying for the Intended Tax Treatment.
51
(iii)
The Parties shall reasonably cooperate with each other and their respective counsel to document and support the Tax treatment of the
Mergers consistent with the Intended Tax Treatment.
(b)
Each of the Parties shall (and shall cause their respective Affiliates to) use commercially reasonable efforts to cooperate fully, as
and to the extent reasonably requested by another Party, in connection with the filing of relevant Tax Returns, and any audit or tax
proceeding.
(c)
Any transfer, documentary, sales, use, stamp, excise, recording, registration, value added and other such similar Taxes (including any
penalties and interest) that become payable in connection with or by reason of the execution of this Agreement and the transactions set
forth herein (collectively, “Transfer Taxes”) shall, in the case of Transfer Taxes payable solely as a result of the
Mergers, be borne and paid equally between AtlasClear on the one hand and the Company Stockholders on the other hand.
Section
6.6 Exclusive Dealing. From the date of this Agreement until the earlier of the Closing or the termination of this
Agreement in accordance with its terms, the Majority Stockholder and the Company shall not, and shall cause the other Group Companies
and its and their respective Representatives not to, directly or indirectly: (i) solicit, initiate, induce, encourage (including by means
of furnishing or disclosing information), facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written
or oral) that constitutes, or that could reasonably be expected to lead to, a Company Acquisition Proposal; (ii) furnish or disclose
any non-public information to any Person in connection with, or that could reasonably be expected to lead to, a Company Acquisition Proposal;
(iii) enter into any Contract, agreement or other arrangement or understanding regarding a Company Acquisition Proposal; (iv) prepare
or take any steps in connection with a public offering of any Equity Securities of any Group Company (or any Affiliate or successor of
any Group Company) (other than in connection the Transactions); or (v) otherwise cooperate in any way with, or assist or participate
in, or knowingly facilitate or encourage any effort or attempt by any Person (other than AtlasClear and its Affiliates) to do or seek
to do any of the foregoing. The Company agrees to (A) notify AtlasClear promptly upon receipt of any Company Acquisition Proposal by
any Group Company, and to describe the material terms and conditions of any such Company Acquisition Proposal in reasonable detail (including
the identity of the Persons making such Company Acquisition Proposal) and (B) keep AtlasClear reasonably informed on a current basis
of any modifications to such offer or information.
Section
6.7 Regulatory Approval. As a condition to the Closing, as soon as reasonably practicable following the date hereof,
the Company shall prepare and submit an application with FINRA including a Form CMA (the “CMA”) consistent with the
requirements of FINRA Rule 1017 seeking approval of the change of ownership and control of the Company and its Subsidiaries contemplated
by this Agreement. The CMA shall be subject to the prior review and approval of AtlasClear, and AtlasClear shall timely provide all information
regarding the AtlasClear Parties required to complete the CMA and to respond to any further FINRA requests. The application fee due to
FINRA for the CMA shall be borne by AtlasClear. The obligations of the Parties to consummate the Transactions shall be subject to the
CMA being approved by FINRA. The foregoing notwithstanding, upon agreement of the Parties, this condition may be satisfied if the Company
and its Subsidiaries have not received a “do not close” letter from FINRA and thirty (30) days has passed since the filing
of the CMA.
52
Section
6.8 Merger Sub and Merger Sub II Equityholder Approval. As promptly as reasonably practicable following the date
of this Agreement, AtlasClear, as the sole shareholder of each of Merger Sub and sole member of Merger Sub II, will approve and adopt
this Agreement, the Ancillary Documents to which each of Merger Sub and Merger Sub II, as applicable, is or will be a party and the transactions
contemplated hereby and thereby (including the Mergers).
Section
6.9 FIRPTA Certificates. At or prior to the Closing, the Company shall deliver, or cause to be delivered, to AtlasClear
a certificate, duly executed by the Company, complying with Treasury Regulations Section 1.1445-2(c)(3), together with evidence that
the Company has provided notice to the Internal Revenue Service in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2),
in each case, in a form and substance reasonably acceptable to AtlasClear.
Section
6.10 AtlasClear Stockholder Approval. AtlasClear shall use reasonable best efforts to obtain any stockholder vote
or approval required under Section 713 of the NYSE American LLC Company Guide (or any successor or related rule) in connection with the
issuance of the Stage 2 Shares to the Company Stockholders in accordance with this Agreement. Without limiting the generality of the
foregoing, if such stockholder approval is required, AtlasClear shall (a) prepare and file with the SEC a proxy statement or information
statement, as applicable (together with any amendments or supplements thereto, the “Stockholder Approval Filing”),
containing the information required to be included therein by the Exchange Act and the rules and regulations promulgated thereunder and
the applicable rules of NYSE American LLC; (b) respond promptly to any comments received from the SEC with respect to the Stockholder
Approval Filing and any request by the SEC for amendments or supplements thereto; (c) as promptly as reasonably practicable following
clearance by the SEC, mail or otherwise disseminate the Stockholder Approval Filing to holders of AtlasClear Shares entitled to vote
thereon; (d) duly call, give notice of, convene and hold a meeting of the holders of AtlasClear Shares for the purpose of obtaining the
required stockholder approval (the “AtlasClear Stockholder Approval”); and (e) through its board of directors, recommend
that holders of AtlasClear Shares vote in favor of the AtlasClear Stockholder Approval. AtlasClear shall give the Company reasonable
opportunity to review and comment on the Stockholder Approval Filing prior to filing with the SEC and shall consider in good faith any
comments proposed by the Company or its Representatives.
Article
VII
CONDITIONS
TO CONSUMMATION OF THE TRANSACTIONS
Section
7.1 Conditions to the Obligations of the Parties. The obligations of the Parties to consummate the Transactions
are subject to the satisfaction or, if permitted by applicable Law, written waiver by the Party for whose benefit such condition exists
of the following conditions:
(a)
each applicable approval or waiting period under any Law relating to the Transactions, and any agreement between a Party with any Governmental
Entity not to consummate Transactions, shall have expired or been terminated or obtained (or deemed, by applicable Law, to have been
obtained), as applicable, including and not limited to the consent of FINRA pursuant to Section 6.7; and
(b)
no Order or Law or other legal restraint or prohibition issued by any court of competent jurisdiction or other Governmental Entity enjoining,
prohibiting or preventing the consummation of the Transactions shall be in effect; and
(c)
the AtlasClear Stockholder Approval shall have been obtained if AtlasClear stockholder approval is required under Section 713 of the
NYSE American LLC Company Guide (or any successor or related rule) in connection with the issuance of the Stage 2 Shares to the Company
Stockholders.
53
Section
7.2 Other Conditions to the Obligations of the AtlasClear Parties. The obligations of the AtlasClear Parties to
consummate the Transactions are subject to the satisfaction or, if permitted by applicable Law, prior written waiver by AtlasClear (on
behalf of itself and the other AtlasClear Parties) of the following further conditions:
(a)
(i) the Company Fundamental Representations shall be true and correct (without giving effect to any limitation as to “materiality”
or “Company Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date, as though made
on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which
case such representation and warranty shall be true and correct in all respects as of such earlier date), (ii) the representations and
warranties set forth in Article IV shall be true and correct in all respects as of the Closing Date, as though made on and as
of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such
representation and warranty shall be true and correct in all respects as of such earlier date).and (iii) the representations and warranties
of the Company set forth in Article III (other than the Company Fundamental Representations) shall be true and correct (without
giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation
set forth therein) in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent
that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true
and correct in all respects as of such earlier date), except where the failure of such representations and warranties to be true and
correct, taken as a whole, does not cause a Company Material Adverse Effect;
(b)
the Company shall have performed and complied in all material respects with the covenants and agreements required to be performed or
complied with by the Company under this Agreement at or prior to the Closing;
(c)
since the date of this Agreement, no Company Material Adverse Effect shall have occurred that is continuing;
(d)
holders of not more than five percent (5%) of the outstanding Company Shares shall have demanded, or shall remain entitled to demand,
appraisal of such Company Shares pursuant to Section 262 of the DGCL, and the Company shall have delivered to AtlasClear (A) evidence
reasonably satisfactory to AtlasClear that this Agreement and the Mergers have been duly adopted and approved by the Majority Stockholder
by written consent in accordance with Section 228 of the DGCL and the Governing Documents of the Company, and (B) evidence that the notices
required by Sections 228(e) and 262(d) of the DGCL have been duly given to each Company Stockholder that did not execute such written
consent, and (C) a joinder, in form and substance reasonably satisfactory to AtlasClear, duly executed by each Company Stockholder other
than the Majority Stockholder, pursuant to which such Company Stockholder agrees to be bound by the Registration Rights and Lock-up Agreement
attached hereto as Exhibit A.
(e)
there shall be no issued and outstanding shares of any class of preferred stock of the Company and all amounts due and payable by the
Company or its Subsidiaries in respect of any preferred stock of the Company shall have been paid in full;
54
(f)
at or prior to the Closing, the Company shall have delivered, or caused to be delivered, to AtlasClear the following documents:
(i)
a certificate duly executed by an authorized officer of the Company, dated as of the Closing Date, to the effect that the conditions
specified in Section 7.2(a), Section 7.2(b), Section 7.2(c) and Section 7.2(d) are satisfied, in a form and
substance reasonably satisfactory to AtlasClear;
(ii)
the Registration Rights and Lock-Up Agreement, duly executed by each Company Stockholder;
(iii)
employment agreements, in substantially the form attached hereto as Exhibit E and reasonably acceptable to AtlasClear, duly executed
by Dawson James and each of Robert D. Keyser, Jr. (individually), Monique Maclaren, Robert D. Keyser III, Joseph M. Keyser and Cory Wachowiz;
(iv)
a letter of transmittal (“Letter of Transmittal”) in form acceptable to AtlasClear (which shall include customary
representations and warranties, indemnifications from each Company Stockholder, and the execution of releases in the form attached hereto
as Exhibit F) (each a “Stockholder Release”), in each case duly executed by each Company Stockholder;
(v)
the Escrow Agreement, duly executed by the Majority Stockholder; and
(vi)
evidence that all shares of preferred stock of the Company issued and outstanding as of the date of this Agreement have been repurchased
or redeemed by the Company prior to the Closing Date which shall include evidence of the payment in full of all amounts owed in respect
of such shares and a full release of all claims by the holders thereof;
(vii)
evidence in form and substance reasonably satisfactory to AtlasClear that all Indebtedness of the Group Companies has been paid in full
and any liens released prior to the Closing, including evidence that any and all regulatory consents required in connection therewith
were received prior to the payment thereof;
(viii)
evidence in form and substance reasonably satisfactory to AtlasClear that all warrants and economic participations set forth on Exhibit
D have been distributed to the equityholders of the Company in accordance with all applicable Laws;
(ix)
evidence of the receipt of all consents, Permits, approvals, and waivers required for the parties to consummate the Transactions (including
the payment in full of all Indebtedness of the Group Companies prior to the Closing) set forth or required to be set forth on Section
3.5 of the Company Disclosure Schedules;
(x)
a certification of trust of the Majority Stockholder, dated as of the Closing Date and duly executed by the Trustee, satisfying the requirements
of Section 736.1017 of the Florida Statutes and confirming the Trustee’s authority to execute and deliver this Agreement and the
Ancillary Documents and to consummate the transactions contemplated hereby and thereby;
(xi)
a spousal consent duly executed by the spouse of Robert D. Keyser, Jr., if any, pursuant to which such spouse consents to the transactions
contemplated by this Agreement and waives any marital, community-property or other rights or claims that such spouse may have in or with
respect to the Company Shares held by the Majority Stockholder or the consideration payable in respect thereof, in form and substance
reasonably acceptable to AtlasClear; provided that, if Robert D. Keyser, Jr. is not married as of the Closing Date, he shall instead
deliver a certification to that effect; and
55
(xii)
evidence of the termination in full of the Keyser Employment Agreement (as defined in the Company Disclosure Schedules).
Section
7.3 Other Conditions to the Obligations of the Company. The obligations of the Company to consummate the Transactions
are subject to the satisfaction or, if permitted by applicable Law, written waiver by the Company of the following further conditions:
(a)
(i) the AtlasClear Fundamental Representations shall be true and correct (without giving effect to any limitation as to “materiality”
or “AtlasClear Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date,
as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier
date, in which case such representation and warranty shall be true and correct in all respects as of such earlier date), and (ii) the
representations and warranties of the AtlasClear Parties (other than the AtlasClear Fundamental Representations) contained in Article
V of this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “AtlasClear
Material Adverse Effect” or any similar limitation set forth herein) in all material respects as of the Closing Date, as though
made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in
which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations
and warranties to be true and correct, taken as a whole, does not cause an AtlasClear Material Adverse Effect;
(b)
the AtlasClear Parties shall have performed and complied in all material respects with the covenants and agreements required to be performed
or complied with by them under this Agreement at or prior to the Closing;
(c)
since the date of this Agreement, no AtlasClear Material Adverse Effect shall have occurred that is continuing;
(d)
if stockholder approval is required under Section 713 of the NYSE American LLC Company Guide (or any successor or related rule) in connection
with the issuance of the Stage 2 Shares to the Company Stockholders, the AtlasClear Stockholder Approval shall have been obtained in
accordance with Section 6.10;
(e)
at or prior to the Closing, AtlasClear shall have delivered, or caused to be delivered, the following documents:
(i)
a certificate duly executed by an authorized officer of AtlasClear, dated as of the Closing Date, to the effect that the conditions specified
in Section 7.3(a), Section 7.3(b) and Section 7.3(c) are satisfied, in a form and substance reasonably satisfactory
to the Company;
(ii)
the Registration Rights and Lock-Up Agreement, duly executed by AtlasClear and the AtlasClear Shareholders; and
(iii)
the Escrow Agreement, duly executed by AtlasClear and the Escrow Agent.
Section
7.4 Frustration of Closing Conditions. The Company may not rely on the failure of any condition set forth in this
Article VII to be satisfied if such failure was proximately caused by the Company’s failure to use reasonable best efforts
to cause the Closing to occur. None of the AtlasClear Parties may rely on the failure of any condition set forth in this Article VII
to be satisfied if such failure was proximately caused by an AtlasClear Party’s failure to use reasonable best efforts to cause
the Closing to occur.
56
Article
VIII
TERMINATION
Section
8.1 Termination. This Agreement may be terminated, and the Transactions may be abandoned at any time prior to the
Closing, solely:
(a)
by mutual written consent of AtlasClear and the Company;
(b)
by AtlasClear, if any of the representations or warranties set forth in Article III shall not be true and correct or if the Company
has failed to perform or has otherwise breached any of its covenants or agreements set forth in this Agreement (including an obligation
to consummate the Closing) such that the condition to Closing set forth in either Section 7.2(a) or Section 7.2(b) would
not be satisfied (assuming the Closing occurred as of such date) and the breach or breaches causing such representations or warranties
not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured
within the earlier of (i) thirty (30) days after written notice thereof is delivered to the Company by AtlasClear, and (ii) the Termination
Date; provided, however, that none of the AtlasClear Parties is then in breach of this Agreement so as to prevent the condition
to Closing set forth in either Section 7.3(a) or Section 7.3(b) from being satisfied (assuming the Closing occurred as
of such date);
(c)
by the Company, if any of the representations or warranties set forth in Article V shall not be true and correct or if any AtlasClear
Party has failed to perform any covenant or agreement on the part of such applicable AtlasClear Party set forth in this Agreement (including
an obligation to consummate the Closing) such that the condition to Closing set forth in either Section 7.3(a) or Section 7.3(b)
would not be satisfied (assuming the Closing occurred as of such date) and the breach or breaches causing such representations or warranties
not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured
within the earlier of (i) thirty (30) days after written notice thereof is delivered to AtlasClear by the Company and (ii) the Termination
Date; provided, however, the Company is not then in breach of this Agreement so as to prevent the condition to Closing
set forth in Section 7.2(a) or Section 7.2(b) from being satisfied (assuming the Closing occurred as of such date);
(d)
by either AtlasClear or the Company, if the Transactions shall not have been consummated on or prior to the date that is the one (1)
year anniversary of the date of this Agreement (the “Termination Date”); provided that (i) the right to terminate
this Agreement pursuant to this Section 8.1(d) shall not be available to AtlasClear if any AtlasClear Party’s breach of
any of its covenants or obligations under this Agreement, or any Ancillary Documents to which it is a party, shall have proximately caused
the failure to consummate the Transactions on or before the Termination Date, and (ii) the right to terminate this Agreement pursuant
to this Section 8.1(d) shall not be available to the Company if the Company’s breach of any of its covenants or obligations
under this Agreement, or any Ancillary Documents to which it is a party, shall have proximately caused the failure to consummate the
Transactions on or before the Termination Date;
(e)
by either AtlasClear or the Company, if any Governmental Entity shall have issued an Order or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Transactions and such Order or other action shall have become final and nonappealable; provided,
that the right to terminate this Agreement pursuant to this Section 8.1(e) shall not be available to any Party whose action or
failure to perform any of its obligations under this Agreement shall have proximately caused, or primarily resulted in, the enactment
or issuance of any such Law or Order; and
57
(f)
by AtlasClear pursuant to and in accordance with Section 2.7(d)(i).
Section
8.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.1, (a)
this entire Agreement shall forthwith become void (and there shall be no Liability or obligation on the part of the Parties and their
respective Non-Party Affiliates) with the exception of Section 6.3(a), this Section 8.2, Article X and Article
I (to the extent related to the foregoing), each of which shall survive such termination and remain valid and binding obligations
of the Parties and (b) the Confidentiality Agreement, which shall survive such termination and remain valid and binding obligations of
the parties thereto in accordance with their respective terms. Notwithstanding the foregoing or anything to the contrary herein, the
termination of this Agreement pursuant to Section 8.1 shall not affect any Liability on the part of any Party for any Willful
Breach of any covenant or agreement set forth in this Agreement prior to such termination or Fraud or any Person’s Liability under
the Confidentiality Agreement.
Article
IX
INDEMNIFICATION.
Section
9.1 Survival of Representations, Warranties and Covenants; Reliance. All representations and warranties of the
Parties contained in this Agreement will survive the execution and delivery hereof and the Closing hereunder, and, after the Closing
(a) the Fundamental Representations and any and all Claims arising out of or related to Fraud will survive the execution and delivery
hereof and the Closing, and continue until the expiration of the applicable statute of limitations; (b) the Statutory Representations
will survive the execution and delivery hereof and the Closing, and continue until the expiration of the applicable statute of limitations
for the applicable matter; and (c) all other representations and warranties will survive the execution and delivery hereof and the Closing,
and continue until the date eighteen (18) months after the Closing Date. For avoidance of doubt, it is the express intent of the Parties
that, if the applicable survival period for an item contemplated by this Section 9.1 is shorter than the statute of limitations
that would otherwise be applicable to such item, then, by contract, the applicable statute of limitations with respect to such item shall
be reduced to the shortened survival period contemplated hereby. Each representation and warranty described above, and any related indemnity
Claim or right, will further survive if the party asserting such Claim provides written notice of such Claim or fact or circumstance
reasonably expected to be the basis for a Claim (even if a Loss has not yet occurred) on or prior to the applicable time period referenced
above to the party against which such Claim is asserted. Except as otherwise expressly provided herein, the covenants and agreements
contained in this Agreement will survive the execution and delivery hereof and the Closing, and continue until the applicable statute
of limitations (unless a shorter period is expressly prescribed with respect to such covenant or agreement). Notwithstanding any right
of AtlasClear to investigate the affairs of the Company and the Company Stockholders, and notwithstanding any knowledge of the Company
of facts determined or determinable by AtlasClear pursuant to such investigation or right of investigation, AtlasClear has the right
to rely fully upon the representations and warranties of each of the Company and each of the Company Stockholders contained in this Agreement
and the other Ancillary Documents.
Section
9.2 Indemnification by AtlasClear. From and after the Closing, subject to the limitations set forth herein, AtlasClear
shall indemnify and hold harmless each of the Company Stockholders, and each of their respective heirs, personal representatives, successors
and assigns (collectively, the “Stockholder Indemnified Parties”), against, from and in respect of any and all Losses
that they incur as a result of or that arise from: (a) the inaccuracy in or breach of any representation or warranty made by any AtlasClear
Party in this Agreement or in any Ancillary Document, or (b) the non-fulfillment or breach of any unwaived covenant, obligation or agreement,
in each case as made by or on behalf of any AtlasClear Party in this Agreement and to the extent such covenant or agreement is to be
performed after the Closing.
58
Section
9.3 Indemnification by the Majority Stockholder. From and after the Closing, subject to the limitations set forth
herein, the Majority Stockholder shall indemnify and hold harmless AtlasClear and its Affiliates (including the Surviving Entity), and
each of their respective equity holders, trustees, directors, managers, officers, employees and agents (collectively, the “AtlasClear
Indemnified Parties”), against, from and in respect of any and all Losses that they incur as a result of or that arise from:
(a) the breach of any representation or warranty set forth in Article III or Article IV; (b) the non-fulfillment or breach
by or on behalf of any of the Majority Stockholder or, at or prior to the Closing, the Company, of any unwaived covenant, obligation
or agreement, in each case as contained in this Agreement or in any certificate delivered pursuant to this Agreement; (c) any Taxes relating
to any period prior to the Closing (or portion thereof), (d) any of the matters set forth on Exhibit G, (e) any claim or action
by or on behalf of any current or former holder or alleged current or former holder of equity interests or equity appreciation rights
(options, phantom or otherwise) in the Company or any Subsidiary thereof or otherwise relating to any allocation or distribution of any
consideration payable in connection with the transactions contemplated by this Agreement,(f) any Indebtedness or transaction expenses
of the Group Companies not paid in full and terminated prior to Closing, and (g) any inaccuracy in the determination of Closing Net Capital
Amount arising out of or related to any information, facts or circumstances material to the calculation thereof which were known or should
have been known by the Majority Stockholder at or prior to the Closing.
Section
9.4 Certain Limitations on Indemnification Obligations.
(a)
Except as otherwise expressly provided in this Agreement, the AtlasClear Indemnified Parties will not be entitled to receive any indemnification
payments under Section 9.3(a) or Section 9.3(d) until the aggregate amount of Losses incurred by the AtlasClear Indemnified
Parties exceeds $245,000 (the “Basket Amount”), in which event the Majority Stockholder will be liable for all such
Losses in excess of the Basket Amount; provided that the Basket Amount will not apply to Losses in connection with breaches of
the Company Fundamental Representations, the Statutory Representations, or in the event of Fraud.
(b)
Except as otherwise expressly provided in this Agreement, the maximum aggregate amount of indemnification payments that the AtlasClear
Indemnified Parties will be entitled to receive with respect to Claims under Section 9.3(a) or Section 9.3(d) will not
exceed $1,650,000 (the “Cap”); provided that the Cap will not apply to Losses in connection with breaches of
the Statutory Representations, the Company Fundamental Representations or in the event of Fraud.
(c)
Except as otherwise expressly provided in this Agreement, the Stockholder Indemnified Parties will not be entitled to receive any indemnification
payments under Section 9.2(a) until the aggregate amount of Losses incurred by the Stockholder Indemnified Parties exceeds $245,000
in which event AtlasClear will be liable for all such Losses in excess of $245,000; provided that the foregoing will not apply
to Losses in connection with breaches of the AtlasClear Fundamental Representations or in the event of Fraud.
(d)
Except as otherwise expressly provided in this Agreement, the maximum aggregate amount of indemnification payments that the Stockholder
Indemnified Parties will be entitled to receive with respect to Claims under Section 9.2 will not exceed $1,650,000; provided
that the foregoing will not apply to Losses in connection with breaches of the AtlasClear Fundamental Representations or in the event
of Fraud.
59
(e)
Except as otherwise expressly provided in this Agreement, the aggregate amount of Losses to which the AtlasClear Indemnified Parties
or the Stockholder Indemnified Parties, as applicable, will be entitled to receive indemnification hereunder shall not exceed an amount
equal to the Purchase Price; provided that such limitations will not apply to Losses in connection with Fraud.
(f)
Notwithstanding anything to the contrary in this Agreement: (i) for purposes of determining the existence of a breach of a representation
or warranty set forth in this Agreement but not for determining the amount of Losses arising out of or resulting from any such breach,
all references to materiality or material adverse effect or words of similar import or effect contained therein shall be disregarded
and deemed to have been made without any such qualification; and (ii) none of the AtlasClear Indemnified Parties or the Stockholder Indemnified
Parties will be permitted to recover any Losses pursuant to this Article IX to the extent such Party has been indemnified or reimbursed
for such amount under any other provision of this Agreement.
Section
9.5 Defense of Claims.
(a)
In the case of any Claim for indemnification under Section 9.2 and Section 9.3 arising from a Claim of a third party (including
the IRS or any other Governmental Entity) of which an indemnified Party received notice and as to which it may request indemnification
hereunder, such indemnified Party must give reasonably prompt written notice to the indemnifying party of any such Claim, including a
description of the Claim, the amount of the Claim (if known and quantifiable), and the basis of the Claim. The failure to give such notice
(or delay in giving such notice) will not, however, relieve the indemnifying Party of its indemnification obligations hereunder except
to the extent that the indemnifying Party is actually harmed thereby. The indemnifying Party has the right to defend and to direct the
defense against any such third party Claim in its name and at its expense, and with qualified counsel selected by the indemnifying Party
and reasonably satisfactory to the indemnified Party unless (A) the indemnifying Party fails to acknowledge fully its obligations to
the indemnified Party(ies) under this Agreement to indemnify for such third party Claim within fifteen (15) calendar days after receiving
notice of such third party Claim; (B) the applicable third party claimant is a Governmental Entity or a then-current customer of AtlasClear,
the Surviving Entity, or one of their respective Subsidiaries or Affiliates; (C) the applicable third party alleges Fraud or Claims with
respect to Taxes; (D) an adverse judgment with respect to the Claim will establish a precedent materially adverse to the continuing business
interests of the Company, AtlasClear or their respective Affiliates; (E) there is a material conflict of interest between the indemnified
Party and the indemnifying Party in the conduct of such defense; (F) the third party Claim is criminal in nature, could reasonably be
expected to lead to criminal proceedings; or (G) the third party Claim seeks injunctive relief or other equitable remedies against the
indemnified Party(ies).
(b)
If the indemnifying Party elects, and is entitled, to defend such Claim, it will within twenty (20) calendar days (or sooner, if the
nature of the Claim so requires) notify the indemnified Party of its intent to do so, and the indemnified Party must, at the request
and expense of the indemnifying Party, cooperate in the defense of such Claim. If the indemnifying Party elects not to, or is not entitled
under this Section 9.5 to, defend such Claim, fails to notify the indemnified Party of its election as herein provided or refuses
to acknowledge or contests its obligation to indemnify under this Agreement, the indemnified Party may pay, settle or defend such Claim.
(c)
Notwithstanding anything to the contrary contained herein, the indemnifying Party will have no indemnification obligations with respect
to any such Claim which has been or will be settled by the indemnified Party without the prior written consent of the indemnifying Party
(which consent may not be unreasonably withheld, conditioned or delayed); provided, however, that notwithstanding the foregoing,
the indemnified Party will not be required to refrain from paying any Claim that has matured by an Order, unless an appeal is duly taken
therefrom and exercise thereof has been stayed, nor will it be required to refrain from paying any Claim where the delay in paying such
Claim would result in the foreclosure of a Lien upon any of the property or assets then held by the indemnified Party or where any delay
in payment would cause the indemnified Party economic loss.
60
(d)
The indemnifying Party’s right to direct the defense will include the right to enter into an agreement settling any Claim by a
third party; provided, that no such settlement will obligate the indemnified Party to agree to any settlement that requires the
taking or restriction of any action (including the payment of money and competition restrictions) by the indemnified Party other than
the delivery of a release for such Claim, except with the prior written consent of the indemnified Party (such consent to be provided
in the sole discretion of the indemnified party). Notwithstanding the indemnifying Party’s right to settle in accordance with the
immediately preceding sentence, the indemnifying Party may not settle any Claim over the objection of the indemnified Party; provided,
however, that consent by the indemnified Party to settlement will not be unreasonably withheld, conditioned or delayed. The indemnified
Party will have the right to participate in the indemnifying Party’s defense of any Claim with counsel selected by it subject to
the indemnifying Party’s right to direct the defense. The fees and disbursements of such counsel will be at the expense of the
indemnified Party; provided, however, that, in the case of any Claim which seeks injunctive or other equitable relief against
the indemnified Party, the fees and disbursements of such counsel will be at the expense of the indemnifying Party.
Section
9.6 Non-Third Party Claims. Any Claim which does not result from a third party Claim will be asserted by a written
notice to the other Party or Parties including a description of the Claim, the amount of the Claim (if known and quantifiable), and the
basis of the Claim, and which will be identified as a “DIRECT INDEMNITY CLAIM NOTICE.” The recipient of such notice will
have a period of thirty (30) days after receipt of such notice within which to respond thereto. If the recipient does not respond within
such thirty (30) days and does not cure the applicable breach, the recipient will be deemed to have accepted responsibility for the Losses
set forth in such notice and will have no further right to contest the validity of such notice. If the recipient responds within such
thirty (30) days after the receipt of the notice and rejects such Claim in whole or in part, the Party delivering such notice will be
free to pursue such remedies as may be available to it under this Agreement, any other Ancillary Document or applicable Law.
Section
9.7 Tax Treatment. Unless otherwise required by applicable Law, all indemnification payments will constitute adjustments
to the Purchase Price for all Tax purposes, and no Party will take any position inconsistent with such characterization.
Section
9.8 No Right of Contribution. The Majority Stockholder will have no right to seek contribution from AtlasClear,
the Company or the Surviving Entity with respect to all or any part of any of the Majority Stockholder’s indemnification obligations
under this Article IX.
Section
9.9 Set-off. AtlasClear shall have the right, subject to this Article IX, to set off any indemnification
amounts owed to the AtlasClear Indemnified Parties pursuant to this Agreement; provided that, except in the case of Fraud, the AtlasClear
Indemnified Parties shall first seek recovery from the Indemnity Escrow Amount with respect to Claims pursuant to Section 9.3(a)
before exercising the set-off rights set forth in this Section 9.9.
Section
9.10 Exclusive Remedy. Except as otherwise expressly provided in this Agreement and except with respect to Fraud,
the remedies provided for in this Article IX will be the sole and exclusive remedies of the Parties and their Affiliates and their
respective shareholders, members, managers, trustees, officers, directors, employees, agents, representatives, successors and assigns
for any breach of or inaccuracy in any representation or warranty contained in this Agreement or any failure to perform the covenants,
agreements or undertakings in this Agreement; provided, however, that the rights and remedies provided by this Agreement are cumulative,
and the use of any one right or remedy by any Party will not preclude or waive the right to use any or all other remedies.
61
Section
9.11 No Waiver. The provisions in this Article IX do not waive or affect any Claims arising out of or relating
to Fraud to which any AtlasClear Indemnified Party may be entitled, or relieve or limit the liability of the Majority Stockholder from
any liability arising out of or resulting from Fraud, or breach of any covenant, in connection with the Transactions or in connection
with the delivery of any of the Ancillary Documents.
Section
9.12 Distribution of Indemnity Escrow Account. Subject to the terms of this Agreement and the Escrow Agreement,
no later than five (5) Business Days following the date that is the eighteen (18) month anniversary of the Closing Date, AtlasClear and
the Majority Stockholder shall jointly instruct the Escrow Agent to release to the Company Stockholders, in accordance with their respective
Pro Rata Shares, any portion of the Indemnity Escrow Amount then remaining in the Indemnity Escrow Account (as defined in the Escrow
Agreement), less (a) any amounts necessary to satisfy any indemnification obligations of the Company Stockholders resolved but remaining
unsatisfied and (b) any amounts necessary to satisfy any other indemnification Claims against any Company Stockholders then pending for
which a Claim notice was timely delivered by the applicable AtlasClear Indemnified Party.
Section
9.13 Calculation of Losses. The amount of any Claims or Losses subject to indemnification under this Article
IX shall be calculated net of any amounts recovered by the indemnified party or its Affiliates under applicable insurance policies
(but taking into account any deductible or retention and premium increase resulting therefrom). The indemnified party shall make or cause
to be made commercially reasonable Claims for insurance under such policies that may be applicable to the matter giving rise to the indemnification
Claim hereunder; provided that the availability of insurance shall not in any way affect the indemnified party’s indemnification
remedies hereunder.
Article
X
MISCELLANEOUS
Section
10.1 Entire Agreement; Assignment. This Agreement (together with the Ancillary Documents and the Confidentiality
Agreement) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. This Agreement may
not be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of AtlasClear and the Company.
Section
10.2 Amendment. This Agreement may be amended or modified only by a written agreement executed and delivered by
AtlasClear and the Company. This Agreement may not be modified or amended except as provided in the immediately preceding sentence and
any purported amendment by any Party or Parties effected in a manner which does not comply with this Section 10.2 shall be void,
ab initio.
62
Section
10.3 Notices. All notices, requests, Claims, demands and other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly given) by delivery in person, by e-mail (having obtained electronic delivery confirmation
thereof (i.e., an electronic record of the sender that the e-mail was sent to the intended recipient thereof without an “error”
or similar message that such e-mail was not received by such intended recipient)), or by registered or certified mail (postage prepaid,
return receipt requested) (upon receipt thereof) to the other Parties as follows:
(a)
If to any AtlasClear Party or the Company (following Closing) to:
AtlasClear
Holdings, Inc.
4350
W. Cypress St. Suite 270
Tampa,
FL 33607
Attention:
Sandip Patel
Email:
[***]
with
a copy (which shall not constitute notice) to:
Greenberg
Traurig, LLP
1750
Tysons Blvd. Suite 1000
McLean,
VA 22102
Attention:
Jason Simon
E-mail:
Jason.simon@gtlaw.com
(b)
If to the Majority Stockholder or Company (prior to Closing) to:
The
Robert D. Keyser, Jr. Revocable Trust c/o Robert D. Keyser, Jr., Trustee
2700
N. Military Trail – Suite 100
Boca
Raton, FL 33431
Attention:
Robert D. Keyser, Jr., Trustee
Email:
[***]
with
a copy (which shall not constitute notice) to:
ArentFox
Schiff LLP
1717
K Street NW
Washington,
D.C. 20006
Attention:
Ralph V. DeMartino and Marc E. Rivera
Email:
ralph.demartino@afslaw.com; marc.rivera@afslaw.com
or
to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth
above.
Section
10.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
Section
10.5 Fees and Expenses. Except as otherwise set forth in this Agreement, all fees and expenses incurred in connection
with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby, including the fees and disbursements
of counsel and accountants, shall be paid by the Party incurring such fees or expenses.
63
Section
10.6 Construction; Interpretation. The term “this Agreement” means this Business Combination Agreement
together with the Schedules and Exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in
accordance with the terms hereof. The headings set forth in this Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement. No Party, nor its respective counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning
and not strictly for or against any Party. Unless otherwise indicated to the contrary herein by the context or use thereof: (a) the words,
“herein,” “hereto,” “hereof” and words of similar import refer to this Agreement as a whole, including
the Schedules and Exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause set forth in this Agreement;
(b) masculine gender shall also include the feminine and neutral genders, and vice versa; (c) words importing the singular shall also
include the plural, and vice versa; (d) the words “include,” “includes” or “including” shall be deemed
to be followed by the words “without limitation”; (e) references to “$” or “dollar” or “US$”
shall be references to United States dollars; (f) the word “or” is disjunctive but not necessarily exclusive; (g) the words
“writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form; (h) the word “day” means calendar day unless Business Day is expressly specified; (i)
references from or through any date mean from and including or through and including such date, respectively, (j) the word “extent”
in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean
simply “if”; (k) all references to Articles, Sections, Exhibits or Schedules are to Articles, Sections, Exhibits and Schedules
of this Agreement; (l) the words “made available” (regardless of whether capitalized or not) shall mean, when used with reference
to documents or other materials required to be provided or made available to AtlasClear, any documents or other materials posted to the
electronic data room on “https://atlasclear-my.sharepoint.com/” made available to AtlasClear as of 10:00 p.m., Eastern Time,
at least one (1) Business Day prior to the date of this Agreement; (m) all references to any Law will be to such Law as amended, supplemented
or otherwise modified or re-enacted from time to time; and (n) all references to any Contract are to that Contract as amended or modified
from time to time in accordance with the terms thereof (subject to any restrictions on amendments or modifications set forth in this
Agreement). If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action
shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.
Section
10.7 Exhibits and Schedules. All Exhibits and Schedules, or documents expressly incorporated into this Agreement,
are hereby incorporated into this Agreement and are hereby made a part hereof as if set out in full in this Agreement. The Schedules
shall be arranged in sections and subsections corresponding to the numbered and lettered Sections and subsections set forth in this Agreement.
Any item disclosed in the Company Disclosure Schedules or in the AtlasClear Disclosure Schedules corresponding to any Section or subsection
of Article III (in the case of the Company Disclosure Schedules) or Article V (in the case of the AtlasClear Disclosure
Schedules), respectively, shall be deemed to have been disclosed with respect to every other section and subsection of Article III
(in the case of the Company Disclosure Schedules) or Article V (in the case of the AtlasClear Disclosure Schedules), respectively,
where the relevance of such disclosure to such other Section or subsection is reasonably apparent on the face of the disclosure. The
information and disclosures set forth in the Schedules that correspond to the section or subsections of Article III or Article
V may not be limited to matters required to be disclosed in the Schedules, and any such additional information or disclosure is for
informational purposes only and does not necessarily include other matters of a similar nature.
Section
10.8 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party and
its successors and permitted assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other
Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. Each of the Non-Party Affiliates
shall be an express third-party beneficiary of Section 10.12.
Section
10.9 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as
to be effective and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or
unenforceable under applicable Law, all other provisions of this Agreement shall remain in full force and effect 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 of this Agreement is invalid, illegal or unenforceable under applicable Law, 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.
64
Section
10.10 Counterparts; Electronic Signatures. This Agreement and each Ancillary Document (including any of the closing
deliverables contemplated hereby) may be executed in one or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any
Ancillary Document (including any of the closing deliverables contemplated hereby) by e-mail, or scanned pages shall be effective as
delivery of a manually executed counterpart to this Agreement or any such Ancillary Document.
Section
10.11 Knowledge of Company; Knowledge of AtlasClear. For all purposes of this Agreement, the phrase “to the
Company’s knowledge”, “to the knowledge of the Company” and “known by the Company” and any derivations
thereof shall mean as of the applicable date, the actual knowledge of the individuals set forth on Section 10.11 of the Company
Disclosure Schedules, assuming reasonable due inquiry. For all purposes of this Agreement, the phrase “to AtlasClear’s knowledge”,
“to the knowledge of AtlasClear” and “known by AtlasClear” and any derivations thereof shall mean as of the applicable
date, the actual knowledge of the individuals set forth on Section 10.11 of the AtlasClear Disclosure Schedules, assuming reasonable
due inquiry. For the avoidance of doubt, none of the individuals set forth on Section 10.11 of the Company Disclosure Schedules
or Section 10.11 of the AtlasClear Disclosure Schedules shall have any personal Liability or obligations regarding such knowledge.
Section
10.12 No Recourse. Except for Claims pursuant to any Ancillary Document by any party(ies) thereto against any Company
Non-Party Affiliate or any AtlasClear Non-Party Affiliate (each, a “Non-Party Affiliate”), and then solely with respect
to Claims against the Non-Party Affiliates that are party to the applicable Ancillary Document, each Party agrees on behalf of itself
and on behalf of the Company Non-Party Affiliates, in the case of the Company, and the AtlasClear Non-Party Affiliates, in the case of
AtlasClear, that (a) this Agreement may only be enforced against, and any action for breach of this Agreement may only be made against,
the Parties, and no Claims of any nature whatsoever arising under or relating to this Agreement, the negotiation hereof or its subject
matter, or the transactions contemplated hereby shall be asserted against any Non-Party Affiliate, and (b) except in the case of Fraud,
none of the Non-Party Affiliates shall have any Liability arising out of or relating to this Agreement, the negotiation hereof or its
subject matter, or the transactions contemplated hereby, including with respect to any Claim (whether in tort, contract or otherwise)
for breach of this Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith,
as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or
materials of any kind furnished by the Company, AtlasClear or any Non-Party Affiliate concerning any Group Company, any AtlasClear Party,
this Agreement or the transactions contemplated hereby.
Section
10.13 Extension; Waiver. The Company may (a) extend the time for the performance of any of the obligations or other
acts of the AtlasClear Parties set forth herein, (b) waive any inaccuracies in the representations and warranties of the AtlasClear Parties
set forth herein or (c) waive compliance by the AtlasClear Parties with any of the agreements or conditions set forth herein. AtlasClear
may (i) extend the time for the performance of any of the obligations or other acts of the Company set forth herein, (ii) waive any inaccuracies
in the representations and warranties of the Company set forth herein or (iii) waive compliance by the Company with any of the agreements
or conditions set forth herein. Any agreement on the part of any such Party to any such extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such Party. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or 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 such rights.
65
Section
10.14 Waiver of Jury Trial. THE PARTIES EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO
TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY DOCUMENT
OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY
DOCUMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 10.14.
Section
10.15 Submission to Jurisdiction. Each of the Parties irrevocably and unconditionally submits to the exclusive
jurisdiction of the Chancery Court of the State of Delaware, or, if the Chancery Court of the State of Delaware declines to accept jurisdiction,
any state or federal court within the State of Delaware for the purposes of any Proceeding, Claim, demand, action or cause of action
(a) arising under this Agreement or under any Ancillary Document or (b) in any way connected with or related or incidental to the dealings
of the Parties in respect of this Agreement or any Ancillary Document or any of the transactions contemplated hereby or any of the transactions
contemplated thereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such
court, and further irrevocably and unconditionally waives and agrees not to plead or Claim in any such court that any such Proceeding
has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way
of motion or as a defense, counterclaim or otherwise, in any Proceeding, Claim, demand, action or cause of action against such Party
(i) arising under this Agreement or under any Ancillary Document or (ii) in any way connected with or related or incidental to the dealings
of the Parties in respect of this Agreement or any Ancillary Document or any of the transactions contemplated hereby or any of the transactions
contemplated thereby, (A) any Claim that such Party is not personally subject to the jurisdiction of the courts as described in this
Section 10.15 for any reason, (B) that such Party or such Party’s property is exempt or immune from the jurisdiction of
any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment
in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, Claim, demand, action or cause
of action in any such court is brought against such Party in an inconvenient forum, (y) the venue of such Proceeding, Claim, demand,
action or cause of action against such Party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against
such Party in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such
Party’s respective address set forth in Section 10.3 shall be effective service of process for any such Proceeding, Claim,
demand, action or cause of action.
66
Section
10.16 Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party
of any one remedy will not preclude the exercise of any other remedy. The Parties agree that irreparable damage for which monetary damages,
even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their respective obligations
under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the Transactions)
in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, in each case, without posting a bond or undertaking and without proof of damages
and this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will
not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms
of this Agreement on the basis that the other Parties have an adequate remedy at law or an award of specific performance is not an appropriate
remedy for any reason at law or equity.
Section
10.17 Guaranty. Robert D. Keyser, Jr., individually (the “Guarantor”), hereby irrevocably and unconditionally
guarantees to the AtlasClear Parties the full and punctual payment and performance of all obligations of the Majority Stockholder under
this Agreement and the Ancillary Documents, including its obligations under Article IX. The Guarantor shall not, and shall cause the
Majority Stockholder not to, revoke or amend the Trust Agreement or distribute or transfer any assets of the trust estate in any manner
that would impair the ability of the Majority Stockholder to perform such obligations. This guaranty is a guaranty of payment and not
of collection, and the Guarantor waives any requirement that the AtlasClear Parties first proceed against the Majority Stockholder or
the Indemnity Escrow Amount. The Guarantor is a party to this Agreement solely for purposes of this Section 10.17 and Article X.
*
* * * *
67
IN
WITNESS WHEREOF, each of the Parties has caused this Business Combination Agreement to be duly executed on its behalf as of the day
and year first above written.
ATLASCLEAR
HOLDINGS, INC.
By:
/s/
Sandip I. Patel
Name:
Sandip
I. Patel
Title:
Chief
Financial Officer
AC
ARK SUBCO 1, INC.
By:
/s/
Sandip I. Patel
Name:
Sandip
I. Patel
Title:
Chief
Financial Officer
AC
ARK SUBCO 2, LLC
By:
/s/
Sandip I. Patel
Name:
Sandip
I. Patel
Title:
Chief
Financial Officer
IN
WITNESS WHEREOF, each of the Parties has caused this Business Combination Agreement to be duly executed on its behalf as of the day
and year first above written.
ARK
FINANCIAL SERVICES, INC.
By:
/s/
Robert D. Keyser, Jr.
Name:
Robert
D. Keyser, Jr.
Title:
President/Director
ROBERT D. KEYSER, JR
/s/
Robert D. Keyser, Jr.
THE ROBERT D. KEYSER, JR. REVOCABLE
TRUST
By:
/s/
Robert D. Keyser, Jr.
Robert
D. Keyser, Jr., Trustee
EX-10.1
EX-10.1
Filename: ex10-1.htm · Sequence: 3
Exhibit
10.1
Execution
Version
THIS
NOTE IS SUBJECT TO CERTAIN TRANSFER AND OTHER RESTRICTIONS SET FORTH HEREIN.
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY COMPARABLE STATE SECURITIES LAW. EXCEPT AS EXPRESSLY
PROVIDED HEREIN, NEITHER THIS NOTE NOR ANY PORTION HEREOF MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
THE SAME IS REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
AND THE MAKER HAS RECEIVED EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE MAKER.
NON-NEGOTIABLE
UNSECURED PROMISSORY NOTE
October 14, 2026
(the “Issue Date”)
$2,500,000
AtlasClear
Holdings, Inc., a Delaware corporation (the “Maker”), hereby promises to pay to The Robert D. Keyser, Jr. Revocable
Trust, a Florida revocable trust (the “Holder”), an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000)
(such amount, the “Principal Amount”), in accordance with the provisions of this subordinated promissory note (this
“Note”).
This
Note is the “Initial Seller Note” issued pursuant to Section 2.1(a) of that certain Business Combination Agreement, dated
as of October 14, 2026 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the “Purchase
Agreement”), by and among the Maker, AC Ark Subco 1, Inc., a Delaware corporation, AC Ark Subco 2, LLC, a Delaware limited
liability company, Ark Financial Services, Inc., a Delaware corporation (the “Company”), the Holder, and Robert D.
Keyser, Jr., an individual (together with the Holder, the “Majority Stockholder”), as consideration for the Purchased
Shares. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in Section 4 or,
if not so defined therein, the meanings ascribed to such terms in the Purchase Agreement.
1.
Interest. Interest shall accrue on the outstanding Principal Amount from and including the Issue Date at a rate equal to five
percent (5%) per annum (such rate, the “Interest Rate”; such interest, the “Interest”), computed
on the basis of a 365/366-day year and the actual number of days elapsed. Interest shall not compound. All accrued and unpaid Interest,
together with the entire outstanding Principal Amount, shall be payable in full in cash on the Maturity Date.
2.
Payments on Note.
(a)
Maturity. Subject to the provisions of Section 2(c), Section 2(d) and Section 3, the Maker shall pay the
entire unpaid Principal Amount of this Note, together with all accrued and unpaid Interest thereon, on the earliest to occur of (x) the
date that is ninety (90) days after the Issue Date, (y) the date of the closing of a Qualified Financing or (z) the occurrence of the
Closing of the Mergers pursuant to the Purchase Agreement (the earliest such date, the “Maturity Date”).
(b)
Time of Payment. If any payment on this Note becomes due on a Saturday, Sunday or legal holiday under the laws of the State of
Delaware, then such payment shall be made on the next Business Day.
(c)
Right of Setoff. The Maker shall be entitled (but not obligated) to, and the Holder may not, offset any amounts owed to the Maker
or any of its Affiliates by the Holder or any other Company Stockholder pursuant to and subject to the terms and conditions of the Purchase
Agreement (including any indemnification or purchase price adjustment obligations thereunder) against any amounts owed pursuant to this
Note, regardless of whether this Note is then held by the original Holder or a permitted assign hereunder.
(d)
Optional Prepayments. Subject to the provisions of Section 3, the Maker may, at any time and from time to time, without
premium or penalty, prepay all or any portion of the unpaid principal amount of this Note; provided that any such prepayment shall include
the aggregate amount of accrued and unpaid interest hereon.
(e)
Default Interest. Any amount payable under this Note (including any Principal Amount or accrued Interest) that is not paid when and
as the same shall become due and payable shall, upon occurrence of an Event of Default, to the extent permitted by applicable law, bear
interest from and including the date of such Event of Default through the date of payment, at a rate per annum equal to the lesser of
(i) ten percent (10%) and (ii) the maximum rate permitted under applicable law (the “Default Rate”), computed on the
basis of a 365/366-day year and the actual number of days elapsed, which interest shall be payable upon payment of the amount past due
giving rise to the Event of Default.
3.
Defaults and Remedies.
(a)
Events of Default. An “Event of Default” shall occur under this Note if the Maker shall fail to make any payment under
this Note when and as the same shall become due and payable and such failure to pay is not cured within ten (10) Business Days after
the date such payment became due and payable.
(b)
Remedies. If an Event of Default has occurred and is continuing, Holder shall be entitled to exercise any rights which Holder
may have been afforded under any contract or agreement at any time and such other rights which Holder may have pursuant to applicable
law.
4.
Definitions.
“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control
with, such Person in question. For the purposes of this definition and the definition of “Subsidiary,” “control”
(including “controlling,” “controlled by” and “under common control with”) as used with respect to
any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of Delaware are authorized
or required by law to close.
“Person”
means and includes an individual, a partnership, a joint venture, a limited liability company, a corporation or trust, an unincorporated
organization, a group, a government or other department or agency thereof, or any other entity.
“Qualified
Financing” means one or more debt or equity financings (or any combination thereof) consummated by the Maker after the Issue
Date resulting in aggregate gross proceeds to the Maker in excess of $2,500,000.
“Securities
Act” means the Securities Act of 1933, as amended.
“Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity, a majority of the partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof.
For purposes hereof, a Person shall be deemed to have a majority ownership interest in a limited liability company, partnership, association,
or other business entity if such Person shall be allocated a majority of limited liability company, partnership, association, or other
business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership,
association, or other business entity.
2
5.
Amendment and Waiver. The provisions of this Note may be amended or waived, and the Maker may take any action herein prohibited
or omit to perform any act herein required to be performed by it, only if the Maker has obtained the prior written consent of the Holder.
6.
Assignment and Transfer. The rights and obligations of the Maker and the Holder shall be binding upon and benefit the successors
and permitted assigns and transferees of the Maker and the Holder; provided, however, that in no event shall Holder sell, exchange, assign,
pledge, hypothecate, transfer or otherwise dispose (each, a “Transfer”) this Note without Maker’s prior written
consent (not to be unreasonably withheld, conditioned or delayed). The Maker shall not assign its rights or obligations under this Note
without the prior written consent of the Holder, which consent shall not be unreasonably withheld.
7.
Cancellation. Immediately after all principal on this Note has been paid in full in cash, this Note shall be automatically canceled
and the Holder shall immediately surrender this Note to the Maker for cancellation. Except in the case of a replacement note issued pursuant
to Section 8, after cancellation of this Note, this Note shall not be reissued.
8.
Replacement. Upon receipt of evidence reasonably satisfactory to the Maker of the loss, theft, destruction or mutilation of this
Note and, in the case of any such loss, theft or destruction of this Note, upon receipt of an indemnity reasonably satisfactory to the
Maker or, in the case of any such mutilation, upon the surrender and cancellation of this Note, the Maker shall execute and deliver,
in lieu thereof, a new Note of like tenor and dated the date of such lost, stolen, destroyed or mutilated Note. Any Note in lieu of which
any such new Note has been so executed and delivered by the Maker shall not be deemed to be an outstanding Note and shall be deemed cancelled.
9.
Place of Payment; Notices. Payments of principal are to be made by the Maker in the lawful money of the United States of America
in immediately available funds. Payments of principal shall be delivered on behalf of the then Holder to the address of the Holder set
forth in the Maker’s records or at such other address as is specified by prior written notice by the Holder to the Maker.
10.
Business Days. If any payment is due, or any time period for giving notice or taking action expires, on a day which is a Saturday,
Sunday or legal holiday in the State of Delaware, the payment shall be due and payable on, and the time period shall automatically be
extended to, the next Business Day immediately following such Saturday, Sunday or legal holiday.
11.
Waiver of Presentment, Demand and Dishonor. The Maker hereby waives presentment for payment, protest, demand, notice of protest,
notice of nonpayment and diligence with respect to this Note, and waives and renounces all rights to the benefits of any statute of limitations
or any moratorium, appraisement, exemption, or homestead now provided or that hereafter may be provided by any federal or applicable
state statute, including but not limited to exemptions provided by or allowed under the Federal Bankruptcy Code, both as to itself and
as to all of its property, whether real or personal, against the enforcement and collection of the obligations hereunder and any and
all extensions, renewals, and modifications hereof.
12.
Governing Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Note shall
be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).
3
13.
Waiver of Jury Trial. Each of the Maker and the Holder, by accepting this Note, agrees that it hereby waives, to the fullest extent
permitted by law, any right to jury trial of any claim, demand, action, or cause of action (i) arising under this Note or (ii) in any
way connected with or related or incidental to the dealings in respect of this Note, in each case whether now existing or hereafter arising,
and whether in contract, tort, equity, or otherwise. Each of the Maker and the Holder, by accepting this Note, hereby agrees and consents
that any such claim, demand, action, or cause of action shall be decided by court trial without a jury and that each Holder and the Maker
may file an original counterpart of a copy of this Note with any court as written evidence of the consent of the Holder or the Maker
to the waiver of such Person’s right to trial by jury.
14.
No Waiver. The rights and remedies of the Holder expressly set forth in this Note are cumulative and in addition to, and not exclusive
of, all other rights and remedies available at law, in equity or otherwise. No failure or delay on the part of the Holder in exercising
any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be
a waiver of any Event of Default. No course of dealing between the Maker and the Holder or their agents or employees shall be effective
to amend, modify or discharge any provision of this Note or to constitute a waiver of any Event of Default. No notice to or demand upon
Maker in any case shall entitle Maker to any other or further notice or demand in similar or other circumstances or constitute a waiver
of the right of the Holder to exercise any right or remedy or take any other or further action in any circumstances without notice or
demand.
15.
Construction. The headings of the various sections and subsections of this Note have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions hereof. Unless the context otherwise requires, words in the
singular include the plural and words in the plural include the singular. The Maker and the Holder have participated jointly in the negotiation
and drafting of this Note. In the event an ambiguity or question of intent or interpretation arises, this Note shall be construed as
if drafted jointly by the Maker and the Holder, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Note.
[Signature
Pages Follow]
4
IN
WITNESS WHEREOF, the Maker has executed and delivered this Note on the date first above written.
MAKER:
AtlasClear Holdings, Inc.
By:
/s/ Sandip I. Patel
Name:
Sandip I. Patel
Title:
Chief Financial Officer
[Signature
Page – Initial Seller Note]
IN
WITNESS WHEREOF, the Holder has executed and delivered this Note on the date first above written.
HOLDER:
The Robert D. Keyser, Jr. Revocable Trust
By:
/s/ Robert D. Keyser, Jr.
Name:
Robert D. Keyser, Jr.
Title:
Trustee
EX-10.2
EX-10.2
Filename: ex10-2.htm · Sequence: 4
Exhibit
10.2
Execution
Version
REGISTRATION
RIGHTS AND LOCK-UP AGREEMENT
This
Registration Rights and Lock-Up Agreement (this “Agreement”) is made and entered into as of October 14, 2026 and effective
as of the Second Effective Time (as defined in the Business Combination Agreement (as defined below)) by and among AtlasClear Holdings,
Inc., a Delaware corporation (the “Company”), and the parties listed on the signature page hereto under the heading
“Holders” (each, a “Holder” and collectively, together with their respective permitted assigns, the “Holders”).
Any capitalized term used but not defined herein will have the meaning ascribed to such term in the Business Combination Agreement.
RECITALS
WHEREAS,
the Company is party to that certain Business Combination Agreement, dated as of the date hereof (the “Business Combination
Agreement”), by and among the Company, AC Ark Subco 1, Inc., a Delaware corporation (“Merger Sub”), AC Ark
Subco 2, LLC, a Delaware limited liability company (“Merger Sub II” and together with Merger Sub, the “Merger
Subs”), Ark Financial Services, Inc., a Delaware corporation (“Ark”), the Robert D. Keyser, Jr. Revocable
Trust, a Florida revocable trust (the “Trust”), and Robert D. Keyser, Jr., an individual (the “Beneficial
Owner” and, collectively with the Trust, the “Majority Stockholder”), pursuant to which, among other things,
on the Closing Date and subject to the terms and conditions contained in the Business Combination Agreement, (a) Merger Sub will merge
with and into Ark (the “First Merger”), with Ark being the surviving entity and a wholly owned subsidiary of the Company,
and (b) following the First Merger, the surviving company in the First Merger will merge with and into Merger Sub II, with Merger Sub
II being the surviving entity and becoming a wholly owned subsidiary of the Company (the “Second Merger”), and the
Majority Stockholder and the other stockholders of Ark (each, a “Stockholder” and collectively, the “Stockholders”)
will receive the consideration set forth in the Business Combination Agreement;
WHEREAS,
pursuant to the terms of the Business Combination Agreement, at the Closing the Stockholders will receive shares of common stock of the
Company, par value $0.0001 per share (the “Common Stock”); and
WHEREAS,
in connection with the transactions contemplated by the Business Combination Agreement, the Company and the Holders desire to enter into
this Agreement, pursuant to which the Company shall grant the Holders certain registration rights following the Closing with respect
to certain securities of the Company, as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions. For purposes of this Agreement, the following terms and variations thereof have the 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 outside 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, and (iii) the Company has a bona
fide business purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble.
“Board”
shall mean the Board of Directors of the Company.
“Business
Combination Agreement” shall have the meaning given in the Recitals hereto.
“Business
Day” means a day other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or
required by law to close.
“Change
in Control” means the 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 have the meaning given in the Recitals hereto.
“Company”
shall have the meaning given in the Preamble.
“Company
Shelf Takedown Notice” shall have the meaning given in subsection 2.1.4.
“Demand
Registration” shall have the meaning given in subsection 2.2.1.
“Demand
Requesting Holder” shall have the meaning given in subsection 2.2.1.
“Demanding
Holders” shall have the meaning given in subsection 2.2.1.
“Effectiveness
Deadline” shall have the meaning given in subsection 2.1.1.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form
S-1” means a Registration Statement on Form S-1.
2
“Form
S-3” means a Registration Statement on Form S-3.
“Holders”
shall have the meaning given in the Preamble.
“Lock-up
Period” shall have the meaning given in subsection 5.1.
“Maximum
Number of Securities” shall have the meaning given in subsection 2.2.4.
“Minimum
Amount” 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 light of the circumstances under
which they were made not misleading.
“New
Registration Statement” shall have the meaning given in subsection 2.1.5.
“Piggyback
Registration” shall have the meaning given in subsection 2.3.1.
“Pro
Rata” shall have the meaning given in subsection 2.2.4.
“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) any shares of Common Stock issued to a Holder at the
Closing pursuant to the terms of the Business Combination Agreement, (b) any shares of Common Stock issued or issuable to a Holder in
payment of the equity portion of any Deferred Consideration Payment Amount pursuant to Section 2.5 of the Business Combination Agreement,
and (c) any other equity security of the Company issued or issuable with respect to any such security described in clause (a) or clause
(b) by way of a stock dividend or stock 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 when: (i) 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; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing 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; (iii) such securities shall have ceased to be outstanding; (iv) 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 (v) such securities have been sold to, or through, a broker, dealer or underwriter
in a public distribution or other public securities transaction.
3
“Registration”
shall mean a registration effected by preparing and filing a Registration Statement 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 and documented fees and disbursements of counsel
for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(C)
printing, messenger, telephone and delivery expenses;
(D)
reasonable and documented fees and disbursements of counsel for the Company;
(E)
reasonable and documented fees and disbursements of all independent registered public accountants of the Company incurred specifically
in connection with such Registration; and
(F)
reasonable and documented fees and expenses of one (1) legal counsel selected by (i) the majority-in-interest of the Demanding Holders
initiating a Demand Registration to be registered for offer and sale in the applicable Registration, (ii) the majority-in-interest of
the Demanding Holders initiating a Shelf Underwritten Offering, or (iii) the majority-in-interest of participating Holders under Section
2.1 if the Registration was initiated by the Company for its own account or that of a Company stockholder other than pursuant to
rights under this Agreement, in each case to be registered for offer and sale in the applicable Registration.
“Registration
Statement” shall mean any registration statement 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.
“Resale
Shelf Registration Statement” 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.
“SEC
Guidance” shall have the meaning given in subsection 2.1.5.
“Shelf
Takedown Notice” shall have the meaning given in subsection 2.1.4.
“Shelf
Underwritten Offering” shall have the meaning given in subsection 2.1.4.
4
“SUO
Requesting Holder” shall have the meaning given in subsection 2.1.4.
“Transfer”
means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of, any interest owned by a person or any interest (including a beneficial
interest) in, or the ownership, control or possession of, any interest owned by a person.
“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.
ARTICLE
II
REGISTRATION
Section
2.1 Resale Shelf Registration Rights
2.1.1
Registration Statement Covering Resale of Registrable Securities. The Company shall prepare and file or cause to be prepared and
filed with the Commission, no later than six (6) months following the Closing Date, a Registration Statement to permit the public resale
of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 of the Securities Act or any successor
thereto on the terms and conditions specified in this subsection 2.1.1 (the “Resale Shelf Registration Statement”).
The Resale Shelf Registration Statement shall be on Form S-3 (or such other form of registration statement as is then available to permit
Registration of such Registrable Securities for resale). The Company shall use reasonable best efforts to cause the Resale Shelf Registration
Statement to be declared effective as soon as possible after filing, but in no event later than sixty (60) days following the filing
deadline (the “Effectiveness Deadline”); provided, that the Effectiveness Deadline shall be extended to ninety (90)
days after the filing deadline if the Registration Statement is reviewed by, and receives comments from, the Commission. With respect
to any Registrable Securities issued after the filing of the Resale Shelf Registration Statement (including any shares of Common Stock
issued in payment of any Deferred Consideration Payment Amount), the Company shall, no later than forty-five (45) days following the
date of issuance of such Registrable Securities, file a post-effective amendment, prospectus supplement or new Registration Statement
registering the resale of such Registrable Securities, and shall use reasonable best efforts to cause any such post-effective amendment
or new Registration Statement to be declared effective within the periods applicable to the Effectiveness Deadline, measured from such
filing deadline. Once effective, the Company shall use reasonable best efforts to cause the Resale Shelf Registration Statement to remain
effective and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not
available, to ensure that another Registration Statement is available, under the Securities Act at all times until all Registrable Securities
have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement or have ceased
to be Registrable Securities. The Registration Statement filed with the Commission pursuant to this subsection 2.1.1 shall contain
a prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or
any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration
Statement (subject to lock-up restrictions provided in Section 5.1 of this Agreement), and shall provide that such Registrable
Securities may be sold pursuant to any method or combination of methods legally available to, and requested by, Holders. If the Resale
Shelf Registration Statement is required to be filed on Form S-1, the Company shall use reasonable best efforts to convert the Resale
Shelf Registration Statement on Form S-1 to a Resale Shelf Registration Statement on Form S-3 as promptly as practicable after the Company
is eligible to use a Resale Shelf Registration Statement on Form S-3 and have the Resale Shelf Registration Statement on Form S-3 declared
effective as promptly as practicable and to cause such Resale Shelf Registration Statement on Form S-3 to remain effective, and to be
supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, to ensure
that another Registration Statement is available, under the Securities Act at all times until all Registrable Securities have been disposed
of in accordance with the intended method(s) of distribution set forth in such Registration Statement or have ceased to be Registrable
Securities.
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2.1.2
Notification and Distribution of Materials. The Company shall notify the Holders in writing of the effectiveness of the Resale
Shelf Registration Statement as soon as practicable, and in any event within one (1) Business Day after the Resale Shelf Registration
Statement becomes effective, and shall furnish to them, without charge, such number of copies of the Resale Shelf Registration Statement
(including any amendments, supplements and exhibits), the Prospectus contained therein (including each preliminary prospectus and all
related amendments and supplements) and any documents incorporated by reference in the Resale Shelf Registration Statement or such other
documents as the Holders may reasonably request in order to facilitate the sale of the Registrable Securities in the manner described
in the Resale Shelf Registration Statement.
2.1.3
Amendments and Supplements. Subject to the provisions of Section 2.1.1 above, the Company shall promptly prepare and file
with the Commission from time to time such amendments and supplements to the Resale Shelf Registration Statement and Prospectus used
in connection therewith as may be necessary to keep the Resale Shelf Registration Statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all the Registrable Securities. If any Resale Shelf Registration Statement filed
pursuant to Section 2.1.1 is filed on Form S-3 and thereafter the Company becomes ineligible to use Form S-3 for secondary sales,
the Company shall promptly notify the Holders of such ineligibility and use its reasonable best efforts to file a shelf registration
on an appropriate form as promptly as practicable to replace the shelf registration statement on Form S-3 and have such replacement Resale
Shelf Registration Statement declared effective as promptly as practicable and to cause such replacement Resale Shelf Registration Statement
to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Resale Shelf Registration Statement
is available or, if not available, that another Resale Shelf Registration Statement is available, for the resale of all the Registrable
Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities; provided, however, that
at any time the Company once again becomes eligible to use Form S-3, the Company shall cause such replacement Resale Shelf Registration
Statement to be amended, or shall file a new replacement Resale Shelf Registration Statement, such that the Resale Shelf Registration
Statement is once again on Form S-3.
2.1.4
At any time and from time to time following the effectiveness of the shelf registration statement required by subsection 2.1.1
or subsection 2.1.2, any Holder may request to sell all or a portion of their Registrable Securities in an underwritten offering
that is registered pursuant to such shelf registration statement (a “Shelf Underwritten Offering”); provided that
such Holder(s) reasonably expects to sell Registrable Securities yielding aggregate gross proceeds in excess of $15,000,000 from such
Shelf Underwritten Offering (such amount of Registrable Securities, as applicable, the “Minimum Amount”). All requests
for a Shelf Underwritten Offering shall be made by giving written notice to the Company (the “Shelf Takedown Notice”).
Each Shelf Takedown Notice shall specify the approximate number of Registrable Securities proposed to be sold in the Shelf Underwritten
Offering and the expected price range (net of underwriting discounts and commissions) of such Shelf Underwritten Offering. Within two
(2) business days after receipt of any Shelf Takedown Notice, the Company shall give written notice of such requested Shelf Underwritten
Offering to all other Holders of Registrable Securities (the “Company Shelf Takedown Notice”) 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 Shelf Underwritten Offering (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such
Shelf Underwritten Offering, a “SUO Requesting Holder”) shall so notify the Company of its intent to participate in
such Shelf Underwritten Offering, in writing, within three (3) business days after the receipt by such Holder of the Company Shelf Takedown
Notice. Upon receipt by the Company of any such written notification from a SUO Requesting Holder(s) to the Company, subject to the provisions
of subsection 2.2.4, the Company shall include in such Shelf Underwritten Offering all Registrable Securities of such SUO Requesting
Holder(s). The Company shall, together with all participating Holders of Registrable Securities of the Company proposing (and permitted)
to distribute their securities through such Shelf Underwritten Offering, enter into an underwriting agreement in customary form for such
Shelf Underwritten Offering with the managing Underwriter or Underwriters selected by the majority-in-interest of the participating Holders
after consultation with the Company and shall take all such other reasonable actions as are reasonably requested by the managing Underwriter
or Underwriters in order to facilitate the disposition of such Registrable Securities. In connection with any Shelf Underwritten Offering
contemplated by this subsection 2.1.4, subject to Section 3.3 and Article IV, the underwriting agreement into which
each Holder and the Company shall enter shall contain representations, covenants, indemnities and other rights and obligations in customary
form for such Shelf Underwritten Offering by the Company.
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2.1.5
Notwithstanding the registration obligations set forth in this Section 2.1, in the event the Commission informs the Company that
all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering
on a single Registration Statement, the Company agrees to promptly (i) inform each of the Holders thereof and use its reasonable best
efforts to file amendments to the Resale Shelf Registration Statement as required by the Commission and/or (ii) withdraw the Resale Shelf
Registration Statement and file a new registration statement (a “New Registration Statement”) on Form S-3 (or such
other form of registration statement as is then available to permit Registration of such Registrable Securities for resale); provided,
however, that prior to filing such amendment or New Registration Statement, the Company shall use its reasonable best efforts to advocate
with the Commission for the registration of all of the Registrable Securities in accordance with any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff (the “SEC Guidance”). Notwithstanding any other
provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered
on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used its reasonable best efforts
to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed
in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement
will be reduced on a pro rata basis based on the total number of Registrable Securities held by the Holders, subject to a determination
by the Commission that certain Holders must be reduced first based on the number of Registrable Securities held by such Holders. In the
event the Company amends the Resale Shelf Registration Statement or files a New Registration Statement, as the case may be, under clause
(i) or (ii) above, the Company will use its reasonable best efforts to file with the Commission, as promptly as allowed by Commission
or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or
such other form available to register for resale those Registrable Securities that were not registered for resale on the Resale Shelf
Registration Statement, as amended, or the New Registration Statement.
2.1.6
Registrations effected pursuant to this Section 2.1 shall not be counted as Demand Registrations effected pursuant to Section
2.2.
Section
2.2 Demand Registration.
2.2.1
Request for Registration. Subject to the provisions of subsection 2.2.4 and Section 2.4 hereof and provided that
the Company does not have an effective Registration Statement pursuant to subsection 2.1.1 or subsection 2.1.2 covering
Registrable Securities, at any time and from time to time on or after the Second Effective Time, Holders holding at least $10,000,000
of the then-outstanding number of Registrable Securities held by all Holders (such Holders, the “Demanding Holders”),
may make a written demand for Registration of all or part of their Registrable Securities on Form S-3 (or such other form of registration
statement as is then available to permit Registration of such Registrable Securities for resale by such Demanding Holders), 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 “Demand 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 Demand Requesting
Holder(s) to the Company, such Demand Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration
pursuant to a Demand Registration and the Company shall (i) file a Registration Statement in respect of all Registrable Securities requested
by the Demanding Holders and Demand Requesting Holder(s) pursuant to such Demand Registration, not more than forty-five (45) days immediately
after the Company’s receipt of the Demand Registration, and (ii) effect the Registration thereunder as soon thereafter as practicable.
Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Demand Registrations under this subsection
2.2.1.
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2.2.2
Effective Registration. Notwithstanding the provisions of subsection 2.2.1 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 that if, 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, 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 after such stop order or injunction is removed, rescinded or otherwise terminated, of such election;
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.
2.2.3
Underwritten Offering. Subject to the provisions of subsection 2.2.4 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 Demand 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
2.2.3 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.
2.2.4
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 Demand Requesting Holders (if any) in writing
that the dollar amount or number of Registrable Securities that the Demanding Holders and the Demand Requesting Holders (if any) desire
to sell, taken together with all other Common Stock or other equity securities that the Company desires to sell and the 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 Demand Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities
that each Demanding Holder and Demand Requesting Holder (if any) has requested be included in such Underwritten Registration and the
aggregate number of Registrable Securities that the Demanding Holders and Demand 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), Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(i) and (ii), 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.
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2.2.5
Demand Registration Withdrawal. A majority-in-interest of the combined Demanding Holders and Demand Requesting Holders (if any),
pursuant to a Registration under subsection 2.2.1 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. If a majority-in-interest of the
Demanding Holders and Demand Requesting Holders (if any), withdraws from a proposed offering pursuant to this Section 2.2.5, then
such registration shall not count as a Demand Registration provided for in Section 2.2. 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 prior to its withdrawal under this subsection 2.2.5.
Section
2.3 Piggyback Registration.
2.3.1
Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to an underwritten
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 (other than Holders of Registrable Securities, which offerings
are covered by Section 2.1 or Section 2.2), 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) for a dividend reinvestment plan, or (v)
filed in connection with any business combination or acquisition involving the Company, 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, 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 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”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration
and shall use its reasonable best 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 2.3.1 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 2.3.1 shall enter into an underwriting
agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
2.3.2
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 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 this Section 2.3, 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:
(i) If
the Registration is undertaken for the Company’s account, the Company shall include
in any such Registration (A) first, 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 2.3.1 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), Common Stock, 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; and
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(ii) 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,
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
2.3.1, Pro Rata, 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), 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), 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.
2.3.3
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. 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 a Registration Statement filed with the Commission
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 prior to its withdrawal under this subsection 2.3.3.
2.3.4
Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.3 hereof
shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.2 hereof.
Section
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,
the 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 2.2.1 and it continues to actively employ, in good faith, all 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 materially 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 materially 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 thirty (30) days; provided,
however, that the Company shall not defer its obligation in this manner more than once in any 12 month period.
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ARTICLE
III
COMPANY PROCEDURES
Section
3.1 General Procedures. If at any time on or after the Second Effective Time the Company is required to effect the Registration of
Registrable Securities, the Company shall use its reasonable best 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, as expeditiously as
possible:
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 reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities
covered by such Registration Statement have been sold;
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 until all Registrable Securities covered by such Registration Statement
are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3
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 request in order to facilitate the disposition of the Registrable Securities
owned by such Holders;
3.1.4
prior to any public offering of Registrable Securities, use its reasonable best 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 and (ii) take such action reasonably 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 reasonably necessary, following opinion of Company legal
counsel, by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary
or advisable, following opinion of Company legal counsel, 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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3.1.5
cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6
provide a transfer agent or warrant 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 Holder of such Registrable Securities covered by such Registration Statement, 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 reasonable best efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8
advise each Holder of Registrable Securities covered by such Registration Statement, promptly after the Company receives notice thereof,
of the time when such registration statement has been declared effective or a supplement to any Prospectus forming a part of such registration
statement has been filed;
3.1.9
at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration
Statement or Prospectus, furnish a copy thereof to each Holder of such Registrable Securities or its counsel;
3.1.10
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;
3.1.11
permit a representative of the 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;
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3.1.12
obtain a “cold comfort” letter from the Company’s independent registered public accountants (and the independent accountant
of any other entity whose financial statements are included in (or incorporated by reference in) a Registration Statement) in the event
of an Underwritten Registration, in customary form and covering such matters of the type customarily covered by “cold comfort”
letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating
Holders and such managing Underwriter;
3.1.13
on the date the Registrable Securities are delivered for sale pursuant to such Registration, 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, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.14
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;
3.1.15
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);
3.1.16
if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $20,000,000, use its reasonable
best 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 any Underwritten Offering; and
3.1.17
otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in
connection with such Registration.
Section
3.2 Registration Expenses. 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.
13
Section
3.3 Requirements for Participation in Underwritten Offerings. 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.
Section
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 he, she or 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 practicable after the time of such notice), or until he, she or 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 require the Company to make an Adverse Disclosure or would require the inclusion
in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control,
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, but in no event more than thirty (30) days, determined in good faith
by the Company to be necessary for such purpose; provided, that the Company shall not exercise such right more than twice, or
for more than sixty (60) days in the aggregate, in any twelve (12)-month period. 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. The Company shall immediately
notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
Section
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 Closing Date 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 upon request. 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 Registrable Securities 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.
Section
3.6 Limitations on Registration Rights. The Company shall not hereafter enter into any agreement with respect to its securities which
is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement and in the event of any
conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
14
ARTICLE
IV
INDEMNIFICATION AND CONTRIBUTION
Section
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
agents and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses (including 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.
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 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 expenses
(including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the
Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any 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 or omission is contained in 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.
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.
15
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 Registrable Securities. The Company and each Holder of Registrable Securities participating in an offering also agree 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 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 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 relates to information
supplied by, 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 4.1.3
above, any reasonable and documented 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.
ARTICLE
V
LOCK-UP
Section
5.1 Lock-Up. Except as permitted by Section 5.2, until the earlier of: (i) the date that is six (6) months from the Closing
Date or (ii) such date on which the Company completes a liquidation, merger, stock exchange or other similar transaction which results
in all of the stockholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property
(the “Lock-up Period”), each Holder shall not Transfer any Registrable Securities beneficially owned or owned of record
by such Holder.
Section
5.2 Exceptions. The provisions of Section 5.1 shall not apply to:
5.2.1
Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock as a bona fide gift;
5.2.2
Transfers of shares of Common Stock to a trust, or other entity formed for estate planning purposes for the primary benefit of the spouse,
domestic partner, parent, sibling, child or grandchild of the Holder or any other person with whom the Holder has a relationship by blood,
marriage or adoption not more remote than first cousin;
5.2.3
Transfers by will or intestate succession upon the death of the Holder;
5.2.4
the Transfer of shares of Common Stock pursuant to a qualified domestic order or in connection with a divorce settlement;
5.2.5
if the Holder is a corporation, partnership (whether general, limited or otherwise), limited liability company, trust or other business
entity, (i) Transfers to another corporation, partnership, limited liability company, trust or other business entity that controls, is
controlled by or is under common control or management with the undersigned, (ii) distributions of shares of Common Stock to partners,
limited liability company members or stockholders of the undersigned;
5.2.6
Transfers to the Company’s officers, directors or their affiliates;
5.2.7
pledges of shares of Common Stock or other Registrable Securities as security or collateral in connection with any borrowing or the incurrence
of any indebtedness by any Holder (provided such borrowing or incurrence of indebtedness is secured by a portfolio of assets or equity
interests issued by multiple issuers);
5.2.8
pursuant to a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction involving
a Change in Control of the Company, provided that in the event that such tender offer, merger, recapitalization, consolidation or other
such transaction is not completed, the Common Stock subject to this Agreement shall remain subject to this Agreement; and
5.2.9
the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act, provided that such plan does not provide
for the transfer of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock during the Lock-up
Period;
provided,
that in the case of any Transfer or distribution pursuant to Sections 5.2.1 through 5.2.6, each donee, distributee or other
transferee shall agree in writing, in form and substance reasonably satisfactory to the Company, to be bound by the provisions of this
Agreement.
16
ARTICLE
VI
GENERAL PROVISIONS
Section
6.1 Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties as to the matters covered
herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case, written or oral, of any and
every nature with respect thereto.
Section
6.2 Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received (a) upon receipt when delivered by hand, (b) upon transmission, if
sent by facsimile or electronic transmission (in each case with receipt verified by electronic confirmation), or (c) one (1) Business
Day after being sent by courier or express delivery service, specifying next day delivery, with proof of receipt. The addresses, email
addresses and facsimile numbers for such notices and communications are those set forth on the signature pages hereof, or such other
address, email address or facsimile numbers as may be designated in writing hereafter, in the same manner, by any such person.
Section
6.3 Assignment; No Third-Party Beneficiaries. 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. This Agreement and the rights, duties and obligations of the Holders
of Registrable Securities hereunder may be freely assigned or delegated by such Holder of Registrable Securities in conjunction with
and to the extent of any permitted transfer of Registrable Securities by any such Holder. This Agreement and the provisions hereof shall
be binding upon and shall inure to the benefit of each of the parties and the permitted assigns of the applicable Holder of Registrable
Securities or of any assignee of the applicable Holder of Registrable Securities. This Agreement is not intended to confer any rights
or benefits on any persons that are not party hereto other than as expressly set forth in Article IV and this Section 6.3.
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 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).
Section
6.4 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties,
it being understood that all parties need not sign the same counterpart and such counterparts may be delivered by the parties hereto
via facsimile or electronic transmission.
17
Section
6.5 Amendment; Waiver. This Agreement may be amended or modified, and any provision hereof may be waived, in whole or in part, at
any time pursuant to an agreement in writing executed by the Company and Holders holding a majority of the Registrable Securities at
such time; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely
affects one Holder, solely in his, her or its capacity as a Holder of the shares of capital stock 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. Any failure by any
party at any time to enforce any of the provisions of this Agreement shall not be construed a waiver of such provision or any other provisions
hereof.
Section
6.6 Severability. In the event that any provision of this Agreement or the application thereof becomes or is declared by a court
of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect
and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto.
Section
6.7 Governing Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State. All legal actions and proceedings arising out of or relating to
this Agreement shall be heard and determined exclusively in any Delaware Chancery Court; provided, that if jurisdiction is not then available
in the Delaware Chancery Court, then any such legal action may be brought in any federal court located in the State of Delaware or any
other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for
themselves and with respect to their respective properties for the purpose of any action arising out of or relating to this Agreement
brought by any party hereto, and (b) agree not to commence any action relating thereto except in the courts described above in Delaware,
other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware
as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process
and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally
waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action arising out of or relating
to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the
courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment
in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the action in any such court is brought in an inconvenient
forum, (ii) the venue of such action is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by
such courts.
Section
6.8 Specific Performance. Each party acknowledges and agrees that the other parties hereto would be irreparably harmed and would
not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed by such first party
in accordance with their specific terms or were otherwise breached by such first party. Accordingly, each party agrees that the other
parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement, this being in addition to any other remedy to which such parties are entitled at law or in equity.
Section
6.9 Term. This Agreement shall terminate (a) with respect to any Holder on the date on which such Holder ceases to hold Registrable
Securities and (b) otherwise upon the date as of which all of the Registrable Securities have been sold pursuant to a Registration Statement
(but in each case 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)). The provisions of Article IV shall survive any termination.
(Next
Page is Signature Page)
18
IN
WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first written above.
COMPANY:
ATLASCLEAR HOLDINGS, INC.
By:
/s/ Sandip I. Patel
Name:
Sandip I. Patel
Title:
Chief Financial Officer
Address for Notice:
4350 West Cypress Street, Suite 270
Tampa,
FL 33607
[Signature
Page to Registration Rights and Lock-Up Agreement]
IN
WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date first written above.
HOLDERS:
Name:
The
Robert D. Keyser, Jr. Revocable Trust
By:
/s/
Robert D. Keyser, Jr.
Name:
Robert
D. Keyser, Jr.
Title:
Trustee
Address for Notice:
Telephone No.:
Facsimile No.:
Email Address:
[Signature
Page to Registration Rights and Lock-Up Agreement]
EX-99.1
EX-99.1
Filename: ex99-1.htm · Sequence: 5
Exhibit
99.1
AtlasClear
Holdings Signs Definitive Agreement to Acquire Ark Financial Services, including its Dawson James Securities Subsidiary, and Completes
Initial 24.9% Investment
● Combined
total revenues plus interest income* of approximately $47.0 million for the companies’
most recent fiscal years (AtlasClear FYE June 30, 2026; Dawson James FYE December 31, 2025)
— more than double AtlasClear’s standalone fiscal 2026 total revenues plus interest
income of $21.9 million*
● Dawson
James, Ark’s principal operating subsidiary, was profitable in 2025, with audited net
income of approximately $2.4 million
● AtlasClearing
(AtlasClear’s correspondent clearing subsidiary) and Dawson James were each in compliance
with their net capital requirements, with approximately $14.4 million and $3.6 million of
net capital at June 30, 2026, and July 31, 2026, respectively
● Adds
a nationally ranked small-cap investment bank to AtlasClear’s clearing platform
● Total
consideration of up to $24.5 million — approximately $8.25 million in cash (including
a $2.5 million seller note) and approximately $16.25 million in AtlasClear common stock priced
at market, including up to $3.25 million of deferred consideration payable only if Dawson
James meets its 2026 and 2027 revenue targets
● No
AtlasClear shares issued for initial 24.9% investment; stock consideration will be issued
only at or after the closing, subject to regulatory approval and other closing conditions,
priced at the then-current market price, with no discount, warrants or price resets
TAMPA,
Fla., October 15, 2026 (GLOBE NEWSWIRE) — AtlasClear Holdings, Inc. (NYSE American: ATCH) (“AtlasClear” or the
“Company”), a company building regulated financial infrastructure for smaller institutions, fintechs and advisors, today
announced that it has entered into a definitive business combination agreement to acquire Ark Financial Services, Inc. (“Ark”),
the parent company of Dawson James Securities, Inc. (“Dawson James”), a full-service investment bank headquartered in Boca
Raton, Florida. Concurrently with signing, AtlasClear completed the purchase of 24.9% of Ark’s outstanding equity. AtlasClear expects
to acquire the remaining 75.1% upon receipt of FINRA approval and satisfaction of other closing conditions.
A
Larger, More Diversified Company
On
a combined basis, AtlasClear and Dawson James generated total revenues plus interest income* of approximately $47.0 million in their
most recent fiscal years (AtlasClear’s fiscal year ended June 30, 2026, and Dawson James’s year ended December 31, 2025),
more than double AtlasClear’s standalone total revenues plus interest income of $21.9 million* and up approximately 100% from a
combined approximately $23.5 million for the companies’ respective prior fiscal years (AtlasClear’s fiscal year ended June
30, 2025, and Dawson James’s year ended December 31, 2024). AtlasClear presents its interest income, which is earned on balances
held at its broker-dealer subsidiary, in other income; Dawson James includes interest income in revenue. Management believes that adding
AtlasClear’s interest income to its total revenues presents the two companies’ results on a consistent basis. Combined total
revenues were approximately $45.2 million for the most recent combined fiscal year, up approximately 110% from approximately $21.5 million
for the prior combined fiscal year. The table below reconciles total revenues plus interest income to each company’s total revenues
determined in accordance with GAAP.
*
This is a non-GAAP measure; see “Basis of Combined Information” below for additional information.
The
combination also broadens the Company’s revenue base. AtlasClear’s growth in fiscal 2026 was led by stock locate fees, and
Dawson James’s revenue is driven primarily by investment banking and advisory fees. Together, approximately 73% of combined total
revenues plus interest income for the most recently completed fiscal year of each company came from sources other than brokerage commissions.
Dawson James was profitable in 2025, reporting audited net income of approximately $2.4 million.
($ millions)
Prior
fiscal
year (1)
Most
recent
fiscal year (2)
Change
AtlasClear total revenues
10.9
20.1
+85 %
Dawson James total revenues
10.6
25.1
+136 %
Combined total revenues
21.5
45.2
+110 %
AtlasClear interest income (other income under
GAAP)
2.0
1.8
Combined total revenues
plus interest income (3)
23.5
47.0
+100 %
Dawson James net income (loss)
(0.7 )
2.4
(1)
AtlasClear fiscal year ended June 30, 2025; Dawson James year ended December 31, 2024. (2) AtlasClear fiscal year ended June 30, 2026;
Dawson James year ended December 31, 2025. (3) Total revenues plus interest income is a supplemental measure that is not calculated in
accordance with GAAP; see “Basis of Combined Information” below. Totals may not sum due to rounding.
Strategic
Rationale
Dawson
James is an active placement agent and underwriter for small-cap and micro-cap companies and ranked #14 by transaction volume in the
first quarter of 2026, according to PlacementTracker’s Market League Tables. Dawson James has begun clearing through AtlasClearing,
and the Company expects that business to grow over time. The combination allows AtlasClear to participate in the full life of a transaction
— from capital raising and distribution through execution, clearing and settlement — and to bring the capital formation needs
of Dawson James’s issuer clients together with AtlasClearing’s clearing, stock locate and custody services and, following
completion of its planned acquisition of Commercial Bancorp of Wyoming, commercial banking.
Management
Commentary
“Today
we take a major step toward the company we set out to build,” said John Schaible, Executive Chairman of AtlasClear Holdings. “On
a combined basis, this transaction more than doubles our revenue and interest income, to approximately $47 million on a historical basis,
and adds a profitable, well-known investment bank to a clearing platform that grew revenue 85% last year. Dawson James brings issuers,
deal flow and distribution; AtlasClearing brings clearing, stock locate and custody; and with Commercial Bancorp we intend to add banking.
Very few firms serving small-cap and micro-cap companies can offer all of that under one roof. We also built this deal to protect our
shareholders. Not one share was issued for our initial stake, and no shares will be issued unless the transaction closes. When shares
are issued, they will be priced at the market, with no discount and no warrants.”
“Dawson
James has already begun clearing through AtlasClearing,” said Craig Ridenhour, President of AtlasClear Holdings and Chairman of
AtlasClearing, Inc. “Bringing an active underwriter and placement agent onto our platform gives our clearing, stock locate and
custody operations direct access to new issuer and investor flow, and we expect that business to grow as we integrate the two firms.”
Structured
to Limit Dilution
AtlasClear’s
management structured the transaction to limit dilution to existing stockholders:
● No
shares at signing. The initial 24.9% investment was funded entirely with $2.5 million
in cash and a $2.5 million seller note. No AtlasClear shares were issued.
● Shares
only at closing. AtlasClear shares will be issued only at the closing of the transaction,
which requires, among other things, FINRA approval and the approval of AtlasClear’s
stockholders.
● Priced
at market and fixed in dollars. The stock consideration at closing is a fixed dollar
amount — $13.8125 million — issued at the five-day volume-weighted average price
of AtlasClear’s common stock ending on the closing date, with no discount to market
and no minimum share count, price reset or ratchet.
● No
warrants or convertible securities. The consideration includes no warrants, preferred
stock or convertible securities.
● Stock
earn-out paid only for performance. Up to $2.4375 million of additional shares is payable
only to the extent Dawson James achieves its revenue targets for 2026 and 2027, and is likewise
priced at the market at the time of payment.
● Lock-up.
Ark stockholders receiving AtlasClear shares will be subject to a lock-up of six months
and will receive customary registration rights.
Transaction
Terms
Under
the business combination agreement, AtlasClear purchased 24.9% of Ark’s outstanding equity from Ark’s majority stockholder
for $2.5 million in cash and a $2.5 million promissory note payable within 90 days (or sooner under certain circumstances). At the closing
of the transaction, AtlasClear will acquire the remaining equity of Ark for $2.4375 million in cash and $13.8125 million in AtlasClear
common stock, valued at the five-day volume-weighted average price ending on the closing date, of which a total of $1.65 million in cash
and stock will be held in escrow to support indemnification obligations. Ark’s former stockholders may also receive up to $3.25
million of deferred consideration, payable 25% in cash and 75% in AtlasClear common stock, based on revenue for the twelve-month periods
ending December 31, 2026 and 2027. Total consideration is up to $24.5 million. In addition, as is customary for broker-dealer acquisitions,
net capital of Dawson James in excess of $1.0 million at closing, valued at market, will be paid to Ark’s stockholders in cash
or, at the majority stockholder’s election, in AtlasClear shares at the same closing price.
Completion
of the transaction is subject to approval by FINRA of Dawson James’s continuing membership application under FINRA Rule 1017, approval
of AtlasClear’s stockholders to the extent required by the NYSE American Company Guide, and other customary closing conditions.
Because Bob Keyser, the majority owner of Ark, is a director of AtlasClear, the transaction was reviewed and approved by the independent
members of AtlasClear’s Board of Directors. Greenberg Traurig, LLP is serving as legal counsel to AtlasClear, and ArentFox Schiff
LLP is serving as legal counsel to Ark.
The
information set forth in this release is subject to the more complete information set forth in the Current Report on Form 8-K to be filed
by AtlasClear.
Basis
of Combined Information
The
combined financial information in this release is the arithmetic sum of (i) AtlasClear’s audited consolidated results for its fiscal
years ended June 30, 2025 and 2026 [as reported in its Annual Report on Form 10-K] and (ii) Dawson James Securities, Inc.’s audited
results for its years ended December 31, 2024 and 2025, as reported in its annual reports filed with the SEC under Rule 17a-5. The two
companies have different fiscal years, and the periods combined are not the same. The combined information is not pro forma financial
information prepared in accordance with Article 11 of Regulation S-X; it does not reflect acquisition accounting, transaction costs,
financing, intercompany eliminations, anticipated synergies, or the results of Ark Financial Services, Inc. and its other subsidiaries,
and it is not necessarily indicative of the results the combined company would have achieved or will achieve. AtlasClear will file audited
financial statements of Ark and pro forma financial information as and when required by SEC rules.
Total
revenues plus interest income is a supplemental measure that is not calculated in accordance with GAAP; it is the sum of total revenues
and interest income and should not be considered a substitute for total revenues determined in accordance with GAAP. Interest income
is presented in other income under GAAP. This measure should not be considered a substitute for total revenue determined in accordance
with GAAP.
Reconciliation:
Fiscal 2026 GAAP total revenue of $20.1 million plus interest income of $1.8 million equals total revenue plus interest income of $21.9
million for AtlasClear.
About
Dawson James Securities, Inc.
Dawson
James Securities, Inc. is a full-service investment firm providing investment banking, capital markets, institutional sales and trading,
research and wealth management services. Headquartered in Boca Raton, Florida, Dawson James is an active placement agent and underwriter
for small-cap and micro-cap companies across sectors including biotechnology, digital assets, defense, industrials and digital media.
Dawson James is a member of FINRA and SIPC. For more information, visit www.dawsonjames.com.
About
AtlasClear Holdings, Inc.
AtlasClear
Holdings, Inc. (NYSE American: ATCH) is building a technology-enabled financial services platform designed for trading, clearing, settlement,
and banking for emerging financial institutions and fintechs. Through its wholly owned subsidiary AtlasClearing, Inc. (formerly Wilson-Davis
& Co., Inc.), a full-service correspondent broker-dealer registered with the SEC and FINRA, its pending acquisition of Ark Financial
Services, Inc. and Dawson James Securities, Inc., and its planned acquisition of Commercial Bancorp of Wyoming, AtlasClear Holdings seeks
to deliver a vertically integrated suite of investment banking, brokerage, clearing, risk management, regulatory, and commercial banking
solutions. For more information, follow us on LinkedIn or X and visit www.atlasclear.com.
Forward-Looking
Statements
This
communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended,
including statements regarding the proposed acquisition of Ark Financial Services, Inc., the expected timing and completion of the transaction,
receipt of FINRA and stockholder approvals, the anticipated benefits of the transaction, including the growth of Dawson James’s
clearing activity through AtlasClearing and the combined company’s revenue mix, the retention of Dawson James personnel, the deferred
consideration, the planned acquisition of Commercial Bancorp of Wyoming, and the Company’s future financial performance and strategy.
Forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“seek,” “should,” “will,” “would,” and similar expressions. These statements are based
on current expectations and assumptions that are subject to risks and uncertainties, many of which are beyond the Company’s control,
and actual results may differ materially. Factors that could cause actual results to differ include, but are not limited to: the failure
to receive FINRA or stockholder approval or to satisfy the other conditions to the transaction; the risk that the transaction is not
completed on the terms described or at all; the risk that the audited financial statements of Ark differ from the financial information
of Dawson James described in this release; the historical results of Dawson James, including revenue derived from a limited number of
transactions, channels or clients, may not be indicative of future results; investment banking revenue is transactional and may vary
significantly from period to period; the ability to retain key Dawson James personnel and clients; the ability to integrate Dawson James
and realize the anticipated benefits; dilution from the issuance of AtlasClear common stock; the risk that the Commercial Bancorp acquisition
is not completed; changes in general economic, market or regulatory conditions; and the other risks described in the Company’s
filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
AtlasClear undertakes no obligation to update or revise forward-looking statements, except as required by law.
Company
Contact:
AtlasClear
Holdings, Inc. | Email: AtlasClearIR@atlasclear.com
Investor
Relations Contact:
Jeff
Ramson, CEO, PCG Advisory, Inc. | Email: jramson@pcgadvisory.com
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