Delaware |
6770 |
85-3681132 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Copies to: | ||
Curt P. Creely, Esq. Kevin M. Shuler, Esq. Garrett F. Bishop, Esq. Foley & Lardner LLP 100 North Tampa Street, Suite 2700 Tampa, Florida 33602 (813) 229-2300 |
Albert Lung, Esq. Morgan, Lewis & Bockius LLP 1400 Page Mill Road Palo Alto, California 94304 (650) 843-4000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
/s/ Bruce M. Rodgers |
Bruce M. Rodgers Chief Executive Officer and Chairman of the Board LMAO Acquisition Opportunities, Inc. [●], 2022 |
1. |
To consider and vote upon a Proposal to approve the transactions contemplated under the Merger Agreement, dated as of April 21, 2022 (the “Merger Agreement”), by and among LMAO, LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO (“Merger Sub”) and SeaStar Medical, Inc., a Delaware corporation (“SeaStar Medical”), (the “Business Combination”), a copy of which is attached to the proxy statement/prospectus as Annex A . This Proposal is referred to as the “Business Combination Proposal” or “Proposal 1.” |
2. |
To consider and vote upon a Proposal to approve the Second Amended and Restated Certificate of Incorporation of LMAO, a copy of which is attached to the proxy statement/prospectus as Annex B (the “Proposed Charter”) to, among other things, change LMAO’s name to “SeaStar Medical Holding Corporation,” and amend certain provisions related to authorized capital stock, reclassification of Class A Common Stock and Class B Common Stock, the classification of the Board, and director removal, to be effective upon the consummation of the Business Combination. This Proposal is referred to as the “Charter Approval Proposal” or “Proposal 2.” |
3. |
To consider and vote upon, on a non-binding advisory basis, four separate governance proposals relating to the following material differences between the Existing Charter and the Proposed Charter: |
(a) |
(i) reclassify LMAO’s existing 100,000,000 authorized shares of Class A Common Stock into 100,000,000 authorized shares of common stock (after giving effect to the conversion of each outstanding share of Class B Common Stock to Class A Common Stock under the terms of LMAO’s current certificate of incorporation) and (ii) increase the number of shares of preferred stock LMAO is authorized to issue from 1,000,000 shares to 10,000,000 shares (Proposal 3A); |
(b) |
change the classification of the Board from two classes of directors with staggered two-year terms to three classes of directors with staggered three-year terms (Proposal 3B); |
(c) |
require the vote of at least two-thirds (66 and 2/3%) of the outstanding shares of capital stock, voting together as a single class, rather than a simple majority, to remove a director from office (Proposal 3C); and |
(d) |
remove certain provisions related to LMAO’s status as a special purpose acquisition company that will no longer be relevant following the Business Combination (Proposal 3D). |
4. |
To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Omnibus Incentive Plan (the “Incentive Plan”, a copy of which is to be attached to the proxy statement/prospectus as Annex D ), to be effective on the later of the date on which it is approved by our stockholders and the closing of the Business Combination. This Proposal is referred to as the “Stock Plan Proposal” or “Proposal 4.” |
5. |
To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Employee Stock Purchase Plan (the “ESPP”, a copy of which is to be attached to the proxy statement/prospectus as Annex E ), to be effective on the later of the date on which it is approved by our stockholders and the closing of the Business Combination. This Proposal is referred to as the “ESPP Proposal” or “Proposal 5.” |
6. |
To consider and vote upon a Proposal to approve, for purposes of complying with Nasdaq Listing Rule 5635, the issuance of shares of Common Stock and securities convertible into or exercisable for Common Stock in the Business Combination, the PIPE Investment, and the Common Stock Investment. This Proposal is referred to as the “Nasdaq Proposal” or “Proposal 6.” |
7. |
To consider and vote upon a Proposal to elect seven (7) directors to serve staggered terms on the Board until the 2023, 2024 and 2025 annual meetings of our stockholders, as applicable, or until their respective successors are duly elected and qualified, or until their earlier death, resignation, retirement or removal. This Proposal is referred to as the “Director Election Proposal” or “Proposal 7.” |
8. |
To consider and vote upon a Proposal to approve the adjournment of the Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing Proposals, in the event LMAO does not receive the requisite stockholder vote to approve the Proposals. This Proposal is called the “Adjournment Proposal” or “Proposal 8.” |
/s/ Bruce M. Rodgers |
Bruce M. Rodgers Chief Executive Officer and Chairman of the Board LMF Acquisition Opportunities, Inc. [●], 2022 |
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F-1 |
• | “Board” means the board of directors of LMAO. |
• | “Business Combination” means the merger contemplated by the Merger Agreement. |
• | “Certificate of Incorporation” or the “Proposed Charter” means LMAO’s Second Amended and Restated Certificate of Incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B . |
• | “Class A Common Stock” means Class A common stock, par value $0.0001 per share, of LMAO. |
• | “Class B Common Stock” means Class B common stock, par value $0.0001 per share, of LMAO. |
• | “Closing Date” means the date of the consummation of the Business Combination. |
• | “Code” means the Internal Revenue Code of 1986, as amended. |
• | “Combined Company” means LMAO after the consummation of the Business Combination, renamed SeaStar Medical Holding Corporation. |
• | “Combined Company Bylaws” means LMAO’s Amended and Restated Bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C . |
• | “Common Stock” means (i) prior to the filing of the Proposed Charter, collectively, Class A Common Stock and Class B Common Stock, and (ii) at and after the filing of the Proposed Charter, LMAO’s common stock, par value $0.0001 per share. For the avoidance of doubt, each share of Class A Common Stock (including each share issued or issuable upon conversion of Class B Common Stock) and each share of Class B Common Stock shall be reclassified into such single class of common stock of LMAO in connection with the filing of the Proposed Charter with the Secretary of State of the State of Delaware. |
• | “Common Stock Investment” means the right of the Combined Company, after the consummation of the Business Combination from time to time, to sell to Tumim Stone Capital up to $100,000,000 worth of shares of Common Stock. |
• | “Common Stock Purchase Agreement” means that certain Common Stock Purchase Agreement, dated as of August 23, 2022, by and among LMAO, SeaStar Medical, and Tumim Stone Capital, as may be amended, modified or supplemented. |
• | “Continental” means Continental Stock Transfer & Trust Company, LMAO’s transfer agent. |
• | “Dow Pension Funds” means collectively, the Dow Employees’ Pension Plan Trust and Union Carbide Employees’ Pension Plan. |
• | “Effective Time” means the time at which the Business Combination becomes effective. |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
• | “Existing Bylaws” means LMAO’s Bylaws. |
• | “Existing Charter” means LMAO’s Amended and Restated Certificate of Incorporation. |
• | “founder shares” means the outstanding shares of Class B Common Stock issued to the Sponsor. |
• | “GAAP” means accounting principles generally accepted in the United States of America. |
• | “Initial Stockholders” means the Sponsor and other initial holders of Class B Common Stock. |
• | “IPO” refers to the initial public offering of 10,350,000 units consummated on January 28, 2021. |
• | “IRS” means the United States Internal Revenue Service. |
• | “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of April 21, 2022, by and among LMAO, Merger Sub and SeaStar Medical. |
• | “Merger Sub” means LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO. |
• | “PIPE Investment” means the private placement equity offering conducted by LMAO prior to the Closing Date pursuant to the Subscription Agreements entered into on August 23, 2022. |
• | “PIPE Investors” means the third-party investors with whom LMAO has entered into the Subscription Agreements, pursuant to which those third-party investors have committed to make a private investment in public equity in the form of Class A Common Stock and PIPE Warrants of up to an aggregate amount of $7,000,000. |
• | “PIPE Warrants” mean the warrants to acquire 700,000 shares of Class A Common Stock at an exercise price of $11.50 per share to be issued to the PIPE Investors in connection with the PIPE Investment. |
• | “Private Placement Warrants” mean the warrants issued to our Sponsor in a private placement simultaneously with the closing of our IPO. |
• | “public shares” means shares of Class A Common Stock sold in the IPO, whether they were purchased in the IPO or thereafter in the open market. |
• | “public stockholders” means holders of public shares of Class A Common Stock. |
• | “SEC” means the U.S. Securities and Exchange Commission. |
• | “Securities Act” means the Securities Act of 1933, as amended. |
• | “SeaStar Medical” means SeaStar Medical, Inc., a Delaware corporation, prior to the consummation of the Business Combination. |
• | “Sponsor” means LMFAO Sponsor, LLC, a Florida limited liability company. |
• | “Subscription Agreements” means subscription agreements that LMAO has entered into with the PIPE Investors, pursuant to which the PIPE Investors have committed to make a private investment in public equity in the form of Class A Common Stock and PIPE Warrants of up to an aggregate amount of $7,000,000. |
• | “Tumim Stone Capital” means Tumim Stone Capital LLC, a Delaware limited liability company. |
• | expectations regarding SeaStar Medical’s strategies and commercialization plans, including its future business plans or objectives, regulatory approval of product candidates, prospective performance and opportunities and competitors, revenues, backlog conversion, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and ability to invest in growth initiatives and pursue acquisition opportunities; |
• | risks related to SeaStar Medical’s technology, intellectual property and regulatory approval and process; |
• | risks related to SeaStar Medical’s ability to secure additional financing to execute its growth strategies; |
• | risks related to the ability to complete the PIPE Investment and the Common Stock Investment in connection with the Business Combination; |
• | risks related to SeaStar Medical’s reliance on suppliers, vendors, partners and third parties; |
• | risks related to the general economic and financial market conditions; political, legal and regulatory environment; and the industries in which SeaStar Medical operates; |
• | the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the outcome of any legal proceedings that may be instituted against LMAO or SeaStar Medical following announcement of the Merger Agreement and the transactions contemplated therein; |
• | the inability to complete the Business Combination due to, among other things, the failure to obtain LMAO or SeaStar Medical stockholder approval; |
• | the risk that the announcement and consummation of the proposed Business Combination disrupts SeaStar Medical’s current plans; |
• | the ability to recognize the anticipated benefits of the Business Combination; |
• | unexpected costs related to the proposed Business Combination; |
• | the amount of any redemptions by existing holders of Common Stock being greater than expected; |
• | limited liquidity and trading of LMAO’s securities; |
• | geopolitical risk and changes in applicable laws or regulations; |
• | the possibility that LMAO and/or SeaStar Medical may be adversely affected by other economic, business, and/or competitive factors; |
• | operational risks; |
• | the risks that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic, may have an adverse effect on SeaStar Medical’s business operations, as well as SeaStar Medical’s financial condition and results of operations; |
• | litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on SeaStar Medical’s resources; and |
• | the risks that the consummation of the Business Combination is substantially delayed or does not occur. |
• | Proposal 1 |
• | Proposal 2 Annex B . |
• | Proposals 3A-3D non-binding advisory basis, separate governance proposals relating to certain material differences between the Existing Charter and the Proposed Charter attached to this proxy statement/prospectus as Annex B . |
• | Proposal 4 |
• | Proposal 5 |
• | Proposal 6 |
• | Proposal 7 |
• | Proposal 8 |
• | by written consent of SeaStar Medical and LMAO; |
• | by SeaStar Medical or LMAO if the Closing has not occurred on or before July 29, 2022, as such date will be extended to October 29, 2022 in the event that the Sponsor elects, in its sole discretion, to extend the time period by which LMAO must consummate a business combination by depositing additional funds into the Trust Account on or prior to July 29, 2022 pursuant to LMAO’s Letter Agreement, dated January 25, 2021; |
• | by SeaStar Medical or LMAO if the Closing is permanently enjoined or prevented by the terms of a final, non-appealable order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, or a statute, rule, or regulation; |
• | by SeaStar Medical or LMAO if the approval of the stockholders of LMAO is not obtained at the Special Meeting (as defined in the Merger Agreement) and vote of LMAO stockholders, subject to any adjournment, postponement, or recess of the meeting; |
• | by SeaStar Medical or LMAO if the other party has breached any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to the Closing would not to be satisfied at the Closing (a “Terminating Breach”), except that, if such Terminating Breach is curable through the exercise of the other party’s commercially reasonable efforts, then, for a period of 30 days after the other party receives written notice from such party of such breach (the “Cure Period”), such termination will not be effective, and such termination will only become effective if the Terminating Breach is not cured within the Cure Period, provided that this termination right will not be available if such party’s failure to fulfill any obligations under the Merger Agreement has been the proximate cause of the failure of the Closing to occur; |
• | by LMAO if SeaStar Medical and each of the Company Requisite Stockholders have not executed and delivered to LMAO the SeaStar Medical stockholder approval and the Support Agreements within three (3) business days after the execution and delivery of the Merger Agreement; |
• | by SeaStar Medical in the event that the LMAO Board changes its recommendation that LMAO stockholders vote in favor of the Business Combination; or |
• | by SeaStar Medical, prior to LMAO obtaining the approval of the stockholders of LMAO, if the LMAO Board fails to include its recommendation that LMAO stockholders vote in favor of the Business Combination in the proxy statement contained in the registration statement distributed to LMAO stockholders. |
(i) | hold public shares; and |
(ii) | prior to 5:00 p.m., Eastern Time, on [●], 2022, (a) submit a written request to Continental that LMAO redeem your public shares for cash and (b) deliver your public shares to Continental, physically or electronically through DTC. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units, and assumes the Convertible Note Conversion and the Preferred Stock Conversion have occurred; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the closing of the Business Combination under the Incentive Plan and ESPP, |
(ii) the issuance of shares of Common Stock for either the Commitment Fee or drawdowns pursuant to the Common Stock Investment, and (iii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
No Redemption (1)(2) |
50% Redemption (1)(2) |
Maximum Redemption (1)(2) |
||||||||||
Shares: |
||||||||||||
LMAO Public Stockholders |
10,453,500 | 5,278,500 | 924,500 | |||||||||
Sponsor |
2,587,500 | 2,587,500 | 2,587,500 | |||||||||
PIPE Investors |
700,000 | 700,000 | 700,000 | |||||||||
SeaStar Stockholders |
7,908,476 | 7,908,476 | 7,908,476 | |||||||||
|
|
|
|
|
|
|||||||
21,649,476 |
16,474,476 |
12,120,476 |
||||||||||
Ownership Percentage |
||||||||||||
LMAO Public Stockholders |
48.3 |
% |
32.0 |
% |
7.6 |
% | ||||||
Sponsor |
12.0 |
% |
15.7 |
% |
21.3 |
% | ||||||
PIPE Investors |
3.2 |
% |
4.2 |
% |
5.8 |
% | ||||||
SeaStar Stockholders |
36.5 |
% |
48.1 |
% |
65.3 |
% |
(1) | LMAO will pay Maxim an aggregate amount of $3,622,500 as deferred underwriting fees upon the completion of the Business Combination. The following table presents the underwriting fees, which includes an underwriting discount of $2,070,000, as a percentage of the aggregate proceeds from the IPO across various redemption scenarios: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption | ||||||||
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) | |||||
10,453,500 |
5.5% | 5,278,500 | 11.2% | 924,500 | 90.3% |
(2) | Stockholders will experience additional dilution to the extent the Combined Company issues additional shares of Common Stock after the Closing. The table above excludes (a) [16,788,000] shares of Common |
Stock that will be issuable upon the exercise of the [5,738,000] Private Placement Warrants, 700,000 PIPE Warrants, and [10,350,000] public warrants; (b) [709,593] shares of Common Stock that will be issuable upon the exercise of [57,942] SeaStar Medical warrants and [271,280] SeaStar Medical options, and settlement of [255,000] SeaStar Medical restricted stock units assumed by LMAO; (c) 1,270,000 shares of Common Stock that will initially be available for issuance under the Incentive Plan; (d) 380,000 shares of Common Stock that will be available for issuance under the ESPP; and (e) shares of Common Stock that will be issuable under the Common Stock Investment. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption |
||||||||||||||||||||||
Shares |
Percentage |
Shares |
Percentage |
Shares |
Percentage |
|||||||||||||||||||
Total shares of Common Stock outstanding at Closing |
21,649,476 | 52.99 | % | 16,474,476 | 46.17 | % | 12,120,476 | 38.70 | % | |||||||||||||||
Shares underlying public warrants |
[10,350,000 | ] | 25.33 | % | [10,350,000 | ] | 29.01 | % | [10,350,000 | ] | 33.04 | % | ||||||||||||
Shares underlying Private Placement Warrants |
[5,738,000 | ] | 14.04 | % | [5,738,000 | ] | 16.08 | % | [5,738,000 | ] | 18.32 | % | ||||||||||||
Shares underlying PIPE Warrants |
700,000 | 1.71 | % | 700,000 | 1.96 | % | 700,000 | 2.24 | % | |||||||||||||||
Shares underlying SeaStar assumed equity awards |
[709,593 | ] | 1.74 | % | [709,593 | ] | 1.99 | % | [709,593 | ] | 2.27 | % | ||||||||||||
Shares initially reserved for issuance under the Incentive Plan (a) |
1,270,000 | 3.11 | % | 1,270,000 | 3.56 | % | 1,270,000 | 4.05 | % | |||||||||||||||
Shares initially reserved for issuance under the ESPP |
380,000 | 0.94 | % | 380,000 | 1.07 | % | 380,000 | 1.20 | % | |||||||||||||||
Shares initially reserved for SeaStar warrants |
57,942 | 0.14 | % | 57,942 | 0.16 | % | 57,942 | 0.18 | % | |||||||||||||||
Total Shares (b) |
[40,855,011 | ] | 100 | % | [35,680,011 | ] | 100 | % | [31,326,011 | ] | 100 | % |
(a) | On the first trading day in January each calendar year, beginning with 2023, the number of shares of Common Stock available for issuance under the Incentive Plan will automatically increase by three percent (3%) of the total number of shares of Common Stock outstanding on the last trading day of December of the immediately preceding calendar year. |
(b) | The number of total shares does not include shares of Common Stock issuable under the Common Stock Investment which will include shares of Common Stock issued as the Commitment Fee and any drawdowns of Common Stock issuable as part of the Common Stock Investment. |
• | If an initial business combination is not completed within 21 months from the closing of the IPO (October 29, 2022), LMAO will be required to liquidate. In such event, [2,587,500] shares of Class B Common Stock held by the Sponsor, which were acquired prior to the IPO for an aggregate purchase price of $25,000, will be worthless. If such founder shares were unrestricted and freely tradeable, they would be valued at approximately $26.5 million, based on the closing price of Class A Common Stock on August 18, 2022. |
• | If an initial business combination is not completed within 21 months from the closing of the IPO (October 29, 2022), the private placement warrants held by the Sponsor will expire worthless. |
• | That the Sponsor and its affiliates can earn a positive rate of return on their investment even if LMAO’s public stockholders experience a negative return following the consummation of the Business Combination. |
• | The exercise of LMAO’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interests. |
• | If the Business Combination with SeaStar Medical is completed, pursuant to the Director Nomination Agreement, the Sponsor will have a right to designate two (2) directors of the Combined Company board of directors. |
• | In connection with the determination of the valuation of SeaStar Medical, LMAO engaged Skyway Capital Markets, LLC (“Skyway”) to act as financial advisor to LMAO. One of LMAO’s board members, Marty Traber, is the Chairman of Skyway. The Board was made aware of Mr. Traber’s connection to Skyway, discussed that Mr. Traber could derive directly or indirectly a pecuniary benefit given the fee paid by LMAO to Skyway in connection with their services and ultimately the remainder of the Board (other than Mr. Traber) unanimously approved the engagement of Skyway to act as financial advisor to LMAO. |
• | The Sponsor and its affiliates are active investors across a number of different investment platforms and companies, which we and our Sponsor believe improved the volume and quality of opportunities that were available to LMAO. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple entities. In order to provide our Sponsor with the flexibility to evaluate opportunities across these platforms, our Existing Charter provides that LMAO renounces its interest in any business combination opportunity offered to any of our directors or officers unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of LMAO, is an opportunity that we are legally permitted to undertake, would be reasonable for LMAO to pursue, and the director or officer is permitted to refer the opportunity to us without violating any legal obligation. This waiver allows our Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the entity. We do not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on our search for an acquisition target. |
• | In connection with our IPO, Maxim was engaged to act as sole manager to LMAO and is entitled to a deferred underwriting fee of $3,622,500 upon the completion of the Business Combination. In connection with the IPO, Maxim received an underwriting discount of $2,070,000. In the event that the Business Combination is not consummated and LMAO is unable to consummate another business combination within the timeline required by LMAO’s organizational documents, Maxim would not be entitled to receive the deferred portion of the IPO underwriter fees. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
• | Maxim and LMAO entered into an engagement letter on March 4, 2021 (the “Maxim-LMAO Engagement Letter”), pursuant to which Maxim provided LMAO with due diligence and financial advisory services until such engagement was terminated pursuant to a termination letter (the “Termination Letter”) entered into on April 21, 2022 (the “Advisory Termination Date”). Prior to the Advisory Termination Date, representatives of Maxim assisted LMAO in efforts to identify and evaluate potential candidates for business combination targets in consideration for advisory fees that Maxim, pursuant to the Termination Letter, agreed to forgo in connection with the Business Combination (provided that if LMAO consummates an initial business combination with a target other than SeaStar Medical that is identified by Maxim during the twelve month period following the Advisory Termination Date, Maxim will be entitled to a portion of the fees otherwise payable to Maxim under the Maxim-LMAO Engagement Letter). Prior to the Advisory Termination Date, a portion of the fees payable under the Maxim-LMAO Engagement Letter would have been due only upon |
consummation of the Business Combination or another business combination by LMAO within the timeline required by LMAO’s organizational documents. |
• | LMAO also engaged Maxim to act as sole placement agent in connection with the PIPE Investment. Maxim will receive a fee equal to 7.0% of the gross proceeds received by LMAO in the PIPE Investment (not including proceeds from certain PIPE Investors, such as the Dow Pension Funds) and expense reimbursements in connection therewith. The fees owed to Maxim by LMAO (including Maxim’s deferred underwriting fee) are contingent upon the closing of the Business Combination or the completion of the PIPE Investment. |
• | Maxim and SeaStar Medical entered into an engagement letter dated August 14, 2021 (the “Maxim-SeaStar Engagement Letter”), pursuant to which SeaStar Medical retained Maxim as its exclusive financial advisor and investment banker to provide certain financial advisory and investment banking services, including advisory services in connection with the Business Combination. As consideration for Maxim’s services under the Maxim-SeaStar Engagement Letter, Maxim is entitled to receive, and SeaStar Medical agreed to pay Maxim, (i) a monthly retainer fee of $15,000 per month for the term of the Maxim-SeaStar Engagement Letter (for a minimum of six (6) months) and (ii) a cash fee of 2.0% of the enterprise value of the combined entity following consummation of the Business Combination (to be no less than $500,000), to be paid on the Closing Date (the “Transaction Fee”). As of June 30, 2022, SeaStar Medical has paid a total of $150,000 in monthly retainer fees to Maxim, which will offset the Transaction Fee upon the consummation of the Business Combination. In addition, SeaStar Medical agreed to reimburse Maxim for reasonable expenses incurred in connection with the engagement. The Maxim-SeaStar Engagement Letter contains customary indemnification provisions. Either party may terminate the Maxim-SeaStar Engagement Letter (i) for cause or (ii) at any time after six (6) months with written notice to the other party. |
• | The Board was fully informed that representatives of Maxim, in Maxim’s capacity as SeaStar Medical’s advisor pursuant to the Maxim-SeaStar Engagement Letter, communicated with LMAO and with other potential merger candidates, on behalf of SeaStar Medical, in relation to a potential transaction involving SeaStar Medical and that the services Maxim provided to SeaStar Medical included assisting with evaluating the commercial terms of the letter of intent submitted by LMAO. SeaStar Medical, in turn, was fully informed that, while representatives of Maxim were providing advisory services to SeaStar Medical, other representatives of Maxim were, prior to termination of the Maxim-LMAO Engagement Letter, providing services to LMAO as their advisor, including the evaluation of potential acquisition opportunities, until the Termination Letter was executed. Maxim did not, in its capacity as advisor to LMAO prior to the Termination Letter, or in its capacity as placement agent for the PIPE Investment, provide to the Board any appraisal, valuation report, fairness opinion or other report related to the potential valuation of SeaStar Medical. Prior to determining to proceed with the Business Combination, the Board engaged Skyway for the purpose of reviewing SeaStar Medical’s financial models and projections and to provide valuation and financial advice to the Board. After careful consideration, the Board made its determination that the Business Combination and the transactions contemplated thereby are fair to, and in the best interests of, LMAO and its stockholders. |
• | FOR the Business Combination Proposal; |
• | FOR the Charter Approval Proposal; |
• | FOR the Governance Proposals; |
• | FOR the Stock Plan Proposal; |
• | FOR the ESPP Proposal; |
• | FOR the Nasdaq Proposal; |
• | FOR the Director Nomination Proposal; and |
• | FOR the Adjournment Proposal. |
• | SeaStar Medical has incurred significant losses since its inception and anticipates that it will continue to incur significant losses for the foreseeable future. |
• | SeaStar Medical has not generated any significant revenue and may never be profitable and SeaStar Medical has a limited operating history, which makes it difficult to forecast its future results of operations. |
• | If SeaStar Medical fails to obtain additional financing, it would be forced to delay, reduce or eliminate its product development program, which may result in the cessation of its operations. |
• | SeaStar Medical’s ability to use its net operating losses to offset future taxable income may be subject to certain limitations. |
• | SeaStar Medical has not received, and may never receive, approval from the FDA to market its product in the United States or abroad and SeaStar Medical is subject to certain risks relating to pursuing an FDA approval via the HDE pathway, including limitations on the ability to profit from sales of the product. |
• | SeaStar Medical will initially depend on revenue generated from a single product and in the foreseeable future will be significantly dependent on a limited number of products. |
• | If SeaStar Medical fails to comply with extensive regulations of United States and foreign regulatory agencies, the commercialization of its products could be delayed or prevented entirely. |
• | Delays in successfully completing SeaStar Medical’s planned clinical trials could jeopardize its ability to obtain regulatory approval and delays, interruptions or the cessation of production by its third-party suppliers of important materials or delays in qualifying new materials, may prevent or delay SeaStar Medical’s ability to manufacture or process its SCD device. |
• | Difficulties in manufacturing SeaStar Medical’s SCD could have an adverse effect upon its revenue and expenses. |
• | SeaStar Medical faces intense competition in the medical device industry and its SCD technology may become obsolete. |
• | If SeaStar Medical or its contractors or service providers fail to comply with laws and regulations, it or they could be subject to regulatory actions, which could affect its ability to develop, market and sell its product candidates and any other future product candidates and may harm its reputation. |
• | SeaStar Medical intends to outsource and rely on third parties for the clinical development and manufacturing, sales and marketing of its SCD or any future product candidates that it may develop, and its future success will be dependent on the timeliness and effectiveness of the efforts of these third parties. |
• | SeaStar Medical is and will be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon it should it be sued. |
• | Should SeaStar Medical’s products be approved for commercialization, a lack of third-party coverage and reimbursement for SeaStar Medical’s devices could delay or limit their adoption or adverse changes in reimbursement policies and procedures by payors may impact SeaStar Medical’s ability to market and sell its products. |
• | A small number of SeaStar Medical’s shareholders, including its major stockholder, the Dow Pension Funds, could significantly influence its business. |
• | SeaStar Medical relies upon exclusively licensed patent rights from third parties which are subject to termination or expiration. If licensors terminate the licenses or fail to maintain or enforce the underlying patents, SeaStar Medical’s competitive position could be materially harmed. |
• | If SeaStar Medical is unable to obtain and maintain sufficient patent protection for its products, if the scope of the patent protection is not sufficiently broad, or if the combination of patents, trade secrets and contractual provisions upon which it relies to protect its intellectual property are inadequate, its competitors could develop and commercialize similar or identical products, and SeaStar Medical’s ability to commercialize such products successfully may be adversely affected. |
• | The United States government may exercise certain rights with regard to SeaStar Medical’s inventions, or licensors’ inventions, developed using federal government funding. |
• | Intellectual property rights do not necessarily address all potential threats to SeaStar Medical’s competitive advantage. |
• | SeaStar Medical may obtain only limited geographical protection with respect to certain patent rights, which may diminish the value of its intellectual property rights in those jurisdictions and prevent it from enforcing its intellectual property rights throughout the world. |
• | The Combined Company does not have experience operating as a United States public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act. |
• | The Combined Company may not be able to consistently comply with all of Nasdaq’s Listing Rules. |
• | SeaStar Medical identified a material weakness in its internal control over financial reporting. If the Combined Company is unable to develop and maintain an effective system of internal controls over financial reporting, the Combined Company may not be able to accurately report its financial results in a timely manner, which may materially and adversely affect the Combined Company’s business, results of operations and financial condition. |
• | The Combined Company may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. |
• | LMAO will be forced to liquidate the Trust Account if it cannot consummate a business combination by October 29, 2022. |
• | If the conditions to the Merger Agreement are not met, the Business Combination may not occur. |
• | If third parties bring claims against LMAO, the proceeds held in the trust could be reduced and the per-share redemption amount received by LMAO’s stockholders may be less than [$10.30] per share and LMAO’s stockholders may be held liable for claims by third parties against LMAO to the extent of distributions received by them upon redemption of their shares. |
• | LMAO is requiring stockholders who wish to redeem their public shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights. |
• | LMAO’s Sponsor, directors, and officers may have certain conflicts in determining to recommend the acquisition of SeaStar Medical, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a stockholder. |
• | LMAO’s stockholders will experience immediate dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination, the PIPE Investment, and the Common Stock Investment. Having a minority share position may reduce the influence that LMAO’s current stockholders have on the management of LMAO. |
• | There are risks to LMAO stockholders who are not affiliates of the Sponsor of becoming stockholders of the Combined Company through the Business Combination rather than acquiring securities of SeaStar Medical directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor. |
Statement of Operations Data: |
For the Period from October 28, 2020 (inception) through December 31, 2020 |
Year Ended December 31, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2022 |
||||||||||||
Revenues |
$ | — | $ | — | $ | — | $ | — | ||||||||
Loss from operations |
(5,236 | ) | (1,122,443 | ) | (335,675 | ) | (1,622,410 | ) | ||||||||
Gain on warrant liability revaluation |
1,185,940 | 57,680 | 5,120,840 | |||||||||||||
Interest earned on investments held in Trust Account . . . . . . . . |
— | 11,820 | 1,754 | 70,213 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Net income (loss) . . . . . . . . . . . |
(5,236 | ) | 75,317 | (276,241 | ) | 3,568,643 | ||||||||||
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|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding – basic and diluted |
||||||||||||||||
Class A Common Stock |
— | 9,651,587 | 8,836,384 | 10,453,000 | ||||||||||||
Class B Common Stock . . . |
2,156,250 | 2,554,418 | 2,520,787 | 2,587,500 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Basic and diluted net income (loss) per share |
||||||||||||||||
Class A Common Stock |
— | 0.02 | (0.02 | ) | 0.27 | |||||||||||
Class B Common Stock . . . |
— | 0.02 | (0.02 | ) | 0.27 | |||||||||||
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|
|
|
|
|
|
Balance Sheet Data: |
As of December 31, 2020 |
As of December 31, 2021 |
As of June 30, 2022 |
|||||||||
Cash |
$ | 38,388 | $ | 51,567 | $ | 79,023 | ||||||
Trust Account |
— | 105,581,820 | 105,652,034 | |||||||||
Total assets |
269,208 | 105,934,441 | 105,954,910 | |||||||||
Total liabilities |
249,444 | 10,929,942 | 7,381,768 | |||||||||
Value of Class A Common Stock subject to redemption |
— | 105,570,000 | 105,570,000 | |||||||||
Stockholders’ equity/(deficit) |
19,764 | (10,565,501 | ) | (6,996,858 | ) |
Year Ended December 31, |
Six Months Ended June 30, |
|||||||||||||||
Statement of Operations Data: |
2020 |
2021 |
2021 |
2022 |
||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
4,025,172 | 2,766,394 | 1,281,583 | 951,456 | ||||||||||||
General and administrative |
2,427,725 | 1,682,279 | 967,935 | 1,172,873 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Total operating expenses |
6,452,897 | 4,448,673 | 2,249,518 | 2,124,329 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Loss from operations |
(6,452,897 | ) | (4,448,673 | ) | (2,249,518 | ) | (2,124,329 | ) | ||||||||
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|
|
|
|
|
|
|||||||||
Other income (expense), net: |
||||||||||||||||
Other income |
84,450 | 91,402 | 91,402 | — | ||||||||||||
Interest expense |
(3,308,635 | ) | (212,436 | ) | (11,490 | ) | (359,638 | ) | ||||||||
Change in fair value of derivative liability |
— | (26,961 | ) | 578,107 | ||||||||||||
Gain on sale of assets and liabilities held for sale |
71,114 | — | — | |||||||||||||
Loss on disposal of other assets |
(5,658 | ) | — | — | ||||||||||||
Gain on early extinguishment of convertible notes |
6,344,993 | — | — | |||||||||||||
Total other income (expense), net |
3,186,263 | (147,995 | ) | 79,912 | 218,468 | |||||||||||
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|
|
|
|
|
|
|
|||||||||
Loss before income tax provision |
(3,266,634 | ) | (4,596,668 | ) | (2,169,606 | ) | (1,905,861 | ) | ||||||||
Income tax provision (benefit) |
9,000 | (787 | ) | 800 | — | |||||||||||
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|
|
|
|
|
|
|
|||||||||
Net loss |
(3,275,634 | ) | (4,595,882 | ) | (2,170,406 | ) | (1,905,861 | ) | ||||||||
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|
|
|
|
|
|
|
|||||||||
Net loss per share of common stock, basic and diluted |
$ | — | $ | — | $ | — | $ | — | ||||||||
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|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding, basic and diluted |
— | — | — | — | ||||||||||||
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|
|
|
|
|
|
|
As of December 31, 2020 |
As of December 31, 2021 |
As of June 30, 2022 |
||||||||||
Balance Sheet Data |
||||||||||||
Cash |
$ | 2,806,585 | $ | 509,874 | $ | 612,862 | ||||||
Total assets |
2,909,196 | 603,384 | 1,424,964 | |||||||||
Accumulated deficit |
(71,716,455 | ) | (76,311,857 | ) | (78,217,651 | ) | ||||||
Total stockholders’ deficit |
(71,583,884 | ) | (76,164,540 | ) | (77,722,435 | ) |
• | completing the clinical development of its SCD, initially for the treatment of adult AKI in the hospital setting; |
• | obtaining regulatory approval for its SCD for the designated indication, including the HDE in pediatrics and PMA for adults; |
• | launching and commercializing its SCD, including building a hospital-directed sales force and collaborating with third parties; |
• | obtaining third party reimbursement status from government agencies and insurance carriers; and |
• | entering into collaboration agreement and partnerships to commercialize its products. |
• | significantly delay, scale back or discontinue the development or commercialization of its product candidates; |
• | seek corporate partners on terms that are less favorable than might otherwise be available; |
• | relinquish or license on unfavorable terms, its rights to technologies or product candidates that it otherwise would seek to develop or commercialize itself. |
• | an inability to secure and obtain support and references from collaborators and suppliers required by the FDA; |
• | a disagreement with the FDA regarding the design of the trial, including the number of clinical study subjects and other data, which may require SeaStar Medical to conduct additional testing or increase the size and complexity of its pivotal study; |
• | a failure to obtain a sufficient supply of filters to conduct its trial; |
• | an inability to enroll a sufficient number of subjects; |
• | a shortage of necessary raw materials, such as calcium; and |
• | delays and failures to train qualified personnel to operate the SCD therapy. |
• | SeaStar Medical’s inability to demonstrate the safety or effectiveness of the SCD or any other product it develops to the FDA’s satisfaction; |
• | insufficient data from its preclinical studies and clinical trials, including for its SCD, to support approval; |
• | failure of the facilities of its third-party manufacturers or suppliers to meet applicable requirements; |
• | inadequate compliance with preclinical, clinical or other regulations; |
• | its failure to meet the FDA’s statistical requirements for approval; and |
• | changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical studies. |
• | the FDA may refuse to approve an application if it believes that applicable regulatory criteria are not satisfied; |
• | the FDA may require additional testing for safety and effectiveness; |
• | the FDA may interpret data from pre-clinical testing and clinical trials in different ways than SeaStar Medical interprets them; |
• | if regulatory approval of a product is granted, the approval may be limited to specific indications or limited with respect to its distribution; and |
• | the FDA may change its approval policies and/or adopt new regulations. |
• | warning letters, untitled letters or other written notice of violations; |
• | civil penalties; |
• | criminal penalties; |
• | injunctions; |
• | product seizure or detention; |
• | product recalls; and |
• | total or partial suspension of productions. |
• | slow patient enrollment; |
• | serious adverse events related to its medical device candidates; |
• | unsatisfactory results of any clinical trial; |
• | the failure of principal third-party investigators to perform clinical trials on SeaStar Medical’s anticipated schedules; |
• | different interpretations of SeaStar Medical’s pre-clinical and clinical data, which could initially lead to inconclusive results; and |
• | delays resulting from the COVID-19 pandemic. |
• | the availability or contamination of raw materials and components used in the manufacturing process, particularly those for which it has no other supplier; |
• | its ability to comply with new regulatory requirements and cGMP; |
• | potential facility contamination by microorganisms or viruses; |
• | updating of its manufacturing specifications; |
• | product quality success rates and yields; and |
• | global viruses and pandemics, including the current COVID-19 pandemic. |
• | are more effective; |
• | have fewer or less severe adverse side effects; |
• | are better tolerated; |
• | are easier to administer; or |
• | are less expensive than SeaStar Medical’s products or its product candidates. |
• | increase its compliance and operational costs; |
• | expose it to regulatory scrutiny, actions, fines and penalties; |
• | result in reputational harm; interrupt or stop its clinical trials; |
• | result in litigation and liability; result in an inability to process personal data or to operate in certain jurisdictions; or |
• | harm its business operations or financial results or otherwise result in a material harm to its business. |
• | further delays or difficulties in enrolling patients in its clinical trials; |
• | delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; |
• | the diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospital staff supporting the conduct of its clinical trials; |
• | the interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; |
• | the interruption of, or delays in receiving, supplies of its product candidates from its contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; |
• | delays in clinical sites receiving the supplies and materials needed to conduct its clinical trials and interruptions in global shipping may affect the transport of clinical trial materials; |
• | limitations on employee resources that would otherwise be focused on the conduct of its clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; |
• | delays in receiving feedback or approvals from the FDA or other regulatory authorities with respect to future clinical trials or regulatory submissions; |
• | changes in local regulations as part of a response to the COVID-19 pandemic, which may require it to change the ways in which its clinical trials are conducted, resulting in unexpected costs, or discontinuing the clinical trials altogether; |
• | delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations on employee resources or the forced furlough of government employees; |
• | the refusal of the FDA to accept data from clinical trials in affected geographies; and |
• | difficulties launching or commercializing products, including due to reduced access to doctors as a result of social distancing protocols. |
• | whether SeaStar Medical can obtain sufficient capital to develop and commercialize its SCD product candidate and grow its business; |
• | whether SeaStar Medical can manage relationships with key suppliers; |
• | the ability to obtain necessary regulatory approvals; |
• | demand for SeaStar Medical’s products; |
• | the timing and costs of new and existing marketing and promotional efforts; |
• | competition, including from established and future competitors; |
• | SeaStar Medical’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel; |
• | the overall strength and stability of the economies in the markets in which it operates or intends to operate in the future; and |
• | regulatory, legislative and political changes. |
• | the scope of rights granted under the license agreement and other interpretation related issues; |
• | the extent to which SeaStar Medical’s technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | the sublicensing of patent and other rights under any collaboration relationships SeaStar Medical might enter into in the future; |
• | SeaStar Medical’s diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know how resulting from the joint creation or use of intellectual property by SeaStar Medical and its licensors; and |
• | the priority of invention of patented technology. |
• | others may be able to make products that are the same as or similar to SeaStar Medical’s products but that are not covered by the claims of patents that it owns or has rights to; |
• | SeaStar Medical or its licensors or any current or future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by its patents or pending patent applications; |
• | SeaStar Medical or its licensors or any future strategic partners might not have been the first to file patent applications covering the inventions in SeaStar Medical’s patents or applications; |
• | others may independently develop similar or alternative technologies or duplicate any of SeaStar Medical’s technologies without infringing SeaStar Medical’s intellectual property rights; |
• | SeaStar Medical’s pending patent rights may not lead to issued patents, or the patents, if granted, may not provide it with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by its competitors; |
• | SeaStar Medical’s competitors might conduct research and development activities in countries where it does not have patent rights and then use the information learned from such activities to develop competitive products for sale in SeaStar Medical’s major commercial markets; |
• | third parties manufacturing or testing SeaStar Medical’s products or technologies could use the intellectual property of others without obtaining a proper license; |
• | SeaStar Medical may not develop additional technologies that are patentable; and |
• | third parties may allege that SeaStar Medical’s development and commercialization of its products infringe their intellectual property rights, the outcome of any related litigation may have an adverse effect on SeaStar Medical’s business, result of operations and financial condition. |
• | its employees may experience uncertainty about their future roles, which might adversely affect the Combined Company’s ability to retain and hire key personnel and other employees; |
• | customers, business partners and other parties with which the Combined Company maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with the Combined Company or fail to extend an existing relationship or subscription with the Combined Company; and |
• | the Combined Company has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the Business Combination. |
• | a limited availability of market quotations for its securities; |
• | reduced liquidity for its securities; |
• | a limited amount of news and analyst coverage for the company; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | You can vote your shares by signing, dating and returning the enclosed proxy card in the pre-paid postage envelope provided. If you submit your proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted, as recommended by our Board. Our Board recommends voting “FOR” each of the Proposals. If you hold your shares of Common Stock in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided to you by your broker, bank or nominee to ensure that the votes related to the shares you beneficially own are properly represented and voted at the Meeting. |
• | You can participate in the Meeting and vote during the Meeting even if you have previously voted by submitting a proxy as described above. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way LMAO can be sure that the broker, bank or nominee has not already voted your shares. |
• | you may send another proxy card with a later date; |
• | if you are a record holder, you may notify our proxy solicitor, Alliance Advisors, in writing before the Meeting that you have revoked your proxy; or |
• | you may participate in the Meeting, revoke your proxy, and vote during the Meeting, as indicated above. |
• | Delivering certificates representing shares of Common Stock to Continental, or |
• | Delivering the shares of Common Stock electronically through the DWAC system. |
• | the due organization, qualification and good standing of SeaStar Medical; |
• | SeaStar Medical having no subsidiaries; |
• | the due authorization of SeaStar Medical to execute the Merger Agreement and other transaction documents, to perform its obligations thereunder, and to consummate the Business Combination; |
• | the absence of conflicts by the execution, delivery and performance of the Merger Agreement and other transaction documents with (a) laws applicable to, (b) organizational documents, material contracts, or licenses of, SeaStar Medical; |
• | the absence of any filings, permits, approvals, or consents from governmental authorities required in connection with SeaStar Medical’s execution, delivery and performance of the Merger Agreement, the other transaction documents, and the consummation of the Business Combination, except for the filing of the certificate of merger; |
• | the capitalization of SeaStar Medical, including its common stock, preferred stock, options, warrants, restricted stock units, and convertible notes; |
• | the audited balance sheet of SeaStar Medical as of, and the related audited statements of income and comprehensive income, stockholders’ equity, and cash flows, for the years ended December 31, 2021, and December 31, 2020 present fairly the financial position of SeaStar Medical and are in conformity with GAAP; |
• | SeaStar Medical having no liabilities, debts, or obligations in accordance with GAAP other than those shown on its audited balance sheets, except for those that have arisen in the ordinary course of business since December 31, 2021 or under the Merger Agreement and other transaction documents; |
• | litigation and proceedings pending or threatened against, or government orders imposed upon, SeaStar Medical or any settlements related thereto; |
• | SeaStar Medical’s compliance with applicable laws (including, without limitation, anticorruption laws, labor and employment laws, other laws relating to SeaStar Medical’s benefit plans, environmental laws, healthcare laws, FDA rules and regulations, and insurance laws); |
• | the material contracts of SeaStar Medical and that such contracts are in full force and effect; |
• | material tax returns required to be filed by SeaStar Medical, and audits, examinations or other proceedings with respect to SeaStar Medical’s taxes; |
• | SeaStar Medical’s insurance policies; |
• | the material permits necessary for SeaStar Medical to conduct its business; |
• | the tangible property of SeaStar Medical, and that such property is free of liens and is in reasonably good condition; |
• | the real property leased by SeaStar Medical, and that such lease is in full force and effect; |
• | SeaStar Medical’s owned and licensed intellectual property, and the violation, infringement or misappropriation of intellectual property against or by SeaStar Medical; |
• | SeaStar Medical’s compliance with its data privacy and data security policies and applicable laws relating to the use, collection, retention, or other processing of any personal data; |
• | the maintenance and implementation of reasonable and appropriate disaster recovery and security plans and other steps to safeguard SeaStar Medical’s trade secrets, confidential information, and IT systems from unauthorized or illegal access and use; |
• | the absence of a Material Adverse Effect (as defined below) since December 31, 2020; |
• | brokerage, finder’s or other fee or commission based upon arrangements made by SeaStar Medical in connection with the transactions contemplated by the Merger Agreement; |
• | related party transactions between SeaStar Medical and its affiliates or directors and officers; |
• | the information supplied by SeaStar Medical in writing specifically for inclusion in the proxy statement/prospectus; and |
• | SeaStar Medical having no government contracts. |
• | the due organization, qualification and good standing of LMAO and Merger Sub; |
• | the due authorization of LMAO and Merger Sub to execute the Merger Agreement and other transaction documents, to perform their obligations thereunder, and to consummate the Business Combination (once approval of LMAO’s stockholders is obtained); |
• | the absence of conflicts by the execution, delivery and performance of the Merger Agreement and other transaction documents with (a) laws applicable to, (b) organizational documents or contracts of, LMAO or Merger Sub (once approval of LMAO’s stockholders is obtained); |
• | litigation, proceedings, and investigations pending or threatened against LMAO or Merger Sub; |
• | the absence of any filings, approvals, or consents from governmental authorities required in connection with LMAO or Merger Sub’s execution or delivery of the Merger Agreement, the other transaction documents, and the consummation of the Business Combination, except for the applicable requirements of securities laws and Nasdaq; |
• | the Trust Account, including there being at least $105,000,000 in such account; |
• | brokerage, finder’s or other fee or commission based upon arrangements made by LMAO or any of its affiliates in connection with the transactions contemplated by the Merger Agreement; |
• | LMAO’s compliance with its SEC filing requirements since the IPO, its financial statements contained therein, and maintenance of disclosure controls and procedures required under the Exchange Act; |
• | the absence of any business activities of LMAO other than activities directed toward the accomplishment of a business combination; |
• | material tax returns required to be filed by LMAO, and audits, examinations or other proceedings with respect to LMAO’s taxes; |
• | the capitalization of LMAO, including its Class A Common Stock, Class B Common Stock, preferred stock, and warrants; |
• | the Nasdaq listing status of LMAO’s units, its Class A Common Stock, and its public warrants; |
• | the Sponsor Support Agreement is in full force and effect; |
• | related party transactions between LMAO and Merger Sub and their affiliates or directors and officers; |
• | Neither LMAO nor Merger Sub being an “investment company” within the meaning of the Investment Company Act; |
• | the absence of any substantial governmental interest in the Combined Company, requiring declaration to the Committee on Foreign Investment in the United States, as a result of the Business Combination; |
• | the absence of any contracts of LMAO or the Merger Sub that would be required to be filed as an exhibit to LMAO’s Annual Report on Form 10-K, but have not yet been filed; and |
• | the absence of any current negotiations or discussion regarding an alternative business combination. |
(i) | any change in applicable laws or GAAP or any interpretation thereof, |
(ii) | any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, |
(iii) | the announcement or the execution of the Merger Agreement, the pendency or consummation of the merger or the performance of the Merger Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, partners, providers and employees, |
(iv) | any change generally affecting any of the industries or markets in which SeaStar Medical operates or the economy as a whole, |
(v) | the taking of any action expressly required by the Merger Agreement or with the prior written consent of LMAO, |
(vi) | any earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event, |
(vii) | any national or international political or social conditions in countries in which, or in the proximate geographic region of which, SeaStar Medical operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a |
national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel, |
(viii) | any failure of SeaStar Medical to meet any projections, forecasts or budgets, and |
(ix) | COVID-19 or any law, directive, pronouncement or guideline issued by a governmental authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such law, directive, pronouncement or guideline or interpretation thereof following the date of the Merger Agreement or SeaStar Medical’s compliance therewith, provided |
• | change or amend the Company Certificate of Incorporation (as defined in the Merger Agreement), bylaws or other organizational documents of SeaStar Medical, except as otherwise required by law, except for any amendment to the Company Certificate of Incorporation in order to facilitate the closing of the Merger; |
• | make, declare, set aside, establish a record date for or pay any dividend or distribution, other than any dividends or distributions from any wholly owned subsidiary of SeaStar Medical to SeaStar Medical or any other wholly owned subsidiary of SeaStar Medical; |
• | enter into, assume, assign, partially or completely amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms or any modification or amendment that is not adverse to SeaStar Medical) any material contract or any lease, sublease, or license related to the leased real property, other than entry into such agreements in the ordinary course of business; |
• | issue, deliver, sell, transfer, pledge, dispose of or place any lien (other than a permitted lien) on any shares of capital stock or any other equity or voting securities of SeaStar Medical; |
• | sell, assign, transfer, convey, lease, license, abandon, allow to lapse of expire, subject to or grant any lien (other than permitted liens) on or otherwise dispose of any material assets, rights or properties of SeaStar Medical (other than owned intellectual property), other than the sale or other disposition of assets or equipment deemed by SeaStar Medical in its reasonable business judgment to be obsolete or no longer material to the business of SeaStar Medical, in each such case, in the ordinary course of business; |
• | (i) cancel or compromise any claims or indebtedness owed to SeaStar Medical, (ii) settle any pending or threatened action (A) if such settlement would require payment by SeaStar Medical in an amount greater than $200,000 or (B) to the extent such settlement includes an agreement to accept or concede injunctive relief, or (C) to the extend such settlements involve a governmental authority or alleged criminal wrongdoing, or (iii) agree to modify in any respect materially adverse to SeaStar Medical any confidentiality or similar contract to which SeaStar Medical is a party; |
• | transfer, sell, assign, license, sublicense, encumber, impair, abandon, permit to lapse or expire, dedicate to the public, cancel, subject to any lien, fail to diligently maintain, or otherwise dispose of any right, title or interest in any Owned Intellectual Property, other than non-exclusive licenses granted to customers in the ordinary course of business; |
• | disclose any confidential information or trade secrets (other than in the ordinary course of business subject to appropriate written obligations with respect to confidentiality, non-use and non-disclosure) or source code to any person; |
• | except as otherwise required by law or the terms of any existing SeaStar Medical benefit plans set forth in SeaStar Medical’s disclosure schedule as in effect on the date of the Merger Agreement, (i) increase the compensation or benefits of any employee of SeaStar Medical except for increases made in the ordinary course of business consistent with past practice, (ii) make any grant of any severance, retention, or termination payment to any person with a base salary of more than $100,000, (iii) hire additional officers or terminate existing officers, (iv) hire any employee of SeaStar Medical or any other individual who is providing or will provide services to SeaStar Medical other than any employee or individual with an annual base salary or annual compensation of less than $100,000, (v) accelerate or commit to accelerate the funding, payment or vesting of any benefit or compensation to any current or former employee, director, officer or other service provider, or (vi), establish, adopt, enter into, amend, or terminate any SeaStar Medical benefit plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a SeaStar Medical benefit plan if it were in existence as of the date of the Merger Agreement; |
• | directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or any substantial equity interest in, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other entity or person or division thereof; |
• | make any loans or advance any money or other property to any person, except for (i) advances in the ordinary course of business, consistent with past practice, to employees or officers of SeaStar Medical for expenses not to exceed $10,000 individually or $50,000 in the aggregate, (ii) prepayments and deposits paid to suppliers of SeaStar Medical in the ordinary course of business and (iii) trade credit extended to customers of SeaStar Medical in the ordinary course of business; |
• | redeem, purchase or otherwise acquire any shares of capital stock (or other equity interests) of SeaStar Medical or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of capital stock (or other equity interests) of SeaStar Medical; |
• | adjust, split, combine, subdivide, recapitalize, reclassify or otherwise effect any change in respect of any shares of capital stock or other equity interests or securities of SeaStar Medical; |
• | make any change in its customary accounting principles or methods of accounting materially affecting the reported assets, liabilities or results of operations of SeaStar Medical, other than as may be required by applicable law, GAAP, or regulatory guidelines; |
• | shorten or lengthen the customary payment cycles for any of its payables or receivables or otherwise engage in unusual efforts to accelerate the collection of accounts receivable or unusually delay the payment of accounts payable or participate in activity of the type sometimes referred to as “trade loading” or “channel stuffing” or any other activity that reasonably could be expected to result in an increase, temporary or otherwise, in the demand for the products offered by SeaStar Medical before the Closing; |
• | adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of SeaStar Medical (other than the Business Combination); |
• | make, change or revoke any material tax election, adopt or change any material accounting method with respect to taxes, file any material amended tax return, file any material tax return prepared in a manner that is inconsistent with the past practices of SeaStar Medical with respect to the treatment of items on such tax return, settle or compromise any material tax liability, enter into any material closing agreement with respect to any tax, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax, claim, or assessment, enter into any tax sharing, tax allocation, tax assumption, or tax indemnification agreement, fail to pay any material taxes when due (including estimated taxes), or take any actions with respect to taxes (including deductions or credits) pursuant to the CARES Act; |
• | directly or indirectly, incur, or modify in any material respect the terms of any indebtedness, or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person for indebtedness; |
• | make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any person, other than the reimbursement of expenses of employees in the ordinary course of business; |
• | fail to maintain in full force and effect material insurance policies covering SeaStar Medical and its properties, assets and businesses in a form and amount consistent with past practices; |
• | enter into any contract with any broker, finder, investment banker or other person under which such person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the Business Combination; |
• | enter into any transaction or amend in any material respect any existing agreement with any person that, to the knowledge of SeaStar Medical, is an affiliate of SeaStar Medical (excluding ordinary course payments of annual compensation, provision of benefits or reimbursement of expenses in respect of members or stockholders who are officers or directors of SeaStar Medical); |
• | enter into any agreement that restricts the ability of SeaStar Medical to (i) engage or compete in any line of business, or (ii) enter into any new line of business; |
• | terminate, amend, fail to review or preserve or otherwise fail to maintain in full force and effect any material permit, except for amendments contemplated in the ordinary course of business; |
• | make individual commitments for capital expenditures or construction of fixed assets in excess of $200,000; or |
• | enter into any agreement, or otherwise become obligated, to do or take any action prohibited by any of the foregoing. |
• | change, modify, or amend the trust agreement, LMAO’s organizational documents or the organizational documents of Merger Sub, other than as strictly necessary to facilitate the closing of the Merger in accordance with the terms and conditions of the Merger Agreement; |
• | declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, LMAO; |
• | split, combine or reclassify any capital stock of, or other equity interests in, LMAO; |
• | other than in connection with redemptions of LMAO’s Class A Common Stock or as otherwise required by LMAO’s organizational documents in order to consummate the Transactions, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, LMAO; |
• | make, change or revoke any material tax election, adopt or change any material accounting method with respect to taxes, file any material amended tax return, file any material tax return prepared in a manner that is inconsistent with the past practices of SeaStar Medical with respect to the treatment of item son such tax returns, settle or compromise any material tax liability, enter into any material closing agreement with respect to any tax, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax, claim, or assessment, enter into any tax sharing, tax allocation, tax assumption, or tax indemnification agreement, fail to pay any material taxes when due (including estimated taxes), or take any actions with respect to taxes (including deductions or credits) pursuant to the CARES Act; |
• | enter into, renew, or amend in any material respect, any transaction or contract with an affiliate of LMAO (including, for the avoidance of doubt, (i) the Sponsor or anyone related by blood, marriage or adoption to any Sponsor and (ii) any person in which any Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater); |
• | voluntarily sell, lease, license, sublicense, abandon, divest, transfer, cancel, abandon or permit to lapse or expire, dedicate to the public, or otherwise dispose of, or agree to do any of the foregoing, or otherwise dispose of material assets or properties of LMAO or Merger Sub; |
• | waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened action) or compromise or settle any liability in excess of $250,000 individually or $1,500,000 in the aggregate; |
• | incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, provided, however, and notwithstanding the foregoing, LMAO shall be permitted to incur indebtedness of $1,035,000 (without seeking or obtaining prior consent of SeaStar Medical) if Sponsor elects to loan such amount to LMAO in connection with an extension to the deadline for LMAO to, pursuant to LMAO’s certificate of incorporation, consummate an initial business combination; provided further, that any such loan, if made, (i) shall be evidenced by a non-interest bearing promissory note repayable at Closing and (ii) shall be made in accordance with, and pursuant to, the terms and conditions of LMAO’s Letter Agreement, dated January 25, 2021, LMAO’s certificate of incorporation and the trust agreement; |
• | offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in, LMAO or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests; |
• | amend, modify or waive any of the terms or rights set forth in any LMAO warrant or LMAO’s warrant agreement, including any amendment, modification or reduction of the warrant price set forth therein; or |
• | agree in writing or otherwise agree, commit or resolve to take any of the actions described in the foregoing. |
• | during the Interim Period, subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to LMAO or its subsidiaries by third parties that may be in LMAO’s or its subsidiaries’ possession from time to time, and except for any information which in the opinion of LMAO’s legal counsel would result in the loss of attorney-client privilege or other privilege from disclosure, (i) afford SeaStar Medical and its representatives reasonable access to its and its subsidiaries’ properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and (ii) furnish such representatives with all financial and operating data and other information concerning its affairs that are in its possession, in each case as SeaStar Medical and its representatives may reasonably request solely for purposes of consummating the Business Combination; |
• | after the Effective Time, indemnify and hold harmless each present and former director, manager and officer of SeaStar Medical and LMAO and each of their respective subsidiaries against any costs, expenses, judgments, fines, losses, damages or liabilities incurred in connection with any action, to the fullest extent that it, SeaStar Medical or its subsidiaries would have been permitted under applicable law and their respective certificate of incorporation, bylaws, or other organization documents in effect on the date of the Merger Agreement to indemnify such person; |
• | cause LMAO and its subsidiaries to maintain, for a period of six years from the Effective Time, provisions in its certificate of incorporation, bylaws and other organizational documents concerning the indemnification and exoneration of officers and directors/managers that are no less favorable to those persons than the provisions of such certificate of incorporation, bylaws and other organizational documents as of the date of the Merger Agreement; |
• | maintain, and cause one or more of its subsidiaries to maintain, for a period of six years from the Effective Time, a directors’ and officers’ liability insurance policy covering those persons who are currently covered by SeaStar Medical’s directors’ and officers’ liability insurance policies on terms not less favorable than the terms of such current insurance coverage, except that in no event will it be required to pay an annual premium for such insurance in excess of 400% of the aggregate annual premium payable by SeaStar Medical for such insurance policy for the year ended December 31, 2021; provided that LMAO may cause coverage to be extended under the current directors’ and officers’ liability insurance by obtaining a six-year “tail” policy containing terms not materially less favorable than the terms of such current insurance coverage with respect to claims existing or occurring at or prior to the Effective Time; |
• | Unless otherwise approved in writing by SeaStar Medical, neither LMAO or Merger Sub shall permit any amendment or modification to be made to, any waiver (in whole or in part) or provide consent to (including consent to termination), of any provision or remedy under, or any replacement of, the Sponsor Support Agreement. LMAO shall take, or cause to be taken, all reasonable actions and use all reasonable efforts to do, or cause to be done, all things necessary, proper or advisable to satisfy in all material respects on a timely basis all conditions and covenants applicable to LMAO in the Sponsor Support Agreement and otherwise comply with its obligations thereunder and to enforce its rights under each such agreement. LMAO will give SeaStar Medical prompt written notice: (i) of any breach or default (or any event or circumstance that, with or without notice, lapse of time or both, could give rise to any breach or default) by any party to the Sponsor Support Agreement; and (ii) of the receipt of any written notice or other written communication from any other party to the Sponsor Support Agreement with respect to any actual, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party under any such agreement or any provisions thereof; |
• | during the Interim Period, use commercially reasonable efforts to ensure it remains listed as a public company on, and for shares of Class A Common Stock and LMAO warrants (but, in the case of its warrants, only to the extent issued as of the date of the Merger Agreement) to be listed on, Nasdaq; |
• | during the Interim Period, use commercially reasonable efforts to keep current and timely file all reports required to be filed or furnished with the SEC and to otherwise comply in all material respects with its reporting obligations under applicable securities laws; |
• | prior to the Effective Time, take all reasonable steps as may be required or permitted to cause any acquisition or disposition of Common Stock that occurs or is deemed to occur by reason of or pursuant to the Business Combination by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to LMAO to be exempt under Rule 16b-3 promulgated under the Exchange Act; |
• | use commercially reasonable efforts to prepare (i) a long-term incentive plan which shall initially reserve shares of Common Stock equal to ten percent (10%) of the Post-Closing Fully-Diluted Share Amount (as defined in the Merger Agreement) (the “LMAO LTIP”) and (ii) an employee stock purchase program which shall initially reserve shares of Common Stock equal to three percent (3%) of the Post-Closing Fully Diluted Share Amount (the “LMAO Employee Stock Purchase Program”) and LMAO shall prior to the Closing, obtain the approval of the LMAO LTIP and LMAO Employee Stock Purchase Program from LMAO stockholders; |
• | during the Interim Period, use commercially reasonable efforts to (i) take all actions necessary to continue to qualify as an “emerging growth company” within the meaning of the JOBS Act and (ii) not take any action that would cause it to not qualify as an “emerging growth company” within the meaning of the JOBS Act; and |
• | during the Interim Period, not take, and not permit any of its affiliates or representatives to take, whether directly or indirectly, written or oral, any action to (i) solicit, initiate, continue or engage in any discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than SeaStar Medical and/or any of its affiliates or representatives) concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any business combination involving LMAO (a “business combination proposal”) other than with SeaStar Medical and its affiliates and representatives and (iii) immediately cease and cause to be terminated, and cause its affiliates and representatives to do the same, any and all existing discussions, conversations, negotiations, or other communications with any person conducted prior to the date of the Merger Agreement with respect to, or which is reasonably likely to give rise to or result in, a business combination proposal. |
• | during the Interim Period, subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to SeaStar Medical by third parties that may be in SeaStar Medical’s possession from time to time, and except for any information which (i) relates to the negotiation of the Merger Agreement or the Business Combination, (ii) is prohibited from being disclosed by applicable law or (iii) in the opinion of SeaStar Medical’s legal counsel would result in the loss of attorney-client privilege or other privilege from disclosure, SeaStar Medical will (A) afford LMAO and its representatives reasonable access during normal business hours with reasonable advance notice to its properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and (B) use its commercially reasonable efforts to furnish LMAO and such representatives with all financial and operating data and other information concerning the affairs of SeaStar Medical that are in its possession, in each case as LMAO or its representatives may reasonably request solely for the purposes of consummating the Business Combination; |
• | on behalf of itself and its affiliates, waive any past, present or future claim of any kind against, and any right to access, the trust account, trustee, and LMAO or to collect from the trust account any monies that may be owed to them by LMAO or any of its affiliates for any reason whatsoever, and will not seek recourse against the trust account at any time for any reason whatsoever; |
• | at the Closing, deliver to LMAO a FIRPTA certification and notice as well as an IRS Form W-9 executed by SeaStar Medical; |
• | deliver to LMAO evidence of the SeaStar Medical stockholder approval and Support Agreements executed by the Company Requisite Stockholders (as defined in the Merger Agreement) within three (3) business days of the execution of the Merger Agreement, which will acknowledge that the adoption and approvals are irrevocable and result in the waiver of any rights of the Company Requisite Stockholders to demand appraisal in connection with the Merger pursuant to the DGCL; |
• | to the extent required by the DGCL, SeaStar Medical will promptly (and, in any event, within 15 Business Days of the date of SeaStar Medical stockholder approval) deliver to any SeaStar Medical stockholder who has not executed the SeaStar Medical stockholder approval (i) a notice of the taking of the actions described in the SeaStar Medical stockholder approval in accordance with Section 228 of the DGCL, and (ii) the notice in accordance with Section 262 of the DGCL; |
• | promptly after the delivery of the SeaStar Medical stockholder approval to LMAO, SeaStar Medical will prepare and mail to each SeaStar Medical stockholder an information statement regarding the transactions contemplated by the Merger Agreement, which shall solicit the consent of SeaStar Medical stockholders (other than the Company Requisite Stockholders) with respect to the adoption and approval of the Merger Agreement and shall include (i) a statement to the effect that the SeaStar Medical’s board of directors had unanimously recommended that SeaStar Medical’s stockholders vote in favor of the adoption and approval of the Merger Agreement; and (ii) such other information as LMAO and SeaStar Medical reasonably agree is required or advisable under applicable Law to be included therein; |
• | prior to the Closing Date, if required to avoid the imposition of taxes under Section 4999 of the Code or the loss of deduction under Section 280G with respect to any payment or benefit in connection with any of the transactions contemplated by the Merger Agreement, SeaStar Medical will (i) solicit and use reasonable best efforts to obtain from each person who SeaStar Medical reasonably believes is a SeaStar Medical “disqualified individual” who would otherwise receive or retain any payment or benefits that could constitute a “parachute payment” as a result of or in connection with the consummation of the Business Combination, a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that no payments and/or benefits shall be deemed to be “excess parachute payments”; (ii) submit to a SeaStar Medical stockholder vote the right of any such “disqualified individual” to receive the Waived 280G Benefits and (iii) deliver to LMAO evidence that a vote of SeaStar Medical’s stockholders was soliciting regarding the right of a “disqualified individual” to receive the Waived 280G Benefits and that either (a) the requisite number of votes of SeaStar Medical stockholders was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (b) the 280G Approval was not obtained, and, as a consequence, the Waived 280G Benefits shall not be retained or provided; |
• | use commercially reasonable efforts to provide LMAO, as promptly as reasonably practicable but no later than May 15, 2022, reviewed financial statements, including condensed balance sheets and condensed statements of income and comprehensive income, stockholder’s equity and cash flows, of SeaStar Medical as at and for the three (3) months ended March 31, 2022, prepared in accordance with GAAP and Regulation S-X (the “Reviewed Financials”), and any other audited or unaudited balance sheets and the related audited or unaudited statements of comprehensive (loss) income, stockholder’s equity and cash flows of the Company as of and for a year-to-date |
• | be available and will use reasonable best efforts to make SeaStar Medical’s officers, managers, representatives and employees available to, in each case, during normal business hours and upon reasonable |
advance notice, to LMAO and its counsel in connection with (i) the drafting of the registration statement and (ii) responding in a timely manner to comments on the registration statement from the SEC; |
• | will reasonably cooperate with LMAO in connection with the preparation for inclusion in the registration statement of pro forma financial statements that comply with the requirements of Regulation S-X under the rules and regulations of the SEC; |
• | after the date on which the proxy statement contained in the registration statement is mailed to LMAO’s stockholders, SeaStar Medical will give LMAO prompt written notice of any action taken or not taken by SeaStar Medical, or of any development regarding SeaStar Medical, which is or becomes known by SeaStar Medical, that would cause the registration statement to contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements not misleading; provided, that if any such action shall be taken or fail to be taken or such development shall otherwise occur, LMAO and SeaStar Medical will cooperate fully to cause an amendment or supplement to be made promptly to the registration statement, such that the registration statement no longer contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, not misleading; and |
• | (i) during the Interim Period, not, and not permit any of its affiliates and representatives to take, whether directly or indirectly, written or oral, any action to (A) solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than LMAO and/or any of its affiliates or representatives) concerning any purchase of any of SeaStar Medical’s equity securities or the issuance and sale of any securities of, or membership interests in, SeaStar Medical or its subsidiaries (other than any purchases of equity securities by SeaStar Medical from employees of SeaStar Medical or its subsidiaries) or any merger, recapitalization or similar business combination transaction, or sale of substantial assets involving SeaStar Medical of its subsidiaries, other than immaterial assets or assets sold in the ordinary course of business (each such acquisition transaction, but excluding the Business Combination, an “Acquisition Transaction”), or (B) commence, continue or renew any due diligence investigation regarding, or that is reasonably likely to give rise to or result in, any offer, inquiry, proposal, indication of interest, written or oral, with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction, and (ii) immediately cease and cause to be terminated, and direct its affiliates and representatives to do the same, any and all discussions, conversations, negotiations, or other communications with any person conducted prior to the date of the Merger Agreement with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction. |
• | use, and will cause its respective subsidiaries to use (i) commercially reasonable efforts to assemble, prepare and file any information as may be reasonably necessary to obtain as promptly as practicable all governmental and regulatory consents required to be obtained in connection with the Business Combination, (ii) commercially reasonable efforts to obtain all material consents and approvals of third parties that any of LMAO, SeaStar Medical, or their respective affiliates are required to obtain in order to consummate the Business Combination, provided that SeaStar Medical shall not be required to seek any such required consents or approvals of third party counterparties to material contracts to the extent such material contract is terminable at will, for convenience or upon or after the giving of notice of termination by a party thereto unless otherwise agreed in writhing by SeaStar Medical and LMAO and (iii) take such other action as may be necessary or reasonably requested by the other party to satisfy the closing conditions and consummate the Business Combination; |
• | jointly prepare, and LMAO will file with the SEC, a preliminary registration statement containing a prospectus/proxy statement on Form S-4 concerning the Business Combination to be sent to LMAO |
stockholders in advance of the Special Meeting (as defined in the Merger Agreement) for the purposes of the matters specified herein; |
• | use their reasonable efforts to (i) cause the registration statement when filed with the SEC to comply in all material respects with all legal requirements applicable thereto, (ii) respond as promptly as reasonably practicable to and resolve all comments received from the SEC, (iii) to be declared effective under the Securities Act as promptly as practicable, (iv) to keep the registration statement effective as long as is necessary to consummate the Business Combination, and (v) otherwise ensure that the information contained therein contains no untrue statement of material fact or material omission; |
• | in regards to LMAO, as promptly as practicable following the Proxy Clearance Date (as defined in the Merger Agreement), cause the proxy statement contained in the registration statement to be mailed to its stockholders of record; |
• | in regards to LMAO, prior to or as promptly as practicable after Proxy Clearance Date, establish a record date (which date will mutually be agreed with SeaStar Medical) for, duly call and give notice of the Special Meeting in accordance with the DGCL for the purposes of obtaining approval for the matters specified herein, which will be held not more than 25 days after the date on which LMAO commences mailing of the proxy statement to its stockholders proxy statement/prospectus to the LMAO stockholders; |
• | in regards to LMAO, use its commercially reasonable efforts to obtain the approval of the matters specified herein at the Special Meeting, including by soliciting proxies as promptly as practicable in accordance with applicable law; |
• | not make any public announcement or issue any public communication regarding the Merger Agreement or the Business Combination without first obtaining the prior consent of SeaStar Medical or LMAO, as applicable, except if such announcement or other communication is required by applicable law or legal process; and |
• | use its commercially reasonable efforts to take, or cause to be take, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Business Combination. |
• | the parties shall have received the clearances, authorizations and other approvals from governmental authorities; |
• | no governmental authority will have issued any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority enjoining or otherwise prohibiting the consummation of the Business Combination and no law or regulation has been adopted that makes consummation of the Business Combination illegal or otherwise prohibited; |
• | The completion of LMAO offering its stockholders with the opportunity to redeem shares of LMAO Class A Common Stock in accordance with LMAO’s organizational documents, which such stockholders may elect by delivering such shares for redemption no later than two (2) business days prior to the date of the Special Meeting (the “LMAO Stockholder Redemption”); |
• | the Available Closing Acquiror Cash (as defined in the Merger Agreement) will not be less than $15,000,000; |
• | LMAO will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining upon the consummation of the Closing (after giving |
effect to the LMAO Stockholder Redemption, and the other transactions contemplated to occur on the Closing Date, including the payment of LMAO’s and SeaStar Medical’s expenses); |
• | the registration statement will have been declared effective under the Securities Act, no stop order suspending the effectiveness of the registration statement will be in effect and no proceedings for purposes of suspending the effectiveness of the registration statement shall have been initiated or be threatened by the SEC; |
• | approval of the stockholders of LMAO will have been obtained; |
• | approval by the Company Requisite Stockholders will have been obtained; |
• | The LMAO Common Stock to be issued in connection with the Business Combination will have been approved for listing on Nasdaq, subject only to official notice of issuance thereof, and no revocation or suspension thereof shall have occurred; and |
• | SeaStar Medical will have amended its Company Options, Company Warrants and Company Restricted Stock Unit Awards (each as defined in the Merger Agreement) in a manner reasonably acceptable to LMAO in order to, to the extent necessary, permit their assignment to, and assumption by, LMAO. |
• | The Specified Representations will be true and correct in all respects as the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date); |
• | certain of the representations and warranties of SeaStar Medical pertaining to its current capitalization will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in each case other than de minimis |
• | each of the remaining representations and warranties of SeaStar Medical will be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in all respects, except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect (as defined in the Merger Agreement); |
• | each of the covenants, agreements, and obligations of SeaStar Medical to be performed or complied with as of or prior to the Closing will have been performed in all material respects; |
• | Since the date of the Merger Agreement, no Material Adverse Effect and be continuing as of immediately prior to the Closing; |
• | SeaStar Medical will have delivered the Reviewed Financials no later than May 15, 2022; |
• | SeaStar Medical will have delivered to LMAO a certificate signed by an officer of SeaStar Medical, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the foregoing conditions have been fulfilled; |
• | SeaStar Medical will have delivered to LMAO executed counterparts of each transaction agreement to which SeaStar Medical is a party; |
• | SeaStar Medical will have delivered to LMAO evidence as to (i) the payment of certain indebtedness set forth on SeaStar Medical’s disclosure schedule, (ii) the termination of any liens related thereto, and (iii) the termination of each agreement set forth on SeaStar Medical’s disclosure schedule; and |
• | SeaStar Medical will have delivered evidence of consents from certain counterparties set forth on SeaStar Medical’s disclosure schedules. |
• | The Acquiror Specified Representations will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date); |
• | certain of the representations and warranties of LMAO and Merger Sub regarding capitalization will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in each case other than de minimis |
• | each of the remaining representations and warranties of LMAO and Merger Sub will be true and correct (without giving any effect to any limitation as to “materiality” or “material adverse effect” or any similar limitation set forth therein) as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in all respects, except, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a material adverse effect; |
• | each of the covenants, agreements, and obligations of LMAO and Merger Sub to be performed or complied with as of or prior to the Closing will have been performed in all material respects; |
• | the Available Closing Acquiror Cash will not be less than $15,000,000; |
• | LMAO will have delivered to SeaStar Medical a certificate signed by an officer of LMAO, dated as of the Closing Date, certifying that, to the knowledge and belief of such officer, the foregoing conditions have been fulfilled; and |
• | LMAO will have delivered to SeaStar Medical executed counterparts of each transaction agreement to which LMAO or Merger Sub is a party. |
• | by written consent of SeaStar Medical and LMAO; |
• | by SeaStar Medical or LMAO if the Closing has not occurred on or before July 29, 2022, as such date will be extended to October 29, 2022 in the event that the Sponsor elects, in its sole discretion, to extend the time period by which LMAO must consummate a business combination by depositing additional funds into the Trust Account on or prior to July 29, 2022 pursuant to LMAO’s Letter Agreement, dated January 25, 2021; |
• | by SeaStar Medical or LMAO if the Closing is permanently enjoined or prevented by the terms of a final, non-appealable order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, or a statute, rule, or regulation; |
• | By SeaStar Medical or LMAO if the approval of the stockholders of LMAO is not obtained at the Special Meeting and vote of LMAO stockholders, subject to any adjournment, postponement, or recess of the meeting; |
• | by SeaStar Medical or LMAO if the other party has breached any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to the Closing would not to be satisfied at the Closing (a “Terminating Breach”), except that, if such Terminating Breach is curable through the exercise of the other party’s commercially reasonable efforts, then, for a period of 30 days after the other party receives written notice from such party of such breach (the “Cure Period”), such termination will not be effective, and such termination will only become effective if the Terminating Breach is not cured within the Cure Period, provided that this termination right will not be available if such party’s failure to fulfill any obligations under the Merger Agreement has been the proximate cause of the failure of the Closing to occur; |
• | by LMAO if SeaStar Medical and each of the Company Requisite Stockholders have not executed and delivered to LMAO the SeaStar Medical stockholder approval and the Support Agreements within three (3) business days after the execution and delivery of the Merger Agreement; |
• | by SeaStar Medical in the event that the LMAO Board changes its recommendation that LMAO stockholders vote in favor of the Business Combination; or |
• | by SeaStar Medical, prior to LMAO obtaining the approval of the stockholders of LMAO, if the LMAO Board fails to include its recommendation that LMAO stockholders vote in favor of the Business Combination in the proxy statement contained in the registration statement distributed to LMAO stockholders. |
• | Met weekly to review referrals of potential acquisition targets and eliminated targets with obvious obstacles precluding a business combination resulting in a list of more than 150 potential acquisition targets in a variety of industries, including financial services, financial technology, electric vehicles, health care, medical device, bio-technology, asset management, real estate services, insurance, aviation, cybersecurity, space technology, electronic gaming, energy, shipping, banking, and manufacturing; |
• | Communicated an interest to discuss a business acquisition with all 150 potential acquisition targets, approximately 117 of whom were willing to enter into preliminary discussions in the period from January 28, 2021 through April 22, 2022; |
• | Entered into non-disclosure agreements with approximately 31 target companies after preliminary discussions and review of publicly available information from the period February 1, 2021 to March 2, 2022; |
• | Had in person, telephonic or email discussions with all of those target companies under NDA, each of which were actively pursued (including SeaStar Medical) by engaging in significant due diligence and detailed discussions directly with senior executives and/or stockholders; |
• | Submitted indications of interest or intent to ten acquisition candidates, nine of which (other than SeaStar Medical) were not introduced by Maxim and were not clients of Maxim; and |
• | Discussed various targets at LMAO’s regularly scheduled board meetings. |
• | Public research on the medical device industry and its prospects in review of SeaStar Medical’s historical financial performance and forecast; |
• | Conference call meetings with SeaStar Medical’s management and representatives regarding operations, company services, technology, intellectual property, major suppliers, partners and customers, and growth prospects, both organic and through possible acquisitions, among other customary due diligence matters; |
• | Review of SeaStar Medical’s potential customer base and sales pipeline, including existing material contracts, near-term prospects and potential for further expansion; |
• | Review of competitive landscape and SeaStar Medical’s potential for achieving further market penetration; and |
• | Review of certain other legal, regulatory, intellectual property and financial due diligence. |
• | Unique and Highly Disruptive Business Model |
• | Attractive Opportunity for Growth out-licensing activities and scaling production with manufacturing partners. |
• | Strong Institutional Backing |
• | Experienced Management Team |
• | Benefits Not Achieved |
• | Liquidation of LMAO |
• | Stockholder Vote |
• | Lack of Third Party Fairness Opinion |
• | Closing Conditions |
• | Litigation |
• | Fees and Expenses |
• | Not in Initial Target Industry |
• | Potential Conflicts of Interest |
• | Other Risks Risk Factors |
• | are fundamentally sound businesses that have a sustainable business model with the ability to successfully navigate the ebbs and flows of an economic downturn, and changes in the industry landscape and regulatory environment; |
• | can benefit from the vast network, experience, and guidance of our management team; |
• | have a defensible market position and demonstrate differentiated competitive advantages with high barriers to entry against new competitors; |
• | have recurring, predictable revenues and the history of, or near-term potential to, generate stable and sustainable free cash flow; |
• | exhibit unrecognized value, desirable returns on capital, and a need for capital to achieve the company’s growth strategy; |
• | are able to structure around or ring fence exposure to legacy assets to the extent desirable to enhance stockholder returns or reduce volatility of such returns; |
• | have the potential for strong and continued growth both organically and through add-on acquisitions; |
• | are at an inflection point and would benefit from a catalyst such as incremental capital, innovation through new operational practices, and application of innovative FinTech, or product creation, or additional management expertise; |
• | have publicly traded comparable companies that operate in a similar industry sector or which have similar operating metrics which may help establish that the valuation of our initial business combination is attractive relative to such public peers; and |
• | are positioned to be publicly traded and can benefit from being publicly traded, which access to broader and more efficient capital markets, to drive improved financial performance and achieve key business strategies. |
(US$ in millions) | ||||||||||||||||||||||||||||
Revenue (1) |
EBITDA (1) |
|||||||||||||||||||||||||||
Company |
Last Twelve Months |
2024E |
2025E |
Last Twelve Months |
2024E |
2025E |
Enterprise Value (2) |
|||||||||||||||||||||
Small Cap |
||||||||||||||||||||||||||||
CorMedix Inc. |
$ | 0 | $ | 47 | $ | 110 | $ | (29 | ) | $ | (6 | ) | $ | 49 | $ | 127 | ||||||||||||
Cytosorbents Corporation |
43 | 89 | 108 | (22 | ) | 17 | 31 | 125 | ||||||||||||||||||||
Spectral Medical Inc. |
2 | 73 | 198 | (7 | ) | 15 | 67 | 73 | ||||||||||||||||||||
Median |
$ |
2 |
$ |
73 |
$ |
110 |
$ |
(22 |
) |
$ |
15 |
$ |
49 |
$ |
125 |
|||||||||||||
Mean |
22 |
81 |
153 |
(14 |
) |
16 |
49 |
99 |
||||||||||||||||||||
Large Cap |
||||||||||||||||||||||||||||
Johnson & Johnson |
$ | 94,880 | $ | 104,047 | $ | 108,347 | $ | 32,371 | $ | 38,190 | $ | 41,725 | $ | 473,068 | ||||||||||||||
Medtronic plc |
31,785 | 35,122 | 37,373 | 9,609 | 11,047 | 11,427 | 160,296 | |||||||||||||||||||||
Stryker Corporation |
17,108 | 20,971 | 22,467 | 4,645 | 6,110 | 6,745 | 108,726 | |||||||||||||||||||||
Boston Scientific Corporation |
11,888 | 14,819 | 15,788 | 3,102 | 4,535 | 3,649 | 70,853 | |||||||||||||||||||||
Baxter International Inc. |
12,784 | 17,415 | 18,319 | 2,981 | 4,343 | 4,680 | 53,867 | |||||||||||||||||||||
Fresenius Medical Care AG & Co. |
19,018 | 23,150 | 24,484 | 2,885 | 4,964 | 5,373 | 33,816 | |||||||||||||||||||||
DaVita Inc. |
11,619 | 13,111 | 13,847 | 2,451 | 2,972 | 2,972 | 24,802 | |||||||||||||||||||||
Smith & Nephew plc |
5,212 | 5,939 | 6,257 | 1,178 | 1,651 | 1,743 | 15,566 | |||||||||||||||||||||
Median |
$ |
14,946 |
$ |
19,193 |
$ |
20,393 |
$ |
3,042 |
$ |
4,750 |
$ |
5,026 |
$ |
62,360 |
||||||||||||||
Mean |
25,537 |
29,322 |
30,860 |
7,403 |
9,196 |
9,789 |
117,624 |
(1) | Capital IQ consensus estimates for 2024E and 2025E |
(2) | Enterprise value equals all fully diluted shares at the stock price less any option proceeds plus straight debt, minority interest, straight preferred stock, all out-of-the-money convertibles, less investments in unconsolidated affiliates and cash. |
Last Twelve Months |
EV / 2024E |
EV / 2025E |
||||||||||||||||||||||
Company |
Revenue |
EBITDA |
Revenue |
EBITDA |
Revenue |
EBITDA |
||||||||||||||||||
Small Cap |
||||||||||||||||||||||||
CorMedix Inc. |
NM | NM | 2.7 | NM | 1.2 | 2.6 | ||||||||||||||||||
Cytosorbents Corporation |
2.9 | NM | 1.4 | 7.4 | 1.2 | 4.0 | ||||||||||||||||||
Spectral Medical Inc. |
NM | NM | 1.0 | 4.8 | 0.4 | 1.1 | ||||||||||||||||||
Median |
2.9x |
NM |
1.4x |
6.1x |
1.2x |
2.6x |
||||||||||||||||||
Mean |
2.9x |
NM |
1.7x |
6.1x |
0.9x |
2.6x |
||||||||||||||||||
Large Cap |
||||||||||||||||||||||||
Johnson & Johnson |
5.0 | 14.6 | 4.5 | 12.4 | 4.4 | 11.3 | ||||||||||||||||||
Medtronic plc |
5.0 | 16.7 | 4.6 | 14.5 | 4.3 | 14.0 | ||||||||||||||||||
Stryker Corporation |
6.4 | 23.4 | 5.2 | 17.8 | 4.8 | 16.1 | ||||||||||||||||||
Boston Scientific Corporation |
6.0 | 22.8 | 4.8 | 15.6 | 4.5 | 19.4 | ||||||||||||||||||
Baxter International Inc. |
4.2 | 18.1 | 3.1 | 12.4 | 2.9 | 11.5 | ||||||||||||||||||
Fresenius Medical Care AG & Co. |
1.8 | 11.7 | 1.5 | 6.8 | 1.4 | 6.3 | ||||||||||||||||||
DaVita Inc. |
2.1 | 10.1 | 1.9 | 9.1 | 1.8 | 8.3 | ||||||||||||||||||
Smith & Nephew plc |
3.0 | 13.2 | 2.6 | 9.4 | 2.5 | 8.9 | ||||||||||||||||||
Median |
4.6x |
15.6x |
3.8x |
12.4x |
3.6x |
11.4x |
||||||||||||||||||
Mean |
4.2x |
16.3x |
3.5x |
12.3x |
3.3x |
12.0x |
($ in thousands) |
Historical |
Projected |
||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
|||||||||||||||||||
Revenues |
$ | — | $ | — | $ | — | $ | 1,715.0 | $ | 6,247.5 | $ | 47,223.8 | ||||||||||||
Cost of goods sold |
$ | — | $ | — | $ | 164.2 | $ | 598.0 | $ | 5,031.9 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
$ | — | $ | — | $ | — | $ | 1,550.8 | $ | 5,649.5 | $ | 42,191.9 | ||||||||||||
Operating expenses |
6,453.0 | 4,449.0 | 6,601.1 | 15,259.3 | 19,888.0 | 22,214.6 | ||||||||||||||||||
Depreciation and amortization |
1.80 | 1.80 | 1.80 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
6,453.00 | 4,449.00 | 6,602.90 | 15,261.10 | 19,889.80 | 22,214.60 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating loss (income) |
(6,453.00 | ) | (4,449.00 | ) | (6,602.90 | ) | (13,710.30 | ) | (14,240.30 | ) | 19,977.30 | |||||||||||||
Other income (loss) |
6,494.00 | 64.00 | ||||||||||||||||||||||
Interest expense |
(3,308.00 | ) | (212.00 | ) | — | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) before income taxes |
(3,267.00 | ) | (4,597.00 | ) | (6,602.90 | ) | (13,710.30 | ) | (14,240.30 | ) | 19,977.30 | |||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Income taxes (benefit) |
9.0 | (1.0 | ) | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net operating profit after tax |
(3,276.0 | ) | (4,596.0 | ) | (6,602.9 | ) | (13,710.3 | ) | (14,240.3 | ) | 19,977.3 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
3,308.00 | 212.00 | ||||||||||||||||||||||
Income taxes (benefit) |
9.0 | (1.0 | ) | — | ||||||||||||||||||||
Depreciation and amortization |
— | — | 1.8 | 1.8 | 1.8 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA (1) |
41.0 | (4,385.0 | ) | (6,601.1 | ) | (13,708.5 | ) | (14,238.5 | ) | 19,977.3 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT |
(6,453.0 | ) | (4,449.0 | ) | (6,602.9 | ) | (13,710.3 | ) | (14,240.3 | ) | 19,977.3 |
(1) | EBITDA represents net income (loss) before interest expense, provision for income taxes, depreciation and amortization. EBITDA does not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of operating performance. |
• | New SCD product candidate sales to pediatric hospitals based on a HDE approval for pediatric acute kidney injury patients on continuous renal replacement therapy; and |
• | New SCD product candidate sales to adult hospitals based on a PMA approval for adult acute kidney injury patients on continuous renal replacement therapy. |
• | United States Government Agency for Healthcare Research data to estimate the annual number of pediatric acute kidney injury patients on continuous renal replacement therapy; |
• | The number of SCD treatments per patient based on pediatric clinical study length of treatment; and |
• | The price per SCD based on current pricing of extracorporeal therapies used today. |
• | United States Government Agency for Healthcare Research data to estimate the annual number of adult acute kidney injury patients on continuous renal replacement therapy; |
• | The number of SCD treatments per patient based on adult clinical study length of treatment; and |
• | The price per SCD based on current pricing of extracorporeal therapies used today. |
• | Obtaining FDA HDE regulatory approval in the first quarter of 2023; |
• | Enrolling patients for SCD 006 (Adult AKI Pivotal Study) beginning in the first quarter of 2023; and |
• | Obtaining FDA PMA regulatory approval in the first half of 2025. |
• | Market growth assumptions for 2022 through 2025 |
• | Growth in headcount. |
• | Large available market |
• | Expansion into new markets |
• | If an initial business combination is not completed within 21 months from the closing of the IPO (October 29, 2022), LMAO will be required to liquidate. In such event, [2,587,500] shares of Class B |
Common Stock held by the Sponsor, which were acquired prior to the IPO for an aggregate purchase price of $25,000, will be worthless. If such founder shares were unrestricted and freely tradeable, they would be valued at approximately $26.5 million, based on the closing price of Class A Common Stock on August 18, 2022. |
• | If an initial business combination is not completed within 21 months from the closing of the IPO (October 29, 2022), the private placement warrants held by the Sponsor will expire worthless. |
• | That the Sponsor and its affiliates can earn a positive rate of return on their investment even if LMAO’s public stockholders experience a negative return following the consummation of the Business Combination. |
• | The exercise of LMAO’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interests. |
• | If the Business Combination with SeaStar Medical is completed, pursuant to the Director Nomination Agreement, the Sponsor will have a right to designate two (2) directors of the Combined Company board of directors. |
• | In connection with the determination of the valuation of SeaStar Medical, LMAO engaged Skyway to act as financial advisor to LMAO. One of LMAO’s board members, Marty Traber, is the Chairman of Skyway. The Board was made aware of Mr. Traber’s connection to Skyway, discussed that Mr. Traber could derive directly or indirectly a pecuniary benefit given the fee paid by LMAO to Skyway in connection with their services and ultimately the remainder of the Board (other than Mr. Traber) unanimously approved the engagement of Skyway to act as financial advisor to LMAO. |
• | The Sponsor and its affiliates are active investors across a number of different investment platforms and companies, which we and our Sponsor believe improved the volume and quality of opportunities that were available to LMAO. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple entities. In order to provide our Sponsor with the flexibility to evaluate opportunities across these platforms, our Existing Charter provides that LMAO renounce its interest in any business combination opportunity offered to any of our directors or officers unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of LMAO, is an opportunity that we are legally permitted to undertake, would be reasonable for LMAO to pursue, and the director or officer is permitted to refer the opportunity to us without violating any legal obligation. This waiver allows our Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the entity. We do not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on our search for an acquisition target. |
• | In connection with our IPO, Maxim was engaged to act as sole manager to LMAO and is entitled to a deferred underwriting fee of $3,622,500 upon the completion of the Business Combination. In connection with the IPO, Maxim received an underwriting discount of $2,070,000. In the event that the Business Combination is not consummated and LMAO is unable to consummate another business combination within the timeline required by LMAO’s organizational documents, Maxim would not be entitled to receive the deferred portion of the IPO underwriter fees. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
• | Maxim and LMAO entered into the Maxim-LMAO Engagement Letter on March 4, 2021, pursuant to which Maxim provided LMAO with due diligence and financial advisory services until such engagement was terminated pursuant to a termination letter (the “Termination Letter”) entered into on April 21, 2022 (the “Advisory Termination Date”). Prior to the Advisory Termination Date, representatives of Maxim assisted LMAO in efforts to identify and evaluate potential candidates for business combination targets in consideration for advisory fees that Maxim, pursuant to the Termination Letter, agreed to forgo in |
connection with the Business Combination (provided that if LMAO consummates an initial business combination with a target other than SeaStar Medical that is identified by Maxim during the twelve month period following the Advisory Termination Date, Maxim will be entitled to a portion of the fees otherwise payable to Maxim under the Maxim-LMAO Engagement Letter). Prior to the Advisory Termination Date, a portion of the fees payable under the Maxim-LMAO Engagement Letter would have been due only upon consummation of the Business Combination or another business combination by LMAO within the timeline required by LMAO’s organizational documents. |
• | Maxim and SeaStar Medical entered into an engagement letter dated August 14, 2021 (the “Maxim-SeaStar Engagement Letter”), pursuant to which SeaStar Medical retained Maxim as its exclusive financial advisor and investment banker to provide certain financial advisory and investment banking services, including advisory services in connection with the Business Combination. As consideration for Maxim’s services under the Maxim-SeaStar Engagement Letter, Maxim is entitled to receive, and SeaStar Medical agreed to pay Maxim, (i) a monthly retainer fee of $15,000 per month for the term of the Maxim-SeaStar Engagement Letter (for a minimum of six (6) months) and (ii) a cash fee of 2.0% of the enterprise value of the combined entity following consummation of the Business Combination (to be no less than $500,000), to be paid at the Closing Date (the “Transaction Fee”). As of June 30, 2022, SeaStar Medical has paid a total of $150,000 in monthly retainer fees to Maxim, which will offset the Transaction Fee upon the consummation of the Business Combination. In addition, SeaStar Medical agreed to reimburse Maxim for reasonable expenses incurred in connection with the engagement. The Maxim-SeaStar Engagement Letter contains customary indemnification provisions. Either party may terminate the Maxim-SeaStar Engagement Letter (i) for cause or (ii) at any time after six (6) months with written notice to the other party. |
• | LMAO also engaged Maxim to act as sole placement agent for the PIPE Investment in connection with the Business Combination. In consideration for Maxim’s placement agent services, Maxim will receive a fee equal to 7.0% of the gross proceeds received by LMAO in the PIPE Investment (not including proceeds from certain PIPE Investors, such as the Dow Pension Funds) and expense reimbursements in connection therewith. The fees owed to Maxim by LMAO (including Maxim’s deferred underwriting fee) are contingent upon the closing of the Business Combination or the completion of the PIPE Investment. |
• | The Board was fully informed that representatives of Maxim, in Maxim’s capacity as SeaStar Medical’s advisor pursuant to the Maxim-SeaStar Engagement Letter, communicated with LMAO and with other potential merger candidates, on behalf of SeaStar Medical, in relation to a potential transaction involving SeaStar Medical and that the services Maxim provided to SeaStar Medical included assisting with evaluating the commercial terms of the letter of intent submitted by LMAO. SeaStar Medical, in turn, was fully informed that, while representatives of Maxim were providing advisory services to SeaStar Medical, other representatives of Maxim were, prior to termination of the Maxim-LMAO Engagement Letter, providing services to LMAO as their advisor, including the evaluation of potential acquisition opportunities, until the Termination Letter was executed. Maxim did not, in its capacity as advisor to LMAO prior to the Termination Letter, or in its capacity as placement agent for the PIPE Investment, provide to the Board any appraisal, valuation report, fairness opinion or other report related to the potential valuation of SeaStar Medical. Prior to determining to proceed with the Business Combination, the Board engaged Skyway for the purpose of reviewing SeaStar Medical’s financial models and projections and to provide valuation and financial advice to the Board. After careful consideration, the Board made its determination that the Business Combination and the transactions contemplated thereby are fair to, and in the best interests of, LMAO and its stockholders. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units, and assumes the Convertible Note Conversion and the Preferred Stock Conversion have occurred; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the Closing under the Incentive Plan or ESPP, (ii) the issuance of shares of Common Stock for either the Commitment Fee or drawdowns pursuant to the Common Stock Investment, and (iii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
No Redemption (1)(2) |
50% Redemption (1)(2) |
Maximum Redemption (1)(2) |
||||||||||
Shares: |
||||||||||||
LMAO Public Stockholders |
10,453,500 | 5,278,500 | 924,500 | |||||||||
Sponsor |
2,587,500 | 2,587,500 | 2,587,500 | |||||||||
PIPE Investors |
700,000 | 700,000 | 700,000 | |||||||||
SeaStar Stockholders |
7,908,476 | 7,908,476 | 7,908,476 | |||||||||
|
|
|
|
|
|
|||||||
21,649,476 |
16,474,476 |
12,120,476 |
||||||||||
Ownership Percentage |
||||||||||||
LMAO Public Stockholders |
48.3 |
% |
32.0 |
% |
7.6 |
% | ||||||
Sponsor |
12.0 |
% |
15.7 |
% |
21.3 |
% | ||||||
PIPE Investors |
3.2 |
% |
4.2 |
% |
5.8 |
% | ||||||
SeaStar Stockholders |
36.5 |
% |
48.1 |
% |
65.3 |
% |
(1) | LMAO will pay Maxim an aggregate amount of $3,622,500 as deferred underwriting fees upon the completion of the Business Combination. The following table presents the underwriting fees, which includes an underwriting discount of $2,070,000, as a percentage of the aggregate proceeds from the IPO across various redemption scenarios: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption | ||||||||
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) | |||||
10,453,500 |
5.5% | 5,278,500 | 11.2% | 924,500 | 90.3% |
(2) | Stockholders will experience additional dilution to the extent the Combined Company issues additional shares of Common Stock after the Closing. The table above excludes (a) [16,788,000] shares of Common Stock that will be issuable upon the exercise of the [5,738,000] Private Placement Warrants, 700,000 PIPE Warrants, and [10,350,000] public warrants; (b) [709,593] shares of Common Stock that will be issuable upon the exercise of the [57,942] SeaStar Medical warrants and [271,280] SeaStar Medical options, and settlement of [255,000] SeaStar Medical restricted stock units assumed by LMAO; (c) 1,270,000 shares of Common Stock that will initially be available for issuance under the Incentive Plan; (d) 380,000 shares of Common Stock that will be available for issuance under the ESPP; and (e) shares of Common Stock that will be issuable under the Common Stock Investment. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption |
||||||||||||||||||||||
Shares |
Percentage |
Shares |
Percentage |
Shares |
Percentage |
|||||||||||||||||||
Total shares of Common Stock outstanding at Closing |
21,649,476 | 52.99 | % | 16,474,476 | 46.17 | % | 12,120,476 | 38.70 | % | |||||||||||||||
Shares underlying public warrants |
[10,350,000 | ] | 25.33 | % | [10,350,000 | ] | 29.01 | % | [10,350,000 | ] | 33.04 | % | ||||||||||||
Shares underlying Private Placement Warrants |
[5,738,000 | ] | 14.04 | % | [5,738,000 | ] | 16.08 | % | [5,738,000 | ] | 18.32 | % | ||||||||||||
Shares underlying PIPE Warrants |
700,000 | 1.71 | % | 700,000 | 1.96 | % | 700,000 | 2.24 | % | |||||||||||||||
Shares underlying SeaStar Assumed equity awards |
[709,593 | ] | 1.74 | % | [709,593 | ] | 1.99 | % | [709,593 | ] | 2.27 | % | ||||||||||||
Shares initially reserved for issuance under the Incentive Plan (a) |
1,270,000 | 3.11 | % | 1,270,000 | 3.56 | % | 1,270,000 | 4.05 | % | |||||||||||||||
Shares initially reserved for issuance under the ESPP |
380,000 | 0.94 | % | 380,000 | 1.07 | % | 380,000 | 1.20 | % | |||||||||||||||
Shares initially reserved for SeaStar warrants |
57,942 | 0.14 | % | 57,942 | 0.16 | % | 57,942 | 0.18 | % | |||||||||||||||
Total Shares (b) |
[40,855,011 | ] | 100 | % | [35,680,011 | ] | 100 | % | [31,326,011 | ] | 100 | % |
(a) | On the first trading day in January each calendar year, beginning with 2023, the number of shares of Common Stock available for issuance under the Incentive Plan will automatically increase by three percent (3%) of the total number of shares of Common Stock outstanding on the last trading day of December of the immediately preceding calendar year. |
(b) | The number of total shares does not include shares of Common Stock issuable under the Common Stock Investment which will include shares of Common Stock issued as the Commitment Fee and any drawdowns of Common Stock issuable as part of the Common Stock Investment. |
(i) | hold public shares and |
(ii) | prior to 5.00 p.m., Eastern Time, on [•], 2022, (a) submit a written request to Continental that LMAO redeem your public shares for cash and (b) deliver your public shares to Continental, physically or electronically through DTC. |
• | Changes to Authorized Capital Stock - |
• | Classified Board - two-year terms. The Proposed Charter divides the Board into three classes with staggered three-year terms; |
• | Director Removal - two-thirds (66 and 2/3%) of the outstanding shares of capital stock of the Combined Company, voting together as a single class, entitled to vote at an election of directors; and |
• | Removal of Blank Check Company Provisions - |
• | If shares of Common Stock otherwise issuable under the Incentive Plan are surrendered in payment of the exercise price of an option, then the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced only by the net number of shares issued by us upon such exercise and not by the gross number of shares as to which such option is exercised. |
• | Upon the exercise of any stock appreciation right under the Incentive Plan, the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced by the net number of shares as to which such right is exercised, and not by the gross number of shares issued by us upon such exercise. |
• | If shares of Common Stock otherwise issuable under the Incentive Plan are withheld by us in satisfaction of the withholding taxes incurred in connection with the issuance, vesting or exercise of any award or the issuance of Common Stock thereunder, then the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced by the net number of shares issued, vested or exercised under such award, calculated in each instance after payment of such share withholding. |
• | Upon the exercise of an option through the net exercise procedure under the Incentive Plan or upon the exercise of a stock appreciation right, then for purposes of calculating the number of shares of Common Stock remaining available for exercise under such option or stock appreciation right, the number of such shares shall be reduced by the net number of shares for which the option or stock appreciation right is exercised, and without regard to any cash settlement of a stock appreciation right. |
• | Unvested shares issued under the Incentive Plan and subsequently forfeited or repurchased by us, at a price per share not greater than the original issue price paid per share, pursuant to our repurchase rights under the Incentive Plan shall be available for subsequent issuance under the Incentive Plan. |
• | Shares of Common Stock that have been repurchased by us on the open market using stock option exercise proceeds shall not be available for subsequent issuance under the Incentive Plan. |
• | Tandem stock appreciation rights granted in conjunction with options, which provide the holders with the right to surrender the related option grant for an appreciation distribution from us in an amount |
equal to the excess of (i) the fair market value of the vested shares of Common Stock subject to the surrendered option over (ii) the aggregate exercise price payable for those shares. |
• | Stand-alone stock appreciation rights, which allow the holders to exercise those rights as to a specific number of shares of our Common Stock and receive in exchange an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the shares of Common Stock as to which those rights are exercised over (ii) the aggregate exercise price in effect for those shares. The exercise price per share may not be less than the fair market value per underlying share of Common Stock on the date the stand-alone stock appreciation right is granted, and the right may not have a term in excess of ten years. |
• | Each outstanding award may be assumed, substituted, replaced with a cash retention program that preserves the intrinsic value of the award and provides for subsequent payout in accordance with the same vesting schedule applicable to the award or otherwise continued in effect by the successor corporation. |
• | To the extent an award is not so assumed, substituted, replaced, or continued, the award will automatically accelerate in full (with vesting of performance-based awards to be determined with reference to actual performance attained as of the change in control or based on target level), unless the acceleration of such award is precluded by other limitations imposed in the applicable award agreement. |
• | The plan administrator has complete discretion to grant one or more awards which will vest in the event the individual’s service with us or the successor entity is terminated within a designated period following a change in control transaction in which those awards are assumed or otherwise continued in effect. |
• | Unless the plan administrator establishes a different definition for one or more awards, a change in control will be deemed to occur for purposes of the Incentive Plan in the event (a) a merger or asset sale or (b) there occurs any transaction pursuant to which any person or group of related persons becomes directly or indirectly the beneficial owner of securities possessing 50% or more of the total combined voting power of our outstanding securities or (c) there is a change in the majority of the Board effected through one or more contested elections for board membership. |
• | Purchase rights may not be granted to any individual who owns stock (including stock purchasable under any outstanding purchase rights) possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its affiliates. |
• | A participant may not be granted rights to purchase more than $25,000 worth of Common Stock (valued at the time each purchase right is granted) for each calendar year in which such purchase rights are outstanding. |
• | The plan administrator will establish the maximum number of shares purchasable by a participant on each purchase date during an offering period. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity with respect to our securities; |
• | a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage for the post-transaction company; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | banks or other financial institutions, underwriters, or insurance companies; |
• | traders in securities who elect to apply a mark-to-market |
• | real estate investment trusts and regulated investment companies; |
• | tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; |
• | expatriates or former long-term residents of the United States; |
• | subchapter S corporations, partnerships or other pass-through entities or investors in such entities; |
• | dealers or traders in securities, commodities or currencies; |
• | grantor trusts; |
• | persons subject to the alternative minimum tax; |
• | U.S. persons whose “functional currency” is not the U.S. dollar; |
• | persons who received shares of Common Stock through the issuance of restricted stock under an equity incentive plan or through a tax-qualified retirement plan or otherwise as compensation; |
• | persons who own (directly or through attribution) 5% or more (by vote or value) of the outstanding shares of Common Stock (excluding treasury shares); |
• | holders holding Common Stock as a position in a “straddle,” as part of a “synthetic security” or “hedge,” as part of a “conversion transaction,” or other integrated investment or risk reduction transaction; |
• | controlled foreign corporations, passive foreign investment companies, or foreign corporations with respect to which there are one or more United States shareholders within the meaning of Treasury Regulation Section 1.367(b)-3(b)(1)(ii); or |
• | the Sponsor or its affiliates. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States or any State thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. |
• | the gain is effectively connected with a trade or business of the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base of the Non-U.S. Holder); |
• | the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more in the taxable year of the disposition, and certain other conditions are met; or |
• | LMAO is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the Non-U.S. Holder’s holding period for such Common Stock redeemed, and either (A) shares of Common Stock are not considered to be regularly traded on an established securities market or (B) such Non-U.S. Holder has owned or is deemed to have owned, at any time during the shorter of the five-year period preceding such disposition and such Non-U.S. Holder’s holding period more than 5% of the outstanding shares of Common Stock. There can be no assurance that shares of Common Stock will be treated as regularly traded on an established securities market for this purpose. |
• | Execute on the clinical plan through key relationships: |
• | Differentiation through medical education: |
• | Business development and out-licensing activities: |
standard of care and treatment infrastructure, and highlight the differentiating factors of our SCD product candidates that can provide a cost effective solution. |
• | Scaling production with manufacturing partners: |
Granted Patents |
Pending Applications |
|||||||||||||||
US |
Foreign |
US |
Foreign |
|||||||||||||
SCD Technology (Patent Families 1-5) |
12 | 14 | 3 | 14 | ||||||||||||
Other Technology (Patent Families 6-10) |
5 | 6 | 2 | 1 | (PCT) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
17 | 20 | 5 | 15 | ||||||||||||
|
|
|
|
|
|
|
|
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Methods for processing leukocytes and methods for treating subjects having inflammatory conditions using such methods | |||
United States | Granted | 2029 | Methods for treating subjects undergoing a cardiopulmonary bypass | |||
United States | Granted | 2029 | Methods for treating subjects with end-stage renal disease | |||
United States | Granted | 2029 | Methods for treating subjects with acute renal failure | |||
United States | Granted | 2029 | Methods for treating subject with sepsis | |||
United States | Granted | 2031 | A device that processes activated leukocytes and platelets | |||
United States | Granted | 2029 | Methods for treating acute lung injury and acute respiratory distress syndrome | |||
United States | Granted | 2029 | Systems for treating activated platelets | |||
United States | Granted | 2028 | Systems for treating activated leukocytes | |||
United States | Pending | 2028* | Systems for treating leukocytes and platelets and methods for treating subject having inflammatory conditions by processing leukocytes or platelets | |||
Canada | Granted | 2028 | Systems and methods for processing leukocytes and platelets and systems for treating inflammatory conditions | |||
Canada | Granted | 2028 | A device for processing activated leukocytes and platelets | |||
Japan | Granted | 2028 | A device and methods for treating leukocytes | |||
Japan | Granted | 2028 | A device for processing activated leukocytes | |||
New Zealand | Granted | 2028 | Systems and methods for processing leukocytes and platelets and for treating inflammatory conditions | |||
Europe | Pending | 2028* | A device for use in treating an inflammatory condition | |||
Europe | Pending | 2028* | A device that processes platelets or leukocytes | |||
Hong Kong | Pending | 2028* | A device for treating an inflammatory condition | |||
Hong Kong | Pending | 2028* | A device that processes platelets or leukocytes |
* | Expiration date if application is granted. |
† |
This patent family was developed with U.S. federal government funding and is subject to obligations under the Bayh-Dole Act. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Cartridge for treating leukocytes or platelets | |||
United States | Pending | 2031* | Methods for processing leukocytes or platelets and for treating a subject with an inflammatory condition | |||
Australia | Granted | 2031 | Cartridge for treating leukocytes or platelets and methods for treating a subject with an inflammatory condition | |||
France, Germany, Italy, Spain, & UK |
Granted | 2031 | Cartridge for sequestering leukocytes or platelets | |||
Canada | Pending | 2031* | Cartridge for processing leukocytes or platelets | |||
Japan | Pending | 2031* | Cartridge for treating leukocytes or platelets | |||
Japan | Pending | 2031* | Cartridge for treating leukocytes or platelets |
* | Expiration date if application is granted. |
† |
This patent family was developed with U.S. federal government funding and is subject to obligations under the Bayh-Dole Act. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2032 | Methods for treating chronic heart failure | |||
Japan | Granted | 2032 | Device for use in treating chronic heart failure | |||
Canada | Pending | 2032* | Device for use in treating chronic heart failure | |||
Europe | Pending | 2032* | Device for use in treating chronic heart failure | |||
Japan | Pending | 2032* | Device for use in treating chronic heart failure |
* | Expiration date if application is granted. |
† |
This patent family was developed with |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2032 | Methods for increasing myocardial function in subject with acute decompensated heart failure | |||
United States | Pending | 2032* | Methods for increasing myocardial function in subject with chronic heart failure | |||
Australia | Granted | 2032 | Methods for increasing myocardial function in a subject with acute chronic heart failure or chronic heart failure | |||
Australia | Granted | 2032 | Methods, cartridges, and systems for improving myocardial function and treating inflammation associated with acute decompensated heart failure and chronic heart failure | |||
Canada | Pending | 2032* | Devices for use in treating subjects with chronic heart failure and acute decompensated heart failure | |||
Europe | Pending | 2032* | Devices for use in treating subjects with chronic heart failure or acute decompensated heart failure | |||
Japan | Pending | 2032* | Devices for use increasing myocardial function in subjects with chronic heart failure or acute decompensated heart failure | |||
Japan | Pending | 2032* | Devices for use in increasing myocardial function in subjects with chronic heart failure or acute decompensated heart failure |
* | Expiration date if application is granted. |
† |
This patent family was developed with |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2025 | Design patent directed to a medical device connector | |||
United States | Granted | 2024 | Design patent directed to a medical device connector | |||
United States | Granted | 2025 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Pending | 2040* | Devices and methods for preparing a donor organ for transplantation |
* | Expiration date if application is granted. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
US | Pending | 2040* | Device and methods for reducing rejection of a transplanted organ in a recipient |
* | Expiration date if application is granted. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
PCT | Pending | 2041* | Devices and methods for treating cytokine release syndrome and tumor lysis syndrome |
* | Expiration date if application is granted. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2027 | Extracorporeal cell-based therapeutic device and delivery system for renal cells |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Methods for enhanced propagation of renal cells |
• | occurs in pediatric patients or in a pediatric subpopulation, and such device is labeled for use in pediatric patients or in a pediatric subpopulation in which the disease or condition occurs, or |
• | occurs in adult patients and does not occur in pediatric patients or occurs in pediatric patients in such numbers that the development of the device for such patients is impossible, highly impracticable, or unsafe. |
• | establishment registration and device listing; |
• | the QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; |
• | labeling regulations and the FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; |
• | medical device reporting regulations, which require that manufactures report to the FDA if their device may have caused or contributed to a death or serious injury, or if their device malfunctioned and the device or a similar device marketed by the manufacturer would be likely to cause or contribute to a death or serious injury if the malfunction were to recur; and |
• | corrections and removal reporting regulations, which require that manufactures report to the FDA field corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy a violation of the FDCA that may present a risk to health. |
• | warning or untitled letters, fines, injunctions, consent decrees and civil penalties; |
• | customer notifications, voluntary or mandatory recall or seizure of our products; |
• | operating restrictions, partial suspension or total shutdown of production; |
• | delay in processing submissions or applications for new products or modifications to existing products; |
• | withdrawing approvals that have already been granted; and |
• | criminal prosecution. |
Three Months Ended June 30, |
Change |
Six Months Ended June 30, |
Change |
|||||||||||||||||||||||||||||
($ in thousands) |
2022 |
2021 |
$ |
% |
2022 |
2021 |
$ |
% |
||||||||||||||||||||||||
Revenue |
$ | — | $ | — | $ | — | — | |||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||
Research and development |
596 | 536 | 60 | 11 | % | 951 | 1,282 | (331 | ) | (26 | %) | |||||||||||||||||||||
General and administrative |
716 | 652 | 64 | 10 | % | 1,173 | 968 | 205 | 21 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total operating expenses |
1,312 | 1,188 | 124 | 10 | % | 2,124 | 2,250 | (126 | ) | (6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loss from operations |
(1,312 |
) |
(1,188 |
) |
(124 |
) |
10 | % | (2,124 |
) |
(2,250 |
) |
126 |
(6 | %) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total other income (expense) |
410 | 82 | 328 | 400 | % | 218 | 80 | 138 | 173 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loss before income tax provision |
(902 |
) |
(1,106 |
) |
204 |
(18 | %) | (1,906 |
) |
(2,170 |
) |
264 |
(12 | %) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Income tax provision (benefit) |
— | — | — | 0 | % | (1 | ) | 1 | (100 | %) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net loss |
$ |
(902 |
) |
$(1,106) |
204 |
(18 | %) | $ |
(1,906 |
) |
$ |
(2,171 |
) |
265 |
(12 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Change |
Six Months Ended June 30, |
Change | |||||||||||||||||||||||||||||
($ in thousands) |
2022 |
2021 |
$ |
% |
2022 |
2021 |
$ |
% |
||||||||||||||||||||||||
Clinical trials |
$ | — | $ | 299 | $ | (299 | ) | (100 | %) | $ | 4 | $ | 639 | $ | (635 | ) | (99 | %) | ||||||||||||||
External services |
388 | 124 | 264 | 213 | % | 658 | 422 | 236 | 56 | % | ||||||||||||||||||||||
Payroll and personnel expenses |
126 | 85 | 41 | 48 | % | 169 | 166 | 3 | 2 | % | ||||||||||||||||||||||
Other research and development expenses |
82 | 28 | 54 | 193 | % | 120 | 55 | 65 | 118 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
$ | 596 | $ | 536 | $ | 60 | 11 | % | $ | 951 | $ | 1,282 | $ | (331 | ) | (26 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
$ |
% |
||||||||||||
Revenue |
$ | — | $ | — | $ | — | — | |||||||||
Operating expenses: |
||||||||||||||||
Research and development |
2,766 | 4,025 | (1,259 | ) | (31 | )% | ||||||||||
General and administrative |
1,683 | 2,428 | (745 | ) | (31 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
4,449 | 6,453 | (2,004 | ) | (31 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Loss from operations |
(4,449 |
) |
(6,453 |
) |
(2,004 |
) |
(31 | )% | ||||||||
|
|
|
|
|
|
|||||||||||
Total other income (expense) |
(148 | ) | 3,186 | (3,334 | ) | (105 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Loss before income tax expense |
(4,597 |
) |
(3,267 |
) |
(1,330 |
) |
41 | % | ||||||||
|
|
|
|
|
|
|||||||||||
Income tax expense (benefit) |
(1 | ) | 9 | (10 | ) | (111 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Net loss |
$ |
(4,596 |
) |
$ |
(3,276 |
) |
$ |
(1,320 |
) |
40 | % | |||||
|
|
|
|
|
|
|
Change |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
$ |
% |
||||||||||||
Clinical trials |
$ | 989 | $ | 1,703 | $ | (714 | ) | (42 | )% | |||||||
External services |
1,278 | 1,384 | (106 | ) | (8 | )% | ||||||||||
Payroll and personnel expenses |
353 | 291 | 62 | 21 | % | |||||||||||
Other research and development expenses |
146 | 647 | (501 | ) | (77 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,766 | $ | 4,025 | $ | (1,259 | ) | (31 | )% | ||||||||
|
|
|
|
|
|
|
|
• | our ability to successfully complete the Business Combination; |
• | the progress and results of our clinical trials and interpretation of those results by the FDA and other regulatory authorities; |
• | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and |
• | the costs of operating as a public company, including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, investor relations fees and expenses related to compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq. |
Year Ended December 31, |
Six Months Ended June 30, |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
2022 |
2021 |
||||||||||||
Statement of cash flows data: |
||||||||||||||||
Total cash (used in)/provided by: |
||||||||||||||||
Operating activities |
$ | (5,114 | ) | $ | (5,572 | ) | $ | (1,587 | ) | $ | (2,659 | ) | ||||
Investing activities |
— | — | — | — | ||||||||||||
Financing activities |
2,817 | 4,892 | 1,681 | 480 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (2,297 | ) | $ | (680 | ) | $ | 103 | $ | (2,179 | ) | ||||||
|
|
|
|
|
|
|
|
($ in thousands) |
Total |
Less than 1 year |
1 – 3 years |
3 – 5 years |
More than 5 years |
|||||||||||||||
Contractual obligations: |
||||||||||||||||||||
Convertible notes |
$ | 4,636 | $ | 2,700 | $ | 418 | $ | 1,518 | $ | — | ||||||||||
SBA loan payable |
63 | 0 | 2 | 2 | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total contractual obligations |
$ |
4,699 |
$ |
2,700 |
$ |
420 |
$ |
1,520 |
$ |
59 |
||||||||||
|
|
|
|
|
|
|
|
|
|
• | the accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the historical financial statements of LMAO as of and for the three and six months ended June 30, 2022 and for the year ended December 31, 2021, and the related notes, included elsewhere in this proxy statement/prospectus; |
• | the historical financial statements of SeaStar Medical as of and for the three and six months ended June 30, 2022 and for the year ended December 31, 2021, and the related notes, included elsewhere in this proxy statement/prospectus; |
• | other information relating to LMAO and SeaStar Medical included in this proxy statement/prospectus, including the Merger Agreement and the description of certain terms thereof set forth under “ Proposal No. 1 — The Business Combination Proposal — The Merger Agreement Management’s Discussion and Analysis of Financial Condition and Results of Operations of LMAO Management’s Discussion and Analysis of Financial Condition and Results of Operations of SeaStar Medical |
• | Scenario 1 — No redemption |
• | Scenario 2 — Maximum redemptions of Class A Common Stock |
exercise their redemption rights upon consummation of the Business Combination at a redemption price of approximately $10.30 per share, which is the maximum amount of redemptions that could occur and still ensure that LMAO meets its requirement to maintain net tangible assets of at least $5,000,001. The maximum redemption scenario assumes that both SeaStar Medical and LMAO have waived their rights to terminate the Business Combination Agreement, including that LMAO have at least $15 million in available cash after the closing of the Business Combination. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||
Current Assets |
||||||||||||||||||||||||||||||
Cash |
$ | 79 | $ | 613 | 106,687 | A | $ | 102,323 | (98,149 | ) | $ | 4,174 | ||||||||||||||||||
438 | K | |||||||||||||||||||||||||||||
(12,494 | ) | C | ||||||||||||||||||||||||||||
7,000 | J | |||||||||||||||||||||||||||||
Other receivables |
— | — | — | |||||||||||||||||||||||||||
Inventory |
— | — | — | |||||||||||||||||||||||||||
Prepaid expenses |
224 | 58 | 1,863 | C | 2,145 | 2,145 | ||||||||||||||||||||||||
Cash and marketable securities held in trust |
105,652 | — | (106,687 | ) | A | — | — | |||||||||||||||||||||||
1,035 | K | |||||||||||||||||||||||||||||
Other assets |
752 | 752 | 752 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current assets |
105,955 | 1,423 | 105,220 | 7,071 | ||||||||||||||||||||||||||
Other long-term assets |
— | 2 | 2 | 2 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Long Term Assets |
— | 2 | 2 | 2 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Assets |
$ | 105,955 | $ | 1,425 | $ | 105,222 | $ | 7,073 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||
Short Term Liabilities |
||||||||||||||||||||||||||||||
Accounts payable and accrued expenses |
1,037 | 1,301 | 1,301 | 1,301 | ||||||||||||||||||||||||||
(637 | ) | C | ||||||||||||||||||||||||||||
(400 | ) | K | ||||||||||||||||||||||||||||
Current portion of notes payable - government loans |
— | — | — | — | ||||||||||||||||||||||||||
Convertible notes, less discount, related party |
— | 2,548 | (2,548 | ) | G | — | — | |||||||||||||||||||||||
Due to related parties |
912 | — | (2,785 | ) | C | |||||||||||||||||||||||||
838 | K | |||||||||||||||||||||||||||||
1,035 | K | |||||||||||||||||||||||||||||
Deferred underwriting Commissions in connection with the initial public offering |
3,623 | — | (3,623 | ) | B | — | — | |||||||||||||||||||||||
Warrant liability |
1,810 | — | (1,164 | ) | H | 646 | 646 | |||||||||||||||||||||||
Derivative liability |
— | — | — | G | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Total Short Term Liabilities |
7,382 | 3,849 | 1,947 | 1,947 | ||||||||||||||||||||||||||
Long Term Liabilities |
||||||||||||||||||||||||||||||
Notes payable - government loans, net of current portion |
63 | 63 | 63 | |||||||||||||||||||||||||||
Convertible notes, less discount, related party, net of current portion |
1,886 | (1,886 | ) | G | — | — | ||||||||||||||||||||||||
Derivative liability |
— | — | G | — | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Long Term Liabilities |
— | 1,949 | 63 | 63 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Liabilities |
7,382 | 5,798 | 2,010 | 2,010 | ||||||||||||||||||||||||||
Class A Common Stock subject to possible redemption 10,350,000 shares at redemption value of $10.30 per share |
105,570 | (105,570 | ) | E | — | — | ||||||||||||||||||||||||
Convertible Preferred Stock |
— | 73,349 | (73,349 | ) | F | — | — | — | ||||||||||||||||||||||
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||
Common Stock |
— | — | — | D | 2 | (1 | ) | I | 1 | |||||||||||||||||||||
1 | E | |||||||||||||||||||||||||||||
1 | F | |||||||||||||||||||||||||||||
Additional Paid in Capital |
— | 496 | 181,428 | (98,148 | ) | I | 83,280 | |||||||||||||||||||||||
(7,209 | ) | C | ||||||||||||||||||||||||||||
105,569 | E | |||||||||||||||||||||||||||||
(6,997 | ) | F | ||||||||||||||||||||||||||||
73,348 | F | |||||||||||||||||||||||||||||
4,434 | G | |||||||||||||||||||||||||||||
1,164 | H | |||||||||||||||||||||||||||||
7,000 | J | |||||||||||||||||||||||||||||
3,623 | B | |||||||||||||||||||||||||||||
Accumulated Deficit |
(6,997 | ) | (78,218 | ) | 6,997 | F | (78,218 | ) | (78,218 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Stockholder’s Equity (Deficit) |
(6,997 | ) | (77,722 | ) | 103,212 | 5,063 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity (Deficit) |
105,955 | $ | 1,425 | $ | 105,222 | $ | 7,073 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
($ in thousands) |
||||||||||||||||||||||||||||||||
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||
Research and Development |
$ | — | $ | 951 | $ | 951 | $ | 951 | ||||||||||||||||||||||||
Merger costs |
$ |
1,062 |
— |
$ |
1,062 |
$ |
1,062 |
|||||||||||||||||||||||||
General and Administrative |
560 | 1,173 | 1,733 | 1,733 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Operating Expenses |
1,622 | 2,124 | 3,746 | 3,746 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loss from Operations |
(1,622 | ) | (2,124 | ) | (3,746 | ) | (3,746 | ) | ||||||||||||||||||||||||
Change in fair value of derivative liability |
578 | 578 | 578 | |||||||||||||||||||||||||||||
Interest Expense |
(360 | ) | (360 | ) | (360 | ) | ||||||||||||||||||||||||||
Gain on warrant liability revaluation |
5,121 | — | 5,121 | 5,121 | ||||||||||||||||||||||||||||
Investment Income Earned on Marketable Securities Held in Trust Account |
70 | — | (70 | ) | aa | — | — | |||||||||||||||||||||||||
Other income |
— | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Other Income (Loss) |
5,191 | 218 | (70 | ) | 5,339 | 5,339 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before taxes |
3,569 | (1,906 | ) | (70 | ) | 1,593 | 1,593 | |||||||||||||||||||||||||
Taxes |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net Income (loss) |
$ | 3,569 | $ | (1,906 | ) | $ | (70 | ) | $ | 1,593 | $ | 1,593 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income per share: |
||||||||||||||||||||||||||||||||
Basic weighted average shares outstanding of redeemable Class A Common Stock |
10,453,500 | — | 21,649,476 | bb | 12,120,476 | |||||||||||||||||||||||||||
Diluted weighted average shares outstanding of redeemable Class A Common Stock |
10,453,500 | — | 21,649,476 | bb | 12,120,476 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basis net income per share, redeemable Class A Common Stock |
$ | 0.27 | $ | — | $ | 0.07 | $ | 0.13 | ||||||||||||||||||||||||
Diluted net income per share, redeemable Class A Common Stock |
$ | 0.27 | $ | — | $ | 0.07 | $ | 0.13 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding of non-redeemable Class B Common Stock |
2,587,500 | — | ||||||||||||||||||||||||||||||
Basic and diluted net income per share, non-redeemable Class B Common Stock |
$ | 0.27 | $ | — | ||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Weighted-average number of common shares used in computing net loss per share attributable to common stockholders - basic and diluted |
— | — | ||||||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - basic and diluted |
— | |||||||||||||||||||||||||||||||
|
|
|
|
($ in thousands) |
||||||||||||||||||||||||||||||||
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||
Research and Development |
$ | — | $ | 2,766 | $ | 2,766 | $ | 2,766 | ||||||||||||||||||||||||
General and Administrative |
1,122 | 1,683 | 2,805 | 2,805 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Operating Expenses |
1,122 | 4,449 | $ | 5,571 | $ | 5,571 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loss from Operations |
(1,122 | ) | (4,449 | ) | (5,571 | ) | (5,571 | ) | ||||||||||||||||||||||||
Change in fair value of derivative liability |
(27 | ) | (27 | ) | (27 | ) | ||||||||||||||||||||||||||
Interest Expense |
(212 | ) | (212 | ) | (212 | ) | ||||||||||||||||||||||||||
Gain on warrant liability revaluation |
1,186 | 1,186 | 1,186 | |||||||||||||||||||||||||||||
Investment Income Earned on Marketable Securities Held in Trust Account |
12 | $ | (12 | ) | aa | — | — | |||||||||||||||||||||||||
Other income |
— | 91 | 91 | 91 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Other Income (Loss) |
1,198 | (148 | ) | (12 | ) | 1,038 | 1,038 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before taxes |
76 | (4,597 | ) | (12 | ) | (4,533 | ) | (4,533 | ) | |||||||||||||||||||||||
Taxes |
(1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net Income (loss) |
$ | 76 | $ | (4,596 | ) | $ | (12 | ) | $ | (4,532 | ) | $ | (4,532 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income per share: |
||||||||||||||||||||||||||||||||
Basic weighted average share outstanding of redeemable Class A Common Stock |
9,651,587 |
— |
21,649,476 | bb |
12,120,476 | |||||||||||||||||||||||||||
Diluted weighted average share outstanding of redeemable Class A Common Stock |
9,651,587 |
— |
21,649,476 | bb |
12,120,476 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic net income per share, redeemable Class A Common Stock |
$ | 0.02 | $ | — | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Diluted net income per share, redeemable Class A Common Stock |
$ | 0.02 | $ | — | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding of non-redeemable Class B Common Stock |
2,554,418 | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic and diluted net income per share, non-redeemable Class B Common Stock |
$ | 0.02 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Weighted-average number of common shares used in computing net loss per share attributable to common stockholders - basic and diluted |
— | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net loss per share attributable to common stockholders - basic and diluted |
$ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
1. |
Description of the Business Combination |
2. |
Basis of Presentation |
• | The pre-Business Combination stockholders of SeaStar Medical are generally expected to hold majority of voting rights in the Combined Company; |
• | The pre-Business Combination stockholders of SeaStar Medical have the right to appoint the majority of directors to the Combined Company’s Board of Directors; |
• | Senior management of SeaStar Medical comprise the senior management of the Combined Company; and |
• | The operations of SeaStar Medical comprise the only ongoing operations of the Combined Company. |
3. |
Transaction Accounting Adjustments |
A | Cash released from Trust Account |
B | Deferred underwriter fee |
C | Transaction costs |
D | Automatic conversion of Class B Common Stock into Class A Common Stock |
E | Reclassification of Class A Common Stock subject to possible redemption — assuming no redemptions |
F | Conversion of SeaStar Medical’s convertible preferred stock (Series A and Series B) and common stock into Common Stock |
Number of shares to be issued in connection with the Business Combination after giving effect to the Preferred Stock Conversion and Convertible Note Conversion: |
Number of shares of SeaStar Medical Common Stock on a fully-diluted basis | 7,095,427 | |
Total SeaStar Medical Common Stock before exchange | 7,095,427 | |
x: Exchange Ratio | 1.215 | |
Total number of shares of Common Stock held by SeaStar Medical stockholders (1) |
7,908,476 |
(1) | The issuance of 7,908,476 shares of Common Stock does not take into account that a portion of such number of shares of Common Stock will be withheld at closing of the Business Combination for future issuance in connection with the exercise of the SeaStar Medical warrants and the SeaStar Medical options assumed by LMAO and the settlement of the SeaStar Medical restricted stock units assumed by LMAO. |
G | Conversion of related party note payable |
H | Reclassification of LMAO Public Warrants from liability to equity |
I | Reclassification of Class A Common Stock subject to possible redemption — assuming a maximum number of redemptions |
J | PIPE Investment - $7.0 million |
K | Related Party Sponsor Loan of $1.75 million and Extension Loan of $1.035 million |
aa | Represents elimination of interest earned on cash and marketable securities held in the trust account |
bb | Represents net loss attributable to Class A common stockholders |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||
$ | 2,379 | $ | 2,379 | |||||
Weighted average Class A Common Stock outstanding, basic |
21,649,476 | 12,120,476 | ||||||
Weighted average Class A Common Stock outstanding, diluted |
21,649,476 | 12,120,476 | ||||||
Net loss per share of Class A Common Stock, basic |
$ | 0.07 | $ | 0.13 | ||||
Net loss per share of Class A Common Stock, diluted |
$ | 0.07 | $ | 0.13 |
aa | Represents elimination of interest earned on cash and marketable securities held in the trust account |
bb | Represents net loss attributable to Class A common stockholders |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||
$ | (4,532 | ) | $ | (4,532 | ) | |||
Weighted average Class A Common Stock outstanding, basic |
21,649,476 | 12,120,476 | ||||||
Weighted average Class A Common Stock outstanding, diluted |
21,649,476 | 12,120,476 | ||||||
Net loss per share of Class A Common Stock, basic |
$ | (0.21 | ) | $ | (0.38 | ) | ||
Net loss per share of Class A Common Stock, diluted |
$ | (0.21 | ) | $ | (0.38 | ) |
• | historical per share information of LMAO for the six months ended June 30, 2022 and year ended December 31, 2021; |
• | historical per share information of SeaStar Medical for the six months ended June 30, 2022 and the year ended December 31, 2021; and |
• | unaudited pro forma per share information of the Combined Company for six months ended June 30, 2022 and the year ended December 31, 2021 after giving effect to the Business Combination, assuming two redemption scenarios as follows: |
• | Scenario 1 No redemption |
• | Scenario 2 Maximum redemptions of Class A Common Stock |
• | The following tables should be read in conjunction with the selected historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of LMAO and SeaStar Medical and the related notes thereto that are included elsewhere in this proxy statement/prospectus. The unaudited LMAO and SeaStar Medical pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and the related notes thereto included elsewhere in this proxy statement/prospectus. |
• | The unaudited pro forma combined net income (loss) per share information below does not purport to represent the actual results of operations that would have occurred had the companies been combined during the period presented, nor does it purport to represent the actual results of operations for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of LMAO and SeaStar Medical would have been had the companies been combined during the period presented. |
Historical |
Pro Forma |
|||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||
As of and for the Six Months Ended June 30, 2022 |
||||||||||||||||
Book value per share (1) |
$ | (0.54 | ) | $ | (11.84 | ) | $ | 4.77 | $ | 0.42 | ||||||
Book value per share of redeemable Class A Common Stock (2) |
$ | (0.43 | ) | — | ||||||||||||
Book value per share of non-redeemable Class B Common Stock(3) |
(0.11 | ) | — | |||||||||||||
Book value per share of common stock equivalents (3) |
— | — | ||||||||||||||
Net loss per share, basic (4) |
$ | 0.27 | $ | 0.07 | $ | 0.13 | ||||||||||
Net loss per share, diluted (5) |
$ | 0.27 | $ | 0.07 | $ | 0.13 | ||||||||||
Net income per share of redeemable Class A Common Stock, basic and diluted (6) |
$ | 0.22 | — | |||||||||||||
Net income per share of non-redeemable Class B Common Stock, basic and diluted(7) |
$ | 0.05 | — | |||||||||||||
Net loss per share attributable to common stockholders, basic and diluted (8) |
$ | 0.27 | — | |||||||||||||
Weighted average shares outstanding - basic |
10,453,500 | — | 21,649,476 | 12,120,476 | ||||||||||||
Weighted average shares outstanding - diluted |
10,453,500 | — | 21,649,476 | 12,120,476 | ||||||||||||
As of and for the Year Ended December 31, 2021 |
— | — | ||||||||||||||
Book value per share (1) |
$ | (0.81 | ) | — | $ | 4.65 | $ | 0.42 | ||||||||
Book value per share of redeemable Class A Common Stock (2) |
$ | (0.65 | ) | — | ||||||||||||
Book value per share of non-redeemable Class B Common Stock(3) |
(0.16 | ) | — | |||||||||||||
Book value per share of common stock equivalents (3) |
— | — | ||||||||||||||
Net loss per share, basic (4) |
$ | 0.01 | $ | (0.21 | ) | $ | (0.38 | ) | ||||||||
Net loss per share, diluted (5) |
$ | 0.01 | $ | (0.21 | ) | $ | (0.38 | ) | ||||||||
Net income per share of redeemable Class A Common Stock, basic and diluted (6) |
$ | 0.00 | — | |||||||||||||
Net income per share of non-redeemable Class B Common Stock, basic and diluted(7) |
$ | 0.00 | — | |||||||||||||
Net loss per share attributable to common stockholders, basic and diluted (8) |
$ | (0.65 | ) | — | ||||||||||||
Weighted average shares outstanding - basic |
9,651,587 | — | 21,649,476 | 12,120,476 | ||||||||||||
Weighted average shares outstanding - diluted |
9,651,587 | — | 21,649,476 | 12,120,476 |
(1) | Book value per share is calculated as total equity divided by pro forma information outstanding basic share. |
(2) | Book value per share is calculated as total equity divided by redeemable Class A Common Stock outstanding at June 30, 2022 and December 31, 2021, respectively. |
(3) | Book value per share is calculated as total equity divided by common stock equivalents (i.e. preferred shares and convertible debt) at June 30, 2022 and December 31, 2021, respectively. |
(4) | Book value per share is calculated as total equity divided by SeaStar Medical Common Stock outstanding at June 30, 2022 and December 31, 2021, respectively. |
(5) | Net loss per share is based on the pro forma information. |
(6) | Net income per share is based on weighted average number of shares of redeemable Class A Common Stock outstanding for the six months ended June 30, 2022 and year ended December 31, 2021, respectively. |
(7) | Net income per share is based on weighted average number of shares of non-redeemable Class B Common Stock outstanding for the six months ended June 30, 2022 and year ended December 31, 2021, respectively. |
(8) | Net loss per share is based on weighted average number of LMAO common stock outstanding for the six months ended June 30, 2022 and year ended December 31, 2021, respectively. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending 3 business days before we send the notice of redemption to the warrant holders. |
• | If we are unable to complete our initial business combination within 18 months from the closing of our IPO (or 21 months from the closing, if we extend the period of time to consummate a business combination), we will: (i) cease all operations, except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than 10 business days thereafter subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
• | Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to: (i) receive funds from the trust account; or (ii) vote on any initial business combination; |
• | Although we do not intend to enter into an initial business combination with a target business that is affiliated with our Sponsor, our directors or our officers, we are not prohibited from doing so. In the event |
we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such an initial business combination is fair to LMAO from a financial point of view; |
• | If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; whether or not we maintain our registration under the our Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above; |
• | So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection with our initial business combination; |
• | If our stockholders approve an amendment to our Existing Charter: (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of our IPO (or 21 months from the closing, if we extend the period of time to consummate a business combination); or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares; and |
• | We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
• | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”); |
• | an affiliate of an interested stockholder; or |
• | an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
• | our Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Common Stock; or |
• | on or subsequent to the date of the transaction, the initial business combination is approved by our Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
Name |
Age |
Position | ||
Bruce Rodgers | 58 | Chief Executive Officer, President, and Chairman of the Board of Directors | ||
Richard Russell | 61 | Chief Financial Officer, Treasurer, Secretary, and Director | ||
Bruce Bennett | 61 | Director | ||
Craig Burson | 61 | Director | ||
Martin Traber | 76 | Director |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; |
• | pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
• | obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing: (i) the independent registered public accounting firm’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers; |
• | reviewing on an annual basis our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
• | if required, producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Name |
Age |
Position | ||
Eric Schlorff | 49 | Chief Executive Officer and Class III Director | ||
Caryl Baron | 55 | Finance Controller | ||
Kevin Chung | 49 | Chief Medical Officer | ||
Kenneth Van Heel | 58 | Class III Director | ||
Rick Barnett | 62 | Class I Director | ||
Andres Lobo | 56 | Class I Director | ||
Allan Collins, MD | 74 | Class II Director | ||
Bruce Rodgers | 59 | Class II Director | ||
Richard Russell | 61 | Class II Director |
• | retaining, overseeing and evaluating the independence and performance of our independent auditor; |
• | reviewing and discussing with our independent auditor their annual audit, including the timing and scope of audit activities; |
• | pre-approving audit services; |
• | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC; |
• | reviewing the adequacy and effectiveness of our accounting and internal controls over financial reporting, disclosure controls and policies and procedures; |
• | reviewing and discussing guidelines and policies governing the process by which our senior management assesses and manages our exposure to risk; |
• | reviewing, and if appropriate, approving or ratifying any related party transactions and other significant conflicts of interest; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | reviewing our program to monitor compliance with our code of ethics; and |
• | overseeing significant deficiencies and material weaknesses in the design or operation of our internal controls over financial reporting. |
• | evaluating, determining, and recommending to our Board, the compensation of our executive officers; |
• | administering and recommending to our Board the compensation of our directors; |
• | reviewing and approving our executive compensation plan and recommending that our Board amend these plans if deemed appropriate; |
• | administering our general compensation plan and other employee benefit plans, including incentive compensation and equity-based plans and recommending that our Board amend these plans if deemed appropriate; |
• | reviewing and approving any severance or termination arrangements to be made with any of our executive officers; and |
• | reviewing and approving at least annually the corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers. |
• | identifying, screening and recommending to our Board director candidates for election (or re-election); |
• | overseeing the policies and procedures with respect to the consideration of director candidates recommended by stockholders; |
• | reviewing and recommending to our Board for approval, as appropriate, disclosures concerning our policies and procedures for identifying and screening Board nominee candidates, the criteria used to evaluate Board membership and director independence as well as any policies regarding Board diversity; |
• | reviewing independence qualifications of directors under the applicable Nasdaq rules; |
• | developing and coordinating with management on appropriate director orientation programs; and |
• | reviewing our stockholder engagement plan, if any, and overseeing relations with stockholders. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | Eric Schlorff, Chief Executive Officer |
• | Caryl Baron, Finance Controller |
Name and Principal Position |
Year |
Salary ($) |
Bonus (1) ($) |
Option Awards (2) ($) |
Total ($) |
|||||||||||||||
Eric Schlorff |
2021 | $ | 300,000 | $ | 22,500 | $ | — | $ | 322,500 | |||||||||||
Chief Executive Officer |
||||||||||||||||||||
Caryl Baron |
2021 | $ | 150,000 | $ | 56,000 | $ | 6,594 | $ | 212,594 | |||||||||||
Finance Controller |
(1) | Amounts reflect annual bonuses for 2021, which were paid in September 2021, as well as a one-time $50,000 cash retention bonus to Ms. Baron. |
(2) | Amounts reflect the grant date fair value of options granted to SeaStar Medical’s named executive officers calculated in accordance with FASB ASC Topic 718. SeaStar Medical’s named executive officers will only have a benefit to the extent the fair market value of its common stock is greater than the exercise price of such stock options. For information regarding assumptions underlying the valuation of equity awards, see Note 2 to SeaStar Medical’s audited financial statements appearing in this proxy statement /prospectus. Ms. Baron received a stock option to purchase 16,361 shares of common stock under the 2019 Stock Incentive Plan during fiscal year 2021. The option is exercisable immediately subject to a repurchase right in favor of the Company which lapses as the option vests. The option vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from January 1, 2021, and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from January 1, 2022, and expires January 1, 2031, subject to the terms of the award agreement. |
OPTION AWARDS |
||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable (1) |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration |
|||||||||||||||
Eric Schlorff |
10,277 (2) |
4,672 | $10.00 | 3/1/2029 | ||||||||||||||||
Chief Executive Officer |
31,922 | (3) |
37,809 | $ | 0.53 | 2/20/2030 | ||||||||||||||
Caryl Baron |
1,743 | (4) |
2,243 | $ | 10.00 | 3/20/2030 | ||||||||||||||
Finance Controller |
— | (5) |
16,361 | $ | 0.55 | 1/1/2031 |
(1) | This table provides information pertaining to all outstanding equity awards held by our named executive officers as of December 31, 2021. Stock options granted prior to 2021 are exercisable upon completion of six(6) months of service following the date of grant, subject to a repurchase right in favor of the Company which lapses as the option vests. Stock options granted in 2021 are exercisable immediately, subject to a repurchase right in favor of the Company which lapses as the option vests. Accordingly, the columns and footnotes below reflect the extent to which stock options held by our named executive officers were vested (as opposed to exercisable) as of December 31, 2021. |
(2) | The option was granted on February 8, 2019 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from March 1, 2019 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from March 1, 2019. |
(3) | The option was granted on August 13, 2020 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from February 20, 2020 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from February 20, 2020. |
(4) | The option was granted on March 30, 2020 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from March 30, 2020 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from March 30, 2020. |
(5) | The option was granted on January 1, 2021 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from January 1, 2021 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from January 1, 2021. |
Name |
Option Awards (1) ($) |
All Other Compensation ($) |
Total ($) |
|||||||||
Richard Barnett |
$ | 8,221 | $ | 112,500 | (2) | $ | 120,721 | |||||
Ray Chow |
$ | 19,213 | $ | 300,000 | (2) | $ | 319,213 | |||||
Allan Collins |
$ | 8,221 | $ | 112,500 | (2) | $ | 120,721 | |||||
David Humes |
$ | 6,229 | $ | 277,401 | $ | 283,630 | ||||||
Andres Lobo |
— | — | — | |||||||||
Ken Van Heel |
$ | 8,286 | — | $ | 8,286 |
(1) | Amounts reflect the grant date fair value of options granted to our non-employee directors calculated in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the valuation of equity awards, see note 7 to our financial statements appearing at the end of this proxy statement /prospectus. |
(2) | Represents cash compensation paid to certain of our non-employee directors during fiscal 2021 for consulting services. See “ SeaStar Medical Related Party Transactions |
(3) | Represent payments to Mr. Humes and Innovative BioTherapies, Inc., an entity controlled and wholly-owned by Dr. Humes, pursuant to a consulting agreement and research service agreement, respectively, during fiscal year 2021. See “ SeaStar Medical Related Party Transactions |
• | each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by LMAO to be the beneficial owner of more than 5% of shares of our Common Stock as of [●], 2022 (pre-Business Combination) or of shares of our Common Stock upon the closing of the Business Combination; |
• | each of LMAO’s executive officers and directors; |
• | each person who will become an executive officer or director of the Combined Company upon the closing of the Business Combination; |
• | all of our current executive officers and directors as a group; and |
• | all executive officers and directors of the Combined Company as a group upon the closing of the Business Combination. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the Closing under the Incentive Plan or ESPP, (ii) the issuance of shares of Common Stock for the commitment fee pursuant to the Common Stock Investment, and (iii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no redemptions of our Class A Common Stock by public stockholders; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
Pre-Business Combination |
Post-Business Combination |
|||||||||||||||||||||||
Number of Shares |
Assuming No Redemption |
Assuming Maximum Redemptions |
||||||||||||||||||||||
Name and Address of Beneficial Owner |
Number of Shares Beneficially Owned |
% of Class |
Number of Shares |
% of Class |
Number of Shares |
% of Class |
||||||||||||||||||
Pre-Business Combination directors and officers(1) |
||||||||||||||||||||||||
LMFAO Sponsor, LLC (our sponsor) (2)(3) |
2,587,500 | 100 | % | 2,587,500 | 12.0 | % | 2,587,500 | 21.3 | % | |||||||||||||||
Bruce Rodgers (3) |
— | * | — | |||||||||||||||||||||
Richard Russell (3) |
— | * | — | |||||||||||||||||||||
Bruce Bennett (4) |
— | * | ||||||||||||||||||||||
Craig Burson (4) |
— | * | ||||||||||||||||||||||
Martin Traber (4) |
— | * | ||||||||||||||||||||||
All pre-Business Combination officers and directors as a group (5 individuals) |
2,587,500 | 100 | % | 2,587,500 | 12.0 | % | 2,587,500 | 21.3 | % | |||||||||||||||
Five Percent Holders (5) |
||||||||||||||||||||||||
Karpus Investment Management (6) |
1,529,348 | 14.6 | % | 1,529,348 | 7.1 | % | 1,529,348 | 12.6 | % | |||||||||||||||
Saba Capital Management, L.P. (7) |
972,567 | 9.3 | % | 972,567 | 4.5 | % | 972,567 | 8.0 | % | |||||||||||||||
Hudson Bay Capital Management LP (8) |
750,000 | 7.2 | % | 750,000 | 3.5 | % | 750,000 | 6.2 | % | |||||||||||||||
Dow Employees’ Pension Plan Trust (9) |
4,496,994 | 20.8 | % | 4,496,994 | 37.1 | % | ||||||||||||||||||
Union Carbide Employees’ Pension Plan (10) |
2,992,764 | 13.8 | % | 2,992,764 | 24.7 | % | ||||||||||||||||||
Post-Business Combination directors and officers (11) |
||||||||||||||||||||||||
Eric Schlorff (12) |
— | * | 58,159 | * | 58,159 | * | ||||||||||||||||||
Rick Barnett (13) |
— | * | 8,478 | * | 8,478 | * | ||||||||||||||||||
Allan Collins, MD (13) |
— | * | 8,478 | * | 8,478 | * | ||||||||||||||||||
Kenneth Van Heel |
— | * | — | * | — | * | ||||||||||||||||||
Andres Lobo |
— | * | — | * | — | * | ||||||||||||||||||
Bruce Rodgers (3) |
— | * | — | * | — | * | ||||||||||||||||||
Richard Russell (3) |
— | * | — | * | — | * | ||||||||||||||||||
Caryl Baron (14) |
— | * | 9,308 | * | 9,308 | * | ||||||||||||||||||
Kevin Chung, MD |
— | * | — | * | — | * |
* | Represents less than 1% of beneficial ownership |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o LMF Acquisition Opportunities, Inc., 1200 W. Platt St., Suite 100, Tampa, Florida 33606 |
(2) | Interests shown consist solely of founder shares, which are shares of Class B Common Stock. Such shares will automatically convert into shares of Class A Common Stock on a one-for-one |
(3) | LMFAO Sponsor, LLC, our Sponsor, is the record holder of the shares reported herein. The sole manager of the Sponsor is LM Funding America, Inc., a Delaware corporation, of which Bruce Rodgers is the Chief Executive Officer, President, and Chairman of the Board of Directors and Richard Russell is the Chief Financial Officer, Treasurer, and Secretary. Although Mr. Rodgers and Mr. Russell have membership interests in the Sponsor, the board of directors of LM Funding America, Inc. has sole voting and investment discretion with respect to the shares held of record by the Sponsor, and as such, neither Mr. Rodgers nor Mr. Russell is deemed to have beneficial ownership of the Class B Common Stock held directly by the Sponsor. |
(4) | Does not include any shares held by the Sponsor. This individual is a member of the Sponsor but does not have voting or dispositive control over the shares held by the Sponsor. |
(5) | Interests shown consist solely of public shares, which are shares of Class A Common Stock. Shares of Class A Common Stock and Class B Common Stock will be reclassified as Common Stock in connection with the Business Combination. |
(6) | According to Schedule 13G filed on February 14, 2022. Karpus Investment Management (“Karpus”) is controlled by City of London Investment Group plc (“CLIG”), which is listed on the London Stock Exchange. However, in accordance with SEC Release No. 34-39538 (January 12, 1998), effective informational barriers have been established between Karpus and CLIG such that voting and investment power over the subject securities is exercised by Karpus independent of CLIG, and, accordingly, attribution of beneficial ownership is not required between Karpus and CLIG. The business address of Karpus is 183 Sully’s Trail, Pittsford, New York 14534. |
(7) | According to Schedule 13G filed on February 2, 2022. The business address of Saba Capital Management, L.P. is 28 Havemeyer Place, 2nd Floor, Greenwich, Connecticut 06830. |
(8) | According to Schedule 13G filed on February 14, 2022. Hudson Bay Capital Management LP (“Hudson”) serves as the investment manager of HB Strategies LLC, in whose name the securities reported herein are held. As such, Hudson may be deemed to be the beneficial owner of all shares of Class A Common Stock held by HB Strategies LLC. Mr. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson. Mr. Gerber disclaims beneficial ownership of these securities. The business address of Hudson is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
(9) | Includes (i) 2,837,079 shares of SeaStar Medical Series A-1 preferred stock, (ii) 6,455 shares of SeaStar Medical Series A-2 preferred stock (iii) 359,797 shares of SeaStar Medical Series B preferred stock, (iv) 1,435 warrants exercisable into SeaStar Medical Series A-2 preferred stock, and (v) convertible notes with an aggregate outstanding principal amount of $2,507,027, which will automatically convert into 250,702 shares of SeaStar Medical Common Stock immediately prior to the Business Combination. Also includes 300,000 shares of Class A Common Stock to be issued under the PIPE Investment and 300,000 PIPE Warrants to purchase shares of Class A Common Stock. The business address of the Dow Employees’ Pension Plan Trust is Sylvia Stoesser Center, 2211 H.H. Dow Way, Midland, MI 48674. |
(10) | Includes (i) 1,891,383 shares of SeaStar Medical Series A-1 preferred stock, (ii) 239,863 shares of SeaStar Medical Series B preferred stock, (iii) 957 warrants exercisable into SeaStar Medical Series A-2 preferred stock, and (iv) convertible notes with an aggregate outstanding principal amount of $1,671,351, which will automatically convert into 167,135 shares of SeaStar Medical Common Stock immediately prior to the Business Combination. Also includes 200,000 shares of Class A Common Stock to be issued under the PIPE Investment and 200,000 PIPE Warrants to purchase shares of Class A Common Stock. The business address of the Union Carbide Employees’ Pension Plan is Sylvia Stoesser Center, 2211 H.H. Dow Way, Midland, MI 48674. |
(11) | Unless otherwise noted, the business address of each of the following entities or individuals is SeaStar Medical, Inc., 3513 Brighton Blvd Ste 410, Denver, CO 80216. |
(12) | Includes 3,531 shares of common stock issuable upon exercise of stock options within 60 days of July 31, 2022 and excludes 165,000 RSUs granted on April 4, 2022 that will not start to vest until the first anniversary of the grant date. |
(13) | Includes 848 shares of common stock issuable upon exercise of stock options within 60 days of July 31, 2022 and excludes 7,000 RSUs granted on April 4, 2022, that will not start to vest until the first anniversary of the grant date. |
(14) | Includes 848 shares of common stock issuable upon exercise of stock options within 60 days of July 31, 2022 and excludes 35,000 RSUs granted on April 4, 2022 that will not start to vest until the first anniversary of the grant date. |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
June 10, 2021 |
$ | 500,000 | December 10, 2022 | 8 | % | |||||
September 10, 2021 (in five tranches) |
||||||||||
Tranche 1 – September 10, 2021 |
$ | 1,400,000 | September 10, 2022 | 8 | % | |||||
Tranche 2 – October 15, 2021 |
$ | 400,000 | October 15, 2022 | 8 | % | |||||
Tranche 3 – November 15, 2021 |
$ | 400,000 | November 15, 2022 | 8 | % | |||||
Tranche 4 – March 16, 2022 |
$ | 200,000 | March 16, 2024 | 8 | % | |||||
Tranche 5 – April 18, 2022 |
$ | 200,000 | April 18, 2025 | 8 | % | |||||
April 12, 2022 |
$ | 800,000 | April 12, 2025 | 8 | % |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
December 31, 2021 |
$ | 44,713 | December 31, 2024 | 8 | % | |||||
January 1, 2022 |
$ | 10,063 | January 1, 2025 | 8 | % | |||||
February 28, 2022 |
$ | 2,100 | February 28, 2025 | 8 | % | |||||
March 31, 2022 |
$ | 8,488 | March 31, 2025 | 8 | % |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
December 31, 2021 |
$ | 69,148.62 | December 31, 2024 | 8 | % | |||||
January 31, 2022 |
$ | 14,635.96 | January 31, 2025 | 8 | % | |||||
March 31, 2022 |
$ | 61,176.44 | March 31, 2025 | 8 | % |
• | the risks, costs and benefits to the Combined Company; |
• | the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
• | the availability of other sources for comparable services or products; and |
• | the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. |
Page |
||||
UNAUDITED CONDENSED FINANCIAL STATEMENTS: |
||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
AUDITED FINANCIAL STATEMENTS: |
||||
F-21 |
||||
F-22 |
||||
F-23 |
||||
F-24 |
||||
F-25 |
||||
F-26 |
Page |
||||
UNAUDITED FINANCIAL STATEMENTS: |
||||
F-39 | ||||
F-40 | ||||
F-41 | ||||
F-42 | ||||
F-43 | ||||
AUDITED FINANCIAL STATEMENTS: |
||||
F-52 |
||||
F-53 |
||||
F-54 |
||||
F-55 |
||||
F-56 |
||||
F-57 |
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Cash |
$ | 79,023 | $ | 51,567 | ||||
Prepaid insurance and other fees |
34,906 | 286,237 | ||||||
Prepaid expenses |
188,947 | 14,817 | ||||||
Cash and marketable securities held in trust |
105,652,034 | 105,581,820 | ||||||
|
|
|
|
|||||
Current Assets |
105,954,910 | 105,934,441 | ||||||
|
|
|
|
|||||
Total assets |
$ | 105,954,910 | $ | 105,934,441 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
Accrued expenses |
1,037,428 | 376,702 | ||||||
Notes and advances payable - related parties |
911,940 | — | ||||||
Deferred underwriting commissions in connection with the initial public offering |
3,622,500 | 3,622,500 | ||||||
Warrant liability (Note 9) |
1,809,900 | 6,930,740 | ||||||
|
|
|
|
|||||
Total current liabilities |
7,381,768 | 10,929,942 | ||||||
|
|
|
|
|||||
Total liabilities |
7,381,768 | 10,929,942 | ||||||
Commitments |
||||||||
Class A common stock subject to possible redemption 10,350,000 shares at redemption value of $10.20 per share |
105,570,000 | 105,570,000 | ||||||
Stockholders’ deficit: |
||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 103,500 issued and outstanding at J une 30 , 2022 and December 31, 2021 excluding 10,350,000 shares subject to possible redemption |
10 | 10 | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 2,587,500 shares issued and outstanding at June 30 , 2022 and December 31, 2021 (See Note 7 ) |
259 | 259 | ||||||
Additional paid-in capital |
— | — | ||||||
Accumulated deficit |
(6,997,127 | ) | (10,565,770 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(6,996,858 | ) | (10,565,501 | ) | ||||
|
|
|
|
|||||
Total liabilities and stockholders’ deficit |
$ | 105,954,910 | $ | 105,934,441 | ||||
|
|
|
|
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Expenses: |
||||||||||||||||
Formation and Administrative costs |
$ | 341,786 | $ | 209,718 | |
$ |
560,442 |
|
|
$ |
335,675 |
| ||||
Merger costs |
1,061,968 | — | 1,061,968 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss from operations |
(1,403,754 | ) | (209,718 | ) | |
|
(1,622,410 |
) |
|
|
(335,675 |
) | ||||
Gain on warrant liability revaluation |
1,518,707 | (1,772,980 | ) | |
|
5,120,840 |
|
|
|
57,680 |
| |||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income earned on marketable securities held in Trust Account |
67,609 | — | |
|
70,213 |
|
|
|
1,754 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income |
$ | 182,562 | $ | (1,982,698 | ) | |
$ |
3,568,643 |
|
|
$ |
(276,241 |
) | |||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income per share: |
|
|
|
|
|
|
|
| ||||||||
Weighted average shares outstanding, basic and dilutive |
|
|
|
|
|
|
|
| ||||||||
Class A - Common stock |
10,453,500 | 10,453,500 | |
|
10,453,500 |
|
|
|
8,836,384 |
| ||||||
Class B - Common stock |
2,587,500 | 2,587,500 | |
|
2,587,500 |
|
|
|
2,520,787 |
| ||||||
Basic and diluted net income per share |
|
|
|
|
|
|
|
| ||||||||
Class A - Common stock |
$ | 0.01 | $ | (0.15 | ) | |
$ |
0.27 |
|
|
$ |
(0.02 |
) | |||
Class B - Common stock |
$ | 0.01 | $ | (0.15 | ) | |
$ |
0.27 |
|
|
$ |
(0.02 |
) |
Class A Common Stock |
Class B Common Stock |
Additional paid in capital |
Accumulated Deficit |
Total Deficit |
||||||||||||||||||||||||
Shares (1) |
Amount |
Shares (1) |
Amount |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
— | $ | — | 2,156,250 | $ | 215 | $ | 24,785 | $ | (5,236 | ) | $ | 19,764 | |||||||||||||||
Class A Units issued for cash |
10,350,000 | 1,035 | — | — | 103,498,965 | — | 103,500,000 | |||||||||||||||||||||
Representative shares issued for no cash |
103,500 | 10 | — | — | (10 | ) | — | — | ||||||||||||||||||||
Class A Units reclassified to Commitments subject to possible redemption |
(10,350,000 | ) | (1,035 | ) | — | — | (105,568,965 | ) | (105,570,000 | ) | ||||||||||||||||||
Underwriter fee & offering costs |
— | — | — | — | (6,211,902 | ) | — | (6,211,902 | ) | |||||||||||||||||||
Private placement warrants issued for cash |
— | — | — | — | 5,738,000 | — | 5,738,000 | |||||||||||||||||||||
Class B shares issued to Sponsor |
— | — | 431,250 | 44 | (44 | ) | — | — | ||||||||||||||||||||
Warrants classified as liabilities |
— | — | — | — | (8,116,680 | ) | — | (8,116,680 | ) | |||||||||||||||||||
Reclass APIC to retained earnings |
— | — | — | — | 10,635,851 | (10,635,851 | ) | — | ||||||||||||||||||||
Net income |
— | — | — | — | — | 1,706,457 | 1,706,457 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - March 31, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (8,934,630 | ) | $ | (8,934,361 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
— | — | — | — | — | (1,982,698 | ) | (1,982,698 | ) | |||||||||||||||||||
Balance - June 30, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (10,917,328 | ) | $ | (10,917,059 | ) | ||||||||||||||
Balance as of December 31, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (10,565,770 | ) | $ | (10,565,501 | ) | ||||||||||||||
Net income |
— | — | — | — | — | 3,386,081 | 3,386,081 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - March 31, 2022 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (7,179,689 | ) | $ | (7,179,420 | ) | ||||||||||||||
Net income |
— | — | — | — | — | 182,562 | 182,562 | |||||||||||||||||||||
Balance - June 30, 2022 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (6,997,127 | ) | $ | (6,996,858 | ) |
• |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• |
Level 3, defined as u nobs ervable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. |
As of June 30, 2022 |
As of December 31, 2021 |
|||||||
Public Warrants |
$ | 1,164,375 | $ | 4,450,500 | ||||
Private Placement Warrants |
645,525 | 2,480,240 | ||||||
|
|
|
|
|||||
$ | 1,809,900 | $ | 6,930,740 | |||||
|
|
|
|
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Level |
June 30, 2022 |
December 31, 2021 |
||||||||||
Assets: |
||||||||||||
Government securities held in Trust Account |
1 | $ | 105,652,034 | $ | 105,581,820 | |||||||
Liabilities: |
||||||||||||
Private Placement Warrants |
3 | 645,525 | 2,480,240 | |||||||||
Public Warrants |
3 | 1,164,375 | 4,450,500 |
For the Twelve Months Ended December 31, 2021 |
From October 28, 2020 (inception) to December 31, 2020 |
|||||||
Expenses: |
||||||||
Formation and Administrative costs |
$ | 1,122,443 | $ | 5,236 | ||||
Loss from operations |
(1,122,443 | ) | (5,236 | ) | ||||
Gain on warrant liability revaluation |
1,185,940 | — | ||||||
Other income |
||||||||
Investment income earned on marketable securities held in Trust Account |
11,820 | — | ||||||
Net income (loss) |
$ | 75,317 | $ | (5,236 | ) | |||
Net income (loss) per share: |
||||||||
Weighted average shares outstanding, basic and dilutive |
||||||||
Class A — Common stock |
9,651,587 | — | ||||||
Class B — Common stock |
2,554,418 | 2,156,250 | ||||||
Basic and diluted net income (loss) per share |
||||||||
Class A — Common stock |
$ | 0.02 | $ | — | ||||
Class B — Common stock |
$ | 0.02 | $ | — |
Class A Common Stock |
Class B Common Stock |
Additional paid in capital |
Accumulated Deficit |
Total Equity (Deficit) |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
— | $ | — | 2,156,250 |
$ | 215 |
$ | 24,785 |
$ | (5,236 |
) | $ | 19,764 |
|||||||||||||||
Class A Units issued for cash |
10,350,000 |
1,035 |
— | — | 103,498,965 |
— | 103,500,000 |
|||||||||||||||||||||
Representative shares issued |
103,500 |
10 |
— | — | (10 |
) | — | — | ||||||||||||||||||||
Class A Units subject to possible redemption |
(10,350,000 |
) | (1,035 |
) | (105,568,965 |
) | — | (105,570,000 |
) | |||||||||||||||||||
Private placement warrants issued for cash |
5,738,000 |
— | 5,738,000 |
|||||||||||||||||||||||||
Class B shares dividend issued to Sponsor |
431,250 |
44 |
(44 |
) | — | — | ||||||||||||||||||||||
Warrants classified as liabilities |
(8,116,680 |
) | — | (8,116,680 |
) | |||||||||||||||||||||||
Underwriting fee & offering costs |
(6,211,902 |
) | — | (6,211,902 |
) | |||||||||||||||||||||||
Reclass APIC to retained earnings |
10,635,851 |
(10,635,851 |
) | — | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | 75,317 |
75,317 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — December 31, 2021 |
103,500 |
$ | 10 |
2,587,500 |
$ | 259 |
$ | — | $ | (10,565,770 |
) | $ | (10,565,501 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. |
As of December 31, 2021 |
As of January 28, 2021 |
|||||||
Class A Common stock price |
$ | 10.04 | $ | 9.90 | ||||
Term in years |
5.07 | 6.00 | ||||||
Risk free rate |
1.27 | % | 0.58 | % | ||||
Implied Volatility |
11.6 | % | 12.1 | % |
As of December 31, 2021 |
As of January 28, 2021 |
|||||||
Public Warrants |
$ | 4,450,500 | $ | 5,175,000 | ||||
Private Placement Warrants |
2,480,240 | 2,941,680 | ||||||
$ | 6,930,740 | $ | 8,116,680 | |||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Level |
December 31, 2021 |
January 28, 2021 |
||||||||||
Assets: |
||||||||||||
Government securities held in Trust Account |
1 | $ | 105,581,820 | $ | 105,570,833 | |||||||
Liabilities: |
||||||||||||
Private Placement Warrants |
3 | 2,480,240 | 2,941,680 | |||||||||
Public Warrants |
3 | 4,450,500 | 5,175,000 |
June 30, 2022 |
December 31, 2021 |
|||||||
ASSETS |
| |||||||
Current assets |
||||||||
Cash |
$ | 613 | $ | 510 | ||||
Other receivables |
— | 58 | ||||||
Prepaid expenses |
58 | 33 | ||||||
Other current assets |
752 | — | ||||||
|
|
|
|
|||||
Total current assets |
1,423 | 601 | ||||||
|
|
|
|
|||||
Other assets |
2 | 2 | ||||||
|
|
|
|
|||||
Total assets |
$ | 1,425 | $ | 603 | ||||
|
|
|
|
|||||
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT |
| |||||||
Current liabilities |
||||||||
Accounts payable |
$ | 669 | $ | 85 | ||||
Accrued expenses |
632 | 186 | ||||||
Convertible notes—related party, net of discount |
2,548 | 2,378 | ||||||
Derivative liability |
— | 471 | ||||||
|
|
|
|
|||||
Total Current liabilities |
3,849 | 3,120 | ||||||
|
|
|
|
|||||
Long-term liabilities |
||||||||
Notes payable—Government loans |
63 | 63 | ||||||
Convertible notes—related party, net of discount, related party, net of current portion |
1,886 | 181 | ||||||
Derivative liability |
— | 55 | ||||||
|
|
|
|
|||||
Total Long-term liabilities |
1,949 | 299 | ||||||
|
|
|
|
|||||
Total Liabilities |
5,798 | 3,419 | ||||||
|
|
|
|
|||||
Commitments and contingencies (see Note 7) |
||||||||
Convertible Preferred stock: $0.001 par value, 3,702,505 and 2,965,505 shares authorized at |
||||||||
June 30, 2022 and December 31, 2021, respectively |
||||||||
Series B preferred stock; 700,950 and 453,950 shares designated; 633,697 and 439,203 shares issued and outstanding with an aggregate liquidation preference of $7,821 and $5,421 as of June 30, 2022 and December 31, 2021, respectively |
7,821 | 5,421 | ||||||
Series A-1 preferred stock; 1,601,060 shares designated; 1,576,154 shares issued and outstanding with an aggregate liquidation preference of $77,799 as of June 30, 2022 and December 31, 2021 |
19,451 | 19,451 | ||||||
Series A-2 preferred stock; 900,495 shares designated; 577,791 and 772,285 shares issued and outstanding with an aggregate liquidation preference of $7,130 and $9,530 as of June 30, 2022 and December 31, 2021, respectively |
46,077 | 48,477 | ||||||
|
|
|
|
|||||
Total Convertible Preferred stock |
73,349 | 73,349 | ||||||
|
|
|
|
|||||
Stockholders’ deficit |
||||||||
Common stock—$0.001 par value per share; 12,000,000 and 3,531,504 shares authorized at June 30, 2022 and December 31, 2021, respectively, and no shares issued or outstanding at June 30, 2022 and December 31, 2021 |
— | — | ||||||
Additional paid-in capital |
496 | 147 | ||||||
Accumulated deficit |
(78,218 | ) | (76,312 | ) | ||||
|
|
|
|
|||||
Total Stockholders’ deficit |
(77,722 | ) | (76,165 | ) | ||||
|
|
|
|
|||||
Total Liabilities, Convertible preferred stock and Stockholders’ deficit |
$ | 1,425 | $ | 603 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Operating expenses |
||||||||||||||||
Research and development |
$ | 596 | $ | 536 | $ | 951 | $ | 1,282 | ||||||||
General and administrative |
716 | 652 | 1,173 | 968 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Operating expenses |
1,312 | 1,188 | 2,124 | 2,250 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(1,312 | ) | (1,188 | ) | (2,124 | ) | (2,250 | ) | ||||||||
Other Income (expense) |
||||||||||||||||
Interest expense |
(191 | ) | (9 | ) | (360 | ) | (11 | ) | ||||||||
Other income |
— | 91 | — | 91 | ||||||||||||
Change in fair value of derivative liability |
601 | — | 578 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Other Income (expense) |
410 | 82 | 218 | 80 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax provision |
(902 | ) | (1,106 | ) | (1,906 | ) | (2,170 | ) | ||||||||
Income tax provision |
— | — | — | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (902 | ) | $ | (1,106 | ) | $ | (1,906 | ) | $ | (2,171 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share of common stock, basic and diluted |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding, basic and diluted |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
Convertible Preferred Stock | Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
426,977 | $ | 5,270 | 1,576,154 | $ | 19,451 | 784,511 | $ | 48,628 | $ | 73,349 | — | $ | — | $ | 133 | $ | (71,716 | ) | $ | (71,583 | ) | ||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 3 | — | 3 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (1,065 | ) | (1,065 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, March 31, 2021 |
426,977 | $ | 5,270 | 1,576,154 | $ | 19,451 | 784,511 | $ | 48,628 | $ | 73,349 | — | $ | — | $ | 136 | $ | (72,781 | ) | $ | (72,645 | ) | ||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 3 | — | 3 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (1,106 | ) | (1,106 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, June 30, 2021 |
426,977 | $ | 5,270 | 1,576,154 | $ | 19,451 | 784,511 | $ | 48,628 | $ | 73,349 | — | $ | — | $ | 139 | $ | (73,887 | ) | $ | (73,748 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Convertible Preferred Stock |
||||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares | Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 |
439,203 | $ | 5,421 | 1,576,154 | $ | 19,451 | 772,285 | $ | 48,477 | $ | 73,349 | — | $ | — | $ | 147 | $ | (76,312 | ) | $ | (76,165 | ) | ||||||||||||||||||||||||||
Conversion of Series A-2 Preferred stock to Series B Preferred stock |
194,494 | 2,400 | — | (2,400 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 4 | — | 4 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (1,004 | ) | (1,004 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, March 31, 2022 |
633,697 | 7,821 | 1,576,154 | 19,451 | 577,791 | 46,077 | 73,349 | — | — | 151 | (77,316 | ) | (77,165 | ) | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 345 | — | 345 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (902 | ) | (902 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, June 30, 2022 |
633,697 | $ | 7,821 | 1,576,154 | $ | 19,451 | 577,791 | $ | 46,077 | $ | 73,349 | — | $ | — | $ | 496 | $ | (78,218 | ) | $ | (77,722 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (1,906 | ) | $ | (2,171 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||
Amortization of discount on secured convertible notes |
208 | 6 | ||||||
Non-cash accrued interest related to convertible notes payable |
151 | 2 | ||||||
Change in fair value of derivative liability |
(578 | ) | — | |||||
Stock-based compensation |
349 | 6 | ||||||
Changes in operating assets and liabilities |
||||||||
Inventory |
— | 55 | ||||||
Prepaid expenses |
(25 | ) | 17 | |||||
Other current assets |
(752 | ) | — | |||||
Accounts payable |
584 | 12 | ||||||
Accrued expenses and other current liabilities |
391 | (586 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(1,578 | ) | (2,659 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Proceeds from issuance of convertible notes |
1,681 | 500 | ||||||
Repayment of PPP loan |
— | (20 | ) | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
1,681 | 480 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash |
103 | (2,179 | ) | |||||
Cash, beginning of period |
510 | 2,807 | ||||||
|
|
|
|
|||||
Cash, end of period |
$ | 613 | $ | 628 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information |
| |||||||
Cash paid for income taxes |
$ | — | $ | 1 | ||||
Cash paid for interest |
$ | — | $ | 1 | ||||
Supplemental disclosure of noncash flow information |
| |||||||
$ | 2,400 | $ | — | |||||
Value of derivative liability on issuance of convertible notes |
52 | 80 | ||||||
Non-cash conversion of accrued expenses into convertible notes |
96 |
1. | DESCRIPTION OF BUSINESS |
1. | DESCRIPTION OF BUSINESS (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Level 3 Rollforward |
Derivative Liability |
|||
Balance December 31, 2021 |
$ | 526 | ||
Additions |
52 | |||
Changes in fair value |
(578 | ) | ||
|
|
|||
Balance June 30, 2022 |
$ | — | ||
|
|
|||
Balance December 31, 2020 |
$ | — | ||
Additions |
80 | |||
Changes in fair value |
— | |||
|
|
|||
Balance June 30, 2021 |
$ | 80 | ||
|
|
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
3. | ACCRUED EXPENSES |
June 30, 2022 |
December 31, 2021 |
|||||||
Accrued interest |
$ | 223 | $ | 72 | ||||
Accrued director remuneration |
123 | — | ||||||
Accrued research and development |
104 | 58 | ||||||
Accrued merger costs |
98 | — | ||||||
Accrued bonus |
60 | — | ||||||
Accrued other |
22 | 29 | ||||||
Accrued legal |
2 | 27 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 632 | $ | 186 | ||||
|
|
|
|
4. | CONVERTIBLE NOTES |
4. | CONVERTIBLE NOTE (continued) |
4. | CONVERTIBLE NOTE (continued) |
June 30, 2022 |
December 31, 2021 |
|||||||
Dow Notes |
$ | 2,340 | $ | 1,620 | ||||
Union Carbide Notes |
1,560 | 1,080 | ||||||
IBT & David Humes Notes |
210 | 114 | ||||||
Investor Notes |
526 | 104 | ||||||
Unamortized Debt Discount |
(202 | ) | (359 | ) | ||||
|
|
|
|
|||||
4,434 | 2,559 | |||||||
Less current portion |
(2,548 | ) | (2,378 | ) | ||||
|
|
|
|
|||||
$ | 1,886 | $ | 181 | |||||
|
|
|
|
5. | NOTES PAYABLE – GOVERNMENT LOANS |
5. | NOTES PAYABLE – GOVERNMENT LOANS (continued) |
As of June 30, |
||||
2022 (remaining) |
$ | — | ||
2023 |
1 | |||
2024 |
1 | |||
2025 |
1 | |||
2026 |
1 | |||
2027 |
1 | |||
Thereafter |
58 | |||
|
|
|||
$ | 63 | |||
|
|
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK |
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK (continued) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Research and development |
$ | 90 | $ | 3 | $ | 90 | $ | 6 | ||||||||
General and administrative |
255 | — | 259 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 345 | $ | 3 | $ | 349 | $ | 6 | ||||||||
|
|
|
|
|
|
|
|
7. | COMMITMENTS AND CONTINGENCIES |
8. | INCOME TAXES |
9. | NET LOSS PER SHARE |
9. | NET LOSS PER SHARE (continued) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Options to purchase common stock |
271,280 | 267,034 | 271,280 | 267,034 | ||||||||||||
Restricted stock units |
255,000 | — | 127,500 | — | ||||||||||||
Convertible preferred stock |
2,787,642 | 2,787,642 | 2,787,642 | 2,787,642 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
3,313,922 | 3,054,676 | 3,186,422 | 3,054,676 | ||||||||||||
|
|
|
|
|
|
|
|
10. | SUBSEQUENT EVENTS |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating expenses |
||||||||
Research and development |
$ | 2,766 | $ | 4,025 | ||||
General and administrative |
1,683 | 2,428 | ||||||
|
|
|
|
|||||
Total operating expenses |
4,449 | 6,453 | ||||||
|
|
|
|
|||||
Loss from operations |
(4,449 | ) | (6,453 | ) | ||||
Other income (expense), net |
||||||||
Interest expense |
(212 | ) | (3,308 | ) | ||||
Other income |
91 | 84 | ||||||
Gain on sale of assets and liabilities held for sale |
— | 71 | ||||||
Change in fair value of derivative liability |
(27 | ) | — | |||||
Loss on disposal of other assets |
— | (6 | ) | |||||
Gain on early extinguishment of convertible notes |
— | 6,345 | ||||||
|
|
|
|
|||||
Total other income (expense), net |
(148 | ) | 3,186 | |||||
|
|
|
|
|||||
Loss before income tax provision |
(4,597 | ) | (3,267 | ) | ||||
Income tax provision (benefit) |
(1 | ) | 9 | |||||
|
|
|
|
|||||
Net loss |
$ | (4,596 | ) | $ | (3,276 | ) | ||
|
|
|
|
|||||
Net loss per share of common stock, basic and diluted |
$ | — | $ | — | ||||
|
|
|
|
|||||
Weighted-average shares outstanding, basic and diluted |
— | — | ||||||
|
|
|
|
Convertible Preferred Stock | Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 |
— | $ | — | — | $ | — | — | $ | — | $ | — | 784,551 | $ | 78 | $ | 48,683 | $ | (68,440 | ) | $ | (19,679 | ) | ||||||||||||||||||||||||||
Conversion of common stock into preferred stock |
— | — | — | — | 784,511 | 48,628 | 48,628 | (784,551 | ) | (78 | ) | (48,550 | ) | — | (48,628 | ) | ||||||||||||||||||||||||||||||||
Conversion of convertible notes into preferred stock |
19,785 | 245 | 1,576,154 | 19,451 | — | — | 19,696 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of stock |
407,192 | 5,025 | — | — | — | — | 5,025 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (3,276 | ) | (3,276 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2020 |
426,977 | 5,270 | 1,576,154 | 19,451 | 784,511 | 48,628 | 73,349 | — | — | 133 | (71,716 | ) | (71,583 | ) | ||||||||||||||||||||||||||||||||||
Conversion of Series A-2 Preferred stock to Series B Preferred stock |
12,226 | 151 | — | — | (12,226 | ) | (151 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 14 | — | 14 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (4,596 | ) | (4,596 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2021 |
439,203 | $ | 5,421 | 1,576,154 | $ | 19,451 | 772,285 | $ | 48,477 | $ | 73,349 | — | $ | — | $ | 147 | $ | (76,312 | ) | $ | (76,165 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (4,596 | ) | $ | (3,276 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||
Amortization of discount on secured convertible notes |
140 | 1,454 | ||||||
Amortization of deferred financing costs |
— | 239 | ||||||
Accrued interest added to principal of convertible notes |
— | 1,615 | ||||||
Non-cash accrued interest related to convertible notes |
72 | — | ||||||
Change in fair value of derivative liability |
27 | — | ||||||
Gain on convertible note extinguishment |
— | (6,345 | ) | |||||
PPP loan forgiveness |
(91 | ) | (84 | ) | ||||
Gain on sale of assets and liabilities held for sale |
— | (71 | ) | |||||
Loss on disposal of other assets |
— | 6 | ||||||
Stock-based compensation |
14 | — | ||||||
Changes in operating assets and liabilities |
||||||||
Inventory |
55 | 137 | ||||||
Prepaid expenses |
12 | 129 | ||||||
Accounts payable |
(297 | ) | 225 | |||||
Accrued expenses and other current liabilities |
(450 | ) | 395 | |||||
Other assets |
— | 4 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(5,114 | ) | (5,572 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Proceeds from issuance of convertible notes |
2,746 | — | ||||||
Proceeds from issuance of Series B Preferred stock |
— | 5,025 | ||||||
Repayment to settle convertible notes |
— | (300 | ) | |||||
Proceeds from PPP loan |
91 | 104 | ||||||
Repayment of PPP loan |
(20 | ) | — | |||||
Proceeds from SBA loan |
— | 63 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
2,817 | 4,892 | ||||||
|
|
|
|
|||||
Net decrease in cash |
(2,297 | ) | (680 | ) | ||||
Cash, beginning of year |
2,807 | 3,487 | ||||||
|
|
|
|
|||||
Cash, end of year |
$ | 510 | $ | 2,807 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid for income taxes |
$ | — | $ | 1 | ||||
Cash paid for interest |
$ | — | $ | 1 | ||||
Supplemental disclosure of noncash flow information |
||||||||
Fair value of derivative liability and discount on issuance of convertible notes |
$ | 499 | $ | — | ||||
Conversion of Series A-2 Preferred stock into Series B Preferred stock |
$ | 151 | $ | — | ||||
Conversion of accrued expenses into convertible notes |
$ | 114 | $ | — | ||||
Other receivables of cash in transit for convertible notes |
$ | 58 | $ | — | ||||
Assets and liabilities held for sale exchanged for prepaid research and development |
$ | — | $ | 110 | ||||
Conversion of common stock into Series A-2 Preferred stock |
$ | — | $ | 48,628 | ||||
Conversion of convertible notes into Series A-1 Preferred stock |
$ | — | $ | 19,696 |
1. | DESCRIPTION OF BUSINESS |
1. | DESCRIPTION OF BUSINESS (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Level 3 Rollforward |
Derivative Liability |
|||
Balance December 31, 2019 |
$ | 9,010 | ||
Recognized as part of the net gain on early extinguishment of convertible notes |
(9,010 | ) | ||
|
|
|||
Balance December 31, 2020 |
— | |||
Additions |
499 | |||
Changes in fair value |
27 | |||
|
|
|||
Balance December 31, 2021 |
$ | 526 | ||
|
|
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
3. | ACCRUED EXPENSES |
2021 |
2020 |
|||||||
Accrued research and development |
$ | 58 | $ | 485 | ||||
Accrued bonus |
— | 47 | ||||||
Accrued legal |
27 | 40 | ||||||
Accrued interest |
72 | — | ||||||
Accrued other |
29 | 106 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 186 | $ | 678 | ||||
|
|
|
|
4. | CONVERTIBLE NOTES |
4. | CONVERTIBLE NOTES (continued) |
2021 | 2020 | |||||||
Dow Notes |
$ | 1,620 | $ | — | ||||
Union Carbide Notes |
1,080 | — | ||||||
IBT & David Humes Notes |
114 | — | ||||||
Investor Notes |
104 | |||||||
Unamortized Debt Discount |
(359 | ) | — | |||||
|
|
|
|
|||||
2,559 | — | |||||||
Less current portion |
(2,378 | ) | — | |||||
|
|
|
|
|||||
$ | 181 | $ | — | |||||
|
|
|
|
4. | CONVERTIBLE NOTES (continued) |
Years ending December 31, |
||||
2022 |
$ | 2,700 | ||
2023 |
— | |||
2024 |
218 | |||
|
|
|||
$ | 2,918 | |||
|
|
5. | NOTES PAYABLE — GOVERNMENT LOANS |
5. | NOTES PAYABLE — GOVERNMENT LOANS (continued) |
Years ending December 31, |
||||
2022 |
$ | — | ||
2023 |
1 | |||
2024 |
1 | |||
2025 |
1 | |||
2026 |
1 | |||
Thereafter |
59 | |||
|
|
|||
$ | 63 | |||
|
|
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK |
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK (continued) |
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK (continued) |
7. | STOCK-BASED COMPENSATION AWARDS |
Options | Weighted Average Exercise Price |
Total Intrinsic Value |
Weighted Average Remaining Contractual Life (Years) |
|||||||||||||
Outstanding as of December 31, 2019 |
73,974 | $ | 10.00 | |||||||||||||
Granted |
106,970 | $ | 3.82 | |||||||||||||
Forfeited |
(39,093 | ) | $ | 10.00 | ||||||||||||
|
|
|||||||||||||||
Outstanding as of December 31, 2020 |
141,851 | $ | 5.34 | $ | — | 8.84 | ||||||||||
|
|
|
|
|||||||||||||
Granted |
153,504 | $ | 0.55 | |||||||||||||
Forfeited |
(7,973 | ) | $ | 10.00 | ||||||||||||
|
|
|||||||||||||||
Outstanding as of December 31, 2021 |
287,382 | $ | 2.65 | $ | — | 8.61 | ||||||||||
|
|
|
|
|||||||||||||
Options exercisable as of December 31, 2021 |
67,840 | $ | 5.53 | $ | — | 7.94 | ||||||||||
|
|
|
|
7. | STOCK-BASED COMPENSATION AWARDS (continued) |
2021 |
2020 |
|||||||
Research and development |
$ | 12 | $ | — | ||||
General and administrative |
2 | — | ||||||
|
|
|
|
|||||
Total |
$ | 14 | $ | — | ||||
|
|
|
|
2021 |
2020 |
|||||||
Expected term (years) |
6.3 | 5.9 | ||||||
Expected volatility |
74.8 | % | 77.1 | % | ||||
Risk-free interest rate |
0.78 | % | 0.1 | % | ||||
Expected dividend rate |
0 | % | 0 | % |
8. | COMMITMENTS AND CONTINGENCIES |
8. | COMMITMENTS AND CONTINGENCIES (continued) |
9. | INCOME TAXES |
2021 |
2020 |
|||||||
Statutory income tax rate |
21.0 | % | 21.0 | % | ||||
State income tax |
3.6 | % | 3.3 | % | ||||
PPP Loan forgiveness |
0.5 | % | 0.5 | % | ||||
Other |
(1.3 | )% | (0.1 | )% | ||||
Valuation allowance |
(23.8 | )% | (25.0 | )% | ||||
|
|
|
|
|||||
Total effective income tax rate |
(0.0 | )% | (0.3 | )% | ||||
|
|
|
|
9. | INCOME TAXES (continued) |
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ | 17,538 | $ | 16,637 | ||||
Accrued compensation |
— | 4 | ||||||
Reserves |
— | 31 | ||||||
Stock-based compensation |
3 | — | ||||||
Tax credits |
648 | 648 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
18,189 | 17,320 | ||||||
|
|
|
|
|||||
Valuation allowance |
(18,189 | ) | (17,320 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ | — | $ | — | ||||
|
|
|
|
10. | NET LOSS PER SHARE |
10. | NET LOSS PER SHARE (continued) |
2021 |
2020 |
|||||||
Options to purchase common stock |
287,382 | 141,851 | ||||||
Convertible preferred stock |
2,787,642 | 2,787,642 | ||||||
|
|
|
|
|||||
Total |
3,075,024 | 2,929,493 | ||||||
|
|
|
|
11. | SUBSEQUENT EVENTS |
11. | SUBSEQUENT EVENTS (continued) |
Page |
||||||
ARTICLE I CERTAIN DEFINITIONS |
A-2 |
|||||
Section 1.01 |
Definitions |
A-2 | ||||
Section 1.02 |
Construction |
A-16 | ||||
Section 1.03 |
Knowledge |
A-17 | ||||
Section 1.04 |
Equitable Adjustments |
A-17 | ||||
ARTICLE II THE MERGER |
A-17 |
|||||
Section 2.01 |
The Merger |
A-17 | ||||
Section 2.02 |
Effective Time |
A-17 | ||||
Section 2.03 |
Effect of the Merger |
A-17 | ||||
Section 2.04 |
Governing Documents |
A-17 | ||||
Section 2.05 |
Directors and Officers |
A-17 | ||||
Section 2.06 |
Further Assurances |
A-18 | ||||
Section 2.07 |
Intended Tax Treatment |
A-18 | ||||
ARTICLE III MERGER CONSIDERATION; CONVERSION OF SECURITIES |
A-18 |
|||||
Section 3.01 |
Merger Consideration |
A-18 | ||||
Section 3.02 |
Effect on Convertible Notes and Capital Stock |
A-19 | ||||
Section 3.03 |
Exchange Procedures; Stockholder Deliverables |
A-20 | ||||
Section 3.04 |
Lost Certificate |
A-21 | ||||
Section 3.05 |
Company Dissenting Shares |
A-21 | ||||
Section 3.06 |
Treatment of Company Warrants |
A-21 | ||||
Section 3.07 |
Treatment of Company Equity Awards and Company Restricted Share Units. |
A-22 | ||||
Section 3.08 |
Withholding Rights |
A-23 | ||||
ARTICLE IV CLOSING TRANSACTIONS; ADJUSTMENT TO MERGER CONSIDERATION |
A-23 |
|||||
Section 4.01 |
Closing |
A-23 | ||||
Section 4.02 |
Closing Statement |
A-23 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
A-24 |
|||||
Section 5.01 |
Corporate Organization of the Company |
A-24 | ||||
Section 5.02 |
Subsidiaries |
A-24 | ||||
Section 5.03 |
Due Authorization |
A-24 | ||||
Section 5.04 |
No Conflict |
A-25 | ||||
Section 5.05 |
Governmental Authorities; Consents |
A-25 | ||||
Section 5.06 |
Current Capitalization |
A-25 | ||||
Section 5.07 |
Financial Statements |
A-26 | ||||
Section 5.08 |
Undisclosed Liabilities |
A-27 | ||||
Section 5.09 |
Litigation and Proceedings |
A-27 | ||||
Section 5.10 |
Compliance with Laws |
A-27 | ||||
Section 5.11 |
Contracts; No Defaults |
A-28 | ||||
Section 5.12 |
Company Benefit Plans |
A-30 | ||||
Section 5.13 |
Labor Matters |
A-31 | ||||
Section 5.14 |
Taxes |
A-33 | ||||
Section 5.15 |
Insurance |
A-35 | ||||
Section 5.16 |
Permits |
A-35 | ||||
Section 5.17 |
Machinery, Equipment and Other Tangible Property |
A-35 | ||||
Section 5.18 |
Real Property |
A-35 |
Section 5.19 |
Intellectual Property, Information Technology and Data Matters |
A-36 | ||||
Section 5.20 |
Environmental Matters |
A-38 | ||||
Section 5.21 |
Absence of Changes |
A-39 | ||||
Section 5.22 |
Brokers’ Fees |
A-39 | ||||
Section 5.23 |
Healthcare Matters |
A-39 | ||||
Section 5.24 |
Insurance Regulatory Matters |
A-40 | ||||
Section 5.25 |
Related Party Transactions |
A-40 | ||||
Section 5.26 |
Registration Statement |
A-40 | ||||
Section 5.27 |
Government Contracts |
A-40 | ||||
Section 5.28 |
FDA Matters |
A-41 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ACQUIROR PARTIES |
A-42 |
|||||
Section 6.01 |
Corporate Organization |
A-42 | ||||
Section 6.02 |
Due Authorization |
A-43 | ||||
Section 6.03 |
No Conflict |
A-43 | ||||
Section 6.04 |
Litigation and Proceedings |
A-44 | ||||
Section 6.05 |
Governmental Authorities; Consents |
A-44 | ||||
Section 6.06 |
Financial Ability; Trust Account |
A-44 | ||||
Section 6.07 |
Brokers’ Fees |
A-45 | ||||
Section 6.08 |
SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities |
A-45 | ||||
Section 6.09 |
Business Activities |
A-46 | ||||
Section 6.10 |
Tax Matters |
A-46 | ||||
Section 6.11 |
Capitalization |
A-48 | ||||
Section 6.12 |
Nasdaq Stock Market Listing |
A-48 | ||||
Section 6.13 |
PIPE Investment |
A-49 | ||||
Section 6.14 |
Sponsor Support Agreement |
A-49 | ||||
Section 6.15 |
Related Party Transactions |
A-49 | ||||
Section 6.16 |
Investment Company Act |
A-50 | ||||
Section 6.17 |
Acquiror Stockholders |
A-50 | ||||
Section 6.18 |
Contracts |
A-50 | ||||
Section 6.19 |
No Alternative Transactions |
A-50 | ||||
ARTICLE VII COVENANTS OF THE COMPANY |
A-50 |
|||||
Section 7.01 |
Conduct of Business |
A-50 | ||||
Section 7.02 |
Inspection |
A-53 | ||||
Section 7.03 |
No Claim Against the Trust Account |
A-53 | ||||
Section 7.04 |
Proxy Solicitation; Other Actions |
A-53 | ||||
Section 7.05 |
Code Section 280G |
A-54 | ||||
Section 7.06 |
FIRPTA Certificates |
A-55 | ||||
Section 7.07 |
Company Stockholder Approval; Support Agreements |
A-55 | ||||
ARTICLE VIII COVENANTS OF ACQUIROR |
A-55 |
|||||
Section 8.01 |
Indemnification and Insurance |
A-55 | ||||
Section 8.02 |
Conduct of Acquiror During the Interim Period |
A-57 | ||||
Section 8.03 |
PIPE Investment |
A-58 | ||||
Section 8.04 |
Certain Transaction Agreements |
A-58 | ||||
Section 8.05 |
Inspection |
A-59 | ||||
Section 8.06 |
Section 16 Matters |
A-59 | ||||
Section 8.07 |
Acquiror NASDAQ Listing |
A-59 | ||||
Section 8.08 |
Acquiror Public Filings |
A-59 | ||||
Section 8.09 |
Intentionally Omitted |
A-59 |
Section 8.10 |
LTIP; Employee Stock Purchase Program |
A-59 | ||||
Section 8.11 |
Qualification as an Emerging Growth Company |
A-60 | ||||
ARTICLE IX JOINT COVENANTS |
A-60 |
|||||
Section 9.01 |
Support of Transaction |
A-60 | ||||
Section 9.02 |
Registration Statement |
A-60 | ||||
Section 9.03 |
Acquiror Special Meeting |
A-62 | ||||
Section 9.04 |
Exclusivity |
A-63 | ||||
Section 9.05 |
Tax Matters |
A-64 | ||||
Section 9.06 |
Confidentiality; Publicity |
A-64 | ||||
Section 9.07 |
Cooperation; Further Assurances |
A-65 | ||||
ARTICLE X CONDITIONS TO OBLIGATIONS |
A-65 |
|||||
Section 10.01 |
Conditions to Obligations of All Parties |
A-65 | ||||
Section 10.02 |
Additional Conditions to Obligations of Acquiror Parties |
A-66 | ||||
Section 10.03 |
Additional Conditions to the Obligations of the Company |
A-67 | ||||
Section 10.04 |
Frustration of Conditions |
A-68 | ||||
Section 10.05 |
Sponsor Agreement |
A-68 | ||||
ARTICLE XI TERMINATION/EFFECTIVENESS |
A-68 |
|||||
Section 11.01 |
Termination |
A-68 | ||||
Section 11.02 |
Effect of Termination |
A-70 | ||||
ARTICLE XII MISCELLANEOUS |
A-70 |
|||||
Section 12.01 |
Waiver |
A-70 | ||||
Section 12.02 |
Notices |
A-70 | ||||
Section 12.03 |
Assignment |
A-71 | ||||
Section 12.04 |
Rights of Third Parties |
A-71 | ||||
Section 12.05 |
Expenses |
A-71 | ||||
Section 12.06 |
Governing Law |
A-71 | ||||
Section 12.07 |
Captions; Counterparts |
A-72 | ||||
Section 12.08 |
Schedules and Exhibits |
A-72 | ||||
Section 12.09 |
Entire Agreement |
A-72 | ||||
Section 12.10 |
Amendments |
A-72 | ||||
Section 12.11 |
Severability |
A-72 | ||||
Section 12.12 |
Jurisdiction; WAIVER OF TRIAL BY JURY |
A-72 | ||||
Section 12.13 |
Enforcement |
A-73 | ||||
Section 12.14 |
Non-Recourse |
A-73 | ||||
Section 12.15 |
Nonsurvival of Representations, Warranties and Covenants |
A-73 | ||||
Section 12.16 |
Acknowledgements |
A-74 | ||||
Section 12.17 |
Legal Representation |
A-75 |
Exhibit A – | Form of Sponsor Support Agreement | |
Exhibit B – | Form of Support Agreement | |
Exhibit C – | Form of Acquiror Charter | |
Exhibit D – | Form of Acquiror Bylaws | |
Exhibit E – | Form of Amended and Restated Registration Rights Agreement | |
Exhibit F – | Form of Director Nomination Agreement | |
Exhibit G – | Form of Certificate of Merger |
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | /s/ Bruce M. Rodgers | |
Name: | Bruce M. Rodgers | |
Title: | Chief Executive Officer and Chairman of the Board of Directors | |
LMF MERGER SUB, INC. | ||
By: | /s/ Bruce M. Rodgers | |
Name: | Bruce M. Rodgers | |
Title: | President |
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: | Eric Schlorff | |
Title: | Chief Executive Officer |
LMF Acquisition Opportunities, Inc. | ||
By: |
| |
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
SeaStar Medical, Inc. | ||
By: |
| |
Name: | ||
Title: |
LMFAO Sponsor, LLC | ||
By: |
| |
Name: Bruce M. Rodgers Title: President and Chief Executive Officer |
Address: |
c/o LMF Acquisition Opportunities, Inc. 1200 W. Platt St., Suite 100 Tampa, Florida 33606 |
By: |
| |
Name: | ||
Title: | ||
Address for Notices: | ||
With copies to: |
LMF Acquisition Opportunities, Inc. | ||
By: | ||
Name: | ||
Title: |
SeaStar Medical, Inc. | ||
By: | ||
Name: | ||
Title: |
STOCKHOLDER | ||||
Signature of Stockholder |
Name of Person Signing for the Stockholder (If signing in a representative capacity for a corporation, trust, partnership or other entity) | |||
Printed Name of Stockholder |
Title of Person Signing for the Stockholder (If signing in a representative capacity for a corporation, trust, partnership or other entity) | |||
[Signature of Stockholder’s Spouse] |
[Printed Name of Stockholder’s Spouse] |
Shares Owned Beneficially |
Shares Held of Record |
Shares Over Which the Stockholder has Full Voting Power |
||||||||||
Company Common Stock: |
[ | ●] | [ | ●] | [ | ●] | ||||||
Company Preferred Stock: |
[ | ●] | [ | ●] | [ | ●] |
By: | ||
Name: | ||
Title: | ||
Address for Notices: | ||
With copies to: |
COMPANY : | ||
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
INVESTORS: | ||
LMFAO SPONSOR, LLC | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: President and Chief Executive Officer |
INVESTORS: | ||
DOW EMPLOYEES’ PENSION PLAN TRUST | ||
By: | ||
Name: | ||
Title: |
UNION CARBIDE EMPLOYEE PENSION PLAN TRUST | ||
By: | ||
Name: | ||
Title: |
RICK BARNETT | ||
By: |
RAY CHOW | ||
By: |
ALLAN COLLINS | ||
By: |
DAVID HUMES | ||
By: |
ANDRES LOBO | ||
By: |
ERIC SCHLORFF | ||
By: |
KENNETH VAN HEEL | ||
By: |
CARYL BARON | ||
By: |
Name |
State of Incorporation | |
SeaStar Medical, Inc. | Delaware | |
LMF Merger Sub, Inc. | Delaware |
S EA STAR MEDICAL , INC . | ||
By: | ||
Name: | ||
Title: |
LMF Acquisition Opportunities, Inc. | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
I |
PURPOSE OF THE PLAN |
II |
TYPES OF AWARDS |
III |
ADMINISTRATION OF THE PLAN |
IV |
ELIGIBILITY |
V |
SHARES SUBJECT TO THE PLAN |
VI |
OPTIONS |
VII |
STOCK APPRECIATION RIGHTS |
VIII |
STOCK AWARDS |
IX |
RESTRICTED STOCK UNITS |
X |
DIVIDEND EQUIVALENT RIGHTS |
XI |
OTHER AWARDS |
XII |
EFFECT OF CHANGE IN CONTROL |
XIII |
REPRICING PROGRAMS |
XIV |
MISCELLANEOUS |
I. | PURPOSE OF THE PLAN |
II. | ADMINISTRATION OF THE PLAN |
III. | STOCK SUBJECT TO PLAN |
IV. | PURCHASE/HOLDING PERIODS |
V. | ELIGIBILITY |
VI. | PAYROLL DEDUCTIONS |
VII. | PURCHASE RIGHTS |
VIII. | ACCRUAL LIMITATIONS |
IX. | EFFECTIVE DATE AND TERM OF THE PLAN |
X. | AMENDMENT OF THE PLAN |
XI. | GENERAL PROVISIONS |
XII. | DEFINITIONS |
SEASTAR MEDICAL HOLDING CORPORATION | ||
By: | ||
Name: |
||
Title: |
||
LMFAO SPONSOR, LLC | ||
By: | ||
Name: |
||
Title: |
Sincerely, |
|
[Applicable Nominee] |
Exhibit |
Description |
Incorporated by Reference | ||||||||
Schedule/ Form |
File Number |
Exhibits |
Filing Date | |||||||
23.1 | Consent of MaloneBailey, LLP, independent registered public accounting firm of LMAO. | |||||||||
23.2 | Consent of Armanino LLP, independent registered public accounting firm of SeaStar Medical. | |||||||||
23.3† | Consent of Foley & Lardner LLP (included in Exhibit 5.1) | |||||||||
24.1 | Power of Attorney (included on the signature page to the initial filing of this registration statement). | Form S-4 | 333-264993 | 24.1 | May 16, 2022 | |||||
99.1 | Consent of Bruce M. Rodgers to be named as a director. | Form S-4 | 333-264993 | 99.1 | May 16, 2022 | |||||
99.2 | Consent of Richard Russell to be named as a director. | Form S-4 | 333-264993 | 99.2 | May 16, 2022 | |||||
99.3 | Consent of Eric Schlorff to be named as a director. | Form S-4 | 333-264993 | 99.3 | May 16, 2022 | |||||
99.4 | Consent of Andres Lobo to be named as a director. | Form S-4 | 333-264993 | 99.4 | May 16, 2022 | |||||
99.5 | Consent of Rick Barnett to be named as a director. | Form S-4 | 333-264993 | 99.5 | May 16, 2022 | |||||
99.6 | Consent of Allan Collins to be named as a director. | Form S-4 | 333-264993 | 99.6 | May 16, 2022 | |||||
99.7 | Consent of Kenneth Van Heel to be named as a director. | Form S-4 | 333-264993 | 99.7 | May 16, 2022 | |||||
99.8 | Preliminary Proxy Card. | |||||||||
101.INS | Inline XBRL Instance Document. | |||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||
107 | Filing Fee Table. | Form S-4 | 333-264993 | 107 | May 16, 2022 |
* | Indicates management contract or compensatory plan or arrangement. |
† | To be filed by amendment. |
# | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request; provided, however, that LMAO may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act, as amended, for any schedule or exhibit so furnished. |
a. | The undersigned registrant hereby undertakes: |
i. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(1) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
(2) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(3) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
ii. | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
iii. | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
iv. | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
v. | That, for the purpose of determining any liability under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the |
undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(1) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(2) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(3) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(4) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
vi. | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to re-offerings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable Form. |
vii. | The undersigned registrant hereby undertakes as follows: that every prospectus (i) that is filed pursuant to the paragraph immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
viii. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
b. | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
c. | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
LMF Acquisition Opportunities, Inc. | ||||
By: | /s/ Bruce M. Rodgers | |||
Name: | Bruce M. Rodgers | |||
Title: | Chief Executive Officer and Chairman of the Board |
Signature |
Title |
Date | ||
/s/ Bruce M. Rodgers |
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | August 24, 2022 | ||
Bruce M. Rodgers | ||||
/s/ Richard Russell |
Chief Financial Officer, Member of the Board of Directors (Principal Financial Officer and Principal Accounting Officer) | August 24, 2022 | ||
Richard Russell | ||||
/s/ * |
Member of the Board of Directors |
August 24, 2022 | ||
Martin Traber | ||||
/s/ * |
Member of the Board of Directors |
August 24, 2022 | ||
Craig Burson | ||||
/s/ * |
Member of the Board of Directors |
August 24, 2022 | ||
Bruce Bennet |
*By: |
/s/ Bruce M. Rodgers | |
Bruce M. Rodgers | ||
Attorney-in-fact |
Exhibit 4.7
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this Agreement), dated as of [], 2022, is by and between LMF Acquisition Opportunities, Inc., a Delaware corporation (the Company), and Continental Stock Transfer & Trust Company, a New York limited purpose trust company, as warrant agent (the Warrant Agent, also referred to herein as the Transfer Agent).
WHEREAS, on April 21, 2022, the Company and SeaStar Medical, Inc., a Delaware corporation (Target) entered into an Agreement and Plan of Merger (the Transaction Agreement and the transactions contemplated by the Transaction Agreement, the Transaction) by and among, the Company, Target, LMF Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (Merger Sub), and certain other parties named therein, pursuant to which, among other things, Merger Sub will merge with and into Target with Target surviving the merger as a wholly-owned subsidiary of the Company;
WHEREAS, on August 23, 2022, the Company entered into that certain Subscription Agreement with [____] (the Subscriber) (the Subscription Agreement and the transactions contemplated by the Subscription Agreement, the Offering), pursuant to which the Subscriber agreed to subscribe for and purchase, effective as of the closing date of the Transaction (the Transaction Closing), [______] shares of the Companys Class A Common Stock, par value $0.0001 per share (the Common Stock), for a purchase price of $10.00 per share of Common Stock, and [______] private placement warrants to purchase one (1) share of Common Stock at an exercise price of $11.50 per share (the Warrants);
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange and exercise of the Warrants;
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form of Warrant. Each Warrant shall be issued in registered form only, and, if a physical certificate is issued, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. Each Warrant shall bear the restrictive legend set forth in Exhibit B.
2.2 Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant Register. The Warrant Agent shall maintain books (the Warrant Register) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. All of the Warrants shall initially be represented by one or more book-entry certificates (each, a Book-Entry Warrant Certificate). Upon registration of the Company Common Stock issuable upon exercise of the Warrants with the U.S. Securities and Exchange Commission (the Commission) pursuant to the terms of the Subscription Agreement between the Company and the holder of the Warrants, the Warrant Agent shall use commercially reasonable efforts to deposit the Warrants with The Depository Trust Company (the Depositary) and register the Warrants in the name of Cede
& Co., as nominee of the Depositary. Following such deposit, ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by: (i) the Depositary or its nominee for each Book-Entry Warrant Certificate, or (ii) institutions that have accounts with the Depositary (each such institution, with respect to a Warrant in its account, a Participant).
If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (Definitive Warrant Certificate). Such Definitive Warrant Certificate shall be in the form annexed hereto as Exhibit A, with appropriate insertions, modifications and omissions, as provided above.
2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (each such person, a Registered Holder) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on a Definitive Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4 No Fractional Warrants. The Company shall not issue fractional Warrants. If a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.
2.5 Warrants. Subject to the provisions of this Agreement, the Warrants shall be identical to the Public Warrants (as defined below), except that so long as they are held by the Subscriber or any Permitted Transferees (as defined below), as applicable, the Warrants: (i) may not be transferred, assigned or sold until thirty (30) days after the Transaction Closing; and (ii) shall not be redeemable by the Company.
3. Terms and Exercise of Warrants.
3.1 Warrant Price. Each Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term Warrant Price as used in this Agreement shall mean the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that if any reduction is also being made to the warrant price of (i) the 5,738,000 warrants issued to LMFAO Sponsor, LLC, a Florida limited liability company (the Private Placement Warrants), (ii) the 10,350,000 warrants issued to public investors in the initial public offering of units of the Companys equity securities (the Public Warrants) and/or (iii) any other warrants issued or to be issued in connection with the Transaction or in the period of ten (10) Business Days following the Transaction Closing (the Other Warrants), any such reduction shall be proportionally the same as the reduction to the Warrant Price, as applicable. Business Day means any day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally open for normal business.
3.2 Duration of Warrants. A Warrant may be exercised only during the period (the Exercise Period) commencing on the date of the Transaction Closing and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five (5) years after the date of the Transaction Closing; or (y) the liquidation of the Company (the Expiration Date); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration statement. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among each of (i) the Warrants, (ii) the Private Placement Warrants, (iii) the Public Warrants, and (iv) the Other Warrants.
3.3 Exercise of Warrants.
3.3.1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate trust department: (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the Book-Entry Warrants) on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time; (ii) an election to purchase (Election to Purchase) shares of
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Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depositarys procedures; and (iii) payment in full of the Warrant Price with lawful money of the United States for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows:
(a) by certified check payable to the order of the Warrant Agent or by wire transfer; or
(b) as provided in Section 7.4 hereof.
3.3.2 Issuance of Shares of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been exercised. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depositary, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise, other than pursuant to Section 7.4, unless a registration statement under the Securities Act with respect to the shares of Common Stock underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Companys satisfying its obligations under Section 7.4. No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants, except pursuant to Section 7.4. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will the Company be required to net cash settle the Warrant exercise. If, by reason of any exercise of Warrants on a cashless basis, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number, the number of shares of Common Stock to be issued to such holder.
3.3.3 Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and non-assessable.
3.3.4 Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5 Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; provided, however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holders Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the Warrant Agents actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify)(the Maximum Percentage) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock that would be issuable upon: (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates; and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act). For purposes of the Warrant, in determining the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares
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of Common Stock as reflected in: (1) the Companys most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the Commission as the case may be; (2) a more recent public announcement by the Company; or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock Dividends.
4.1.1 Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the Fair Market Value (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of: (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Common Stock) and (ii) one (1) minus the quotient of: (x) the price per share of Common Stock paid in such rights offering, divided by (y) the Fair Market Value. For purposes of this subsection 4.1.1: (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion; and (ii) Fair Market Value means the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
4.1.2 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Companys capital stock into which the Warrants are convertible), other than: (a) as described in subsection 4.1.1 above; or (b) Ordinary Cash Dividends (as defined below) (any such non-excluded event being referred to herein as an Extraordinary Dividend), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Companys board of directors (the Board), in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, Ordinary Cash Dividends means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50.
4.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction: (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment; and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another entity or conversion of the Company as another entity (other than a consolidation or merger in which the Company is the continuing
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corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the exercise of the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the Alternative Issuance ); provided, however, that in connection with the closing of any such consolidation, merger, sale or conveyance, the successor or purchasing entity shall execute an amendment hereto with the Warrant Agent providing for delivery of such Alternative Issuance; provided, further, that: (i) if the holders of the Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively make such election; and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Common Stock under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided, further, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) (but in no event less than zero) equal to the difference of: (i) the Warrant Price in effect prior to such reduction; minus (ii) (A) the Per Share Consideration (as defined below); minus (B) the Black-Scholes Warrant Value (as defined below). The Black-Scholes Warrant Value means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (Bloomberg). For purposes of calculating such amount: (1) the price of each share of Common Stock shall be the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event; (2) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event; and (3) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. Per Share Consideration means: (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common Stock; and (ii) in all other cases, the amount of cash per share of Common Stock, if any, plus the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.
4.5 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each Registered Holder, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.6 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to such holder.
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4.7 Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.8 Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to: (i) avoid an adverse impact on the Warrants; and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment, provided, however, that under no circumstances shall the Warrants be adjusted pursuant to this Section 4.8 as a result of any issuance of securities in connection with the Transaction. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
4.9 No Adjustment. For the avoidance of doubt, no adjustment shall be made to the terms of the Warrants solely as a result of an adjustment to the conversion ratio of the Companys Class B common stock (the Class B Common Stock) into shares of Common Stock or the conversion of the shares of Class B Common Stock into shares of Common Stock, in each case, pursuant to the Companys Charter, as amended from time to time.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, in the case of certificated Warrants, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate or Definitive Warrant Certificate, each Book-Entry Warrant Certificate and Definitive Warrant Certificate may be transferred only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant.
5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. [Intentionally Left Blank]
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1 No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
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7.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration of Common Stock; Cashless Exercise at Companys Option.
7.4.1 Registration of the Common Stock. Section 7 (Registration of Subscriber Securities) of the Subscription Agreement as it applies to the Subscriber Shares (as defined in the Subscription Agreement) will apply, mutatis mutandis, to the Warrants, as if it had been fully set forth herein. If the Registration Statement (as defined in the Subscription Agreement) has not been declared effective by the earlier of (i) the 45th calendar day (or 75th calendar day if the Commission notifies the Company that it will review the registration statement) following the Transaction Closing and (ii) the second (2nd) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be reviewed or will not be subject to further review, holders of the Warrants shall have the right, during the period beginning on the 46th calendar day (or 76th calendar day if the Commission notifies the Company that it will review the registration statement) after the Transaction Closing and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a cashless basis, by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption) for that number of shares of Common Stock equal to the quotient obtained by dividing: (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the Fair Market Value (as defined below), by (y) the Fair Market Value. Solely for purposes of this subsection 7.4.1, Fair Market Value shall mean the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the cashless exercise of a Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that: (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act; and (ii) the shares of Common Stock issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act (or any successor statute)) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this subsection 7.4.1.
7.4.2 Cashless Exercise at Companys Option. If the Common Stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act (or any successor statute), the Company may, at its option: (i) require holders of Warrants who exercise Warrants to exercise such Warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act (or any successor statute) as described in subsection 7.4.1; and (ii) in the event the Company so elects, the Company shall not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary. If the Company does not elect at the time of exercise to require a holder of Warrants who exercises Warrants to exercise such Warrants on a cashless basis, it agrees to use its best efforts to register or qualify for sale the Common Stock issuable upon exercise of the Warrant under the blue sky laws of the state of residence of the exercising Warrant holder to the extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1 Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
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8.2 Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Companys cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
8.3 Fees and Expenses of Warrant Agent.
8.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all reasonable and documented third party expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4 Liability of Warrant Agent.
8.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agents gross negligence, willful misconduct or bad faith.
8.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and non-assessable.
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8.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of the Warrants.
8.6 Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (Claim) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous Provisions.
9.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
LMF Acquisition Opportunities, Inc.
1200 W. Platt St., Suite 100
Tampa, Florida 33606
Attention: Bruce M. Rodgers
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3 Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the City of New York, County of New York, State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
9.4 Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holders Warrant for inspection by the Warrant Agent.
9.6 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
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9.7 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8 Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder: (i) for the purpose of curing any ambiguity, or curing, correcting or supplementing any mistake, including to confirm the provisions of this Agreement to the description of the terms of the Warrants and this Agreement set forth in the Prospectus, or any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders; and (ii) to provide for the delivery of Alternative Issuance pursuant to Section 4.4. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the vote or written consent of the Registered Holders of a majority of the then outstanding Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders. All modifications or amendments to the Private Placement Warrants, the Public Warrants and/or the Other Warrants shall be offered to the Registered Holders of the then outstanding Warrants, for their acceptance or refusal based on the vote or written consent of the Registered Holders of the then outstanding Warrant.
9.9 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: |
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Name: | Bruce M. Rodgers | |
Title: | Chief Executive Officer | |
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | ||
By: |
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Name: | ||
Title: |
[Signature Page to Warrant Agreement]
EXHIBIT A
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
LMF ACQUISITION OPPORTUNITIES, INC.
Incorporated Under the Laws of the State of Delaware
CUSIP _____
Warrant Certificate
This Warrant Certificate certifies that _______, or registered assigns, is the registered holder of warrant(s) evidenced hereby (the Warrants and each, a Warrant) to purchase shares of Class A common stock, $0.0001 par value per share (Common Stock), of LMF Acquisition Opportunities, Inc., a Delaware corporation (the Company). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise price (the Exercise Price) as determined pursuant to the Warrant Agreement, payable in lawful money (or through cashless exercise as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Exercise Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: |
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Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | ||
By: |
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Name: | ||
Title: |
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [ ], 2022 (the Warrant Agreement), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, as warrant agent (the Warrant Agent), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words holders or holder meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through cashless exercise as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised, other than pursuant to Section 7.4 of the Warrant Agreement, unless at the time of exercise: (i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act; and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through cashless exercise as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive _______ shares of Common Stock and herewith tenders payment for such shares of Common Stock to the order of LMF Acquisition Opportunities, Inc. (the Company) in the amount of $ _______ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of _______, whose address is _______ and that such shares of Common Stock be delivered to _______, whose address is ________. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of ________, whose address is ________ and that such Warrant Certificate be delivered to _______, whose address is ________.
In the event that the Warrant is to be exercised on a cashless basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise: (i) the number of shares of Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise; and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of ________, whose address is _______, and that such Warrant Certificate be delivered to _______, whose address is _______.
[Signature Page Follows]
Date:_______, 2021 |
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Signature Guaranteed: | ||||||
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE)).
EXHIBIT B
LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A SUBSCRIPTION AGREEMENT DATED AS OF [ ], 2022, BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE ISSUER), AND THE HOLDERS OF THE ISSUERS SECURITIES AND CERTAIN OTHER PARTIES NAMED THEREIN. A COPY OF SUCH SUBSCRIPTION AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
Exhibit 10.27
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the Agreement) is made as of May 18, 2022 (the Effective Date) by and between SeaStar Medical, Inc. (the Company), and Kevin Chung (Executive).
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties agree as follows:
1. Employment Period. Executives employment with the Company pursuant to this Agreement shall be at will, and either the Company or Executive may terminate the employment relationship at any time in accordance with the provisions of Paragraph 7. The period during which Executive is in fact employed by the Company pursuant to this Agreement shall constitute the Employment Period hereunder. Executives commencement of employment hereunder shall be July 1, 2022 (the Employment Commencement Date).
2. Duties and Responsibilities.
A. During the Employment Period, Executive shall serve as the Companys Chief Medical Officer (CMO), and will work out of his home office in Virginia, subject to reasonable business travel, and shall report to the Companys Chief Executive Officer (CEO). Executive agrees to perform in good faith and to the best of his ability all services that may be required of Executive hereunder and to be available to render such services at all reasonable times and places in accordance with such directions and requests as may be made from time to time by the Company or Board of Directors of the Company (the Board).
B. Executive is expected and agrees to devote his full working time and attention to the business of the Company, and will not render services to any other business without the prior approval of the Company, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of the Company. To maintain Executives medical license, Executive will work in hospital setting up to four days on average per month. Notwithstanding the foregoing, to continue to build executive presence, Executive may participate in up to four advisory or foundation boards at one time. Executive also may invest in up to one percent (1%) of the outstanding securities of any publicly-held corporation without approval of the Company. Moreover, in the sole discretion of, and upon approval from, the CEO, Executive may participate in other board or advisory positions that do not in any way negatively impact or conflict with the Company or Executives employment with the Company.
C. Executive understands and agrees that he must fully comply with the Companys standard operating policies, procedures, and practices that are from time to time in effect during the term of his employment.
3. Compensation.
A. During the Employment Period, Executive shall receive an annual gross base salary in the amount of Three Hundred Fifty Thousand Dollars ($350,000), to be paid in monthly installments accordance with the Companys normal payroll procedures, less all applicable withholdings and deductions (Base Salary).
B. The Company shall pay Executive a one-time signing bonus in the amount of Twenty-Five Thousand Dollars ($25,000) (the Signing Bonus), less all applicable withholdings and deductions, payable to Executive on July 31, 2022, provided Executive is employed on the payment date.
C. During the Employment Period, Executive will be eligible to receive an annual discretionary bonus of up to a maximum amount of 40% of the Base Salary, with the actual amount, if any, to be determined in the sole discretion of the Company, based on a combination of factors including Company and individual performance. The Bonus, if awarded, shall be paid to Executive no later than March 15 of the year following the year to which the Bonus relates (the Bonus Payment Date), provided Executive is employed by the Company on the Bonus Payment Date. If Executive is not employed by the Company on the Bonus Payment Date, Executive shall not receive any Bonus.
D. The Company shall deduct and withhold from any compensation payable to Executive any and all applicable federal, state, and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statutes, regulations, ordinances, or orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages.
4. Equity.
A. On or following commencement of Executives employment and subject to approval of the Board, the Company will grant Executive an option under the Companys Equity incentive plan then in effect (the Plan) to purchase up to [TBD] shares of the Companys Common Stock (the Option), which is a number of shares equal to 1% of the outstanding capital stock of the Company. The Option will have an exercise price equal to the fair market value of the Companys common stock on the date of grant, be immediately exercisable, subject to the right of repurchase of unvested shares, and will vest over four (4) years in forty-eight (48) equal monthly installments commencing on the one-month anniversary of the Employment Commencement Date. Vesting shall cease upon Executives cessation of employment with the Company and will be subject to the terms and conditions of the Plan and the written Stock Option Agreement governing the Option. Notwithstanding the foregoing (i) in the event of certain separations from service from the Company, the vesting of the Option will be accelerated to the extent set forth in Paragraph 8 below; and (ii) Executive shall have up to twelve (12) months following any termination of employment to exercise any then-vested options to purchase Company Common Stock (and understands and assumes the burden for any modified treatment thereunder associated with the extended exercise period).
5. Benefits; Reimbursement.
A. Health Insurance. During the Employment Period, Executive shall be eligible to participate in all employee benefits and benefit plans generally made available to the Companys employees from time-to-time, including, but not limited to, medical, dental, vision and long-term disability insurance benefits and arrangements, subject to the terms, conditions and relevant qualification criteria for such benefits and benefit plans. The Company, in its discretion, may change from time-to-time the employee benefits and benefit plans it generally makes available to its employees.
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B. Expense Reimbursement. During the Employment Period, Executive shall be entitled to reimbursement for all reasonable and necessary expenses incurred by Executive associated with the conduct of the Companys business in accordance with the Companys policies. Such reimbursements shall be subject to the Companys then-existing policies and procedures for reimbursement of business expenses, but in any event shall include submission of written requests for reimbursement within thirty (30) days of incurring the expense, accompanied by vouchers, receipts or other details of such expenses in the form required by the Company, sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal and state taxing authorities. If such expense qualifies for reimbursement, then the Company will reimburse Executive for that expense in accordance with existing expense reimbursement policies and practices.
C. Vacation, Sick, and Holiday Pay. During the Employment Period, Executive shall be entitled to earn or receive vacation, sick, and holiday pay pursuant to the terms of the Companys generally applicable employee policies, as may exist from time to time.
6. Proprietary Information and Inventions Agreement. As a condition of employment and the benefits provided by this Agreement, Executive is required to timely execute and return the Companys form of Proprietary Information and Inventions Agreement, attached hereto as Exhibit A (the PIIA). Executive shall at all times remain subject to the terms and conditions of such PIIA, and nothing in this Agreement shall supersede, modify, or affect Executives obligations, duties, and responsibilities thereunder.
7. Termination of Employment. Executives employment pursuant to this Agreement is at will and may be terminated by either party at any time, with or without cause, in accordance with the following provisions:
A. Upon cessation of Executives employment for any reason, Executive, or his estate if applicable, shall be paid any unpaid Base Salary earned under Paragraph 3 for services rendered through the date of such termination.
B. Executive may voluntarily separate from his employment under this Agreement at any time and for any reasons, but is requested to give the Company at least thirty (30) days prior written notice of such resignation.
C. The Company may terminate Executives employment with or without Cause under this Agreement at any time by providing notice of such termination to Executive. Such termination shall be effective immediately upon Executives receipt of such notice, unless otherwise indicated by the notice.
8. Severance Benefits
A. Resignation, Termination for Cause, or Death. If Executive resigns, is terminated for Cause (as defined below), or dies, then he (or his estate, as applicable) shall only be entitled to payment of his Base Salary payable through the date of termination, but shall not otherwise be entitled to any severance or separation pay from the Company.
B. Termination Without Cause. If the Company terminates Executives employment without Cause (as defined below) then, subject to Executive timely executing, returning, and not revoking a separation agreement and general release of claims acceptable to the
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Company in its discretion (Separation Agreement), the Company will pay Executive as severance in an amount equivalent to twelve (12) months of Executives Base Salary in effect on the termination date, and payable in equal installments as salary continuation payments for a 12-month period following the termination date (Severance Payment), in accordance with the Companys normal payroll dates and practices, the first installment of which shall be made on the Companys first regular payroll period following the sixtieth (60th) day after the termination date (and will include any Severance Payment installment(s) that would have otherwise been paid during the period following the termination date through the date of the first Severance Payment installment); provided that, Executive has timely executed and delivered the Separation Agreement and the Separation Agreement has become irrevocable by its terms as of such date. The Severance Payment shall be in lieu of any other severance benefits under any Company plan, program or policy, and Executive waives his rights, if any, to have such payment taken into account in computing any other vested benefits payable to or on behalf of Executive, by the Company, if any.
C. Termination Without Cause Following Change in Control. If the Company terminates Executives employment without Cause (as defined below) within twelve (12) months following a Change of Control (as defined below), then, in addition to the severance payment set forth above, and similarly subject to Executive timely executing, returning, and not revoking the Separation Agreement, then 100% of any remaining balance of any unvested Shares shall immediately vest.
(1) For purposes of this Agreement, Cause means, in the Companys reasonable good faith belief that one of the following have occurred:
(i) Executives commission of any act of fraud, embezzlement, dishonesty, or sexual harassment;
(ii) Executives refusal or failure to comply in any material respect with any written policies or procedures of the Company, any parent of the Company, or the Board (including, without limitation, the Companys anti-discrimination and harassment policies and the Companys drug and alcohol policy);
(iii) any unauthorized use or disclosure by Executive of confidential information or trade secrets of the Company (or any parent or subsidiary of the Company); or
(iv) any other gross negligence or misconduct by Executive adversely affecting the business or affairs of the Company (or any parent or subsidiary of the Company) in a material manner.
(2) For purposes of this Agreement, Change of Control means a change in ownership or control of the Company effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved by the Companys stockholders, unless securities representing fifty percent (50%) or more of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Companys outstanding voting securities immediately prior to such transaction;
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(ii) a sale, transfer, or other disposition of all or substantially all of the Companys assets;
(iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a group within the meaning of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the 1934 Act) (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) acquires directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) fifty percent (50%) or more of the total combined voting power of the Companys securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Companys existing stockholders; or
(iv) a change in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
9. Benefit Limit. The benefit limitations of this Paragraph shall be applicable in the event Executive receives any benefits under this Agreement which are deemed to constitute parachute payments under Code Section 280G. In the event that any payments to which Executive becomes entitled in accordance with the provisions of this Agreement would otherwise constitute a parachute payment under Code Section 280G, then such payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment or (ii) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive under this Agreement (or on any other benefits to which Executive may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of his employment with the Company) under Code Section 4999.
10. Delayed Commencement of Benefits. Notwithstanding any provision to the contrary in this Agreement, no payments or benefits that are subject to the restrictions of Code Section 409A to which Executive becomes entitled under this Agreement shall be made or paid to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his separation from service with the Company or (ii) the date of his death, if Executive is deemed at the time of such separation from service a key employee within the meaning of that term under Code Section 416(i) and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein.
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11. Compliance with Section 409A. It is the intent of the Company and Executive that the provisions of this Agreement comply with all applicable requirements of Code Section 409A. Accordingly, to the extent any provisions of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A, then the Company and Executive shall, within the remedial amendment period provided under the Treasury Regulations issued under Code Section 409A, effect through mutual agreement the appropriate amendments to those provisions which are necessary in order to bring the provisions of this Agreement into compliance with Section 409A. If any payment under this Agreement is subject to Code Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Code Section 409A, (ii) payments to be made upon a termination of employment or service shall only be made upon a separation from service under Code Section 409A, (iii) each payment shall be treated as a separate payment for purposes of Code Section 409A, and (iv) if any payment is subject to the execution of a Separation Agreement, in no event shall the timing of Executives execution of the Separation Agreement result in Executive designating, directly or indirectly, the calendar year of payment, and if such a payment that is subject to execution of the Separation Agreement could be made in more than one taxable year, payment shall be made in the later taxable year.
12. Cessation of Benefits. In the event of a breach by Executive of any of his obligations of this Agreement or under the PIIA, he shall cease to be entitled to any further benefits under this Agreement. In no event shall Executive be entitled to any severance benefits under this Agreement if (i) his employment ceases by reason of a termination for Cause, or (ii) he voluntarily resigns from employment with the Company.
13. Successors and Assigns. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate, or successor, or in connection with any sale, transfer, or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Companys obligations hereunder.
14. Notices.
A. Any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if delivered either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand, or other communication shall be delivered personally, then such notice shall be conclusively deemed given at the time of such personal delivery.
B. If such notice, demand, or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after deposit in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
To the Company:
SeaStar Medical, Inc.
3513 Brighton Blvd
Ste 410
Denver, CO 80516
Attn: Chief Executive Officer
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To Executive:
Kevin Chung, MD
6910 Strata Street
Mclean, VA 22101
(or such personal address as the Company may have on file for Executive at the time of notice.)
C. Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party hereto.
15. General Creditor Status. The benefits to which Executive may become entitled under this Agreement shall be paid, when due, from the Companys general assets, and no trust fund, escrow arrangement or other segregated account shall be established as a funding vehicle for such payments. Accordingly, Executives right (or the right of the executors or administrators of Executives estate) to receive such benefits shall at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.
16. Governing Documents. This Agreement, together with (i) any equity award agreements, and (ii) the PIIA, shall constitute the entire agreement and understanding of the Company and Executive with respect to the terms and conditions of Executives employment with the Company and the eligibility for any potential severance payments and consulting payments following separation from employment with the Company, and this Agreement shall supersede all prior and contemporaneous written or verbal agreements and understandings between Executive and the Company relating to such subject matter. This Agreement, including but not limited to the at-will nature of the employment relationship as reflected herein, may only be amended by written instrument signed by Executive and the CEO.
17. Governing Law. The provisions of Agreement shall be construed and interpreted under the laws of the State of Virginia applicable to agreements executed and wholly performed within the State of Virginia. If any provision of this Agreement as applied to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. Should any provision of this Agreement become or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken, and the remainder of this Agreement shall continue in full force and effect.
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18. Arbitration.
A. Except as provided herein and the PIIA, each party hereto agrees that any and all disputes which arise out of or relate to Executives employment, the termination of Executives employment, or the terms of this Agreement shall be resolved through final and binding arbitration. Such arbitration shall be in lieu of any trial before a judge and/or jury, and Executive and the Company expressly waive all rights to have such disputes resolved via trial before a judge and/or jury. Such disputes shall include, without limitation, claims for breach of contract or of the covenant of good faith and fair dealing, claims of discrimination, claims under any federal, state, or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way Executives employment with the Company or its termination. The only claims not covered by this Employment Agreement to arbitrate disputes, which shall instead be resolved pursuant to applicable law, are: (i) claims for benefits under the unemployment insurance benefits; (ii) claims for workers compensation benefits under any of the Companys workers compensation insurance policy or fund; (iii) claims under the National Labor Relations Act; and (iv) claims that may not be arbitrated as a matter of law.
B. Arbitration will be conducted in Virginia. Arbitration shall be conducted in accordance with the Federal Arbitration Act (FAA) and the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA Rules available at www.adr.org) or any other discovery required by applicable law in arbitration proceedings, including, but not limited to, discovery available under the applicable state and/or federal arbitration statutes. Also, to the extent that any of the AAA Rules or anything in this arbitration section conflicts with any arbitration procedures required by applicable law, the arbitration procedures required by applicable law shall govern.
C. During the course of arbitration, the Company will bear the cost of (i) the arbitrators fee, and (ii) any other expense or cost Executive would not be required to bear if Executive were free to bring the dispute or claim in court. Each party shall bear such partys own attorneys fees incurred in connection with the arbitration. The arbitrator will not have authority to award attorneys fees unless a statute or contract at issue in the dispute authorizes the award of attorneys fees to the prevailing party. In such case, the arbitrator shall have the authority to make an award of attorneys fees as required or permitted by the applicable statute or contract.
D. The arbitrator shall issue a written award that sets forth the essential findings of fact and conclusions of law on which the award is based. The arbitrator shall have the authority to award any relief authorized by law in connection with the asserted claims or disputes. The arbitrators award shall be subject to correction, confirmation, or vacation, as provided by applicable law setting forth the standard of judicial review of arbitration awards. Judgment upon the arbitrators award may be entered in any court having jurisdiction thereof.
E. This arbitration provision does not prohibit Executive from pursuing an administrative claim with a local, state, or federal administrative agency such as the Equal Employment Opportunity Commission, but this arbitration agreement does prohibit Executive from seeking or pursuing court action regarding any such claim.
19. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
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20. Construction. The language of this Agreement shall be construed as to its fair meaning, and not strictly for or against either party. Any rule of construction that any ambiguities in a contract shall be construed against the drafter of a contract shall not apply.
21. Indemnification. Executive will be provided indemnification to the maximum extent permitted by the Companys and its subsidiaries and affiliates Articles of Incorporation or Bylaws, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year written above.
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Title: | Chief Executive Officer |
EXECUTIVE |
/s/ Kevin Chung |
Kevin Chung |
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Exhibit 10.29
SUBSCRIPTION AGREEMENT
August 23, 2022
LMF Acquisition Opportunities, Inc.
1200 W. Platt Street, Suite 100 Tampa, Florida 33606
SeaStar Medical, Inc.
3513 Brighton Boulevard, Suite 410
Denver, Colorado 80216
Ladies and Gentlemen:
In connection with the proposed business combination (the Transaction) between LMF Acquisition Opportunities, Inc., a Delaware corporation (the Company) and SeaStar Medical, Inc., a Delaware corporation (Target), pursuant to that certain Agreement and Plan of Merger, dated as of April 21, 2022 (the Transaction Agreement), by and among, the Company, Target, LMF Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (Merger Sub), and certain other parties named therein, the Company is seeking commitments to purchase shares of the Companys Class A Common Stock, par value $0.0001 per share (the Common Stock), for a purchase price of $10.00 per share (the Purchase Price per Share and the aggregate of such Purchase Price per Share for all Shares (as defined below) being referred to herein as the Purchase Price), and PIPE Warrants (as defined below), in a private placement to be conducted by the Company (the Offering).
On the date set forth on the signature page of this subscription agreement (this Subscription Agreement), the Company is entering into subscription agreements (the Other Subscription Agreements and together with this Subscription Agreement, the Subscription Agreements) with certain other subscribers (the Other Subscribers), pursuant to which the Other Subscribers, severally and not jointly, have agreed to purchase, on or prior to the date hereof, in the Offering, effective on the closing date of the Transaction, inclusive of the shares of Common Stock to be purchased by the undersigned, an aggregate amount of up to 700,000 shares of Common Stock, at the Purchase Price and an aggregate amount of up to 700,000 private placement warrants of the Company. In connection therewith, the undersigned subscriber (Subscriber) and the Company agree as follows:
1. Subscription. Subscriber hereby subscribes for and agrees to purchase from the Company, and the Company agrees to issue and sell to Subscriber, such number of shares of Common Stock (the Shares) and PIPE Warrants as is set forth on the signature page of this Subscription Agreement and at the Purchase Price per Share and on the terms provided for herein. In addition to the Shares, upon payment of the Purchase Price per Share, on the Closing Date (as defined below), the Company shall issue to the Subscriber, and the Subscriber shall subscribe from the Company, an aggregate number of warrants equal to the number of Shares subscribed for herein with each warrant providing the holder thereof the right to purchase one (1) share of Common Stock at an exercise price of $11.50 per share (the PIPE Warrants). The form of warrant representing the PIPE Warrants shall be in substantially the form of the Warrant Agreement attached hereto as Exhibit B to be entered into between the Company and Continental Stock
Transfer & Trust Company (Continental), as warrant agent (the Warrant Agreement). The shares of Common Stock underlying the PIPE Warrants are hereinafter referred to as the Subscriber Warrant Shares and the Shares, the PIPE Warrants and the Subscriber Warrant Shares are collectively referred to as the Subscriber Securities. The term Shares as used in this Subscription Agreement shall be deemed to include the Subscriber Warrant Shares, as the context requires.
2. Closing; Delivery of Shares and PIPE Warrants. The closing of the sale of Shares and PIPE Warrants contemplated hereby (the Closing, and the date that the Closing actually occurs, the Closing Date) is contingent upon the substantially concurrent consummation of the Transaction (the Transaction Closing). The Closing shall occur on the date of, and concurrently with, the Transaction Closing. At least five (5) business days (as defined below) before the anticipated Closing Date, the Company shall deliver written notice to the Subscriber (the Closing Notice) specifying (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Purchase Price to the Company. No later than two (2) business days after receiving the Closing Notice, the Subscriber shall deliver to the Company such information as is reasonably requested in the Closing Notice in order for the Company to issue the Shares and PIPE Warrants to the Subscriber. The Subscriber shall deliver to the Company on or prior to 8:00 a.m. (Eastern time) (or as soon as practicable after the Company or its transfer agent delivers evidence of the issuance to Subscriber of the Shares and PIPE Warrants on and as of the Closing Date) on the Closing Date the Purchase Price in cash via wire transfer to the account specified in the Closing Notice against delivery by the Company to Subscriber of (i) the Shares and PIPE Warrants in book entry form, free and clear of any liens or other restrictions (other than those arising under state or federal securities laws or in connection with this Subscription Agreement), in the name of the Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by the Subscriber, as applicable, and (ii) written notice from the Company or its transfer agent evidencing the issuance to Subscriber of the Shares and PIPE Warrants on and as of the Closing Date. In the event that the consummation of the Transaction does not occur within three (3) business day after the anticipated Closing Date specified in the Closing Notice, the Company shall promptly (but in no event later than five (5) business days after the anticipated Closing Date specified in the Closing Notice) return the funds so delivered by the Subscriber to the Company by wire transfer in immediately available funds to the account specified by the Subscriber.
3. Closing Conditions. In addition to the conditions set forth in Section 2:
(a) General Conditions. The Closing is also subject to the satisfaction or valid waiver by each party of the conditions that, on the Closing Date:
(i) no suspension of the qualification of the Shares or PIPE Warrants for offering or sale or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) no applicable governmental authority shall have enacted, rendered, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition;
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(iii) The Common Stock shall have been approved for listing on the Trading Market (as defined below), subject to official notice of issuance, and a Listing of Additional Shares notification form shall have been filed for the Shares and the Subscriber Warrant Shares with the Trading Market; and
(iv) all conditions precedent to the Transaction Closing set forth in the Transaction Agreement, as it may be amended from time to time, shall have been satisfied or waived (other than those conditions which, by their nature, are to be satisfied at the Transaction Closing).
(b) Company Conditions. The obligations of the Company to consummate the Closing are also subject to the satisfaction or valid waiver by the Company of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Subscriber contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing shall constitute a reaffirmation by the Subscriber of each of the representations, warranties and agreements of the Subscriber contained in this Subscription Agreement as of the Closing Date; and
(ii) the Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to Closing.
(c) Subscriber Conditions. The obligations of the Subscriber to consummate the Closing are also subject to the satisfaction or valid waiver by the Subscriber of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Company contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing shall constitute a reaffirmation by the Company of each of the representations, warranties and agreements of the Company contained in this Subscription Agreement as of the Closing Date;
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(ii) the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to Closing;
(iii) the Company and Continental Stock Transfer & Trust Company shall have executed the warrant agreement relating to the PIPE Warrants and the Company shall have issued the warrant certificate relating to the PIPE Warrants, in each case in substantially the form set forth as Exhibit B hereto; and
(iv) no amendment or modification of the Transaction Agreement (as the same exists on the date hereof as provided to the Subscriber) shall have occurred that would reasonably be expected to materially and adversely affect the economic benefits that the Subscriber would reasonably expect to receive under this Subscription Agreement.
4. Company Representations and Warranties. The Company represents and warrants to the Subscriber that:
(a) Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.
(b) Authorization; Enforcement. This Subscription Agreement has been duly authorized, executed and delivered by the Company and is enforceable against the Company in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(c) Issuance. The Shares and PIPE Warrants have been duly authorized. When issued and delivered to the Subscriber against full payment therefor in accordance with the terms of this Subscription Agreement, the Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Companys certificate of incorporation or formation, bylaws, operating agreement, memorandum and articles of association or similar organization documents, as applicable and in each case as amended (together, the
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Organizational Documents). When paid for in accordance with this Subscription Agreement, the PIPE Warrants will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity. Upon the issuance of the PIPE Warrants, the maximum number of Subscriber Warrant Shares underlying such warrants shall have been reserved for issuance and when issued in accordance with the terms of the PIPE Warrants, will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Companys Organizational Documents.
(d) No Conflicts. The execution, delivery and performance of this Subscription Agreement, including the issuance and sale of the Shares, the PIPE Warrants and the Subscriber Warrant Shares and the consummation of the transactions contemplated hereby, will be done in accordance with the Nadsaq marketplace rules, and (i) will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, license, lease or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company is subject, which would have a material adverse effect on the business, properties, assets, liabilities, operations, financial condition, stockholders equity or results of operations of the Company (a Material Adverse Effect) or affect the validity of the Shares, the PIPE Warrants or the Subscriber Warrant Shares (when issued) or the legal authority or ability of the Company to perform in all material respects its obligations under the terms of this Subscription Agreement; (ii) result in any violation of the provisions of the Organizational Documents; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that would have a Material Adverse Effect or materially affect the validity of the Shares, the PIPE Warrants or the Subscriber Warrant Shares (when issued) or the legal authority or ability of the Company to perform in all material respects its obligations under the terms of this Subscription Agreement.
(e) Filings, Consents and Approvals. Assuming the accuracy of the representations and warranties of the Subscriber in Section 5, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by the Company of this Subscription Agreement (including, without limitation, the issuance of the Shares, the PIPE Warrants and the Subscriber Warrant Shares), other than (i) any required filing of a Notice of Exempt Offering of Securities on Form D with U.S. Securities and Exchange Commission (the Commission) under Regulation D of the Securities Act of 1933, as amended (the Securities Act), (ii) the filing of the registration statement pursuant to Section 7 below, (iii) the filings required by applicable state or federal securities laws, and (iv) any filings or notices required by Nasdaq.
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(f) Capitalization. As of the date of this Subscription Agreement, the capitalization of the Company is as set forth on Schedule 4(f) attached hereto. All issued and outstanding shares of capital stock of the Company as set forth on Schedule 4(f) Common Stock have been duly authorized and validly issued, are fully paid and are non-assessable and are not subject to preemptive rights. Except as set forth above and pursuant to the Other Subscription Agreements, the Transaction Agreement (as may be amended from time to time) and the other agreements and arrangements referred to therein or in the SEC Reports (as defined below), as of the date hereof, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company shares of Common Stock or other equity interests in the Company, or securities convertible into or exchangeable or exercisable for such equity interests. Except for Merger Sub, as of the date hereof, the Company has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any securities of the company, other than (1) as set forth in the SEC Reports and (2) as contemplated by the Transaction Agreement (as it may be amended from time to time).
(g) Registration of Common Stock. The issued and outstanding shares of Common Stock are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and are listed for trading on the Nasdaq Capital Market (the Trading Market) under the symbol LMAO. There is no suit, action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company by the Trading Market or the Commission with respect to any intention by such entity to deregister the Common Stock or prohibit or terminate the listing of the Common Stock on Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by Nasdaq of the Companys listing application with respect to the Transaction. The Company has taken no action that is designed to terminate the registration of the Common Stock under the Exchange Act.
(h) Regulatory Actions. Except for such matters as have not had and would not be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no (i) action, suit, claim or other proceeding, in each case by or before any governmental authority pending, or, to the knowledge of the Company, threatened against the Company or (ii) judgment, decree, injunction, ruling or order of any governmental entity outstanding against the Company.
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(i) Compliance. The Company is in compliance with all applicable laws, except where such non-compliance would not reasonably be expected to have a Material Adverse Effect. The Company has not received any written communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.
(j) Broker Fees. The Company has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other person to any brokers or finders fee or any other commission or similar fee in connection with the transactions contemplated by this Subscription Agreement for which the Subscriber could become liable. Other than compensation paid to Maxim Group LLC, as placement agent (the Placement Agent), the Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscriber in connection with the sale of any Subscriber Securities in the Offering.
(k) Private Placement. Assuming the accuracy of the Subscribers representations and warranties set forth in Section 5, in connection with the offer, sale and delivery of the Shares and PIPE Warrants in the manner contemplated by this Subscription Agreement, it is not necessary to register the Shares, the PIPE Warrants or Subscriber Warrant Shares under the Securities Act. None of the Subscriber Securities (i) were offered by any form of general solicitation or general advertising and (ii) are being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. The Company has not, directly or indirectly, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which, to its knowledge, is or will be (i) integrated with the Securities sold pursuant to this Subscription Agreement for purposes of the Securities Act in a manner that would require registration of the Securities under the Securities Act or (ii) except for the Equity Line Purchase Agreement, aggregated with prior offerings by the Company for the purposes of Nasdaq rules and regulations.
(l) SEC Reports; Financial Statements. The Company has filed all forms, reports, statements, schedules, proxies, registration statements and other documents required to be filed by the Company with the Commission prior to the date of this Subscription Agreement (the SEC Reports). As of their respective dates, all SEC Reports complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the Commission promulgated thereunder, 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. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. A copy of each SEC Report is available to the Subscriber via the Commissions EDGAR system. There are no outstanding or unresolved comments in comment letters received by the Company from the staff of the Division of Corporation Finance of the Commission with respect to any of the SEC Reports.
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(m) No Side Letters. Other than the Other Subscription Agreements, the Transaction Agreement (as it may be amended from time to time), that certain commitment letter dated April 21, 2022 by and among the Company, Dow Employees Pension Plan Trust, Union Carbide Employee Pension Plan and SeaStar Medical, Inc., and the Equity Line Purchase Agreement (as defined below), the Company has not entered into any side letter or similar agreement with any Other Subscriber or any other investor in connection with such Other Subscribers or investors direct or indirect investment in the Company. No Other Subscription Agreement includes terms and conditions that are materially more advantageous to any such Other Subscriber than the Subscriber hereunder, and such Other Subscription Agreements have not been amended or modified in any material respect following the date of this Subscription Agreement. All Other Subscribers are purchasing the Shares and PIPE Warrants for the same Purchase Price per Share. For purposes hereof, the term Equity Line Purchase Agreement refers to the Common Stock Purchase Agreement of even date herewith among the Company, SeaStar Medical, Inc. and Tumim Stone Capital LLC.
(n) Warrant Agreement. Upon issuance in accordance with and payment pursuant to the terms of the Warrant Agreement, each of the Subscriber Warrant Shares will be validly issued, fully paid and non-assessable, free and clear of any liens or other encumbrances (other than those arising under applicable securities laws or in connection with this Subscription Agreement) and will not have been issued in violation of or subject to any preemptive or similar rights created under the Companys Organizational Documents (as in effect at such time of issuance).
(o) Absence of Litigation. As of the date hereof, there is no action, suit, proceeding, arbitration, claim, investigation or inquiry pending or, to the Companys knowledge, threatened in writing by any governmental body against the Company which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, nor are there any orders, writs, injunctions, judgments or decrees outstanding of any court or government agency or instrumentality and binding upon the Company that have had or would reasonably be expected to have a Material Adverse Effect. As of the date hereof, neither the Company, nor to the knowledge of the Company, any director or officer thereof, is, or within the last 10 years has been, the subject of any action involving a claim of violation of or liability under federal or state securities laws relating to the Company or a claim of breach of fiduciary duty relating to the Company.
(p) Sarbanes-Oxley Compliance. The Company is, and since January 28, 2021, has been, in compliance in all material respects with applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the Commission thereunder.
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(q) Disclosure Controls and Procedures. The Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably designed to ensure that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Companys management as appropriate to allow timely decisions regarding required disclosure.
(r) Price Stabilization of Common Stock. The Company has not taken, nor will it take, directly or indirectly, any action designed to stabilize or manipulate the price of the Common Stock to facilitate the sale or resale of the Subscriber Securities.
(s) Investment Company Act. The Company is not, and immediately after consummation of the Offering will not be, an investment company within the meaning of the Investment Company Act of 1940, as amended.
(t) No Disqualification Events. No bad actor disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a Disqualification Event) is applicable to the Company or, to the knowledge of the Company, any Covered Person (as defined below), except for a Disqualification Event as to which Rule 506(d)(2)(iiiv) or (d)(3), is applicable. Covered Person means, with respect to the Company as an issuer for purposes of Rule 506 promulgated under the Securities Act, any person listed in the first paragraph of Rule 506(d)(1).
The Company understands that the foregoing representations and warranties shall be deemed material to and have been relied upon by the Subscriber.
5. Subscriber Representations, Warranties and Covenants. The Subscriber represents and warrants to the Company that:
(a) Subscriber Status. At the time the Subscriber was offered the Shares and PIPE Warrants, it was, and as of the date hereof, the Subscriber is (i) an accredited investor (within the meaning of Rule 501 of Regulation D under the Securities Act) (an Accredited Investor) or an Institutional Account (within the meaning of FINRA Rule 4512(c)) (an Institutional Account), as indicated in the questionnaire attached as Exhibit A hereto (an Investor Questionnaire), and (ii) is acquiring the Shares and PIPE Warrants only for its own account and not for the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. The Subscriber, if not an individual, is not an entity formed for the specific purpose of acquiring the Shares and PIPE Warrants.
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(b) Nature of Investment. The Subscriber understands that the Shares and PIPE Warrants are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares and PIPE Warrants delivered at the Closing have not been registered under the Securities Act. The Subscriber understands that the Shares and PIPE Warrants may not be resold, transferred, pledged or otherwise disposed of by the Subscriber absent an effective registration statement under the Securities Act except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates (if any) or any book-entry shares representing the Shares or PIPE Warrants delivered at the Closing shall contain a legend or restrictive notation to such effect, and as a result of such restrictions, the Subscriber may not be able to readily resell the Shares and PIPE Warrants and may be required to bear the financial risk of an investment in the Shares and PIPE Warrants for an indefinite period of time. The Subscriber acknowledges that the Shares and PIPE Warrants will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. The Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares or PIPE Warrants. The Subscriber acknowledges and agrees that the effectiveness of the registration statement registering the resale of the Shares, the PIPE Warrants or the Subscriber Warrant Shares pursuant to Section 7 is not a condition to the Closing of this Offering.
(c) Authorization and Enforcement. The execution, delivery and performance by the Subscriber of this Subscription Agreement are within the powers of the Subscriber, have been duly authorized and will not constitute or result in a breach or default under or conflict with any federal or state statute, rule or regulation applicable to the Subscriber, any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Subscriber is a party or by which the Subscriber is bound, and, if the Subscriber is not an individual, will not violate any provisions of the Subscribers charter documents, including its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory, if the Subscriber is an individual, has legal competence and capacity to execute the same or, if the Subscriber is not an individual the signatory has been duly authorized to execute the same, and this Subscription Agreement constitutes a legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity. If the Subscriber is not an individual, the Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation.
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(d) Other Representations. The Subscriber understands and agrees that the Subscriber is purchasing Shares and PIPE Warrants directly from the Company. The Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to the Subscriber by the Company, or any of its officers or directors, expressly (other than those representations, warranties, covenants and agreements included in this Subscription Agreement) or by implication.
(e) Tax Treatment. The Subscribers acquisition and holding of the Shares and PIPE Warrants will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
(f) Receipt of Disclosure. The Subscriber acknowledges and agrees that the Subscriber has received such information as the Subscriber deems necessary in order to make an investment decision with respect to the Shares and PIPE Warrants. Without limiting the generality of the foregoing, the Subscriber acknowledges that it has received (or in the case of documents filed with the Commission, had access to) the following items (collectively, the Disclosure Documents): (i) the final prospectus of the Company, dated as of January 25, 2021 and filed with the Commission (File No. 333-251962) (the SPAC Prospectus), (ii) each filing made by the Company with the Commission following the filing of the SPAC Prospectus through the date of this Subscription Agreement, including the amendment to the preliminary proxy statement/prospectus of the Company relating to the Transaction, dated as of July 11, 2022 and filed with the Commission (File No. 333-264993), and (iii) the Transaction Agreement, a copy of which has been filed by the Company with the Commission. The Subscriber represents and agrees that the Subscriber and the Subscribers professional advisor(s), if any, have had the full opportunity to ask the Companys management questions, receive such answers and obtain such information as the Subscriber and such Subscribers professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares and PIPE Warrants. Except for the representations, warranties and agreements of the Company expressly set forth in this Subscription Agreement, the Subscriber is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it deems appropriate) with respect to the Transaction, the Shares, the PIPE Warrants and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.
(g) No General Solicitation. The Subscriber became aware of this Offering of the Shares and PIPE Warrants solely by means of direct contact between the Subscriber and the Company, the Placement Agent or a representative of the Company or the Placement Agent, and the Shares and PIPE Warrants were offered to the Subscriber solely by direct contact between the Subscriber and the Company, the Placement Agent or a representative of the Company or the Placement Agent. The Subscriber acknowledges that the Company represents and warrants that the Shares and PIPE Warrants (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
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(h) Investment Risks. The Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares and PIPE Warrants, including those set forth in the Disclosure Documents and in the Companys filings with the Commission. The Subscriber is able to fend for itself in the transactions contemplated herein and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and PIPE Warrants, and the Subscriber has sought such accounting, legal and tax advice as the Subscriber has considered necessary to make an informed investment decision. Alone, or together with any professional advisor(s), the Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and PIPE Warrants and determined that the Shares and PIPE Warrants are a suitable investment for the Subscriber and that the Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Subscribers investment in the Company. The Subscriber acknowledges specifically that a possibility of total loss exists.
(i) Compliance. The Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of this Offering of the Shares and PIPE Warrants or made any findings or determination as to the fairness of this investment or the accuracy or adequacy of the Companys reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof.
(j) Diligence Disclaimer. Neither the due diligence investigation conducted by the Subscriber in connection with making its decision to acquire the Shares and PIPE Warrants nor any representations and warranties made by the Subscriber herein shall modify, amend or affect the Subscribers right to rely on the truth, accuracy and completeness of the Companys representations and warranties contained herein.
(k) OFAC/Patriot Act. The Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Departments Office of Foreign Assets Control (OFAC) or in any Executive Order issued by the President of the United States and administered by OFAC (OFAC List), or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a Prohibited Investor). The Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Subscriber is permitted to do so under applicable law. If the Subscriber is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the BSA/PATRIOT Act), the Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by the Subscriber and used to purchase the Shares and PIPE Warrants were legally derived.
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(l) No Reliance on Placement Agent. In making its decision to purchase the Shares and PIPE Warrants, the Subscriber has relied solely upon independent investigation made by the Subscriber and the representations and warranties of the Company set forth herein. Without limiting the generality of the foregoing, the Subscriber has not relied on any statements or other information provided by the Placement Agent concerning the Company, Target or the Shares or the offer and sale of the Shares or PIPE Warrants. The Subscriber acknowledges and agrees that no disclosure or offering document has been prepared by the Placement Agent in connection with the offer and sale of the Shares or PIPE Warrants. The Placement Agent and its members, directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company, the Shares or the or PIPE Warrants or the accuracy, completeness or adequacy of any information supplied to the Subscriber by the Company. In connection with the issue and purchase of the Shares or PIPE Warrants, the Placement Agent has not made any recommendations regarding an investment in the Company, the Shares or PIPE Warrants or acted as the Subscribers financial advisor or fiduciary. The Subscriber hereby further acknowledges and agrees that (a) the Placement Agent is acting solely as placement agent and equity capital markets advisor to the Company in connection with the Transaction and are not acting as underwriters or in any other capacity and are not and shall not be construed as fiduciaries or financial advisors for the Subscriber, the Company or any other person or entity in connection with the Transaction, (b) the Placement Agent has not made and will not make any representation or warranty, whether express or implied, of any kind or character and have not provided any advice or recommendation in connection with the Transaction, (c) the Placement Agent has no responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the Transaction or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (ii) the business, condition (financial or otherwise), operations, properties or prospects of, or any other matter concerning the Company or the Transaction, and (d) the Placement Agents shall have no liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by you, the Company or any other person or entity), whether in contract, tort or otherwise, to the Subscriber, or to any person claiming through you, in respect of the Transaction. The Subscriber waives, to the fullest extent permitted by law, any claims it may have based on any actual or potential conflicts of interest in connection with the Placement Agent advising or assisting the Company with respect to any transaction contemplated by this engagement. The Subscriber understands and acknowledges that, in light of the Placement Agents role as placement agent and equity capital markets advisor to the Company, the matters described in any Subscription Agreement and the fees in connection therewith may give rise to potential conflicts of interest or the appearance thereof. The Subscriber consents to (and agrees, to the extent applicable and permitted by applicable law, on behalf of its equity holders, to waive any claims the Subscriber or its equity holders may have based on any actual or potential conflicts of interest that may arise or result from) the Placement Agent
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acting as placement agent and equity capital markets advisor to the Company and the Placement Agent or one or more of its affiliates engaging in, and receiving any compensation in connection with, any of the activities described in any Subscription Agreement. The Subscriber acknowledges that the Placement Agent does not assume any responsibility for independent verification of, or the accuracy or completeness of, any information or projections provided to the Subscriber hereunder.
6. Additional Covenants.
(a) Transfer Restrictions.
(i) The Shares and PIPE Warrants may only be resold, transferred, pledged or otherwise disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares or PIPE Warrants other than pursuant to an effective registration statement, Rule 144 under the Securities Act (Rule 144) or pursuant to another applicable exemption from the registration requirements of the Securities Act, or a transfer to the Company or to one or more affiliates of the Subscriber or to a lender to Subscriber pursuant to a pledge and, thereafter, a transferee thereof pursuant to a foreclosure, of the Subscriber, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company the form and substance of which opinion shall be reasonably satisfactory to the Company to the effect that such transfer does not require registration of such transferred Shares or PIPE Warrants under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Subscription Agreement and such transferee and each Subscriber affiliate transferee and each lender transferee and their subsequent transferees shall have the rights and obligations of the Subscriber under this Agreement.
(ii) The Company acknowledges and agrees that the Subscriber may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Shares or the Shares, as applicable, to a financial institution that is an accredited investor as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Subscriber may transfer pledged or secured Shares or Shares, as applicable, to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith; further, no notice shall be required of such pledge; provided that the Subscriber and its pledgee shall be required to comply with other provisions of Section 6 hereof in order to effect a sale, transfer or assignment of the Shares or Shares, as applicable, to such pledgee. At the Subscribers expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of the Shares or the Shares, as applicable, may reasonably request in connection with a pledge or transfer of the Shares or the Shares, as applicable.
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(iii) The Subscriber agrees to the imprinting, so long as is required by this Subscription Agreement, of a legend on any of the Shares and PIPE Warrants, and after the consummation of the Transaction, the Shares and PIPE Warrants, in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE FEDERAL, STATE AND FOREIGN SECURITIES LAWS.
(iv) The Subscriber agrees with the Company that the Subscriber will sell any Subscriber Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Subscriber Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from instruments representing Subscriber Securities, and after the consummation of the Transaction, the Subscriber Securities, as set forth in this Section 6 is predicated upon the Companys reliance upon this understanding.
(b) Public Disclosure. The Company shall (a) by 9:30 am ET on the business day following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby (Disclosure Time), and (b) file a Current Report on Form 8-K with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Subscriber that it shall have publicly disclosed all material, non-public information delivered to any of the Subscribers by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Agreement. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, agents, employees or affiliates on the one hand, and any of the Subscriber or any of their affiliates on the other hand, shall terminate. Notwithstanding the foregoing, no party shall publicly disclose the name of any other party, or include the name of any other party in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the party being disclosed, except (a) as required by federal securities law in connection with any registration statement contemplated by Section 7 of this Subscription Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case prior notice of such disclosure permitted under this clause (b) shall be made to the other party.
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(c) Non-Public Information. Following the Disclosure Time or otherwise as required by applicable law, the Company covenants and agrees that neither it, nor any other person acting on its behalf will provide any Subscriber or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Subscriber shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that the Subscriber shall be relying on the foregoing covenant in effecting transactions in securities of the Company; provided, that each Subscriber shall be solely responsible for its compliance with federal, state and foreign securities laws.
(d) Certain Transactions and Confidentiality. The Subscriber covenants that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with it will (i) execute any purchases or sales of any of the Companys securities or (ii) will engage in any Short Sales with respect to securities of the Company; in each instance during the period commencing at the time that the Subscriber first learned of the transactions contemplated hereunder and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 6(b). The Subscriber covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 6(b), the Subscriber will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the Subscriber makes no representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 6(b), (ii) the Subscriber shall not be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 6(b) and (iii) the Subscriber shall have no duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 6(b). Notwithstanding the foregoing, in the case that the Subscriber is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Subscribers assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Subscribers assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement. For purposes of this Section, Short Sales shall include, without limitation, all short sales as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.
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(e) Subscriber Undertaking. The Company may request from the Subscriber such additional information as the Company may deem necessary to evaluate the eligibility of the Subscriber to acquire the Subscriber Securities, and the Subscriber shall provide such information to the Company upon such request to the extent readily available and to the extent consistent with the Subscribers internal policies and procedures, and provided that the Company agrees to keep confidential any such information provided by the Subscriber.
7. Registration of Subscriber Securities.
(a) The Company agrees that, within thirty (30) calendar days following the Closing Date, the Company will submit to or file with the Commission (at the Companys sole cost and expense) a registration statement registering the resale of the Subscriber Securities (the Registration Statement), and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (1) forty-five (45) calendar days following the Closing Date (or seventy-five (75) calendar days after the Closing Date if the Registration Statement is reviewed by, and comments thereto are provided by, the Commission) and (2) the second (2nd) business day after the date the Company is notified in writing by the Commission that the Registration Statement will not be reviewed or will not be subject to further review. The Company will use its commercially reasonable efforts to provide a draft of the Registration Statement to Subscriber for review at least two (2) business days in advance of the filing of the Registration Statement. In no event shall the Subscriber be identified as a statutory underwriter in the Registration Statement unless in response to a comment or request from the staff of the Commission or another regulatory agency; provided, however, that if the Commission requests that the Subscriber be identified as a statutory underwriter in the Registration Statement, the Subscriber will have an opportunity to withdraw from the Registration Statement. Notwithstanding the foregoing, if the Commission prevents the Company from including any or all of the shares or warrants proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Subscriber Securities by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Subscriber Securities which is equal to the maximum number of Shares, PIPE Warrants and Subscriber Warrant Shares as is permitted by the Commission. In such event, the number of Subscriber Securities to be registered for each selling stockholder named in the Registration Statement shall be reduced pro rata among all such selling stockholders. The Company agrees that the Company will use its commercially reasonable efforts to cause such Registration Statement to remain effective until the earlier of (i) three years from the issuance of the Subscriber Securities, (ii) the date on which all of the Subscriber Securities shall have been sold, or (iii) the first date on which Subscriber can sell all of its Subscriber Securities (or securities received in exchange therefor) under Rule 144 without limitation as to the manner of sale or the amount of such securities that may be sold, and the Company shall use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable. The Company will use its commercially reasonable efforts to (x) cause the removal of all restrictive legends from any Registrable Securities (as defined below) being sold under the Registration Statement or pursuant
17
to Rule 144 at the time of sale of such Registrable Securities and, at the request of a Holder (as defined below), cause the removal of all restrictive legends from any Registrable Securities held by such Holder that may be sold by such Holder without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions, and (y) cause its legal counsel to deliver the necessary legal opinions, if any, to the transfer agent in connection with the instruction under subclause (x) upon the receipt of such supporting documentation, if any, as reasonably requested by such counsel. The Company will use commercially reasonable efforts to file all reports, and provide all customary and reasonable cooperation, reasonably necessary to enable Holder to resell Registrable Securities pursuant to the Registration Statement or Rule 144, as applicable, qualify the Registrable Securities for listing on the applicable stock exchange and update or amend the Registration Statement as necessary to include Registrable Securities. Registrable Securities shall mean, as of any date of determination, the Subscriber Securities and any other equity security issued or issuable with respect to the Subscriber Securities by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, provided, however, that such securities shall cease to be Registrable Securities at the earliest of (A) five (5) years, (B) the date all Shares and PIPE Warrants held by a Holder may be sold by such Holder without volume or manner of sale limitations pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (B) the date on which such securities have actually been sold by a Holder, or (C) when such securities shall have ceased to be outstanding. Holder shall mean the Subscriber or any affiliate of the Subscriber to which the rights under this Section 7 shall have been assigned. Subscriber agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Exchange Act, of Subscriber Securities to the Company (or its successor) upon reasonable request to assist the Company in making the determination described above. The Companys obligations to include the Subscriber Securities in the Registration Statement are contingent upon Subscriber furnishing in writing to the Company such information regarding Subscriber, the securities of the Company held by Subscriber and the intended method of disposition of the Subscriber Securities as shall be reasonably requested by the Company to effect the registration of the Subscriber Securities, and shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations provided that Subscriber shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Subscriber Securities. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Subscriber Securities. Notwithstanding anything to the contrary in this Subscription Agreement, the Company may delay filing, postpone effectiveness or suspend the use of the Registration Statement if it determines that, in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed, to include information that would at that time not otherwise be required in a current, quarterly or annual report under the Exchange Act, or if such filing, effectiveness or use would materially affect a bona fide business or financing transaction of the Company or would require premature disclosure of information that would materially adversely affect the Company (each such circumstance, a Suspension Event); provided, that, (i) the Company shall not so delay filing, postpone effectiveness, or suspend the use of the Registration Statement for a period of more than forty-five (45) consecutive days or more than two (2) times in any three hundred sixty (360) day period and (ii) the Company shall use commercially reasonable efforts to make the Registration Statement available for the sale by Subscriber of its Subscriber
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Securities as soon as practicable thereafter. Upon receipt of any written notice from the Company (which notice shall not contain any material non-public information regarding the Company and which notice shall not be subject to any duty of confidentiality) of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that (I) it will promptly discontinue offers and sales of the Subscriber Securities under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (II) it will maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, Subscriber will deliver to the Company or, in Subscribers sole discretion destroy, all copies of the prospectus covering the Subscriber Securities in Subscribers possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Subscriber Securities shall not apply (X) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (Y) to copies stored electronically on archival servers as a result of automatic data back-up. For as long as the Subscriber holds Subscriber Securities, the Company shall file all reports for so long as the condition in Rule 144(c)(1) (or Rule 144(i)(2), if applicable) is required to be satisfied, and provide all customary and reasonable cooperation, necessary to enable the Subscriber to resell the Subscriber Securities pursuant to Rule 144 of the Securities Act (in each case, when Rule 144 of the Securities Act becomes available to the Subscribers). At its expense, the Company shall advise the Subscriber within two (2) business days: (i) when the Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for such purpose; and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares, PIPE Warrants or Subscriber Warrant Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(b) The Company shall indemnify and hold harmless Subscriber (to the extent a seller under the Registration Statement), the officers, directors, agents and employees of Subscriber, each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys fees) and expenses (collectively, Losses) that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission
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to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding Subscriber furnished in writing to the Company by Subscriber expressly for use therein or that Subscriber has omitted a material fact from such information. The Company shall notify Subscriber promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 5 of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party and shall survive the transfer of the Subscriber Securities by Subscriber. Notwithstanding the forgoing, the Companys indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed).
(c) Subscriber shall, severally and not jointly with any Other Subscriber in the offering contemplated by this Subscription Agreement, indemnify and hold harmless the Company, its directors, officers, agents and employees, each person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling persons, to the fullest extent permitted by applicable law, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding Subscriber furnished in writing to the Company by Subscriber expressly for use therein. In no event shall the liability of Subscriber be greater in amount than the dollar amount of the net proceeds received by Subscriber upon the sale of the Subscribed Shares giving rise to such indemnification obligation. Notwithstanding the forgoing, Subscriber indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of Subscriber (which consent shall not be unreasonably withheld or delayed).
(d) Any person or entity entitled to indemnification herein shall (A) 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 persons or entitys right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (B) unless in such indemnified partys 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, conditioned or delayed). An indemnifying party who is not
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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 includes a statement or admission of fault and culpability on the part of such indemnified party or which 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.
(e) The indemnification provided for under this Subscription 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 or entity of such indemnified party and shall survive the transfer of securities.
(f) If the indemnification provided under this Section 7 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; provided, however, the liability of the Subscriber shall be limited to the net proceeds received by such Subscriber from the sale of Subscriber Securities giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying partys and indemnified partys relative intent, knowledge, access to information and opportunity to correct or prevent such action. 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 this Section 7, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. 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 Section 7(f) from any person or entity who was not guilty of such fraudulent misrepresentation.
8. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of: (a) the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement; (b) such date and time as the Transaction Agreement is terminated in accordance with its terms; or (c) the Termination Date as defined in the Transaction Agreement if the transactions
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contemplated by this Subscription Agreement are not consummated on or prior to such date; provided that (i) nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Company shall notify the Subscriber of the termination of the Transaction Agreement promptly after the termination of such agreement and (ii) the provisions of Sections 8 through 10 of this Subscription Agreement will survive any termination of this Subscription Agreement and continue indefinitely.
9. Trust Account Waiver. The Subscriber hereby represents and warrants that it has read the SPAC Prospectus and understands that the Company has established a trust account (the Trust Account) containing the proceeds of its initial public offering (the IPO) and the overallotment shares acquired by its underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Companys public stockholders (including overallotment shares acquired by the Companys underwriters, the Public Stockholders). For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Subscriber hereby agrees that notwithstanding anything to the contrary contained in this Subscription Agreement, Subscriber does not now and shall not at any time hereafter have, and waives any and all right, title and interest, or any claims of any kind it has or may have in the future as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby, the Shares or PIPE Warrants, in or to any monies held in the Trust Account (or any distributions therefrom directly or indirectly to Public Stockholders (Public Distributions)), and agrees not to seek recourse or make or bring any action, suit, claim or other proceeding against the Trust Account or Public Distributions as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby, the Shares or PIPE Warrants, regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability. To the extent the Subscriber commences any action or proceeding based upon, in connection with, as a result of or arising out of, this Subscription Agreement, the transactions contemplated hereby, the Shares or PIPE Warrants, which proceeding seeks, in whole or in part, monetary relief against the Company or its representatives, the Subscriber hereby acknowledges and agrees that the Subscribers sole remedy shall be against funds held outside of the Trust Account (other than Public Distributions) and that such claim shall not permit the Subscriber (or any person claiming on its behalf or in lieu of any of it) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. Notwithstanding anything else in this Section 9 to the contrary, nothing herein shall be deemed to limit the Subscribers right, title, interest or claim to the Trust Account by virtue of the Subscribers record or beneficial ownership of Common Stock acquired by any means other than pursuant to this Subscription Agreement, including but not limited to any redemption right with respect to any such securities of the Company.
10. Miscellaneous.
(a) Transferability. Neither this Subscription Agreement nor any rights that may accrue to the Subscriber hereunder (other than the Subscriber Securities acquired hereunder, if any, subject to applicable securities laws and the rights set forth in Section 7) may be transferred or assigned by the Subscriber without the prior written consent of the
22
Company, and any purported transfer or assignment without such consent shall be null and void ab initio. Notwithstanding the foregoing, prior to the Closing the Subscriber may assign all of its rights and obligations under this Subscription Agreement to an affiliate of the Subscriber, or to any fund or account managed by the same investment manager as Subscriber, that is an Accredited Investor or an Institutional Account, so long as the Subscriber provides the Company with at least five (5) business days prior written notice of such assignment and a completed Investor Questionnaire duly executed by such assignee; provided, further that (i) such assignee will be deemed to have made to the Company each of the representations, warranties and covenants of the Subscriber set forth in Section 5 as of the date of such assignment and as of the Closing Date, and (ii) no such assignment by the Subscriber will relieve the Subscriber of its obligations under this Subscription Agreement, and the Subscriber will remain secondarily liable under this Subscription Agreement for the obligations of the assignee hereunder.
(b) Company Reliance. The Subscriber acknowledges that the Company, the Placement Agent, the Target and others will rely on the acknowledgments, understandings, agreements, representations and warranties of the Subscriber contained in this Subscription Agreement, provided, however, that the Closing may only be enforced against the Subscriber by the Company. Prior to the Closing, the Subscriber agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate in any material respect.
(c) Survival. All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
(d) Amendments and Waivers. This Subscription Agreement may not be amended, modified or waived except by an instrument in writing, signed by the party against whom enforcement of such amendment, modification or waiver is sought. Section 4, Section 5, this Section 10(d), Section 10(n) and Section 11 of this Subscription Agreement may not be amended, modified, terminated or waived in any manner that is material and adverse to the Placement Agent without the written consent of the Placement Agent.
(e) Entire Agreement. This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof (other than any confidentiality agreement entered into by the Company and the Subscriber in connection with the Offering).
(f) Successors and Assigns. This Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
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(g) Severability. If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(h) Counterparts. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(i) Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
(j) JURY TRIAL. THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS SUBSCRIPTION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
(k) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered by facsimile or email, with affirmative confirmation of receipt, (iii) one business day after being sent, if sent by reputable, internationally recognized overnight courier service or (iv) three (3) business days after being mailed, if sent by registered or certified mail, prepaid and return receipt requested, in each case to the applicable party at the addresses set forth on the applicable signature pages hereto.
(l) Headings and Certain Defined Terms. The headings set forth in this Subscription Agreement are for convenience of reference only and shall not be used in interpreting this Subscription Agreement. In this Subscription Agreement, unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this Subscription Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) including (and with correlative meaning include) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words without limitation; and (iii) the words
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herein, hereto and hereby and other words of similar import in this Subscription Agreement shall be deemed in each case to refer to this Subscription Agreement as a whole and not to any particular portion of this Subscription Agreement. As used in this Subscription Agreement, the term: (w) business day shall mean any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized to close for business (excluding as a result of stay at home, shelter-in-place, non-essential employee or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day); (x) person shall refer to any individual, corporation, partnership, trust, limited liability company or other entity or association, including any governmental or regulatory body, whether acting in an individual, fiduciary or any other capacity; (y) affiliate shall mean, with respect to any specified person, any other person or group of persons acting together that, directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with such specified person (where the term control (and any correlative terms) means the possession, direct or indirect, 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); and (z) representative with respect to any person shall mean such persons affiliates and its and its affiliates respective directors, officers, employees, consultants, advisors, agents and other representatives..
(m) Further Assurances. At Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties may reasonably deem practical and necessary in order to consummate the Offering as contemplated by this Subscription Agreement.
(n) Third-Party Beneficiary. The parties hereto agree that the Placement Agent is an express third-party beneficiary of the representations, warranties and covenants of the Company contained in Section 4, the representations, warranties and convents of the Subscriber contained in Section 5, and its express rights set forth in Section 10(f) and this Section 10(n).
(o) Share Adjustment. If any change in the number, type or classes of authorized shares of the Company (including the Shares), other than as contemplated by the Transaction Agreement (as may be amended from time to time) or any agreement contemplated by the Transaction, shall occur between the date hereof and immediately prior to the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.
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11. Non-Reliance and Exculpation. The Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person other than the statements, representations and warranties contained in this Subscription Agreement in making its investment or decision to invest in the Company. The Subscriber agrees that neither (i) any Other Subscriber pursuant to the Other Subscription Agreements (including the controlling persons, members, officers, directors, partners, agents, or employees of any such Other Subscriber) nor (ii) the Placement Agent, its affiliates or any of its affiliates control persons, officers, directors, employees or other representatives, shall be liable to the Subscriber pursuant to this Subscription Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares and PIPE Warrants. The Subscriber acknowledges that neither the Placement Agent nor its representatives: (a) shall be liable to the Subscriber for any improper payment made in accordance with the information provided by the Company; (b) make any representation or warranty, or have any responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or documentation delivered by or on behalf of the Company pursuant to this Subscription Agreement or the Transaction Agreement (together with any related documents, the Transaction Documents); or (c) shall be liable to the Subscriber (whether in tort, contract or otherwise) (x) for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers conferred upon it by this Subscription Agreement or any Transaction Document or (y) for anything which any of them may do or refrain from doing in connection with this Subscription Agreement or any Transaction Document, except for their gross negligence, willful misconduct or bad faith.
{SIGNATURE PAGES FOLLOW}
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IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: |
| |
Name: | ||
Title: |
Address for Notice:
1200 West Platt Street, Suite 100
Tampa, Florida 33606
Attn: Bruce M. Rodgers
Email: bruce@lmfunding.com
with a copy (which will not constitute notice) to:
Foley & Lardner LLP
100 N. Tampa Street, Suite 2700
Tampa, FL 33602
Attn: Curt Creely
Email:ccreely@foley.com
SEASTAR MEDICAL, INC. | ||
By: |
| |
Name: | ||
Title: |
Address for Notice:
SeaStar Medical, Inc.
3513 Brighton Blvd., Suite 410
Denver, CO 80216
Attn:Eric Schlorff
Email:Eric@seastarmed.com
with a copy (which will not constitute notice) to:
Morgan, Lewis & Bockius LLP
1400 Page Mill Road
Palo Alto, CA 94304
Attn:Albert Lung, Partner
Email:Albert.Lung@morganlewis.com
{SUBSCRIBER SIGNATURE PAGE TO THE ANDA SUBSCRIPTION AGREEMENT}
IN WITNESS WHEREOF, the undersigned has caused this Subscription Agreement to be duly executed by its authorized signatory as of the date first indicated above.
Name(s) of Subscriber: |
Signature of Authorized Signatory of Subscriber: |
Name of Authorized Signatory: |
Title of Authorized Signatory: |
Address for Notice to Subscriber: |
Address for Delivery of Shares and PIPE Warrants to Subscriber (if not same as address for notice): |
Subscription Amount: $__________________ |
Number of Shares: |
Number of PIPE Warrants: |
EIN Number: |
Exhibit A
Accredited Investor Questionnaire
Capitalized terms used and not defined in this Exhibit A shall have the meanings given in the Subscription Agreement to which this Exhibit A is attached.
The undersigned represents and warrants that the undersigned is an Institutional Account as such term is defined in FINRA Rule 4512(c).
The undersigned represents and warrants that the undersigned is an accredited investor as such term is defined in Rule 501(a) (1), (2), (3), or (7) of Regulation D under the U.S. Securities Act of 1933, as amended (the Securities Act), for one or more of the reasons specified below (please check all boxes that apply):
_______ (i) | A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; | |
_______ (ii) | A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the Exchange Act); | |
_______ (iii) | An investment adviser registered pursuant to section 203 of the Investment Advisers Act of 1940 (the Investment Advisers Act) or registered pursuant to the laws of a state, or an investment adviser relying on the exemption from registering with the Commission under the section 203(l) or (m) of the Investment Advisers Act; | |
_______ (iv) | An insurance company as defined in section 2(13) of the Exchange Act; | |
_______ (v) | An investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act; | |
_______ (vi) | A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; | |
_______ (vii) | A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; | |
_______ (viii) | An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors; |
1
Type of the Subscriber. Indicate the form of entity of the Subscriber: 2
Exhibit B Form of Warrant Agreement (attached)
_______ (ix)
A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
_______ (x)
An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust, partnership, or limited liability company, or any other entity not formed for the specific purpose of acquiring the
Shares and PIPE Warrants, with total assets in excess of $5,000,000; and/or
_______ (xi)
A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks of investing in the Company.
_______ (xii)
The Subscriber does not qualify under any of the investor categories set forth in (i) through (xi) above.
2.1
☐
Limited Partnership
☐
Corporation
☐
General Partnership
☐
Revocable Trust
☐
Other Type of Trust (indicate
type):
☐
Other (indicate form of organization):
Subscriber:
Subscriber
Name:
By:
Signatory Name:
Signatory Title:
Exhibit 10.30
COMMON STOCK PURCHASE AGREEMENT
Dated as of August 23, 2022
by and among
LMF ACQUISITION OPPORTUNITIES, INC.
SEASTAR MEDICAL, INC.
and
TUMIM STONE CAPITAL LLC
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS |
2 | |||||
ARTICLE II PURCHASE AND SALE OF COMMON STOCK |
3 | |||||
Section 2.1. |
Purchase and Sale of Stock | 3 | ||||
Section 2.2. |
Closing; Closing Date | 3 | ||||
Section 2.3. |
Initial Public Announcements and Required Filings | 3 | ||||
ARTICLE III PURCHASE TERMS |
4 | |||||
Section 3.1. |
VWAP Purchases | 4 | ||||
Section 3.2. |
Settlement | 5 | ||||
Section 3.3. |
Compliance with Rules of Trading Market | 6 | ||||
Section 3.4. |
Beneficial Ownership Limitation | 7 | ||||
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR |
8 | |||||
Section 4.1. |
Organization and Standing of the Investor | 8 | ||||
Section 4.2. |
Authorization and Power | 8 | ||||
Section 4.3. |
No Conflicts | 8 | ||||
Section 4.4. |
Investment Purpose | 9 | ||||
Section 4.5. |
Accredited Investor Status | 9 | ||||
Section 4.6. |
Reliance on Exemptions | 9 | ||||
Section 4.7. |
Information | 9 | ||||
Section 4.8. |
No Governmental Review | 9 | ||||
Section 4.9. |
No General Solicitation | 10 | ||||
Section 4.10. |
Not an Affiliate | 10 | ||||
Section 4.11. |
No Prior Short Sales | 10 | ||||
Section 4.12. |
Statutory Underwriter Status | 10 | ||||
Section 4.13. |
Resales of Securities | 10 | ||||
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY, LMFAO AND SEASTAR MEDICAL |
11 | |||||
Section 5.1. |
Organization, Good Standing and Power | 11 | ||||
Section 5.2. |
Authorization, Enforcement | 11 | ||||
Section 5.3. |
Capitalization | 11 | ||||
Section 5.4. |
Issuance of Securities | 12 | ||||
Section 5.5. |
No Conflicts | 12 | ||||
Section 5.6. |
Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants | 13 | ||||
Section 5.7. |
Subsidiaries | 16 | ||||
Section 5.8. |
No Material Adverse Effect | 16 | ||||
Section 5.9. |
No Undisclosed Liabilities | 17 | ||||
Section 5.10. |
No Material Defaults | 17 | ||||
Section 5.11. |
Solvency | 17 | ||||
Section 5.12. |
Title To Assets; Real Property | 17 |
i
Section 5.13. |
Actions Pending | 18 | ||||
Section 5.14. |
Compliance With Laws; Permits | 18 | ||||
Section 5.15. |
Certain Fees | 19 | ||||
Section 5.16. |
Disclosure | 19 | ||||
Section 5.17. |
Intellectual Property; IT Systems; Data Security | 19 | ||||
Section 5.18. |
Environmental Compliance | 21 | ||||
Section 5.19. |
Material Agreements | 21 | ||||
Section 5.20. |
Transactions With Affiliates | 22 | ||||
Section 5.21. |
Employees; Labor Laws | 22 | ||||
Section 5.22. |
Use of Proceeds | 22 | ||||
Section 5.23. |
Investment Company Act Status | 22 | ||||
Section 5.24. |
ERISA | 22 | ||||
Section 5.25. |
Taxes | 23 | ||||
Section 5.26. |
Insurance | 24 | ||||
Section 5.27. |
Exemption from Registration | 24 | ||||
Section 5.28. |
No General Solicitation or Advertising | 24 | ||||
Section 5.29. |
No Integrated Offering | 24 | ||||
Section 5.30. |
Dilutive Effect | 24 | ||||
Section 5.31. |
Manipulation of Price | 25 | ||||
Section 5.32. |
Securities Act | 25 | ||||
Section 5.33. |
Listing and Maintenance Requirements; DTC Eligibility | 25 | ||||
Section 5.34. |
Application of Takeover Protections | 25 | ||||
Section 5.35. |
Anti-Corruption Laws; Trade Controls | 26 | ||||
Section 5.36. |
Healthcare Matters | 26 | ||||
Section 5.37. |
FDA Matters | 27 | ||||
Section 5.38. |
Emerging Growth Company Status | 28 | ||||
Section 5.39. |
Smaller Reporting Company Status | 28 | ||||
Section 5.40. |
No Disqualification Events | 28 | ||||
Section 5.41. |
Acknowledgement Regarding Investors Acquisition of Securities | 29 | ||||
Section 5.42. |
Organization, Good Standing and Power | 29 | ||||
Section 5.43. |
Authorization, Enforcement | 29 | ||||
Section 5.44. |
No Conflicts | 30 | ||||
Section 5.45. |
SEC Reports, Financial Statements; Sarbanes-Oxley Act; Accountants | 30 | ||||
Section 5.46. |
Subsidiaries | 31 | ||||
Section 5.47. |
No LMFAO Material Adverse Effect | 31 | ||||
Section 5.48. |
No Undisclosed Liabilities | 31 | ||||
Section 5.49. |
No Material Defaults | 32 | ||||
Section 5.50. |
Financial Ability; Trust Account | 32 | ||||
Section 5.51. |
Actions Pending | 33 | ||||
Section 5.52. |
Compliance With Laws | 33 | ||||
Section 5.53. |
Certain Fees | 33 | ||||
Section 5.54. |
Investment Company Act Status | 33 | ||||
Section 5.55. |
Taxes | 33 | ||||
Section 5.56. |
Insurance | 34 | ||||
Section 5.57. |
Exemption from Registration | 34 | ||||
Section 5.58. |
No General Solicitation or Advertising | 34 |
ii
Section 5.59. |
No Integrated Offering | 34 | ||||
Section 5.60. |
Securities Act | 34 | ||||
Section 5.61. |
Anti-Corruption Laws; Trade Controls | 34 | ||||
Section 5.62. |
Nasdaq Stock Market Listing | 35 | ||||
Section 5.63. |
LMFAOs Stockholders | 35 | ||||
Section 5.64. |
Contracts | 35 | ||||
Section 5.65. |
Acknowledgement Regarding Investors Acquisition of Securities | 35 | ||||
Section 5.66. |
Organization, Good Standing and Power | 36 | ||||
Section 5.67. |
Authorization, Enforcement | 36 | ||||
Section 5.68. |
No Conflicts | 36 | ||||
Section 5.69. |
Financial Statements; Accountants | 37 | ||||
Section 5.70. |
Subsidiaries | 37 | ||||
Section 5.71. |
No SeaStar Medical Material Adverse Effect | 38 | ||||
Section 5.72. |
No Undisclosed Liabilities | 38 | ||||
Section 5.73. |
No Material Defaults | 38 | ||||
Section 5.74. |
Actions Pending | 38 | ||||
Section 5.75. |
Compliance With Laws | 38 | ||||
Section 5.76. |
Certain Fees | 38 | ||||
Section 5.77. |
Investment Company Act Status | 39 | ||||
Section 5.78. |
Taxes | 39 | ||||
Section 5.79. |
Insurance | 39 | ||||
Section 5.80. |
Anti-Corruption Laws; Trade Controls | 39 | ||||
Section 5.81. |
Acknowledgement Regarding Investors Acquisition of Securities | 39 | ||||
ARTICLE VI ADDITIONAL COVENANTS |
40 | |||||
Section 6.1. |
Securities Compliance | 40 | ||||
Section 6.2. |
Reservation of Common Stock | 40 | ||||
Section 6.3. |
Registration and Listing | 41 | ||||
Section 6.4. |
Compliance with Laws | 41 | ||||
Section 6.5. |
Keeping of Records and Books of Account; Due Diligence | 41 | ||||
Section 6.6. |
No Frustration; No Variable Rate Transactions | 42 | ||||
Section 6.7. |
Corporate Existence | 42 | ||||
Section 6.8. |
Fundamental Transaction | 42 | ||||
Section 6.9. |
Selling Restrictions | 43 | ||||
Section 6.10. |
Effective Registration Statement | 43 | ||||
Section 6.11. |
Blue Sky | 43 | ||||
Section 6.12. |
Non-Public Information | 43 | ||||
Section 6.13. |
Broker/Dealer | 44 | ||||
Section 6.14. |
Disclosure Schedule | 44 | ||||
Section 6.15. |
Delivery of Bring Down Opinions and Compliance Certificates Upon Occurrence of Certain Events | 44 | ||||
ARTICLE VII CONDITIONS TO CLOSING, COMMENCEMENT AND VWAP PURCHASES |
45 | |||||
Section 7.1. |
Conditions Precedent to Closing | 45 | ||||
Section 7.2. |
Conditions Precedent to Commencement | 47 | ||||
Section 7.3. |
Conditions Precedent to VWAP Purchases after Commencement Date | 50 |
iii
ARTICLE VIII TERMINATION |
54 | |||||
Section 8.1. |
Automatic Termination | 54 | ||||
Section 8.2. |
Other Termination | 54 | ||||
Section 8.3. |
Effect of Termination | 55 | ||||
ARTICLE IX INDEMNIFICATION |
57 | |||||
Section 9.1. |
Indemnification of Investor | 57 | ||||
Section 9.2. |
Indemnification Procedures | 58 | ||||
ARTICLE X MISCELLANEOUS |
59 | |||||
Section 10.1. |
Certain Fees and Expenses; Commitment Fee/Shares; Commencement Irrevocable Transfer Agent Instructions | 59 | ||||
Section 10.2. |
Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial | 62 | ||||
Section 10.3. |
Entire Agreement | 62 | ||||
Section 10.4. |
Notices | 63 | ||||
Section 10.5. |
Waivers | 64 | ||||
Section 10.6. |
Amendments | 65 | ||||
Section 10.7. |
Headings | 65 | ||||
Section 10.8. |
Construction | 65 | ||||
Section 10.9. |
Binding Effect | 65 | ||||
Section 10.10. |
No Third Party Beneficiaries | 65 | ||||
Section 10.11. |
Governing Law | 65 | ||||
Section 10.12. |
Survival | 66 | ||||
Section 10.13. |
Counterparts | 66 | ||||
Section 10.14. |
Publicity | 66 | ||||
Section 10.15. |
Severability | 66 | ||||
Section 10.16. |
Further Assurances | 67 | ||||
Section 10.17. |
Trust Account Waiver | 67 |
Annex I. Definitions
iv
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT is made and entered into as of August 23, 2022 (as it may be amended at or prior to the Closing hereunder, this Agreement), by and among Tumim Stone Capital LLC, a Delaware limited liability company (the Investor), LMF Acquisition Opportunities, Inc., a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (LMFAO), and SeaStar Medical, Inc., a Delaware corporation (SeaStar Medical).
RECITALS
WHEREAS, on April 21, 2022, LMFAO, LMF Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of LMFAO (Merger Sub), and SeaStar Medical entered into that certain Agreement and Plan of Merger (as amended from time to time, the Merger Agreement), pursuant to which, among other things, Merger Sub will merge with and into SeaStar Medical (the Merger), with SeaStar Medical surviving the Merger as a wholly owned subsidiary of LMFAO (the Merger and each of the other transactions to be completed as a part of or at the same time as the Merger pursuant to the Merger Agreement, collectively, are referred to herein as the Business Combination);
WHEREAS, upon the closing of the Business Combination (the Business Combination Closing), among other things, (i) LMFAO will change its name to SeaStar Medical Holding Corporation and, therefore, all references in this Agreement to the Company shall mean SeaStar Medical Holding Corporation, a Delaware corporation from and after the Business Combination Closing, (ii) the Company shall be subject to the reporting requirements of the Exchange Act under Section 13(a) or Section 15(d) of the Exchange Act, (iii) the Common Stock shall be registered under the Exchange Act pursuant to Section 12(b) of the Exchange Act, (iv) the Common Stock shall be listed and traded on the Trading Market under the symbol ICU, and (v) the Common Stock may be issued by the Company and transferred electronically to third parties via DTC through its Deposit/Withdrawal at Custodian delivery system;
WHEREAS, each of LMFAO, SeaStar Medical and the Investor desire to enter into this Agreement on the date hereof and prior to the Business Combination Closing, with the effectiveness of this Agreement (other than the obligation of SeaStar Medical to pay the Investor Expense Reimbursement to the Investor, which is effective as of the date of this Agreement, and the obligation of the Company to pay the Commitment Fee to the Investor, which is effective as of the date of this Agreement provided that the Business Combination Closing occurs at any time) delayed until the Business Combination Closing shall have occurred pursuant to the Business Combination Agreement and the Closing under this Agreement, as it may be amended at or prior to the Closing, shall have occurred on the Closing Date as set forth in Section 2.2 and subject to the satisfaction of the conditions set forth in Section 7.1 of this Agreement (which Closing shall not occur prior to 5:00 p.m., New York City time, on the second (2nd) Trading Day immediately following the date of the Business Combination Closing), it being acknowledged and agreed by each of LMFAO, SeaStar Medical and the Investor that, other than the obligation of SeaStar Medical to pay the Investor Expense Reimbursement, which is effective as of the date of this Agreement, and the obligation of the Company to pay the Commitment Fee to the Investor, which is effective as of the date of this Agreement provided that the Business Combination Closing occurs at any time, this Agreement shall be of no force or effect prior to the Closing on the Closing Date (and as it may be amended at or prior to the Closing);
WHEREAS, following the Business Combination Closing and the Closing hereunder, the Company may, from time to time from and after the Commencement on the Commencement Date and during the Investment Period hereunder, at its election in its sole discretion, issue and sell to the Investor up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued Common Stock and (ii) the Exchange Cap (to the extent applicable under Section 3.3 hereof), upon the terms and subject to the satisfaction of the conditions set forth in this Agreement;
WHEREAS, the offer and sale of Common Stock by the Company to the Investor pursuant to this Agreement will be made in reliance upon the provisions of Section 4(a)(2) of the Securities Act (Section 4(a)(2)) and/or Rule 506(b) of Regulation D promulgated by the Commission under the Securities Act (Regulation D), and upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the sales of Common Stock to the Investor to be made hereunder;
WHEREAS, each of LMFAO, SeaStar Medical and the Investor are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the Registration Rights Agreement), which shall become effective concurrently with the effectiveness of this Agreement (as it may be amended at or prior to the Closing) at the Closing on the Closing Date (it being acknowledged and agreed by each of LMFAO, SeaStar Medical and the Investor that the Registration Rights Agreement shall be of no force or effect prior to the Closing on the Closing Date), and pursuant to which the Company shall register the resale of the Registrable Securities (as defined in the Registration Rights Agreement), upon the terms and subject to the conditions set forth therein; and
WHEREAS, in consideration for the Investors execution and delivery of this Agreement, (i) if the Closing under this Agreement shall have occurred on the Closing Date as set forth in Section 2.2, the Company shall cause its transfer agent to issue to the Investor the Commitment Shares, pursuant to and in accordance with Section 10.1(ii), or (ii) if this Agreement is terminated by any party hereto under Section 8.2 at any time prior to the Closing under this Agreement, the Company shall pay to the Investor the Commitment Fee, pursuant to and in accordance with Section 10.1(ii), provided that the Business Combination Closing occurs pursuant to the Business Combination Agreement at any time before or after such termination.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this Agreement.
2
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1. Purchase and Sale of Stock. Upon the terms and subject to the conditions of this Agreement, from and after the Commencement on the Commencement Date and during the Investment Period, the Company, in its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall purchase from the Company, up to the lesser of (i) $100,000,000 (the Total Commitment) in aggregate gross purchase price of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock and (ii) the Exchange Cap, to the extent applicable under Section 3.3 (such lesser amount of shares of Common Stock, the Aggregate Limit), by the delivery to the Investor of VWAP Purchase Notices as provided in Article III.
Section 2.2. Closing; Closing Date. Other than the obligation of SeaStar Medical to pay the Investor Expense Reimbursement, which is effective as of August 23, 2022, and the obligation of the Company to pay the Commitment Fee to the Investor, which is effective as of August 23, 2022, provided that the Business Combination Closing occurs at any time thereafter, this Agreement, as it may be amended hereunder, shall become effective (the Closing) upon the delivery of all documents, instruments and writings required to be delivered at the Closing as provided in Section 7.1(v) to the offices of Dorsey & Whitney LLP, 51 West 52nd Street, New York, NY 10019-6119, at [] [a.m./p.m.]1, New York City time (such date of Closing, the Closing Date); provided, however, that the Closing shall not occur prior to 5:00 p.m., New York City time, on the second (2nd) Trading Day immediately following the date on which the Business Combination Closing shall have occurred. In consideration of and in express reliance upon the representations, warranties and covenants contained in, and upon the terms and subject to the conditions of, this Agreement (as it may be amended at or prior to the Closing), during the Investment Period, the Company, at its sole option and discretion, may issue and sell to the Investor, and, if the Company elects to so issue and sell, the Investor shall purchase from the Company, the Shares in respect of each VWAP Purchase.
Section 2.3. Initial Public Announcements and Required Filings. Not later than the Trading Day immediately following the Closing Date, the Company shall file with the Commission a current report on Form 8-K disclosing the execution of this Agreement, as it may be amended at or prior to the Closing, and the Registration Rights Agreement by the parties hereto and describing the material terms thereof, and attaching as exhibits thereto copies of each of this Agreement (and any amendments hereto at or prior to the Closing) and the Registration Rights Agreement and, if applicable, any press release issued by the Company disclosing the execution of this Agreement (and any amendments hereto at or prior to the Closing) and the Registration Rights Agreement by the Company (including all exhibits thereto, the Current Report). The Company shall provide the Investor a reasonable opportunity to comment on a draft of the Current Report prior to filing the Current Report with the Commission and shall give due consideration to all such comments. From and after the filing of the Current Report with the Commission, the Company shall have publicly disclosed all material, nonpublic information delivered to the Investor (or the Investors representatives or agents), if any, by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, agents or representatives (if
1 | To be inserted by amendment to this agreement on the Closing Date. |
3
any) in connection with the transactions contemplated by the Transaction Documents. The Investor covenants that until such time as the transactions contemplated by this Agreement and the Registration Rights Agreement are publicly disclosed by the Company as described in this Section 2.3 (or such earlier time as the transactions contemplated by this Agreement and the Registration Rights Agreement are otherwise publicly disclosed in any report, statement, schedule or other document filed by LMFAO, SeaStar Medical or the Company with the Commission, or in any press release issued by LMFAO, SeaStar Medical or the Company prior to the filing of the Current Report by the Company as described in this Section 2.3), the Investor shall maintain the confidentiality of all disclosures made to it in connection with the transactions contemplated by the Transaction Documents (including the existence and terms of the transactions contemplated thereby), except that the Investor may disclose the terms of such transactions to its financial, accounting, legal and other advisors (provided that the Investor directs such Persons to maintain the confidentiality of such information). Not later than fifteen (15) calendar days following the Closing Date, the Company shall file, to the extent required, a Form D with respect to the issuance and sale of the Securities in accordance with Regulation D and shall provide a copy thereof to the Investor promptly after such filing. The Company shall use its commercially reasonable efforts to prepare and, as soon as practicable, but in no event later than the applicable Filing Deadline, file with the Commission the Initial Registration Statement and any New Registration Statement covering only the resale by the Investor of the Registrable Securities in accordance with the Securities Act and the Registration Rights Agreement. At or before 5:30 p.m. (New York City time) on the Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule 424(b) under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement (or post-effective amendment thereto).
ARTICLE III
PURCHASE TERMS
Effective at the Closing on the Closing Date (which shall not occur prior to 5:00 p.m., New York City time, on the second (2nd) Trading Day immediately following the date on which the Business Combination Closing shall have occurred), and subject to the satisfaction of each of the conditions set forth in Article VII, the parties agree as follows:
Section 3.1. VWAP Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 (the Commencement and the date of initial satisfaction of all of such conditions, the Commencement Date) and from time to time thereafter, subject to the satisfaction of all of the conditions set forth in Section 7.3 and in this Section 3.1, the Company shall have the right, but not the obligation, to direct the Investor, by its timely delivery to the Investor of a VWAP Purchase Notice on a VWAP Purchase Exercise Date to purchase the VWAP Purchase Share Amount set forth by the Company therein, not to exceed the applicable VWAP Purchase Maximum Amount, at the VWAP Purchase Price therefor (as confirmed in the applicable VWAP Purchase Confirmation) in accordance with this Agreement (each such purchase, a VWAP Purchase). The Company may deliver a VWAP Purchase Notice to the Investor on any Trading Day selected by the Company as the VWAP Purchase Exercise Date for a VWAP Purchase, provided that (i) the Company may not deliver more than one VWAP Purchase Notice to the Investor on any single Trading Day, (ii) at least three (3) Trading Days has elapsed since the
4
Trading Day on which most recent prior VWAP Purchase Notice was delivered by the Company to the Investor pursuant to and in accordance with this Agreement and (iii) all Shares subject to all prior VWAP Purchase Notices for VWAP Purchases that have been properly delivered by the Company to the Investor under this Agreement (as applicable) have theretofore been received by the Investor or its Broker-Dealer as DWAC Shares, prior to the Companys delivery of such VWAP Purchase Notice to the Investor on such VWAP Purchase Exercise Date. The Investor is obligated to accept each VWAP Purchase Notice prepared and timely delivered by the Company in accordance with the terms of and subject to the satisfaction of the conditions contained in this Agreement. If the Company delivers any VWAP Purchase Notice directing the Investor to purchase a VWAP Purchase Share Amount in excess of the applicable VWAP Purchase Maximum Amount that the Company is then permitted to include in such VWAP Purchase Notice, such VWAP Purchase Notice shall be void ab initio to the extent of the amount by which the VWAP Purchase Share Amount set forth in such VWAP Purchase Notice exceeds such applicable VWAP Purchase Maximum Amount, and the Investor shall have no obligation to purchase, and shall not purchase, such excess Shares pursuant to such VWAP Purchase Notice; provided, however, that the Investor shall remain obligated to purchase the applicable VWAP Purchase Maximum Amount pursuant to such VWAP Purchase Notice. At or prior to 9:30 a.m., New York City time, on the Trading Day immediately following the VWAP Purchase Valuation Period for each VWAP Purchase (each, a VWAP Purchase Settlement Date), the Investor shall provide to the Company a written confirmation for such VWAP Purchase setting forth the applicable VWAP Purchase Share Amount and the applicable VWAP Purchase Price (both on a per Share basis and the total aggregate VWAP Purchase Price to be paid by the Investor for such applicable VWAP Purchase Share Amount) with respect to such VWAP Purchase (each, a VWAP Purchase Confirmation). Notwithstanding the foregoing, the Company shall not deliver any VWAP Purchase Notices to the Investor during the PEA Period or during any Allowable Grace Period.
Section 3.2. Settlement. The Shares constituting the applicable VWAP Purchase Share Amount to be purchased by the Investor in a VWAP Purchase shall be delivered to the Investor as DWAC Shares not later than 1:00 p.m., New York City time, on the VWAP Purchase Settlement Date. For each VWAP Purchase, the Investor shall pay to the Company an amount in cash equal to the product of (i) the total number of Shares purchased by the Investor in such VWAP Purchase (as confirmed in the applicable VWAP Purchase Confirmation) and (ii) the VWAP Purchase Price for such Shares (as confirmed in the applicable VWAP Purchase Confirmation), as full payment for such Shares, via wire transfer of immediately available funds not later than 5:00 p.m., New York City time, on the VWAP Purchase Settlement Date for such VWAP Purchase, provided the Investor shall have timely received, as DWAC Shares, all of such Shares purchased by the Investor in such VWAP Purchase on such VWAP Purchase Settlement Date in accordance with the first sentence of this Section 3.2, it being hereby acknowledged and agreed that if any of such Shares are received by the Investor after 1:00 p.m., New York City time, on the applicable VWAP Purchase Settlement Date, then the Companys receipt of the funds representing the VWAP Purchase Price for such Shares in its designated bank account shall occur on the Trading Day next following the Trading Day on which the Investor shall have received all of such Shares as DWAC Shares. If the Company or its transfer agent shall fail for any reason, other than a failure of the Investor or its Broker-Dealer to set up a DWAC and required instructions, to electronically transfer any Shares as DWAC Shares in respect of a VWAP Purchase within three (3) Trading Days following the receipt by the Company of the applicable purchase price therefor in compliance with this Section 3.2, and if on or after such Trading Day the Investor purchases (in an open market
5
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of such Shares that the Investor anticipated receiving from the Company in respect of such VWAP Purchase, then the Company shall, within two (2) Trading Days after the Investors request, either (1) pay cash to the Investor in an amount equal to the Investors total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the Cover Price), at which point the Companys obligation to deliver such Shares as DWAC Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Investor such Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total purchase price paid by the Investor pursuant to this Agreement for all of the Shares to be purchased by the Investor in connection with such VWAP Purchase. The Company shall not issue any fraction of a share of Common Stock upon any VWAP Purchase. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up or down to the nearest whole share. All payments made under this Agreement shall be made in lawful money of the United States of America by wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any day that is not a Trading Day, the same shall instead be due on the next succeeding day that is a Trading Day.
Section 3.3. Compliance with Rules of Trading Market.
(a) Exchange Cap. Subject to Section 3.3(b), the Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after giving effect thereto, the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement and the transactions contemplated hereby would exceed []2 (such number of shares equal to 19.99% of the number of shares of Common Stock issued and outstanding immediately prior to the Closing on the Closing Date under this Agreement), which number of shares shall be reduced, on a share-for-share basis, by the number of shares of Common Stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of the Trading Market (such maximum number of shares, the Exchange Cap), unless the Companys stockholders have approved the issuance of Common Stock pursuant to this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Trading Market. For the avoidance of doubt, the Company may, but shall be under no obligation to, request its stockholders to approve the issuance of Common Stock pursuant to this Agreement; provided, that if such stockholder approval is not obtained, the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all times during the term of this Agreement (except as set forth in Section 3.3(b)).
2 | To be inserted by amendment to this agreement on the Closing Date. SeaStar Medical and/or LMFAO to confirm with Nasdaq that the Exchange Cap will be calculated at Closing, since that is when this agreement is effective (aside from Commitment Fee and legal fee reimbursement obligations) and pre-merger effective time capital structure is not relevant to what post-merger cap structure of the Company will be etc. Also, the commitment shares are being calculated based on market price of post-merger Company, not LMFAO market price of Class A common stock. |
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(b) At-Market Transaction. Notwithstanding Section 3.3(a) above, the Exchange Cap shall not be applicable for any purposes of this Agreement and the transactions contemplated hereby, solely to the extent that (and only for so long as) the Average Price shall equal or exceed the Base Price (it being hereby acknowledged and agreed that the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all other times during the term of this Agreement, unless the stockholder approval referred to in Section 3.3(a) is obtained). The parties acknowledge and agree that the Minimum Price used to determine the Base Price3 hereunder represents the lower of (i) the Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) on [the Trading Day immediately prior to]4 the Closing Date and (ii) the average Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) for the five (5) consecutive Trading Days ending on [the Trading Day immediately prior to]5 the Closing Date.
(c) General. The Company shall not issue or sell any shares of Common Stock pursuant to this Agreement if such issuance or sale would reasonably be expected to result in (i) a violation of the Securities Act or (ii) a breach of the rules of the Trading Market. The provisions of this Section 3.3 shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3 only if necessary to ensure compliance with the Securities Act and the applicable rules of the Trading Market.
Section 3.4. Beneficial Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue or sell, and the Investor shall not purchase or acquire, any shares of Common Stock under this Agreement which, when aggregated with all other shares of Common Stock then beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor of more than 9.99% of the outstanding shares of Common Stock (the Beneficial Ownership Limitation). Upon the written or oral request of the Investor, the Company shall promptly (but not later than twenty-four (24) hours after the next business day on which the transfer agent is open for business) confirm orally or in writing to the Investor the number of shares of Common Stock then outstanding. The Investor and the Company shall each cooperate in good faith in the determinations required under this Section 3.4 and the application of this Section 3.4. The Investors written certification to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error. The provisions of this Section 3.4 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.4 to the extent necessary to properly give effect to the limitations contained in this Section 3.4.
3 | Minimum Price and Base Price to be calculated as of the Closing and inserted by amendment to this Agreement to be signed at the Closing, rather than calculated as of the time of signing. NOTE: To be confirmed by SeaStar Medical and/or LMFAO with Nasdaq prior to the Closing. |
4 | Use if agreements are executed before market close on a Trading Day. |
5 | Use if agreements are executed before market close on a Trading Day. |
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
The Investor hereby makes the following representations, warranties and covenants to the Company:
Section 4.1. Organization and Standing of the Investor. The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.
Section 4.2. Authorization and Power. The Investor has the requisite limited liability company power and authority to enter into and perform its obligations under this Agreement and the Registration Rights Agreement and to purchase or acquire the Securities in accordance with the terms hereof. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited liability company action, and no further consent or authorization of the Investor, its Board of Directors or its members is required. Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by the Investor and constitutes a valid and binding obligation of the Investor enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership, or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies).
Section 4.3. No Conflicts. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement and the consummation by the Investor of the transactions contemplated hereby and thereby do not and shall not (i) result in a violation of such Investors certificate of formation, limited liability company agreement or other applicable organizational instruments, (ii) conflict with, constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Investor is a party or is bound, (iii) create or impose any lien, charge or encumbrance on any property of the Investor under any agreement or any commitment to which the Investor is party or under which the Investor is bound or under which any of its properties or assets are bound, or (iv) result in a violation of any federal, state, local or foreign statute, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Investor or by which any of its properties or assets are bound or affected, except, in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, prohibit or otherwise interfere with, in any material respect, the ability of the Investor to enter into and perform its obligations under this Agreement and the Registration Rights Agreement. The Investor is not required under any applicable federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the Registration Rights Agreement or to purchase or acquire the Securities in accordance with the terms hereof; provided, however, that for purposes of the representation made in this sentence, the Investor is assuming and relying upon the accuracy of the relevant representations and warranties and the compliance with the relevant covenants and agreements of the Company in the Transaction Documents to which it is a party.
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Section 4.4. Investment Purpose. The Investor is acquiring the Securities for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with, or pursuant to, a registration statement filed pursuant to the Registration Rights Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Securities.
Section 4.5. Accredited Investor Status. The Investor is an accredited investor as that term is defined in Rule 501(a) of Regulation D.
Section 4.6. Reliance on Exemptions. The Investor understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Investors compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of the Investor to acquire the Securities.
Section 4.7. Information. All materials relating to the business, financial condition, management and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Investor have been furnished or otherwise made available to the Investor or its advisors, including, without limitation, the Commission Documents. The Investor understands that its investment in the Securities involves a high degree of risk. The Investor is able to bear the economic risk of an investment in the Securities and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a proposed investment in the Securities. The Investor and its advisors have been afforded the opportunity to ask questions of and receive answers from representatives of the Company concerning the financial condition and business of the Company and other matters relating to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investors right to rely on the Companys representations and warranties contained in this Agreement. The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. The Investor understands that it (and not the Company) shall be responsible for its own tax liabilities that may arise as a result of this investment or the transactions contemplated by this Agreement.
Section 4.8. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
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Section 4.9. No General Solicitation. The Investor is not purchasing or acquiring the Securities as a result of any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.
Section 4.10. Not an Affiliate. The Investor is not an officer, director or an Affiliate of the Company. Immediately prior to the execution of this Agreement, the Investor did not beneficially own any shares of Common Stock or securities exercisable for or convertible into shares of Common Stock, and during the Restricted Period, Investor will not acquire beneficial ownership of any shares of the Companys capital stock (including shares of Common Stock or securities exercisable for or convertible into shares of Common Stock) other than pursuant to this Agreement; provided, however, that nothing in this Agreement shall prohibit or be deemed to prohibit the Investor from purchasing, in an open market transaction or otherwise, shares of Common Stock necessary to make delivery by the Investor in satisfaction of a sale by the Investor of Shares that the Investor anticipated receiving from the Company in connection with the settlement of a VWAP Purchase, if the Company or its transfer agent shall have failed for any reason (other than a failure of Investor or its Broker-Dealer to set up a DWAC and required instructions) to timely electronically transfer all of the Shares subject to such VWAP Purchase to the Investor on the applicable VWAP Purchase Settlement Date by crediting the Investors or its designated Broker-Dealers account at DTC through its DWAC delivery system in compliance with Section 3.2 of this Agreement.
Section 4.11. No Prior Short Sales. At no time prior to the date of this Agreement has any of the Investor, its agents, representatives or Affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.
Section 4.12. Statutory Underwriter Status. The Investor acknowledges that it will be disclosed as an underwriter and a selling stockholder in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law and to the extent the Prospectus is related to the resale of Registrable Securities.
Section 4.13. Resales of Securities. The Investor represents, warrants and covenants that it will resell Securities purchased or acquired by the Investor from the Company pursuant to this Agreement only pursuant to the Registration Statement in which the resale of such Securities is registered under the Securities Act and the Prospectus contained therein, in a manner described under the caption Plan of Distribution in such Registration Statement and Prospectus, and in a manner in compliance with all applicable U.S. federal and applicable state securities laws, rules and regulations.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY,
LMFAO AND SEASTAR MEDICAL
I. Company Representations, Warranties and Covenants. Except as set forth in the disclosure schedule delivered by the Company to the Investor (which is hereby incorporated by reference in, and constitutes an integral part of, this Agreement) (the Disclosure Schedule), the Company hereby makes the following representations, warranties and covenants to the Investor:
Section 5.1. Organization, Good Standing and Power. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any of its Subsidiaries is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
Section 5.2. Authorization, Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under each of the Transaction Documents to which it is a party and to issue the Securities in accordance with the terms hereof and thereof. Except for approvals of the Companys Board of Directors or a committee thereof as may be required in connection with any issuance and sale of Shares to the Investor hereunder (which approvals shall be obtained prior to the delivery of any VWAP Purchase Notice), the execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of Directors or its stockholders is required. Each of the Transaction Documents to which the Company is a party has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies).
Section 5.3. Capitalization. The authorized capital stock of the Company and the shares thereof issued and outstanding were as set forth in the Commission Documents as of the dates reflected therein. All of the outstanding shares of Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Except as set forth in the Commission Documents, this Agreement and the Registration Rights Agreement, there are no agreements or arrangements under which the Company is obligated to register the sale of any securities under the
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Securities Act. Except as set forth in the Commission Documents, no shares of Common Stock are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the Companys equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted securities or as set forth in the Commission Documents, the Company is not a party to, and it has no Knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth in the Commission Documents, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any of the other Transaction Documents or the consummation of the transactions described herein or therein. The Company has filed with the Commission true and correct copies of the Companys Certificate of Incorporation as in effect on the Closing Date (the Charter), and the Companys Bylaws as in effect on the Closing Date (the Bylaws).
Section 5.4. Issuance of Securities. As of the Closing Date, the Commitment Shares shall have been, and the Shares to be issued under this Agreement shall have been, or with respect to Shares to be purchased by the Investor pursuant to a particular VWAP Purchase Notice, will be, prior to the delivery to the Investor hereunder of such VWAP Purchase Notice, duly authorized by all necessary corporate action on the part of the Company. The Commitment Shares, when issued to the Investor in accordance with this Agreement, and the Shares, when issued and sold against payment therefor in accordance with this Agreement, shall be validly issued and outstanding, fully paid and non-assessable and free from all liens, charges, Taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances with respect to the issue thereof, and the Investor shall be entitled to all rights accorded to a holder of Common Stock. As of the Closing Date and as of the Commencement Date, an aggregate of []6 shares of Common Stock shall have been duly authorized and reserved by the Company for issuance and sale to the Investor as Shares pursuant to VWAP Purchases under this Agreement.
Section 5.5. No Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby do not and shall not (i) result in a violation of any provision of the Companys Charter or Bylaws, (ii) result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or is bound, (iii) create or impose a lien, charge or encumbrance on any property or assets of the Company or any of its Subsidiaries under any agreement or any commitment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of their respective properties or assets is subject,
6 | To be inserted by amendment to this Agreement signed at the Closing post-merger effective time, at which time this Agreement as so amended will be effective in its entirety. |
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or (iv) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound or affected (including federal and state securities laws and regulations and the rules and regulations of the Trading Market or applicable Eligible Market), except, in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations, liens, charges, encumbrances and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Except as specifically contemplated by this Agreement or the Registration Rights Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required under any federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency (including, without limitation, the Trading Market) in order for it to execute, deliver or perform any of its obligations under the Transaction Documents to which it is a party, or to issue the Securities to the Investor in accordance with the terms hereof and thereof (other than such consents, authorizations, orders, filings or registrations as have been obtained or made prior to the Closing Date); provided, however, that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the representations and warranties of the Investor in this Agreement and the compliance by it with its covenants and agreements contained in this Agreement and the Registration Rights Agreement.
Section 5.6. Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants.
(a) Since the date on which the Business Combination Closing occurred (the Business Combination Closing Date), the Company has timely filed (giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act) all Commission Documents required to be filed with or furnished to the Commission by the Company under the Securities Act or the Exchange Act, including those required to be filed with or furnished to the Commission under Section 13(a) or Section 15(d) of the Exchange Act. As of the Closing Date, no Subsidiary of the Company is required to file or furnish any report, schedule, registration, form, statement, information or other document with the Commission. As of its filing date, each Commission Document filed with or furnished to the Commission prior to the Closing Date complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and other federal, state and local laws, rules and regulations applicable to it (or, if amended or superseded by a filing prior to the Closing Date, on the date of such amended or superseded filing). Each Registration Statement, on the date it is filed with the Commission, on the date it is declared effective by the Commission and on each VWAP Purchase Exercise Date shall comply in all material respects with the requirements of the Securities Act (including, without limitation, Rule 415 under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except that this representation and warranty shall not apply to statements in or omissions from such Registration Statement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. The Prospectus and each Prospectus Supplement required to be filed pursuant to this Agreement or the Registration Rights Agreement after the Closing Date, when taken together, on its date and on each VWAP Purchase Exercise Date shall comply in all material respects with the requirements of the Securities Act (including,
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without limitation, Rule 424(b) under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that this representation and warranty shall not apply to statements in or omissions from the Prospectus or any Prospectus Supplement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. Each Commission Document (other than the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto) to be filed with or furnished to the Commission after the Closing Date and incorporated by reference in the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto required to be filed pursuant to this Agreement or the Registration Rights Agreement (including, without limitation, the Current Report), when such document is filed with or furnished to the Commission and, if applicable, when such document becomes effective, as the case may be, shall comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and other federal, state and local laws, rules and regulations applicable to it. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Act or the Exchange Act.
(b) The historical consolidated financial statements of LMFAO as of and for any periods ending prior to the Business Combination Closing Date included or incorporated by reference in the Form S-4 Registration Statement, the Merger Proxy Statement/Prospectus, the 2021 Form 10-K and the Merger Form 8-K, and the historical consolidated financial statements of the Company as of and for any periods ending on or after the Business Combination Closing Date included or incorporated by reference in the Commission Documents, in each case together with the related notes and schedules, present fairly, in all material respects, the financial position of LMFAO and the consolidated financial position of the Company and its consolidated Subsidiaries, respectively, as of the dates indicated, and the results of operations, cash flows and changes in stockholders equity of LMFAO and of the Company and its consolidated Subsidiaries, respectively, for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance with the published requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with generally accepted accounting principles in the United States (GAAP) applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved. The historical financial statements of SeaStar Medical as of and for any periods ending prior to the Business Combination Closing Date included or incorporated by reference in the Form S-4 Registration Statement, the Merger Proxy Statement/Prospectus and the Merger Form 8-K, together with the related notes and schedules, present fairly, in all material respects, the financial position of SeaStar Medical as of the dates indicated, and the results of operations, cash flows and changes in stockholders equity of SeaStar Medical for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance with the published requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with GAAP applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to
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the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved. The unaudited pro forma condensed combined financial statements and any other pro forma financial statements or data included or incorporated by reference in the Form S-4 Registration Statement, the Merger Proxy Statement/Prospectus and the Merger Form 8-K, and any other pro forma financial statements or data included or incorporated by reference in any Commission Documents filed by the Company with the Commission (as applicable) comply with the requirements of Regulation S-X of the Securities Act, including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the circumstances referred to therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data. The other financial and statistical data with respect to the Company and the Subsidiaries contained or incorporated by reference in the Commission Documents are accurately and fairly presented, in all material respects, and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Commission Documents that are not included or incorporated by reference as required. The Company and its Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any variable interest entities as that term is used in Accounting Standards Codification Paragraph 810-10-25-20), not described in Commission Documents which are required to be described in the Commission Documents. All disclosures contained or incorporated by reference in the Commission Documents, if any, regarding non-GAAP financial measures (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.
(c) Except as disclosed in the Commission Documents, since the Business Combination Closing Date, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with managements general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Commission Documents, the Initial Registration Statement or any New Registration Statement fairly present the information called for in all material respects and have been prepared in accordance with the Commissions rules and guidelines applicable thereto. Except as disclosed in the Commission Documents, since the Business Combination Closing Date, there has been no change in the Companys internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting. Except as set forth in the Commission Documents, the Company has established disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 of the Exchange Act) that comply with the requirements of the Exchange Act. The Company presented in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of June 30,
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2022 and, except as set forth in the Companys Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 or any Commission Document filed with the Commission for a period subsequent to June 30, 2022, the Companys disclosure controls and procedures are effective.] Since the Business Combination Closing Date, there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, the Companys board of directors or any committee thereof.
(d) MaloneBailey, LLP, whose report on the consolidated financial statements of LMFAO as of December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020, and the related notes, which report is included in the Form S-4 Registration Statement, the Merger Proxy Statement/Prospectus and the 2021 Form 10-K, were during the periods covered by their report, with respect to LMFAO, independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States).
(e) Armanino LLP (the Accountant), whose report on the financial statements of SeaStar Medical as of December 31, 2021 and 2020, and for each of the two years in the period ended December 31, 2021, and the related notes, which report is included in the Form S-4 Registration Statement and the Merger Proxy Statement/Prospectus, was during the periods covered by their report, with respect to SeaStar Medical, an independent registered public accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Companys Knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act with respect to the Company.
(f) Since the Business Combination Closing Date, the Company has timely filed all certifications and statements the Company is required to file under (i) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (ii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) with respect to all Commission Documents with respect to which the Company is required to file such certifications and statements thereunder.
Section 5.7. Subsidiaries. Exhibit 21.1 of the Merger Proxy Statement/Prospectus sets forth each Subsidiary of the Company as of the Business Combination Closing Date, showing its jurisdiction of incorporation or organization, and the Company does not have any other Subsidiaries as of the Closing Date, other than SeaStar Medical. No Subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiarys capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiarys property or assets to the Company or any other Subsidiary of the Company, except as described in or contemplated by the Commission Documents or as would not reasonably be expected to have a Material Adverse Effect.
Section 5.8. No Material Adverse Effect. Except as disclosed in the Commission Documents and for any actions taken in response to COVID-19 Measures, since the Business Combination Closing Date, there has not occurred any Material Adverse Effect, or any development that would result in a Material Adverse Effect.
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Section 5.9. No Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a balance sheet of the Company or any Subsidiary (including the notes thereto) in conformity with GAAP and are not disclosed in the Commission Documents, other than those incurred in the ordinary course of the Companys or its Subsidiaries respective businesses since the Business Combination Closing Date and which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
Section 5.10. No Material Defaults. Except as set forth in the Commission Documents, Since the Business Combination Closing Date, there has been no existing or continuing default or event of default in respect of any Indebtedness of the Company or any of its Subsidiaries.
Section 5.11. Solvency. Since the Business Combination Closing Date, the Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to Title 11 of the United States Code or any similar federal or state bankruptcy law or law for the relief of debtors, nor does the Company have any Knowledge that its creditors intend to initiate involuntary bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under Title 11 of the United States Code or any other federal or state bankruptcy law or any law for the relief of debtors. The Company is financially solvent and is generally able to pay its debts as they become due.
Section 5.12. Title To Assets; Real Property. Except as set forth in the Commission Documents, the Company or one of its Subsidiaries has good and marketable title to, or, in the case of leased properties and assets, valid leasehold interests in, all of the material items of tangible personal property used or held for use in the business of the Company, free and clear of any and all Liens (except for Permitted Liens), except where the failure to have such good and marketable title or valid leasehold interests as would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the Commission Documents, all such items of tangible personal property that are material to the operation of the business of the Company are in reasonably good condition and in a state of reasonably good maintenance and repair and are suitable for the purposes used. As of the Business Combination Closing Date, neither the Company nor any of its Subsidiaries owns any real property. The Company or one of its Subsidiaries has a valid and subsisting leasehold estate in, and enjoys peaceful and undisturbed possession of, all Leased Real Property, subject only to Permitted Liens. With respect to each Contract (including all modifications, amendments, extensions, supplements, renewals, rent commencement notices, guarantees, waivers, side letters and other agreements with respect thereto) pursuant to which the Company uses, holds or occupies (or have been granted an option to use, hold or occupy) any Leased Real Property or is otherwise a party with respect to the Leased Real Property (each, a Lease), except as disclosed in the Commission Documents, (i) such Lease is valid, binding and enforceable and in full force and effect against the Company or one of its Subsidiaries and, to the Companys Knowledge, the other party thereto, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law, and each such Lease is in full force and effect, (ii) the Company has not received or given any written notice of material default or breach under any Lease and, to the Knowledge of the Company, the Company has not
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received oral notice of any default or breach that has not been cured; and (iii) there does not exist under any Lease any event or condition which, with notice or lapse of time or both, would become a default or breach by the Company or any of its Subsidiaries or, to the Companys Knowledge, the other party thereto, except in the case of clause (ii) and (iii), where such default or breach would not, individually or in the aggregate, have a Material Adverse Effect.
Section 5.13. Actions Pending. Except as set forth in the Commission Documents, since the Business Combination Closing Date there has been no, pending or, to the Knowledge of the Company, threatened Action by, against or affecting the Company or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, there is no, and since the Business Combination Closing Date there has been no, Governmental Order imposed upon or, to the Knowledge of the Company, threatened against or affecting the Company or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is not a party to a settlement, conciliation or similar agreement regarding any of the matters set forth in the two preceding sentences that contains any ongoing obligations, restrictions or liabilities (of any nature) that, individually or in the aggregate, would have a Material Adverse Effect.
Section 5.14. Compliance With Laws; Permits. Except as disclosed in the Commission Documents or where the failure to be, or to have been, in compliance with such Laws would not, individually or in the aggregate, have a Material Adverse Effect, since the Business Combination Closing Date, the Company has been in compliance with all applicable Laws and Governmental Orders. Except as disclosed in the Commission Documents, since the Business Combination Closing Date, the Company has held, all licenses, approvals, clearances, concessions, exemptions, qualifications, accreditations, consents, registrations, franchises, certificates and permits, including but not limited to Healthcare Permits (Permits), necessary for the lawful conduct of the business of the Company, except where the failure to so hold would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect. Except as disclosed in the Commission Documents, since the Business Combination Closing Date, to the Knowledge of the Company, the Company has not received any written notice of any material violations of applicable Laws, Governmental Orders or Permits (other than allegations asserted by providers in connection with requests for claims adjustments by such providers in the ordinary course of business), and to the Knowledge of the Company, no charge, claim, assertion or Action of any material violation of any Law, Governmental Order or material Permit by the Company is currently threatened against the Company (other than allegations asserted by providers in connection with requests for claims adjustments by such providers in the ordinary course of business). Except as disclosed in the Commission Documents, since the Business Combination Closing Date, the Company has not received any written notice nor has any Knowledge that any Governmental Authority is considering limiting, suspending, terminating, adversely amending or revoking any Permit, except where such limitation, suspension, termination, amendment or revocation would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect. Except as disclosed in the Commission Documents, since the Business Combination Closing Date, no investigation or review by any Governmental Authority with respect to the Company is pending or, to the Knowledge of the Company, threatened, and no such investigations have been conducted by any Governmental Authority since the Business Combination Closing Date, other than those the outcome of which would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect. This Section 5.14 does not relate to environmental matters, such items being the subject of Section 5.18.
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Section 5.15. Certain Fees. Except for the fees payable to Maxim Group LLC for acting as the Companys placement agent in connection with the transactions contemplated by the Transaction Documents, no brokerage or finders fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5.15 incurred by the Company or its Subsidiaries that may be due or payable in connection with the transactions contemplated by the Transaction Documents.
Section 5.16. Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or any of its agents, advisors or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by the Transaction Documents. The Company understands and confirms that the Investor will rely on the foregoing representations in effecting resales of Securities under the Registration Statement. All disclosure provided to Investor regarding the Company and its Subsidiaries, their businesses and the transactions contemplated by the Transaction Documents (including, without limitation, the representations and warranties of the Company contained in the Transaction Documents to which it is a party (as modified by the Disclosure Schedule)) furnished in writing by or on behalf of the Company or any of its Subsidiaries for purposes of or in connection with the Transaction Documents (other than forward-looking information and projections and information of a general economic nature and general information about the Companys industry), taken together, is true and correct in all material respects on the date on which such information is dated or certified, and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading at such time.
Section 5.17. Intellectual Property; IT Systems; Data Security.
(a) Except as set forth in the Commission Documents, each of the following items of Intellectual Property included in the Owned Intellectual Property: (i) granted Patents and pending applications for Patents, (ii) registered Marks, pending applications for registration of Marks and material unregistered Marks, (iii) registered Copyrights and pending applications for Copyright registration, and (iv) internet domain names and social media accounts (collectively, the Registered Intellectual Property), is subsisting, and to the Companys Knowledge, valid, and enforceable, except where the failure to be subsisting, valid and enforceable would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, all necessary registration, maintenance, renewal, and other relevant filing fees due have been timely paid and all necessary documents and certificates in connection therewith have been timely filed with the relevant authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining the Registered Intellectual Property in full force and effect, except where the failure would not, individually or in the
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aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, the Company or one of its Subsidiaries (x) solely and exclusively owns all Owned Intellectual Property and (y) has the right, pursuant to a valid written license, sublicense, agreement or permission, to all other Intellectual Property used in or necessary for the conduct and operation of the business of the Company (collectively, Licensed Intellectual Property), in each case free and clear of all Liens other than Permitted Liens. Except as set forth in the Commission Documents, to the Companys Knowledge, the conduct and operation of the business of the Company and its Subsidiaries does not infringe, misappropriate, or otherwise violate, and since the Business Combination Closing Date, neither the Company nor any of its Subsidiaries has infringed, misappropriated, or otherwise violated, any Intellectual Property rights or proprietary rights of any third party, and no Action is pending or has been asserted or, to the Knowledge of the Company, threatened (A) that the conduct or operation of the business of the Company or any of its Subsidiaries or that the use or exploitation by the Company or any of its Subsidiaries of any Owned Intellectual Property infringes the Intellectual Property rights or proprietary rights of any third party, or (B) challenging the ownership, use, validity, or enforceability of any Owned Intellectual Property, in any case that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, to the Companys Knowledge, no Person is infringing, misappropriating, or otherwise violating, or has since the Business Combination Closing Date infringed, misappropriated, or otherwise violated, any Owned Intellectual Property, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and no Action is pending or has been asserted or threatened by the Company or any of its Subsidiaries against any Person relating to any of the foregoing or challenging the ownership, use, validity, or enforceability of any Owned Intellectual Property.
(b) The Company and its Subsidiaries use commercially reasonable efforts to maintain and protect the confidentiality, integrity, and security of the IT Systems and to prevent any unauthorized use, access, interruption, or modification of the IT Systems. The IT Systems are (i) sufficient for the immediate and currently anticipated future needs of the Company and its Subsidiaries, and (ii) in sufficiently good working condition to effectively perform all information technology operations as necessary for the operation of the business of the Company and its Subsidiaries as currently conducted. Except as set forth in the Commission Documents, the Company and its Subsidiaries maintain commercially reasonable back-up, disaster recovery and business continuity plans and procedures, act in compliance therewith, and have taken commercially reasonable steps to test such plans and procedures on a periodic basis, and such plans and procedures have been proven effective upon such testing. Since the Business Combination Closing Date, neither the Company nor any of its Subsidiaries has been subject to any, or received any written notices of any or provided any notice to any Person in connection with any, (i) breaches of security (including theft, exfiltration, and unauthorized use, access, collection, processing, storage, disposal, destruction, transfer, disclosure, interruption or modification by any Person), phishing incidents, ransomware or malware attacks, or other security incidents affecting (A) the IT Systems, or (B) any data or other information about or from an individual, including any Personal Information, stored or maintained by the Company or any of its Subsidiaries (or any third party on its or their behalf), or (ii) failures, breakdowns, continued substandard performance, or other adverse events affecting any IT Systems that have caused any material disruption of or interruption in or to the use of the IT Systems, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(c) Except as disclosed in the Commission Documents, the Company is and has been in compliance in all material respects with all of the following to the extent relating to confidential or sensitive information or Personal Information (including the collection, processing, use, security, transfer, or disposition thereof), or otherwise relating to privacy, security, or security breach notification requirements and applicable to the business of the Company: (i) all applicable Laws; (ii) the Companys internal and external privacy policies; (iii) all applicable industry standards; and (iv) applicable provisions of all Contracts relating to the foregoing (collectively, Data Security Requirements), except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, the Company has not received any notice of any claims of or investigations or inquiries related to, or been charged with, the violation of any Data Security Requirements that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.18. Environmental Compliance. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (Environmental Laws); (ii) have received all Permits or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such Permit or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 5.19. Material Agreements. Except as set forth in the Commission Documents, neither the Company nor any Subsidiary of the Company is a party to any Contract, a copy of which would be required to be filed with the Commission as an exhibit to an annual report on Form 10-K (collectively, Material Agreements). Each of the Material Agreements described in the Commission Documents conform in all material respects to the descriptions thereof contained or incorporated by reference therein. Except as set forth in the Commission Documents, the Company and each of its Subsidiaries have performed in all material respects all the obligations then required to be performed by them under the Material Agreements, have received no notice of default or an event of default by the Company or any of its Subsidiaries thereunder and are not aware of any basis for the assertion thereof, and neither the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any other contracting party thereto are in default under any Material Agreement now in effect, the result of which would have a Material Adverse Effect. Except as set forth in the Commission Documents, each of the Material Agreements is in full force and effect, and constitutes a legal, valid and binding obligation enforceable in accordance with its terms against the Company and/or any of its Subsidiaries and, to the Knowledge of the Company, each other contracting party thereto, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application.
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Section 5.20. Transactions With Affiliates. Except as set forth in the Commission Documents, there are no loans, leases, agreements, contracts, royalty agreements, management contracts, service arrangements or other continuing transactions exceeding $120,000 between (a) the Company or any Subsidiary, on the one hand, and (b) any person or entity who would be covered by Item 404(a) of Regulation S-K, on the other hand, for the time period as required under Item 404(a) thereof. Except as disclosed in the Commission Documents, there are no outstanding amounts payable to or receivable from, or advances by the Company or any of its Subsidiaries to, and neither the Company nor any of its Subsidiaries is otherwise a creditor of or debtor to, any beneficial owner of more than 5% of the outstanding shares of Common Stock, or any director, employee or affiliate of the Company or any of its Subsidiaries, other than (i) reimbursement for reasonable expenses incurred on behalf of the Company or any of its Subsidiaries or (ii) as part of the normal and customary terms of such persons employment or service as a director with the Company or any of its Subsidiaries.
Section 5.21. Employees; Labor Laws. No material labor dispute with the employees of the Company exists, except as described in the Commission Documents, or, to the Knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary is in violation of or has received notice of any violation with respect to any federal or state law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or state wage and hour laws, nor any state law precluding the denial of credit due to the neighborhood in which a property is situated, the violation of any of which could reasonably be expected to have a Material Adverse Effect.
Section 5.22. Use of Proceeds. The proceeds from the sale of the Shares by the Company to Investor shall be used by the Company and its Subsidiaries in the manner as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement.
Section 5.23. Investment Company Act Status. The Company is not, and as a result of the consummation of the transactions contemplated by the Transaction Documents and the application of the proceeds from the sale of the Shares as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement the Company will not be required to register as an investment company within the meaning of the Investment Company Act of 1940, as amended.
Section 5.24. ERISA. For purposes of this Agreement, Company Benefit Plan means any employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) (including multiemployer plans as defined in Section 3(37) of ERISA) in effect now or at any time within the last six years, and any other stock purchase, stock option or other equity or equity based, termination, severance, employment, individual consulting, retention, transaction, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, retirement, welfare benefit, employee loan and all other benefit or compensation plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, (i) which is or was contributed to, required to be contributed to, sponsored by, maintained by or made available by the Company for the benefit of any current or former employee, officer, director, owner, or consultant of the Company or any of its Subsidiaries, or (ii) under or with respect to which the Company or any of its Subsidiaries has or could reasonably be expected to have any material current or contingent liability or obligation, or (iii) is
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made available to a Company Employee in connection with an agreement between the Company or any of its Subsidiaries and a professional employee organization or other leasing organization. Each Company Benefit Plan is and has been established, funded, maintained and administered, in form and operation, in material compliance with its terms and all applicable Laws, including ERISA and the Internal Revenue Code of 1986, as amended (the Code). There are no audits, investigations or Actions (other than routine claims for benefits) pending or, to the knowledge of the Company, threatened with respect to any Company Benefit Plan. Each Company Benefit Plan which is intended to be qualified within the meaning of Code Section 401(a) is so qualified (or was so qualified at the time of its termination) and (A) has received a current favorable determination or opinion letter as to its qualification or (B) has been established under a standardized master and prototype or volume submitter plan for which a current favorable Internal Revenue Service advisory letter or opinion letter has been obtained by the plan sponsor and upon which the Company may rely, and, to the Knowledge of the Company, nothing has occurred, whether by action or failure to act, that could reasonably be expected to materially adversely affect such qualification. Except as set forth in the Commission Documents, none of the Company or any ERISA Affiliate (as defined below) has incurred any material current or potential material liability in respect of, or is obligated to provide any, post-employment, post-retirement or post-ownership health, medical or life insurance benefits for any current, former or retired employee, officer, director, owner or service provider of the Company or any ERISA Affiliate, except as required to avoid an excise tax under Code Section 4980B and for which the covered individual pays the full premium cost. Except as set forth in the Commission Documents, none of the Company or any ERISA Affiliate sponsored, maintained, participated in or was required to contribute to, at any point during the six-year period prior to the date hereof, and the Company has no material current or contingent liability or obligation under or with respect to, any: (i) multiemployer pension plan (as defined in Section 3(37) of ERISA or Code Section 4001(a)(3)), (ii) a defined benefit pension plan that is subject to Section 302 or Title IV of ERISA or Code Section 412 or Code Section 4971; (iii) multiple employer welfare arrangement (as defined in Section 3(40) of ERISA); or (iv) multiple employer plan subject to Code Section 413(c). For purposes of this Agreement, ERISA Affiliate means any entity (whether or not incorporated) other than the Company that is, or at any relevant time prior to the date hereof was, considered under common control and treated as one employer under Code Sections 414(b), (c), (m) or (o) or Section 4001 of ERISA. Except as set forth in the Commission Documents, no Company Benefit Plan is and the Company does not currently have, nor has the Company had, any obligation to maintain, sponsor, establish, participate in or contribute to any Company Benefit Plan (or similar arrangement) that is subject to any Law, custom or rule of any jurisdiction outside of the United States.
Section 5.25. Taxes. Each of the Company and its Subsidiaries has filed all material Tax Returns as required by applicable federal, state and local law. These Tax Returns are true, correct and complete in all material respects. Each of the Company and its Subsidiaries has paid all material Taxes, other than Taxes being contested in good faith and for which adequate reserves have been established. None of the Company or any of its Subsidiaries is currently engaged in any material audit, administrative or judicial proceeding with respect to Taxes. None of the Company or any of its Subsidiaries has received any written notice from a Governmental Authority of a proposed deficiency of any material amount of Taxes. Each of the Company and its Subsidiaries has withheld or collected from each payment made to its employees all material Taxes required to be withheld or collected therefrom and has paid the same to the proper tax authority.
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Section 5.26. Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
Section 5.27. Exemption from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the offer and sale of the Securities from the Company to the Investor in accordance with the terms and conditions of this Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D; provided, however, that at the request of and with the express agreements of the Investor (including, without limitation, the representations, warranties and covenants of Investor set forth in Sections 4.10 through 4.13), the Securities to be issued from and after Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued to the Investor or its designee only as DWAC Shares and will not bear legends noting restrictions as to resale of such securities under federal or state securities laws, nor will any such securities be subject to stop transfer instructions.
Section 5.28. No General Solicitation or Advertising. Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.
Section 5.29. No Integrated Offering. None of the Company or any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market. None of the Company, its Subsidiaries, their Affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act or cause the offering of any of the Securities to be integrated with any other offering of securities of the Company.
Section 5.30. Dilutive Effect. The Company is aware and acknowledges that issuance of the Securities could cause dilution to existing stockholders and could significantly increase the number of outstanding shares of Common Stock. The Company further acknowledges that its obligation to issue the Commitment Shares and to issue the Shares pursuant to each VWAP Purchase Notice delivered by the Company to the Investor pursuant to this Agreement is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.
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Section 5.31.Manipulation of Price. Neither the Company nor any of its officers, directors or Affiliates has, and, to the Knowledge of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed or intended to cause or to result in the stabilization or manipulation of the price of any security of the Company, or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company, in each case to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company. Neither the Company nor any of its officers, directors or Affiliates will during the term of this Agreement, and, to the Knowledge of the Company, no Person acting on their behalf will during the term of this Agreement, take any of the actions referred to in the immediately preceding sentence.
Section 5.32. Securities Act. The Company has complied and shall comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder, including, without limitation, the applicable requirements of the Securities Act. Each Registration Statement, upon filing with the Commission and at the time it is declared effective by the Commission, shall satisfy all of the requirements of the Securities Act to register the resale of the Registrable Securities included therein by the Investor in accordance with the Registration Rights Agreement on a delayed or continuous basis under Rule 415 under the Securities Act at then-prevailing market prices, and not fixed prices. The Company is not currently, and has not been since the Business Combination Closing Date, an issuer identified in, or subject to, Rule 144(i). The Company has filed current Form 10 information (as defined in Rule 144(i)(3) under the Securities Act) with the Commission on []7, 2022 reflecting its status as an entity that is not a shell company.
Section 5.33. Listing and Maintenance Requirements; DTC Eligibility. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its Knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not received notice from the Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Trading Market. The Common Stock is eligible for participation in the DTC book entry system and has shares on deposit at DTC for transferred electronically to third parties via DTC through its Deposit/Withdrawal at Custodian (DWAC) delivery system. The Company has not received notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated.
Section 5.34. Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Companys Charter or the laws of its state of incorporation that is or could become applicable to the Investor as a result of the Investor and the Company fulfilling their respective obligations or exercising their respective rights under the Transaction Documents (as applicable), including, without limitation, as a result of the Companys issuance of the Securities and the Investors ownership of the Securities.
7 | To be inserted by amendment to this Agreement signed at Closing. |
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Section 5.35. Anti-Corruption Laws; Trade Controls. None of the Company, any of its Subsidiaries nor any of their respective representatives, has in violation of Anti-Corruption Laws offered, provided, promised, or authorized the provision of any contribution, gift, entertainment, expense relating to political activity, or any other money, property, or thing of value, directly or indirectly, to any Government Official to influence official action or to secure an improper advantage, or to encourage the recipient to breach a duty of good faith or loyalty or the policies of his/her employer. None of the Company, its Subsidiaries nor any of their respective representatives, is currently, or has been in the past five years: (i) a Sanctioned Person, (ii) organized, resident or located in a Sanctioned Country, (iii) engaging in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, or (iv) otherwise in violation of Trade Controls or Anti-Corruption Laws. In the past five years, neither the Company nor any of its Subsidiaries has received from any Governmental Authority or any other Person any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit, in each case concerning any actual or potential violation or wrongdoing related to Trade Controls or Anti-Corruption Laws.
Section 5.36. Healthcare Matters. Except as disclosed in the Commission Documents, since the Business Combination Closing Date, the Company and each of its Subsidiaries are, and at all times have been, in compliance with all applicable Healthcare Laws, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, there are no, and since the Business Combination Closing Date, there have not been any Actions pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries alleging a violation of Healthcare Law. Except as disclosed in the Commission Documents, none of the Company, any of its Subsidiaries or any of their respective directors, managing employees or executive officers, is currently, or has ever been suspended, excluded or debarred from any Government Program or threatened with or currently subject to an investigation or proceeding that could result in suspension, exclusion or debarment from any Government Program or any other debarment, exclusion or sanction list or database, in each case that remains unresolved as of the Closing Date. Since the Business Combination Closing Date, to the Companys Knowledge, neither the Company nor any of its Subsidiaries has made an untrue statement of fact or fraudulent statement to any Governmental Authority, failed to disclose a fact required to be disclosed to any Governmental Authority, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure was made, would be in material violation of any Healthcare Law. Except as disclosed in the Commission Documents, neither the Company nor any of its Subsidiaries (i) is a party to a corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services, (ii) has any reporting obligation pursuant to any settlement agreement entered into with any Governmental Authority, (iii) is the subject of any Government Program investigation conducted by any federal or state enforcement agency, (iv) is a defendant in any qui tam/False Claims Act litigation, or (v) has been served with or received any search warrant, subpoena, civil investigative demand, contact letter, or personal or telephone contact by or from any federal or state enforcement agency, in each case other than routine contacts
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and notifications not relating to an investigation or an actual or potential violation of Law, or in any case as would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since the Business Combination Closing Date, (i) each of the Company and its Subsidiaries has been in compliance in all material respects with HIPAA and has had privacy and security policies, notices, procedures and safeguards that materially comply with HIPAA; (ii) neither the Company nor any of its Subsidiaries has received written notice of, and there is no Action at law or in equity or, inquiry or investigation pending or threatened with respect to any alleged breach as defined in 45 C.F.R. § 164.402 (a Breach) by the Company, any of its Subsidiaries or their workforce (as defined in 45 C.F.R. § 160.103); (iii) no Breach by the Company, any of its Subsidiaries or their workforce or successful security incident (as defined in 45 C.F.R. § 164.304) has occurred with respect to protected health information or PHI (as defined in 45 C.F.R. § 160.103) in the possession or under the control of the Company, any of its Subsidiaries or any of their business associates; and (iv) the Company and its Subsidiaries have undertaken all surveys, audits, inventories, reviews, analyses and/or assessments (including any necessary risk assessments) of all areas of the business of the Company and its Subsidiaries required by HIPAA and have implemented appropriate corrective action to address all material vulnerabilities in their HIPAA safeguards and controls identified through such necessary assessments. Except as set forth in the Commission Documents, all products or services marketed by or on behalf of the Company and its Subsidiaries that are subject to the jurisdiction of Healthcare Laws are marketed in compliance with all applicable Healthcare Laws, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.37. FDA Matters. Except as set forth in the Commission Documents, since the Business Combination Closing Date, the Company at all times has been in compliance in all material respects with the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and applicable regulations, as amended (collectively, the FDCA), including the rules and regulations of the U.S. Food and Drug Administration (the FDA) promulgated thereunder, and comparable Laws in any non-U.S. jurisdiction. Except as set forth in the Commission Documents, as to each product subject to the FDCA or similar Law in any non-U.S. jurisdiction that is developed, manufactured, manufactured for, tested, distributed, and/or marketed by the Company (a Company Product), each such Company Product since the Business Combination Closing Date has been, developed, manufactured, manufactured for, labeled, tested, distributed, and/or marketed in material compliance with all applicable requirements under the FDCA and similar laws, including those relating to investigational use, approval, or premarket clearance to market any Company Product, current good manufacturing practices, labeling, and Quality System Regulation, as defined in 21 C.F.R. Parts 4, 211, and 820 (as applicable), advertising, promotion, continuing medical education, recordkeeping, training, medical device reporting, adverse event reporting, and filing of other reports and security. Except as set forth in the Commission Documents, since the Business Combination Closing Date, the Company has not received any written communication from FDA or any other Governmental Authority (i) contesting the investigational use of, premarket clearance or approval of, the uses of, or the labeling and promotion of any Company Product, or (ii) otherwise alleging any violation of the FDCA or any similar Law as applicable to any Company Product. Except as set forth in the Commission Documents, no Company Product (i) is currently under consideration by the Company for recall, withdrawal, suspension, seizure, or discontinuance, or (ii) has been recalled, subjected to a product
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advisory notice, withdrawn, suspended, seized, or discontinued (other than for commercial or other business reasons) by the Company, whether voluntarily or otherwise. Except as set forth in the Commission Documents, the Company has not received any written communication that the FDA or any similar Governmental Authority (i) intends to withhold or materially condition its approval or clearance of any Company Product; (ii) has commenced, or has threatened to initiate, any action to withdraw its approval or clearance of any Company Product; (iii) has requested the recall, withdrawal, suspension, seizure, or discontinuance of any Company Product; (iv) has commenced, or has threatened to initiate, any action to enjoin the manufacture, sale, or distribution of any Company Product or the operations of the Company; or (v) has commenced, or has threatened to initiate, any criminal action or proceeding against the Company or any of its respective officers, employees, or agents. Except as set forth in the Commission Documents, as to each medical device (as that term is defined under the FDCA) for which a premarket approval application, premarket notification, investigational device exemption, or similar state or foreign regulatory application has been submitted, approved, or cleared for sale and distribution in the United States, the Company is in material compliance with 21 U.S.C. §§ 360, 360c, 360d, 360e, 360e-1, 360g, 360h, 360i and 360j and 21 C.F.R. Parts 803, 807, 812, 814, 820, 821, and 822, respectively, as applicable to the Companys medical devices. Except as set forth in the Commission Documents, no medical device or component of a medical device that is material to the Companys ability to carry out its business or operations as currently conducted is (i) adulterated within the meaning of 21 U.S.C. § 351 (or similar Law), (ii) misbranded within the meaning of 21 U.S.C. § 352 (or similar Law), or (iii) in violation of 21 U.S.C. §§ 360 or 360e (or similar Law). No officer or director of the Company or any of its Subsidiaries, and to the Knowledge of the Company, no employee of the Company or any of its Subsidiaries, has ever been convicted of any felony under any Law for conduct relating to the development, testing, or approval of any drug product or device, including, without limitation, the preparation or submission of a new drug application, abbreviated new drug application, device 510(k) notification, device premarket approval application, or biologics license application. Except as set forth in the Commission Documents, to the Knowledge of the Company, none of the FDA, Drug Enforcement Administration, or other Governmental Authority has issued any Warning Letter, Untitled Letter, Notice of Violation, enforcement proceeding, or other correspondence stating or indicating that the Company has violated any Laws in any material respect.
Section 5.38. Emerging Growth Company Status. As of the Closing Date the Company was, and as of the Commencement Date the Company will be, an emerging growth company as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012.
Section 5.39. Smaller Reporting Company Status. As of the Closing Date the Company was, and as of the Commencement Date the Company will be, a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.
Section 5.40. No Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, any beneficial owner of 20% or more of the Companys outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an Issuer Covered Person) is subject to any of the Bad Actor disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a Disqualification Event), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
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Section 5.41. Acknowledgement Regarding Investors Acquisition of Securities. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arms-length purchaser with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement or the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and any advice given by the Investor or any of its representatives or agents in connection therewith is merely incidental to the Investors acquisition of the Securities. The Company further represents to the Investor that the Companys decision to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation of the transactions contemplated thereby by the Company and its representatives. The Company acknowledges and agrees that the Investor has not made and does not make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those specifically set forth in Article IV.
II. LMFAO Representations and Warranties. LMFAO hereby makes the following representations and warranties to the Investor as of the date of this Agreement, which representations and warranties shall survive the execution and delivery of this Agreement until the Business Combination Closing, at which time such representations and warranties shall have no further force or effect and shall be superseded in their entirety by the representations, warranties and covenants of the Company set forth above in Subsection I of this Article V:
Section 5.42. Organization, Good Standing and Power. Each of LMFAO and Merger Sub is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither LMFAO nor Merger Sub is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of LMFAO and Merger Sub is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in an LMFAO Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
Section 5.43. Authorization, Enforcement. LMFAO has the requisite corporate power and authority to enter into this Agreement and the Registration Rights Agreement. Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by LMFAO and constitutes a valid and binding obligation of LMFAO enforceable against LMFAO in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies).
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Section 5.44. No Conflicts. The execution and delivery by LMFAO of this Agreement and the Registration Rights Agreement do not and shall not (i) result in a violation of any provision of LMFAOs or Merger Subs respective certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which LMFAO is a party or is bound, (iii) create or impose a lien, charge or encumbrance on any property or assets of LMFAO under any agreement or any commitment to which LMFAO is a party or by which LMFAO is bound or to which any of its properties or assets is subject, or (iv) result in a violation of any U.S. federal, state, local or foreign statute, rule, regulation, order, judgment or decree applicable to LMFAO or by which any property or asset of LMFAO is bound or affected (including U.S. federal and state securities laws and regulations, the DGCL and the rules and regulations of The Nasdaq Stock Market LLC), except, in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations, liens, charges, encumbrances and violations as would not, individually or in the aggregate, have an LMFAO Material Adverse Effect.
Section 5.45. SEC Reports, Financial Statements; Sarbanes-Oxley Act; Accountants.
(a) LMFAO has filed in a timely manner all required registration statements, reports, schedules, forms, statements and other documents required to be filed by it with the Commission since January 25, 2021 (collectively, as they have been amended since the time of their filing and including all exhibits thereto, the LMFAO SEC Reports). None of the LMFAO SEC Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Business Combination Closing, then on the date of such filing), 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 made therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements (including, in each case, the notes and schedules thereto) included in the LMFAO SEC Reports complied as to form in all material respects with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the Commission) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the financial position of LMFAO as of the respective dates thereof and the results of its operations and cash flows for the respective periods then ended. Neither LMFAO nor Merger Sub has any material off-balance sheet arrangements that are not disclosed in the LMFAO SEC Reports. To the knowledge of LMFAO, as of the date of this Agreement, there are no outstanding comments from the Commissions staff with respect to the LMFAO SEC Reports. To the knowledge of LMFAO, none of the LMFAO SEC Reports filed on or prior to the date hereof is subject to ongoing Commission review or investigation as of the date of this Agreement.
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(b) LMFAO has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to LMFAO is made known to LMFAOs principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To the knowledge of LMFAO and except as set forth in the LMFAO SEC Reports, such disclosure controls and procedures are effective in timely alerting LMFAOs principal executive officer and principal financial officer to material information required to be included in LMFAOs periodic reports required under the Exchange Act.
(c) LMFAO has established and maintained a system of internal controls. To the knowledge of LMFAO and except as set forth in the LMFAO SEC Reports, such internal controls are sufficient to provide reasonable assurance regarding the reliability of LMFAOs financial reporting and the preparation of LMFAOs financial statements for external purposes in accordance with GAAP.
(d) Except as set forth in the LMFAO SEC Reports, neither LMFAO (including any employee thereof) nor LMFAOs independent auditors has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by LMFAO, (ii) any fraud, whether or not material, that involves LMFAOs management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by LMFAO or (iii) any claim or allegation regarding any of the foregoing.
(e) MaloneBailey, LLP, whose report on the consolidated financial statements of LMFAO as of December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020, and the related notes, which report is included in the Form S-4 Registration Statement, the Merger Proxy Statement/Prospectus and the 2021 Form 10-K, were during the periods covered by their report, with respect to LMFAO, independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States).
Section 5.46. Subsidiaries. LMFAO does not have any Subsidiaries as of the date of this Agreement, other than Merger Sub.
Section 5.47. No LMFAO Material Adverse Effect. Except as disclosed in the LMFAO SEC Reports and for any actions taken in response to COVID-19 Measures, since December 31, 2021, (a) there has not occurred any LMFAO Material Adverse Effect, or any development that would result in an LMFAO Material Adverse Effect, and (b) LMFAO and Merger Sub have conducted their respective businesses in the ordinary course of business consistent with past practice in all material respects.
Section 5.48. No Undisclosed Liabilities. There is no liability, debt or obligation against LMFAO or Merger Sub, except for liabilities and obligations (i) reflected or reserved for on LMFAOs consolidated balance sheet for the period ended December 31, 2021 or disclosed in the notes thereto (other than any such liabilities not reflected, reserved or disclosed as are not and would not be, in the aggregate, material to LMFAO and Merger Sub, taken as a whole), or (ii) that have arisen since the date of LMFAOs consolidated balance sheet for the period ended December 31, 2021 in the ordinary course of business of LMFAO and Merger Sub (other than any such liabilities as are not and would not be, in the aggregate, material to LMFAO and Merger Sub, taken as a whole).
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Section 5.49. No Material Defaults. Except as set forth in the LMFAO SEC Reports, since December 31, 2021, there has been no existing or continuing default or event of default in respect of any Indebtedness of LMFAO or Merger Sub.
Section 5.50. Financial Ability; Trust Account. As of the date of this Agreement, there is at least $105,000,000 invested in a trust account (the Trust Account), maintained by Continental Stock Transfer & Trust Company, a New York corporation, acting as trustee (the Trustee), pursuant to the Investment Management Trust Agreement, dated January 25, 2021, by and between LMFAO and the Trustee on file with the LMFAO SEC Reports as of the date of this Agreement (the Trust Agreement). Prior to the Business Combination Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement, LMFAOs certificate or articles of incorporation, bylaws or other organizational or charter documents and LMFAOs final prospectus dated January 27, 2021. Amounts in the Trust Account are invested in United States Government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. LMFAO has performed all material obligations required to be performed by it to date under, and is not in material default, breach or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach thereunder. As of the date of this Agreement, there are no claims or proceedings pending with respect to the Trust Account. Since January 25, 2021, LMFAO has not released any money from the Trust Account (other than interest income earned on the principal held in the Trust Account as permitted by the Trust Agreement). As of the Effective Time, the obligations of LMFAO to dissolve or liquidate pursuant to LMFAOs certificate or articles of incorporation, bylaws or other organizational or charter documents shall terminate, and, as of the Business Combination Closing, LMFAO shall have no obligation whatsoever pursuant to LMFAOs certificate or articles of incorporation, bylaws or other organizational or charter documents to dissolve and liquidate the assets of LMFAO by reason of the consummation of the Transactions. To LMFAOs knowledge, as of the date of this Agreement, following the Business Combination Closing, no stockholder of LMFAO shall be entitled to receive any amount from the Trust Account except to the extent such stockholder shall have elected to tender its shares of LMFAOs class A common stock for redemption in accordance with LMFAOs certificate or articles of incorporation, bylaws or other organizational or charter documents. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of LMFAO and the Trustee, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies). The Trust Agreement has not been terminated, repudiated, rescinded, amended or supplemented or modified, in any respect, and, to the knowledge of LMFAO, no such termination, repudiation, rescission, amendment, supplement or modification is contemplated. There are no side letters and there are no Contracts, arrangements or understandings, whether written or oral, with the Trustee or any other Person that would cause the description of the Trust Agreement in the LMFAO SEC Reports to be inaccurate. As of the date of this Agreement, LMFAO has no reason to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to LMFAO on the Business Combination Closing Date.
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Section 5.51. Actions Pending. Except as set forth in the LMFAO SEC Reports, since December 31, 2021 there has been no, pending or, to the knowledge of LMFAO, threatened Action by, against or affecting LMFAO or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have an LMFAO Material Adverse Effect. Except as set forth in the LMFAO SEC Reports, there is no, and since December 31, 2021 there has been no, Governmental Order imposed upon or, to the knowledge of LMFAO, threatened against or affecting LMFAO or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have an LMFAO Material Adverse Effect. LMFAO is not a party to a settlement, conciliation or similar agreement regarding any of the matters set forth in the two preceding sentences that contains any ongoing obligations, restrictions or liabilities (of any nature) that, individually or in the aggregate, would have an LMFAO Material Adverse Effect.
Section 5.52. Compliance With Laws. The business of LMFAO and Merger Sub has been and is presently being conducted in compliance with all applicable U.S. federal, state, local and foreign governmental laws, rules, regulations and ordinances, except as set forth in the LMFAO SEC Reports and except for such non-compliance which, individually or in the aggregate, would not have an LMFAO Material Adverse Effect. LMFAO is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation of any Governmental Authority applicable to LMFAO, and LMFAO will not conduct its business in violation of any of the foregoing, except in all cases for any such violations which could not, individually or in the aggregate, have an LMFAO Material Adverse Effect. There are no material statutes, laws, rules, regulations or ordinances of any Governmental Authority, self-regulatory organization or body that are applicable to LMFAO or to its business, assets or properties that are required to be described in LMFAO SEC Report that are not described therein as required.
Section 5.53. Certain Fees. Except for the fees payable to Maxim Group LLC for acting as the Companys placement agent in connection with the transactions contemplated by the Transaction Documents, no brokerage or finders fees or commissions are or will be payable by LMFAO or the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5.15 incurred by LMFAO, the Company or its Subsidiaries that may be due or payable in connection with the transactions contemplated by the Transaction Documents.
Section 5.54. Investment Company Act Status. Neither LMFAO nor Merger Sub is an investment company within the meaning of the Investment Company Act of 1940, as amended.
Section 5.55. Taxes. LMFAO has filed all material Tax Returns as required by applicable federal, state and local law. These Tax Returns are true, correct and complete in all material respects. LMFAO has paid all material Taxes, other than Taxes being contested in good faith and for which adequate reserves have been established. LMFAO is not currently engaged in any material audit, administrative or judicial proceeding with respect to Taxes. LMFAO has not received any written notice from a Governmental Authority of a proposed deficiency of any material amount of Taxes. LMFAO has withheld or collected from each payment made to its employees all material Taxes required to be withheld or collected therefrom and has paid the same to the proper tax authority.
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Section 5.56. Insurance. LMFAO is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which LMFAO is engaged, including, but not limited to, directors and officers insurance coverage.
Section 5.57. Exemption from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the offer and sale of the Securities from the Company to the Investor in accordance with the terms and conditions of this Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D.
Section 5.58. No General Solicitation or Advertising. Neither LMFAO, Merger Sub, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.
Section 5.59. No Integrated Offering. None of LMFAO or any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market. None of LMFAO, Merger Sub, their Affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act or cause the offering of any of the Securities to be integrated with any other offering of securities of the Company.
Section 5.60. Securities Act. LMFAO has complied and shall comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder, including, without limitation, the applicable requirements of the Securities Act.
Section 5.61. Anti-Corruption Laws; Trade Controls. Neither LMFAO nor any of its representatives has in violation of Anti-Corruption Laws offered, provided, promised, or authorized the provision of any contribution, gift, entertainment, expense relating to political activity, or any other money, property, or thing of value, directly or indirectly, to any Government Official to influence official action or to secure an improper advantage, or to encourage the recipient to breach a duty of good faith or loyalty or the policies of his/her employer. Neither LMFAO nor any of its representatives is currently, or has been in the past five years: (i) a Sanctioned Person, (ii) organized, resident or located in a Sanctioned Country, (iii) engaging in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, or
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(iv) otherwise in violation of Trade Controls or Anti-Corruption Laws. In the past five years, LMFAO has not received from any Governmental Authority or any other Person any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit, in each case concerning any actual or potential violation or wrongdoing related to Trade Controls or Anti-Corruption Laws.
Section 5.62. Nasdaq Stock Market Listing. The issued and outstanding shares of LMFAOs class A common stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol LMAO. LMFAO is in compliance with the rules of Nasdaq and there is no Action pending or, to the knowledge of LMFAO, threatened against LMFAO by Nasdaq or the Commission with respect to any intention by such entity to deregister LMFAOs class A common stock or terminate the listing of LMFAOs class A common stock on Nasdaq. LMFAO has not taken any action in an attempt to terminate the registration of LMFAOs class A common stock under the Exchange Act. Except as set forth in the LMFAO SEC Reports, LMFAO has not received any notice from Nasdaq or the Commission regarding the revocation of such listing or otherwise regarding the delisting of LMFAOs class A common stock from the Nasdaq or the Commission.
Section 5.63. LMFAOs Stockholders. No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the Business Combination such that a declaration to the Committee on Foreign Investment in the United States would be mandatory under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company post-Business Combination Closing.
Section 5.64. Contracts. Except for those Contracts filed (or incorporated by reference) as exhibits to the LMFAO SEC Reports, and except for the documents to be executed by LMFAO in connection with the PIPE Investment (as defined in the Merger Agreement) or the other Transactions (as defined in the Merger Agreement), neither LMFAO nor Merger Sub is a party to any Contract that would be required to be filed (or incorporated by reference) as an exhibit to LMFAOs Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K.
Section 5.65. Acknowledgement Regarding Investors Acquisition of Securities. LMFAO acknowledges and agrees that the Investor is acting solely in the capacity of an arms-length purchaser with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents. LMFAO further acknowledges that the Investor is not acting as a financial advisor or fiduciary of LMFAO or the Company (or in any similar capacity) with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and any advice given by the Investor or any of its representatives or agents in connection therewith is merely incidental to the Investors acquisition of the Securities. LMFAO further represents to the Investor that LMFAOs decision to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation of the transactions contemplated thereby by LMFAO and its representatives. LMFAO acknowledges and agrees that the Investor has not made and does not make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those specifically set forth in Article IV.
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III. SeaStar Medical Representations and Warranties. SeaStar Medical hereby makes the following representations and warranties to the Investor as of the date of this Agreement, which representations and warranties shall survive the execution and delivery of this Agreement until the Business Combination Closing, at which time such representations and warranties shall have no further force or effect and shall be superseded in their entirety by the representations, warranties and covenants of the Company set forth above in Subsection I of this Article V:
Section 5.66. Organization, Good Standing and Power. SeaStar Medical is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. SeaStar Medical is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. SeaStar Medical is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in an SeaStar Medical Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
Section 5.67. Authorization, Enforcement. SeaStar Medical has the requisite corporate power and authority to enter into this Agreement and the Registration Rights Agreement. Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by SeaStar Medical and constitutes a valid and binding obligation of SeaStar Medical enforceable against SeaStar Medical in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies).
Section 5.68. No Conflicts. The execution and delivery by SeaStar Medical of this Agreement and the Registration Rights Agreement do not and shall not (i) result in a violation of any provision of SeaStar Medicals certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which SeaStar Medical is a party or is bound, (iii) create or impose a lien, charge or encumbrance on any property or assets of SeaStar Medical under any agreement or any commitment to which SeaStar Medical is a party or by which SeaStar Medical is bound or to which any of its properties or assets is subject, or (iv) result in a violation of any U.S. federal, state, local or foreign statute, rule, regulation, order, judgment or decree applicable to SeaStar Medical or by which any property or asset of SeaStar Medical is bound or affected (including U.S. federal and state securities laws and regulations and the DGCL), except, in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations, liens, charges, encumbrances and violations as would not, individually or in the aggregate, have an LMFAO Material Adverse Effect.
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Section 5.69. Financial Statements; Accountants.
(a) The audited balance sheets of SeaStar Medical as at December 31, 2021 and December 31, 2020, respectively, and the related audited statements of income and comprehensive income, stockholders equity and cash flows for the years then ended, together with the auditors reports thereon (the SeaStar Medical Financial Statements) present fairly, in all material respects, the financial position, cash flows and results of operations of the Company as of the dates and for the periods indicated in such SeaStar Medical Financial Statements in conformity with GAAP consistently applied in all material respects and were derived from, and accurately reflect in all material respects, the books and records of the Company.
(b) The books of account and other financial records of SeaStar Medical have been kept accurately in all material respects, the transactions entered therein represent bona fide transactions, and the revenues, expenses, assets and liabilities of the Company have been properly recorded therein in all material respects. There has been no change in the accounting methods or practices of SeaStar Medical since December 31, 2020. SeaStar Medical has established and maintains a system of internal accounting controls which is intended to provide, in all material respects, reasonable assurance: (i) that transactions, receipts and expenditures of SeaStar Medical are being executed and made only in accordance with appropriate authorizations of management and in all material respects in accordance with applicable Law, (ii) that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of SeaStar Medical, (iv) that the amount recorded for assets on the books and records of SeaStar Medical is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference, and (v) that accounts, notes and other receivables and inventory are recorded accurately. Since January 1, 2020, neither SeaStar Medical nor any of its officers, directors or employees has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls (including any notification of any significant deficiency or material weakness), including any written complaint, allegation, assertion or claim that SeaStar Medical or any of its officers, directors or employees has engaged in questionable accounting or auditing practices.
(c) The Accountant, whose report on the financial statements of SeaStar Medical as of December 31, 2021 and 2020, and for each of the two years in the period ended December 31, 2021, and the related notes, which report is included in the Form S-4 Registration Statement and the Merger Proxy Statement/Prospectus, was during the periods covered by their report, with respect to SeaStar Medical, independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the knowledge of SeaStar Medical, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act with respect to SeaStar Medical.
Section 5.70. Subsidiaries. SeaStar Medical has no Subsidiaries, except Innovative BioTherapies, Inc., which is dormant. Without limiting the generality of the foregoing, SeaStar Medical does not control, own or possess, directly or indirectly, or have any interest or participation (direct or indirect) in, any other Person.
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Section 5.71. No SeaStar Medical Material Adverse Effect. Except for any actions taken in response to COVID-19 Measures, since December 31, 2021, (a) there has not occurred any SeaStar Medical Material Adverse Effect, or any development that would result in an SeaStar Medical Material Adverse Effect, and (b) SeaStar Medical has conducted its business in the ordinary course of business consistent with past practice in all material respects.
Section 5.72. No Undisclosed Liabilities. There is no liability, debt or obligation against SeaStar Medical, except for liabilities and obligations (i) reflected or reserved for on SeaStar Medicals balance sheet for the period ended December 31, 2021 or disclosed in the notes thereto (other than any such liabilities not reflected, reserved or disclosed as are not and would not be, in the aggregate, material to SeaStar Medical), or (ii) that have arisen since the date of SeaStar Medicals balance sheet for the period ended December 31, 2021 in the ordinary course of business of SeaStar Medical (other than any such liabilities as are not and would not be, in the aggregate, material to SeaStar Medical).
Section 5.73. No Material Defaults. Since December 31, 2021, there has been no existing or continuing default or event of default in respect of any Indebtedness of SeaStar Medical.
Section 5.74. Actions Pending. Since December 31, 2021 there has been no, pending or, to the knowledge of SeaStar Medical, threatened Action by, against or affecting SeaStar Medical or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have a SeaStar Medical Material Adverse Effect. There is no, and since December 31, 2021 there has been no, Governmental Order imposed upon or, to the knowledge of SeaStar Medical, threatened against or affecting SeaStar Medical or any of its properties, rights or assets that would, individually or in the aggregate, reasonably be expected to have a SeaStar Medical Material Adverse Effect. SeaStar Medical is not a party to a settlement, conciliation or similar agreement regarding any of the matters set forth in the two preceding sentences that contains any ongoing obligations, restrictions or liabilities (of any nature) that, individually or in the aggregate, would have a SeaStar Medical Material Adverse Effect.
Section 5.75. Compliance With Laws. The business of SeaStar Medical has been and is presently being conducted in compliance with all applicable U.S. federal, state, local and foreign governmental laws, rules, regulations and ordinances, except for such non-compliance which, individually or in the aggregate, would not have a SeaStar Medical Material Adverse Effect. SeaStar Medical is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation of any Governmental Authority applicable to SeaStar Medical, and SeaStar Medical will not conduct its business in violation of any of the foregoing, except in all cases for any such violations which could not, individually or in the aggregate, have a SeaStar Medical Material Adverse Effect.
Section 5.76. Certain Fees. Except for the fees payable to Maxim Group LLC for acting as the Companys placement agent in connection with the transactions contemplated by the Transaction Documents, no brokerage or finders fees or commissions are or will be payable by SeaStar Medical to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5.15 incurred by SeaStar Medical that may be due or payable in connection with the transactions contemplated by the Transaction Documents.
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Section 5.77. Investment Company Act Status. SeaStar Medical is not an investment company within the meaning of the Investment Company Act of 1940, as amended.
Section 5.78. Taxes. SeaStar Medical has filed all material Tax Returns as required by applicable federal, state and local law. These Tax Returns are true, correct and complete in all material respects. SeaStar Medical has paid all material Taxes, other than Taxes being contested in good faith and for which adequate reserves have been established. SeaStar Medical is not currently engaged in any material audit, administrative or judicial proceeding with respect to Taxes. SeaStar Medical has not received any written notice from a Governmental Authority of a proposed deficiency of any material amount of Taxes. SeaStar Medical has withheld or collected from each payment made to its employees all material Taxes required to be withheld or collected therefrom and has paid the same to the proper tax authority.
Section 5.79. Insurance. SeaStar Medical is insured by insurers against such losses and risks and in such amounts as are prudent and customary in the businesses in which SeaStar Medical is engaged, including, but not limited to, directors and officers insurance coverage.
Section 5.80. Anti-Corruption Laws; Trade Controls. Neither SeaStar Medical nor any of its representatives has in violation of Anti-Corruption Laws offered, provided, promised, or authorized the provision of any contribution, gift, entertainment, expense relating to political activity, or any other money, property, or thing of value, directly or indirectly, to any Government Official to influence official action or to secure an improper advantage, or to encourage the recipient to breach a duty of good faith or loyalty or the policies of his/her employer. Neither SeaStar Medical nor any of its representatives is currently, or has been in the past five years: (i) a Sanctioned Person, (ii) organized, resident or located in a Sanctioned Country, (iii) engaging in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, or (iv) otherwise in violation of Trade Controls or Anti-Corruption Laws. In the past five years, SeaStar Medical has not received from any Governmental Authority or any other Person any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit, in each case concerning any actual or potential violation or wrongdoing related to Trade Controls or Anti-Corruption Laws.
Section 5.81. Acknowledgement Regarding Investors Acquisition of Securities. SeaStar Medical acknowledges and agrees that the Investor is acting solely in the capacity of an arms-length purchaser with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents. SeaStar Medical further acknowledges that the Investor is not acting as a financial advisor or fiduciary of SeaStar Medical (or in any similar capacity) with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and any advice given by the Investor or any of its representatives or agents in connection therewith is merely incidental to the Investors acquisition of the Securities. SeaStar Medical further represents to the Investor that SeaStar Medical decision to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation of the transactions contemplated thereby by SeaStar Medical and its representatives. SeaStar Medical acknowledges and agrees that the Investor has not made and does not make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those specifically set forth in Article IV.
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ARTICLE VI
ADDITIONAL COVENANTS
The Company covenants with the Investor, and the Investor covenants with the Company, as follows, which covenants of one party are for the benefit of the other party, during the Investment Period (and with respect to the Company, for the period following the termination of this Agreement specified in Section 8.3 pursuant to and in accordance with Section 8.3):
Section 6.1. Securities Compliance. After the Closing Date, the Company shall notify the Commission and the Trading Market, if and as applicable, in accordance with their respective rules and regulations, of the transactions contemplated by the Transaction Documents, and shall take all necessary action, undertake all proceedings and obtain all registrations, permits, consents and approvals for the legal and valid issuance of the Securities to the Investor in accordance with the terms of the Transaction Documents, as applicable.
Section 6.2. Reservation of Common Stock. From and after the Closing Date the Company shall have available and the Company shall reserve and keep available at all times, free of preemptive and other similar rights of stockholders, the requisite aggregate number of authorized but unissued shares of Common Stock to enable the Company to timely effect (i) the issuance and delivery of all Commitment Shares to be issued and delivered to the Investor under Section 10.1(ii) hereof within the time period specified in Section 10.1(ii) hereof, and (ii) the issuance, sale and delivery of all Shares to be issued, sold and delivered in respect of each VWAP Purchase effected under this Agreement, in the case of this clause (ii), at least prior to the delivery by the Company to the Investor of the applicable VWAP Purchase Notice in connection with such VWAP Purchase. Without limiting the generality of the foregoing, (a) as of the Trading Day on which the Initial Registration Statement is initially filed by the Company with the Commission (and in no event later than the Filing Deadline with respect to the Initial Registration Statement as set forth in the Registration Rights Agreement), the Company shall have reserved, out of its authorized and unissued Common Stock, a sufficient number of shares of Common Stock solely for the purpose of issuing all of the Commitment Shares under this Agreement to be issued and delivered to the Investor under Section 10.1(ii) hereof within the time period specified in Section 10.1(ii) hereof, and (b) as of the Closing Date the Company shall have reserved, and as of the Commencement Date shall have continued to reserve, out of its authorized and unissued Common Stock, []8 shares of Common Stock solely for the purpose of issuing and selling to the Investor as Shares that the Company may, in its sole discretion, elect to direct the Investor to purchase in VWAP Purchase effected by the Company from time to time from and after the Commencement Date under this Agreement. The number of shares of Common Stock so reserved for the purpose of effecting VWAP Purchases under this Agreement may be increased from time to time by the Company from and after the Commencement Date, and such number of reserved shares may be reduced from and after the Commencement Date only by the number of Shares actually issued, sold and delivered to the Investor pursuant to any VWAP Purchase effected by the Company from and after the Commencement Date pursuant to this Agreement.
8 | To be inserted by amendment to this Agreement at the Closing. |
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Section 6.3. Registration and Listing. During the Investment Period, the Company shall use its commercially reasonable efforts to cause the Common Stock to continue to be registered as a class of securities under Sections 12(b) of the Exchange Act, and to comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the Exchange Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company shall use its commercially reasonable efforts to continue the listing and trading of its Common Stock and the listing of the Securities purchased by the Investor hereunder on the Trading Market and to comply with the Companys reporting, filing and other obligations under the rules and regulations of the Trading Market. The Company shall not take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on the Trading Market. If the Company receives any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market shall be terminated on a date certain, the Company shall promptly (and in any case within 24 hours) notify the Investor of such fact in writing and shall use its commercially reasonable efforts to cause the Common Stock to be listed or quoted on another Eligible Market.
Section 6.4. Compliance with Laws.
(i) During the Investment Period, the Company shall comply with applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, applicable state securities or Blue Sky laws, and applicable listing rules of the Trading Market or Eligible Market, in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement, except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Company to enter into and perform its obligations under this Agreement in any material respect or for Investor to conduct resales of Shares under the Registration Statement in any material respect.
(ii) The Investor shall comply with all laws, rules, regulations and orders applicable to the performance by it of its obligations under this Agreement and its investment in the Shares, except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Investor to enter into and perform its obligations under this Agreement in any material respect. Without limiting the foregoing, the Investor shall comply with all applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, and all applicable state securities or Blue Sky laws, in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement.
Section 6.5. Keeping of Records and Books of Account; Due Diligence.
(i) The Investor and the Company shall each maintain records showing the remaining Total Commitment, the remaining Aggregate Limit and the dates and VWAP Purchase Share Amount for each VWAP Purchase pursuant to this Agreement.
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(ii) Subject to the requirements of Section 6.12, from time to time from and after the Closing Date, the Company shall make available for inspection and review by the Investor during normal business hours and after reasonable notice, customary documentation reasonably requested by the Investor and/or its appointed counsel or advisors to conduct due diligence; provided, however, that after the Closing Date, the Investors continued due diligence shall not be a condition precedent to the Commencement or to the Investors obligation to accept a VWAP Purchase Notice timely delivered by the Company to the Investor in accordance with this Agreement.
Section 6.6. No Frustration; No Variable Rate Transactions.
(i) No Frustration. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation of the Company to deliver (i) the Commitment Shares to the Investor not later than 4:00 p.m. (New York City time) on the Trading Day on which the Initial Registration Statement is initially filed by the Company with the Commission (and in no event later than 4:00 p.m. (New York City time) on the Filing Deadline for the Initial Registration Statement as set forth in the Registration Rights Agreement), and (ii) the Shares to the Investor in respect of a VWAP Purchase not later than the applicable VWAP Purchase Settlement Date for such VWAP Purchase. For the avoidance of doubt, nothing in this Section 6.6(i) shall in any way limit the Companys right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).
(ii) No Variable Rate Transactions. The Company shall not effect or enter into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction, other than in connection with an Exempt Issuance. The Investor shall be entitled to seek injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages, without the necessity of showing economic loss and without any bond or other security being required.
Section 6.7. Corporate Existence. The Company shall take all steps necessary to preserve and continue the corporate existence of the Company; provided, however, that, except as provided in Section 6.8, nothing in this Agreement shall be deemed to prohibit the Company from engaging in any Fundamental Transaction with another Person. For the avoidance of doubt, nothing in this Section 6.7 shall in any way limit the Companys right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).
Section 6.8. Fundamental Transaction. If a VWAP Purchase Notice has been timely and properly delivered to the Investor for a VWAP Purchase under this Agreement, but the payment for, against issuance and delivery as DWAC Shares to the Investor of, all of the Shares constituting the full VWAP Purchase Share Amount purchased by the Investor in such VWAP Purchase has not been fully settled in accordance with this Agreement, including, without limitation, Section 3.2 of this Agreement, the Company shall not effect any Fundamental Transaction until the expiration of three (3) Trading Days following the later of (i) the VWAP
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Purchase Settlement Date for the VWAP Purchase to which such VWAP Purchase Notice relates and (ii) such later Trading Date on which the payment for, against issuance and delivery as DWAC Shares to the Investor of, all of such Shares constituting the entire VWAP Purchase Share Amount purchased by the Investor in such VWAP Purchase shall have been fully settled in accordance with this Agreement, including, without limitation, Section 3.2 of this Agreement.
Section 6.9. Selling Restrictions. The Investor covenants and agrees that commencing upon the execution of this Agreement on the Closing Date and ending on the date of any termination of this Agreement pursuant to Section 8.1 or Section 8.2 (the Restricted Period), neither the Investor nor any of its Affiliates nor any entity managed or controlled by the Investor (collectively, the Restricted Persons and each of the foregoing is referred to herein as a Restricted Person) shall, directly or indirectly, (i) engage in or effect any Short Sales of Common Stock or (ii) execute any stock pledge, forward sales contract, option, put, call, swap or similar hedging arrangement (including on a total return basis), which establishes a net short position with respect to the Common Stock. In addition to the foregoing, in connection with any resale of Securities by the Investor, each of the Restricted Persons shall comply in all respects with all applicable requirements of the Securities Act and the Exchange Act, including, without limitation, Regulation SHO, and all orders of any regulatory authority applicable to any Restricted Person.
Section 6.10. Effective Registration Statement. During the Investment Period, the Company shall use its commercially reasonable efforts to maintain the continuous effectiveness of the Initial Registration Statement and each New Registration Statement filed with the Commission under the Securities Act for the applicable Registration Period pursuant to and in accordance with the Registration Rights Agreement.
Section 6.11. Blue Sky. The Company shall take such action, if any, as is necessary by the Company in order to obtain an exemption for or to qualify the Securities for sale by the Company to the Investor pursuant to the Transaction Documents, and at the request of the Investor, the subsequent resale of Registrable Securities by the Investor, in each case, under applicable state securities or Blue Sky laws and shall provide evidence of any such action so taken to the Investor from time to time following the Closing Date; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.11, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.
Section 6.12. Non-Public Information. Neither the Company or any of its Subsidiaries, nor any of their respective directors, officers, employees or agents shall disclose any material non-public information about the Company to the Investor, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company or any of its Subsidiaries, or any of their respective directors, officers, employees and agents (as determined in the reasonable good faith judgment of the Investor), (i) the Investor shall promptly provide written notice of such breach to the Company and (ii) after such notice has been provided to the Company and, provided that the Company shall have failed to publicly disclose such material, non-public information within 24 hours following demand therefor by the Investor, in addition to any other remedy provided herein
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or in the other Transaction Documents, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Company, any of its Subsidiaries, or any of their respective directors, officers, employees or agents. The Investor shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors, officers, employees, stockholders or agents, for any such disclosure.
Section 6.13. Broker/Dealer. The Investor shall use one or more broker-dealers to effectuate all sales, if any, of the Securities that it may purchase or otherwise acquire from the Company pursuant to the Transaction Documents, as applicable, which shall be unaffiliated with the Investor and not then currently engaged or used by the Company, and shall be a DTC participant (collectively, the Broker-Dealer). The Investor shall, from time to time, provide the Company and its transfer agent with all information regarding the Broker-Dealer reasonably requested by the Company. The Investor shall be solely responsible for all fees and commissions of the Broker-Dealer, which shall not exceed customary brokerage fees and commissions.
Section 6.14. Disclosure Schedule.
(i) The Company may, from time to time, update the Disclosure Schedule as may be required to satisfy the conditions set forth in Section 7.2(i) and Section 7.3(i) (to the extent such condition set forth in Section 7.3(i) relates to the condition in Section 7.2(i) as of a specific VWAP Purchase Condition Satisfaction Time). For purposes of this Section 6.14, any disclosure made in a schedule to the Compliance Certificate shall be deemed to be an update of the Disclosure Schedule. Notwithstanding anything in this Agreement to the contrary, no update to the Disclosure Schedule pursuant to this Section 6.14 shall cure any breach of a representation or warranty of the Company contained in this Agreement and made prior to the update and shall not affect any of the Investors rights or remedies with respect thereto.
(ii) Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosure contained in any Schedule of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Schedule of the Disclosure Schedule as though fully set forth in such Schedule for which applicability of such information and disclosure is readily apparent on its face. The fact that any item of information is disclosed in the Disclosure Schedule shall not be construed to mean that such information is required to be disclosed by this Agreement. Except as expressly set forth in this Agreement, such information and the thresholds (whether based on quantity, qualitative characterization, dollar amounts or otherwise) set forth herein shall not be used as a basis for interpreting the terms material or Material Adverse Effect or other similar terms in this Agreement.
Section 6.15. Delivery of Bring Down Opinions and Compliance Certificates Upon Occurrence of Certain Events. Within three (3) Trading Days immediately following (i) the end of each PEA Period, if the Company is required under the Securities Act to file with the Commission (A) a post-effective amendment to the Initial Registration Statement required to be filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement, (B) a New Registration Statement required to be filed by the Company with the Commission pursuant to Section 2(c) of the Registration Rights Agreement, or (C) a post-effective
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amendment to a New Registration Statement required to be filed by the Company with the Commission pursuant to Section 2(c) of the Registration Rights Agreement, in each case with respect to a fiscal year ending after the Commencement Date, to register the resale of Securities by the Investor under the Securities Act pursuant to this Agreement and the Registration Rights Agreement, and (ii) the date the Company files with the Commission (A) a Prospectus Supplement to the Prospectus contained in the Initial Registration Statement or any New Registration Statement under the Securities Act, (B) an annual report on Form 10-K under the Exchange Act with respect to a fiscal year ending after the Commencement Date, (C) an amendment on Form 10-K/A to an annual report on Form 10-K under the Exchange Act with respect to a fiscal year ending after the Commencement Date, which contains amended material financial information (or a restatement of material financial information) or an amendment to other material information contained in a previously filed Form 10-K, and (D) a Commission Document under the Exchange Act (other than those referred to in clauses (ii)(A) and (ii)(B) of this Section 6.15), which contains amended material financial information (or a restatement of material financial information) or an amendment to other material information contained or incorporated by reference in the Initial Registration Statement, any New Registration Statement, or the Prospectus or any Prospectus Supplement contained in the Initial Registration Statement or any New Registration Statement (it being hereby acknowledged and agreed that the filing by the Company with the Commission of a quarterly report on Form 10-Q that includes only updated financial information as of the end of the Companys most recent fiscal quarter shall not, in and of itself, constitute an amendment or restatement for purposes of clause (ii) of this Section 6.15), in each case of this clause (ii) if the Company is not also then required under the Securities Act to file a post-effective amendment to the Initial Registration Statement, any New Registration Statement or a post-effective amendment to any New Registration Statement, in each case with respect to a fiscal year ending after the Commencement Date, to register the resale of Securities by the Investor under the Securities Act pursuant to this Agreement and the Registration Rights Agreement, and in any case of this clause (ii), not more than once per calendar quarter, the Company shall (I) deliver to the Investor a Compliance Certificate, dated such date, and (II) cause to be furnished to the Investor an opinion and negative assurances bring down from outside counsel to the Company substantially in the form mutually agreed to by the Company and the Investor prior to the Closing, modified, as necessary, to relate to such Registration Statement or post-effective amendment, or the Prospectus contained therein as then amended or supplemented by such Prospectus Supplement, as applicable (each such opinion, a Bring Down Opinion).
ARTICLE VII
CONDITIONS TO CLOSING, COMMENCEMENT AND VWAP PURCHASES
Section 7.1. Conditions Precedent to Closing. The Closing is subject to the satisfaction of each of the conditions set forth in this Section 7.1 on the Closing Date.
(i) Business Combination Closing. The Business Combination Closing shall have occurred at least two (2) Trading Days prior to the Closing Date, and as of the Closing Date, SeaStar Medical is a wholly owned Subsidiary of the Company (formerly LMFAO).
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(ii) Accuracy of the Investors Representations and Warranties. The representations and warranties of the Investor contained in this Agreement (a) that are not qualified by materiality shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by materiality shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(iii) Accuracy of the Companys Representations and Warranties. The representations and warranties of the Company contained in this Agreement (a) that are not qualified by materiality or Material Adverse Effect shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by materiality or Material Adverse Effect shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(iv) Payment of Investor Expense Reimbursement and Issuance of Commitment Shares or Payment of Commitment Fee. Prior to the Closing, SeaStar Medical (prior to the Business Combination Closing) or the Company (after the Business Combination Closing) shall have paid by wire transfer of immediately available funds to an account designated by the Investor, the Investor Expense Reimbursement in accordance with Section 10.1(i), all of which Investor Expense Reimbursement shall be fully earned as of date of this Agreement, regardless of whether the Business Combination Closing shall occur or whether the Closing or the Commencement shall occur, or any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. On the Closing Date, the Company shall deliver irrevocable instructions to its transfer agent to issue to the Investor, not later than 4:00 p.m. (New York City time) on the Trading Day immediately following the Closing Date, a certificate or book-entry statement representing the Commitment Shares in the name of the Investor or its designee (in which case such designee name shall have been provided to the Company not later than two (2) Trading Days prior to the Closing Date), in consideration for the Investors execution and delivery of this Agreement. Such certificate or book-entry statement shall be delivered to the Investor by overnight courier at its address set forth in Section 10.4 hereof. For the avoidance of doubt, the entire Commitment Fee shall be fully earned by the Investor as of the date of this Agreement, which Commitment Fee (i) shall be paid to the Investor in cash pursuant to and in accordance with Section 10.1(ii) if this Agreement is terminated by any party hereto under Section 8.2 at any time prior to the Closing under this Agreement, provided the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, or (ii) shall be paid to the Investor as Commitment Shares, provided the Closing shall have occurred on the Closing Date, at such time and otherwise in accordance with Section 10.1(ii) of this Agreement, in either case of clause (i) and (ii) regardless of whether the Commencement shall occur, or any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement (it being hereby acknowledged and agreed that in the event of any purported termination of this Agreement by any of the parties hereto under Section 8.2 after the date of this Agreement but prior to the Closing under this Agreement, the entire Commitment Fee shall become immediately due and payable by the Company to the Investor, provided that the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, which Commitment Fee shall be paid by wire transfer of immediately available funds to an account designated by the Investor to the Company, not later than one (1) Trading Day after the Business Combination Closing has occurred, and no such termination of this Agreement shall become effective unless and until the entire Commitment Fee has been paid by the Company to the Investor pursuant to and in accordance with this Agreement).
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(v) Closing Deliverables. At the Closing, counterpart signature pages of this Agreement and the Registration Rights Agreement executed by each of the parties hereto shall be delivered as provided in Section 2.2. Simultaneously with the execution and delivery of this Agreement and the Registration Rights Agreement, the Investors counsel shall have received (a) the opinions of outside counsel to the Company, dated the Closing Date, in the forms mutually agreed to by the Company and the Investor prior to the Closing, and (b) the closing certificate from the Company, dated the Closing Date, in the form of Exhibit B hereto.
Section 7.2. Conditions Precedent to Commencement. The right of the Company to commence delivering VWAP Purchase Notices under this Agreement, and the obligation of the Investor to accept VWAP Purchase Notices delivered to the Investor by the Company under this Agreement, are subject to the initial satisfaction, at Commencement, of each of the conditions set forth in this Section 7.2.
(i) Accuracy of the Companys Representations and Warranties. The representations and warranties of the Company contained in this Agreement (a) that are not qualified by materiality or Material Adverse Effect shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by materiality or Material Adverse Effect shall have been true and correct when made and shall be true and correct as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(ii) Performance of the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company at or prior to the Commencement. The Company shall deliver to the Investor on the Commencement Date the compliance certificate substantially in the form attached hereto as Exhibit C (the Compliance Certificate).
(iii) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein required to be filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement shall have been declared effective under the Securities Act by the Commission, and the Investor shall be permitted to utilize the Prospectus therein to resell (a) all of the Commitment Shares and (b) all of the Shares included in such Prospectus.
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(iv) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other federal or state governmental authority for any additional information relating to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Initial Registration Statement or prohibiting or suspending the use of the Prospectus contained therein or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; or (c) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or a supplement to the Prospectus contained therein or any Prospectus Supplement thereto to comply with the Securities Act or any other law. The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or the prohibition or suspension of the use of the Prospectus contained therein or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.
(v) Other Commission Filings. The Current Report and the Form D shall have been filed with the Commission as required pursuant to Section 2.3. The final Prospectus included in the Initial Registration Statement shall have been filed with the Commission prior to Commencement in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, prior to Commencement shall have been filed with the Commission.
(vi) No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended by the Commission, the Trading Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Commencement Date), the Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market shall be terminated on a date certain (unless, prior to such date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).
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(vii) Compliance with Laws. The Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations and ordinances in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the Company shall have obtained all permits and qualifications required by any applicable state securities or Blue Sky laws for the offer and sale of the Securities by the Company to the Investor and the subsequent resale of the Registrable Securities by the Investor (or shall have the availability of exemptions therefrom).
(viii) No Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents.
(ix) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or governmental authority shall have been commenced, and no inquiry or investigation by any governmental authority shall have been commenced, against the Company or any Subsidiary, or any of the officers, directors or affiliates of the Company or any Subsidiary, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents, or seeking material damages in connection with such transactions.
(x) Listing of Securities. All of the Securities that have been and may be issued pursuant to this Agreement shall have been approved for listing or quotation on the Trading Market (or on an Eligible Market) as of the Commencement Date, subject only to notice of issuance.
(xi) No Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall have occurred and be continuing.
(xii) No Bankruptcy Proceedings. No Person shall have commenced a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law. The Company shall not have, pursuant to or within the meaning of any Bankruptcy Law, (a) commenced a voluntary case, (b) consented to the entry of an order for relief against it in an involuntary case, (c) consented to the appointment of a Custodian of the Company or for all or substantially all of its property, or (d) made a general assignment for the benefit of its creditors. A court of competent jurisdiction shall not have entered an order or decree under any Bankruptcy Law that (I) is for relief against the Company in an involuntary case, (II) appoints a Custodian of the Company or for all or substantially all of its property, or (III) orders the liquidation of the Company or any of its Subsidiaries.
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(xiii) Commitment Shares Issued. The Company shall have caused its transfer agent to issue and deliver to the Investor, not later than 4:00 p.m. (New York City time) on the Trading Day on which the Initial Registration Statement is initially filed by the Company with the Commission, and in no event later than 4:00 p.m. (New York City time) on the Filing Deadline for the Initial Registration Statement as set forth in the Registration Rights Agreement, one or more certificate(s) or book-entry statement(s) representing the Commitment Shares in the name of the Investor or its designee (in which case such designee name shall have been provided to the Company prior to the date of issuance of such Commitment Shares). Such certificate or book-entry statement shall be delivered to the Investor by email or overnight courier at its address set forth in Section 10.4. On or prior to the Commencement Date, the Company shall have caused its transfer agent to credit the Investors or its designees account at DTC as DWAC Shares, in accordance with Section 10.1(iv), such number of shares of Common Stock equal to the number of Commitment Shares previously issued to the Investor in certificated or book-entry form pursuant to Section 10.1(ii) hereof.
(xiv) Delivery of Commencement Irrevocable Transfer Agent Instructions and Notice of Effectiveness. The Commencement Irrevocable Transfer Agent Instructions shall have been executed by the Company and delivered to acknowledged in writing by the Companys transfer agent, and the Notice of Effectiveness relating to the Initial Registration Statement shall have been executed by the Companys outside counsel and delivered to the Companys transfer agent, in each case directing the Companys transfer agent to issue to the Investor or its designated Broker-Dealer all of the Commitment Shares and Shares included in the Initial Registration Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement.
(xv) Reservation of Shares. As of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, []9 shares of Common Stock solely for the purpose of effecting VWAP Purchases under this Agreement.
(xvi) Opinions and Bring-Down Opinions of Company Counsel. On the Commencement Date, the Investor shall have received the opinions, bring-down opinions and negative assurances from outside counsel to the Company, dated the Commencement Date, in the forms mutually agreed to by the Company and the Investor prior to the Closing.
Section 7.3. Conditions Precedent to VWAP Purchases after Commencement Date. The right of the Company to deliver a VWAP Purchase Notice under this Agreement after the Commencement Date, and the obligation of the Investor to accept a VWAP Purchase Notice delivered to the Investor by the Company under this Agreement after the Commencement Date, are subject to the satisfaction of each of the conditions set forth in this Section 7.3 at the applicable VWAP Purchase Condition Satisfaction Time for the VWAP Purchase to be effected by such VWAP Purchase Notice.
(i) Satisfaction of Certain Prior Conditions. Each of the conditions set forth in subsections (i), (ii), and (vii) through (xiii) set forth in Section 7.2 shall be satisfied at each VWAP Purchase Condition Satisfaction Time after the Commencement Date (with the terms Commencement and Commencement Date in the conditions set forth in subsections (i) and (ii) of Section 7.2 replaced with applicable VWAP Purchase Condition Satisfaction Time); provided, however, that the Company shall not be required to deliver the Compliance Certificate after the Commencement Date, except as provided in Section 6.15 and Section 7.3(x).
9 | To be inserted by amendment to this Agreement signed at the Closing. |
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(ii) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement, and any post-effective amendment thereto required to be filed by the Company with the Commission after the Commencement Date and prior to the applicable VWAP Purchase Condition Satisfaction Time pursuant to the Registration Rights Agreement, in each case shall have been declared effective under the Securities Act by the Commission and shall remain effective for the applicable Registration Period (as defined in the Registration Rights Agreement), and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Commitment Shares, (b) all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices delivered by the Company to the Investor prior to the delivery of the applicable VWAP Purchase Notice on the applicable VWAP Purchase Exercise Date, and (c) all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice delivered by the Company to the Investor for a VWAP Purchase in accordance with this Agreement.
(iii) Any Required New Registration Statement Effective. Any New Registration Statement covering the resale by the Investor of the Registrable Securities included therein, and any post-effective amendment thereto, required to be filed by the Company with the Commission pursuant to the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Condition Satisfaction Time, in each case shall have been declared effective under the Securities Act by the Commission and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Commitment Shares (if any) included in such New Registration Statement, and any post-effective amendment thereto, (b) all of the Shares included in such New Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices delivered by the Company to the Investor prior to the delivery of the applicable VWAP Purchase Notice on the applicable VWAP Purchase Exercise Date, and (c) all of the Shares included in such new Registration Statement, and any post-effective amendment thereto, that are issuable pursuant the applicable VWAP Purchase Notice delivered by the Company to the Investor for a VWAP Purchase in accordance with this Agreement.
(iv) Delivery of Subsequent Irrevocable Transfer Agent Instructions and Notice of Effectiveness. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall have delivered or caused to be delivered to its transfer agent (a) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by the Companys transfer agent and (b) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement.
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(v) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other federal or state governmental authority for any additional information relating to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or prohibiting or suspending the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; or (c) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto to comply with the Securities Act or any other law (other than the transactions contemplated by the applicable VWAP Purchase Notice delivered by the Company to the Investor with respect to a VWAP Purchase to be effected hereunder). The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the prohibition or suspension of the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.
(vi) Other Commission Filings. The final Prospectus included in any post-effective amendment to the Initial Registration Statement, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Condition Satisfaction Time shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. The final Prospectus included in any New
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Registration Statement and in any post-effective amendment thereto, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Condition Satisfaction Time shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, after the Commencement Date and prior to the applicable VWAP Purchase Condition Satisfaction Time shall have been filed with the Commission and, if any Registrable Securities are covered by a Registration Statement on Form S-3, such filings shall have been made within the applicable time period prescribed for such filing under the Exchange Act.
(vii) No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended by the Commission, the Trading Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the applicable VWAP Purchase Condition Satisfaction Time), the Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market shall be terminated on a date certain (unless, prior to such date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).
(viii) Certain Limitations. The issuance and sale of the Shares issuable pursuant to the applicable VWAP Purchase Notice shall not (a) exceed the applicable VWAP Purchase Maximum Amount, (b) cause the Aggregate Limit or the Beneficial Ownership Limitation to be exceeded, or (c) cause the Exchange Cap (to the extent applicable under Section 3.3) to be exceeded, unless in the case of this clause (c), the Companys stockholders have theretofore approved the issuance of Common Stock under this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Trading Market.
(ix) Shares Authorized and Delivered. All of the Shares issuable pursuant to the applicable VWAP Purchase Notice shall have been duly authorized by all necessary corporate action of the Company. The Company shall have delivered to the Investor (or its designated Broker-Dealer), and the Investor (or its designated Broker-Dealer) shall have received, all Shares relating to all prior VWAP Purchase Notices as DWAC Shares.
(x) Opinions and Bring-Down Opinions of Company Counsel. The Investor shall have received (a) all Bring Down Opinions from the Companys outside counsel for which the Company was obligated to instruct its outside counsel to deliver to the Investor prior to the applicable VWAP Purchase Condition Satisfaction Time and (b) all Compliance Certificates from the Company that the Company was obligated to deliver to the Investor prior to the applicable VWAP Purchase Condition Satisfaction Time in accordance with Section 6.15.
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ARTICLE VIII
TERMINATION
Section 8.1. Automatic Termination. Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest to occur of (i) the first day of the month next following the 24-month anniversary of the Closing Date, (ii) the date on which the Investor shall have purchased the Total Commitment worth of Shares pursuant to this Agreement, (iii) the date on which the Common Stock shall have failed to be listed or quoted on the Trading Market or any Eligible Market, (iv) the thirtieth (30th) Trading Day next following the date on which, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30th) Trading Day, and (v) the date on which, pursuant to or within the meaning of any Bankruptcy Law, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.
Section 8.2. Other Termination. Subject to Section 8.3, any of LMFAO or SeaStar Medical, prior to the Business Combination Closing, or the Company, from and after the Business Combination Closing, may terminate this Agreement effective upon five (5) Trading Days prior written notice to the Investor in accordance with Section 10.4; provided, however, that (i) if this Agreement is terminated by any of LMFAO, SeaStar Medical or the Company at any time after the date of this Agreement, SeaStar Medical (if this Agreement is terminated prior to the Business Combination Closing pursuant to the Business Combination Agreement) or the Company (if this Agreement is terminated at any time after the Business Combination Closing pursuant to the Business Combination Agreement) shall have paid the Investor Expense Reimbursement required to be paid to the Investor pursuant to Section 10.1(i) of this Agreement, in each case prior to such termination, (ii) if this Agreement is terminated by LMAO, SeaStar Medical or the Company at any time after the date of this Agreement, but prior to the Closing under this Agreement, and if the Business Combination Closing occurs pursuant to the Business Combination Agreement at any time either before or after such termination, the Company shall have paid to the Investor the Commitment Fee required to be paid to the Investor pursuant to Section 10.1(ii) of this Agreement not later than one (1) Trading Day immediately following the Business Combination Closing, (iii) if this Agreement is terminated by the Company at any time after the Closing on the Closing Date under this Agreement, the Company shall have issued all Commitment Shares to the Investor pursuant to Section 10.1(ii) of this Agreement, prior to such termination, and (iv) prior to issuing any press release, or making any public statement or announcement, with respect to such termination, LMFAO and SeaStar Medical, prior to the Business Combination Closing, and the Company, from and after the Business Combination Closing, shall consult with the Investor and its counsel on the form and substance of such press release or other disclosure. Subject to Section 8.3, this Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent. Subject to Section 8.3, the Investor shall have the right to terminate this Agreement effective upon five (5) Trading Days prior written notice to the Company in accordance with Section 10.4, if: (a) any condition, occurrence, state of facts or event constituting a Material Adverse Effect has occurred
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and is continuing; (b) a Fundamental Transaction shall have occurred; (c) the Initial Registration Statement and any New Registration Statement is not filed by the applicable Filing Deadline therefor or declared effective by the Commission by the applicable Effectiveness Deadline therefor, or the Company is otherwise in breach or default in any material respect under any of the other provisions of the Registration Rights Agreement, and, if such failure, breach or default is capable of being cured, such failure, breach or default is not cured within 10 Trading Days after notice of such failure, breach or default is delivered to the Company pursuant to Section 10.4; (d) while a Registration Statement, or any post-effective amendment thereto, is required to be maintained effective pursuant to the terms of the Registration Rights Agreement and the Investor holds any Registrable Securities, the effectiveness of such Registration Statement, or any post-effective amendment thereto, lapses for any reason (including, without limitation, the issuance of a stop order by the Commission) or such Registration Statement or any post-effective amendment thereto, the Prospectus contained therein or any Prospectus Supplement thereto otherwise becomes unavailable to the Investor for the resale of all of the Registrable Securities included therein in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of 20 consecutive Trading Days or for more than an aggregate of 60 Trading Days in any 365-day period, other than due to acts of the Investor; (e) trading in the Common Stock on the Trading Market (or if the Common Stock is then listed on an Eligible Market, trading in the Common Stock on such Eligible Market) shall have been suspended and such suspension continues for a period of three (3) consecutive Trading Days; (f) the Company is in material breach or default of this Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within 10 Trading Days after notice of such breach or default is delivered to the Company pursuant to Section 10.4; or (g) the Business Combination Closing Date shall not have occurred prior to December 1, 2022. Unless notification thereof is required elsewhere in this Agreement (in which case such notification shall be provided in accordance with such other provision), the Company shall promptly (but in no event later than 24 hours) notify the Investor (and, if required under applicable law, including, without limitation, Regulation FD promulgated by the Commission, or under the applicable rules and regulations of the Trading Market, the Company shall publicly disclose such information in accordance with Regulation FD and the applicable rules and regulations of the Trading Market) upon becoming aware of any of the events set forth in the immediately preceding sentence.
Section 8.3. Effect of Termination. In the event of termination by LMFAO, SeaStar Medical, the Company or the Investor (other than by mutual termination) pursuant to Section 8.2, written notice thereof shall forthwith be given to the other parties as provided in Section 10.4 and the transactions contemplated by this Agreement shall be terminated without further action by any party. If this Agreement is terminated as provided in Section 8.1 or Section 8.2, this Agreement shall become void and of no further force and effect, except that (i) provisions of Subsection II of Article V of this Agreement (LMFAO Representations and Warranties) and Subsection III of Article V of this Agreement (SeaStar Medical Representations and Warranties) shall survive the execution and delivery of this Agreement until the Business Combination Closing, at which time such representations and warranties shall have no further force or effect and shall be superseded in their entirety by the representations, warranties and covenants of the Company set forth in Subsection I of Article V (Representations, Warranties and Covenants of the Company), (ii) the provisions of Subsection I of Article V (Representations, Warranties and Covenants of the Company), Article IX (Indemnification), Article X (Miscellaneous) and this Article VIII (Termination) shall remain in full force and effect indefinitely notwithstanding such termination,
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and, (iii) so long as the Investor owns any Securities, the covenants and agreements of the Company contained in Article VI (Additional Covenants) shall remain in full force and notwithstanding such termination for a period of six (6) months following such termination. Notwithstanding anything in this Agreement to the contrary, no termination of this Agreement by any party shall (i) become effective prior to the first Trading Day immediately following the applicable VWAP Purchase Settlement Date related to any pending VWAP Purchase Notice that has not been fully settled in accordance with the terms and conditions of this Agreement (it being hereby acknowledged and agreed that no termination of this Agreement shall limit, alter, modify, change or otherwise affect any of the Companys or the Investors rights or obligations under the Transaction Documents with respect to any pending VWAP Purchase, and that the parties shall fully perform their respective obligations with respect to any such pending VWAP Purchase under the Transaction Documents), (ii) limit, alter, modify, change or otherwise affect the Companys or the Investors rights or obligations under the Registration Rights Agreement, all of which shall survive any such termination, (iii) affect the Investor Expense Reimbursement payable to the Investor, all of which fees and expenses shall be fully earned and non-refundable as of the date of this Agreement pursuant to Section 10.1(i), regardless of whether the Business Combination Closing shall occur, or whether the Closing or the Commencement shall occur or whether any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement, or (iv) affect the Commitment Fee payable to the Investor, or any rights of the Investor thereto, it being hereby acknowledged and agreed that the entire Commitment Fee shall be fully earned by the Investor as of the date of this Agreement, which Commitment Fee (i) shall be paid to the Investor in cash pursuant to and in accordance with Section 10.1(ii) if this Agreement is terminated by any party hereto under Section 8.2 at any time prior to the Closing under this Agreement, provided the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, or (ii) shall be paid to the Investor as Commitment Shares, provided the Closing shall have occurred on the Closing Date, at such time and otherwise in accordance with Section 10.1(ii) of this Agreement, in either case of clause (i) and (ii) regardless of whether the Commencement shall occur, or any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement (it being hereby further acknowledged and agreed that in the event of any purported termination of this Agreement by any of the parties hereto under Section 8.2 after the date of this Agreement but prior to the Closing under this Agreement, the entire Commitment Fee shall become immediately due and payable by the Company to the Investor, provided that the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, which Commitment Fee shall be paid by wire transfer of immediately available funds to an account designated by the Investor to the Company, not later than one (1) Trading Day after the Business Combination Closing has occurred, and no such termination of this Agreement shall become effective unless and until the entire Commitment Fee has been paid by the Company to the Investor pursuant to and in accordance with this Agreement). Nothing in this Section 8.3 shall be deemed to release LMFAO, SeaStar Medical, the Company or the Investor from any liability for any breach or default under this Agreement or any of the other Transaction Documents to which it is a party, or to impair the rights of LMFAO, SeaStar Medical, the Company and the Investor to compel specific performance by the other parties of their respective obligations under the Transaction Documents to which they are a party.
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ARTICLE IX
INDEMNIFICATION
Section 9.1. Indemnification of Investor. In consideration of the Investors execution and delivery of this Agreement and acquiring the Securities hereunder and in addition to all of the Companys other obligations under the Transaction Documents to which it is a party, subject to the provisions of this Section 9.1, LMFAO and SeaStar Medical, severally and not jointly, prior to the Business Combination Closing, and the Company, from and after the Business Combination Closing, shall indemnify and hold harmless the Investor, each of its directors, officers, shareholders, members, partners, employees, representatives, agents and advisors (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title), each Person, if any, who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act), and the respective directors, officers, shareholders, members, partners, employees, representatives, agents and advisors (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an Investor Party), from and against all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses (including all judgments, amounts paid in settlement, court costs, reasonable attorneys fees and costs of defense and investigation) (collectively, Damages) that any Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company or by LMFAO or SeaStar Medical in this Agreement in this Agreement, the Registration Rights Agreement or in the other Transaction Documents to which it is a party or (b) any action, suit, claim or proceeding (including for these purposes a derivative action brought on behalf of the Company, LMFAO or SeaStar Medical) instituted against such Investor Party arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents, other than claims for indemnification within the scope of Section 6 of the Registration Rights Agreement; provided, however, that (x) the foregoing indemnity shall not apply to any Damages to the extent, but only to the extent, that such Damages resulted directly and primarily from a breach of any of the Investors representations, warranties, covenants or agreements contained in this Agreement or the Registration Rights Agreement, and (y) LMFAO, SeaStar Medical and the Company shall not be liable under subsection (b) of this Section 9.1 to the extent, but only to the extent, that a court of competent jurisdiction shall have determined by a final judgment (from which no further appeals are available) that such Damages resulted directly and primarily from any acts or failures to act, undertaken or omitted to be taken by such Investor Party through its fraud, bad faith, gross negligence, or willful or reckless misconduct.
Prior to the Business Combination Closing, LMFAO and SeaStar Medical, severally and not jointly, and from and after the Business Combination Closing, the Company shall reimburse any Investor Party promptly upon demand (with accompanying presentation of documentary evidence) for all legal and other costs and expenses reasonably incurred by such Investor Party in connection with (i) any action, suit, claim or proceeding, whether at law or in equity, to enforce compliance by the Company with any provision of the Transaction Documents or (ii) any other any action, suit, claim or proceeding, whether at law or in equity, with respect to which it is entitled to indemnification under this Section 9.1; provided that the Investor shall promptly reimburse the Company for all such legal and other costs and expenses to the extent a court of competent jurisdiction determines that any Investor Party was not entitled to such reimbursement.
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An Investor Partys right to indemnification or other remedies based upon the representations, warranties, covenants and agreements of LMFAO, SeaStar Medical or the Company set forth in the Transaction Documents shall not in any way be affected by any investigation or knowledge of such Investor Party. Such representations, warranties, covenants and agreements shall not be affected or deemed waived by reason of the fact that an Investor Party knew or should have known that any representation or warranty might be inaccurate or that LMFAO, SeaStar Medical or the Company failed to comply with any agreement or covenant. Any investigation by such Investor Party shall be for its own protection only and shall not affect or impair any right or remedy hereunder.
To the extent that the foregoing undertakings by LMFAO, SeaStar Medical and the Company set forth in this Section 9.1 may be unenforceable for any reason, LMFAO, SeaStar Medical and the Company shall make the maximum contribution to the payment and satisfaction of each of the Damages which is permissible under applicable law.
Section 9.2. Indemnification Procedures. Promptly after an Investor Party receives notice of a claim or the commencement of an action for which the Investor Party intends to seek indemnification under Section 9.1, the Investor Party will notify the Company (or, with respect to claims relating to any period prior to the Business Combination Closing, SWVL and Holdings) (such party, the Indemnifying Party) in writing of the claim or commencement of the action, suit or proceeding; provided, however, that failure to notify the Indemnifying Party will not relieve such party from liability under Section 9.1, except to the extent it has been materially prejudiced by the failure to give notice. The Indemnifying Party will be entitled to participate in the defense of any claim, action, suit or proceeding as to which indemnification is being sought, and if the Indemnifying Party acknowledges in writing the obligation to indemnify the Investor Party against whom the claim or action is brought, the Indemnifying Party may (but will not be required to) assume the defense against the claim, action, suit or proceeding with counsel satisfactory to it. After the Indemnifying Party notifies the Investor Party that the Indemnifying Party wishes to assume the defense of a claim, action, suit or proceeding, the Indemnifying Party will not be liable for any further legal or other expenses incurred by the Investor Party in connection with the defense against the claim, action, suit or proceeding except if, in the opinion of counsel to the Investor Party, it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Indemnifying Party and such Investor Party. In such event, the Indemnifying Party will pay the reasonable fees and expenses of no more than one separate counsel for all such Investor Parties promptly as such fees and expenses are incurred. Each Investor Party, as a condition to receiving indemnification as provided in Section 9.1, will cooperate in all reasonable respects with the Indemnifying Party in the defense of any action or claim as to which indemnification is sought. The Indemnifying Party will not be liable for any settlement of any action effected without its prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. The Indemnifying Party will not, without the prior written consent of the Investor Party, effect any settlement of a pending or threatened action with respect to which an Investor Party is, or is informed that it may be, made a party and for which it would be entitled to indemnification, unless the settlement includes an unconditional release of the Investor Party from all liability and claims which are the subject matter of the pending or threatened action.
The remedies provided for in this Article IX are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Investor Party at law or in equity.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Certain Fees and Expenses; Commitment Fee/Shares; Commencement Irrevocable Transfer Agent Instructions.
(i) Certain Fees and Expenses. Each party shall bear its own fees and expenses related to the transactions contemplated by this Agreement; provided, however, that SeaStar Medical (if prior to the Business Combination Closing) or the Company (if after the Business Combination Closing) has paid prior to the Closing, by wire transfer of immediately available funds to an account designated by the Investor, $75,000 as reimbursement for the Investors reasonable out-of-pocket expenses (including the Investors legal fees and expenses), in connection with the transaction contemplated by the Transaction Documents (the Investor Expense Reimbursement). For the avoidance of doubt, the Investor Expense Reimbursement shall be fully earned and non-refundable as of the date of this Agreement, regardless of whether the Business Combination Closing shall occur pursuant to the Business Combination Agreement, or whether the Closing or the Commencement shall occur pursuant to this Agreement or whether any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. The Company shall pay all U.S. federal, state and local stamp and other similar transfer and other Taxes and duties levied in connection with issuance of the Securities pursuant hereto.
(ii) Commitment Fee; Commitment Shares. In consideration for the Investors execution and delivery of this Agreement, after the Closing on the Closing Date the Company shall deliver irrevocable instructions to its transfer agent to issue and deliver to the Investor, not later than 4:00 p.m. (New York City time) on the Trading Day on which the Initial Registration Statement is initially filed by the Company with the Commission, and in no event later than 4:00 p.m. (New York City time) on the Filing Deadline for the Initial Registration Statement as set forth in the Registration Rights Agreement, one or more certificate(s) or book-entry statement(s) representing the Commitment Shares in the name of the Investor or its designee (in which case such designee name shall have been provided to the Company prior to the date of issuance of such Commitment Shares). Such certificate or book-entry statement shall be delivered to the Investor by overnight courier at its address set forth in Section 10.4. Upon issuance, the Commitment Shares shall constitute restricted securities as such term is defined in Rule 144(a)(3) under the Securities Act and, subject to the provisions of subsection (iv) of this Section 10.1, the certificate or book-entry statement representing the Commitment Shares shall bear the restrictive legend set forth below in subsection (iii) of this Section 10.1. The Commitment Shares shall constitute Registrable Securities and shall be included in the Initial Registration Statement and any post-effective amendment thereto, and the Prospectus included therein and, if necessary to register the resale thereof by the Investor under the Securities Act, in any New Registration Statement and any post-effective amendment thereto, in each case in accordance with this Agreement and the Registration Rights Agreement. For the avoidance of doubt, the entire Commitment Fee shall be fully earned by the Investor as of the date of this Agreement, which Commitment Fee (i) shall be paid to the Investor in cash pursuant to and in accordance with this Section 10.1(ii) if this Agreement is terminated by any party hereto under Section 8.2 at any time prior to the Closing under this Agreement, provided the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, or (ii)
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shall be paid to the Investor as Commitment Shares, provided the Closing shall have occurred on the Closing Date, at such time and otherwise in accordance with this Section 10.1(ii) of this Agreement, in either case of clause (i) and (ii) regardless of whether the Commencement shall occur, or any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement (it being hereby further acknowledged and agreed that in the event of any purported termination of this Agreement by any of the parties hereto under Section 8.2 after the date of this Agreement but prior to the Closing under this Agreement, the entire Commitment Fee shall become immediately due and payable by the Company to the Investor, provided that the Business Combination Closing occurs pursuant to the Business Combination Agreement either before or after such termination, which Commitment Fee shall be paid by wire transfer of immediately available funds to an account designated by the Investor to the Company, not later than one (1) Trading Day after the Business Combination Closing has occurred, and no such termination of this Agreement shall become effective unless and until the entire Commitment Fee has been paid by the Company to the Investor pursuant to and in accordance with this Agreement), and upon the issuance of the Commitment Shares to the Investor pursuant to and in accordance with this Agreement, the obligation of the Company to pay the cash Commitment Fee to the Investor under this Agreement shall terminate.
(iii) Legends. The certificate(s) or book-entry statement(s) representing the Commitment Shares issued prior to the Effective Date of the Initial Registration Statement, except as set forth below, shall bear a restrictive legend in substantially the following form (and stop transfer instructions may be placed against transfer of the Commitment Shares):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
Notwithstanding the foregoing and for the avoidance of doubt, all Shares to be issued in respect of any VWAP Purchase Notice delivered to the Investor pursuant to this Agreement shall be issued to the Investor in accordance with Section 3.2 by crediting the Investors or its designees account at DTC as DWAC Shares, and the Company shall not take any action or give instructions to any transfer agent of the Company otherwise.
(iv) Irrevocable Transfer Agent Instructions; Notice of Effectiveness. On the earlier of (a) the Commencement Date and (b) such time that the Investor shall request, provided all conditions of Rule 144 are met, the Company shall, no later than one (1) Trading Day following the delivery by the Investor to the Company or its transfer agent of one or more legended certificates or book-entry statements representing the Commitment Shares issued to the Investor
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pursuant to Section 10.1(ii) (which certificates or book-entry statements the Investor shall promptly deliver on or prior to the first to occur of the events described in clauses (a) and (b) of this sentence), cause the Companys transfer agent to credit the Investors or its designees account at DTC as DWAC Shares such number of shares of Common Stock equal to the number of Commitment Shares issued to the Investor pursuant to Section 10.1(ii). The Company shall take all actions to carry out the intent and accomplish the purposes of the immediately preceding sentence, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to its transfer agent, and any successor transfer agent of the Company, as may be requested from time to time by the Investor or necessary or desirable to carry out the intent and accomplish the purposes of the immediately preceding sentence. On the Effective Date of the Initial Registration Statement and prior to Commencement, the Company shall deliver or cause to be delivered to its transfer agent (and thereafter, shall deliver or cause to be delivered to any subsequent transfer agent of the Company), (i) irrevocable instructions executed by the Company and acknowledged in writing by the Companys transfer agent (the Commencement Irrevocable Transfer Agent Instructions) and (ii) the notice of effectiveness in the form attached as an exhibit to the Registration Rights Agreement (the Notice of Effectiveness) relating to the Initial Registration Statement executed by the Companys outside counsel, in each case directing the Companys transfer agent to issue to the Investor or its designee all of the Commitment Shares and the Shares included in the Initial Registration Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall deliver or cause to be delivered to its transfer agent (and thereafter, shall deliver or cause to be delivered to any subsequent transfer agent of the Company) (i) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by the Companys transfer agent and (ii) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement. For the avoidance of doubt, all Shares and Commitment Shares to be issued from and after Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued to the Investor or its designee only as DWAC Shares. The Company represents and warrants to the Investor that, while this Agreement is effective, no instruction other than those referred to in this Section 10.1(iv) will be given by the Company to its transfer agent, or any successor transfer agent of the Company, with respect to the Shares and the Commitment Shares from and after Commencement, and the Shares and the Commitment Shares (as applicable) covered by the Initial Registration Statement or any post-effective amendment thereof, or any New Registration Statement or post-effective amendment thereof, as applicable, shall otherwise be freely transferable on the books and records of the Company and no stop transfer instructions shall be maintained against the transfer thereof. The Company agrees that if the Company fails to fully comply with the provisions of this Section 10.1(iv) within three (3) Trading Days after the date on which the Investor has provided the deliverables referred to above that the Investor is required to provide to the Company or its transfer agent, the Company shall, at the Investors written instruction, purchase from the Investor all shares of Common Stock purchased or acquired by the Investor pursuant to this Agreement that contain the restrictive legend referred to in Section 10.1(iii) hereof (or any similar restrictive legend) at the greater of (i) the purchase price paid for such shares of Common Stock (as applicable) and (ii) the Closing Sale Price of the Common Stock on the date of the Investors written instruction.
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Section 10.2. Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial.
(i) Each of the parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.
(ii) Each of the parties hereto (a) hereby irrevocably submits to the jurisdiction of the U.S. District Court and other courts of the United States sitting in the State of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and (b) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the parties hereto consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 10.2 shall affect or limit any right to serve process in any other manner permitted by law.
(iii) EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2.
Section 10.3. Entire Agreement. The Transaction Documents set forth the entire agreement and understanding of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to subject matter hereof not expressly set forth in the Transaction Documents. The Disclosure Schedule and all exhibits to this Agreement are hereby incorporated by reference in, and made a part of, this Agreement as if set forth in full herein.
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Section 10.4. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or electronic mail delivery at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The address for such communications shall be:
If to LMFAO pre-Business Combination Closing:
LMF Acquisition Opportunities, Inc.
1200 West Platt Street, Suite 100
Tampa, Florida 33606
Telephone Number: (813) 222-8996
Email: bruce@lmfunding.com
rrussell@lmfunding.com
Attention: Bruce M. Rodgers, CEO
Richard Russell, CFO
With a copy (which shall not constitute notice) to:
Foley & Lardner LLP
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Telephone Number: (813) 229-2300
Email: ccreely@foley.com
Attention: Curt P. Creely, Esq.
If to SeaStar Medical pre-Business Combination Closing:
SeaStar Medical, Inc.
3513 Brighton Boulevard, Suite #410
Denver, Colorado 80216
Telephone Number: (844) 427-8100
Email: eric@seastarmed.com
Attention: Eric Schlorff, CEO
With a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
1400 Page Mill Road
Palo Alto, CA 94304
Telephone Number: (650) 843-4000
Email: albert.lung@morganlewis.com
Attention: Albert Lung, Esq.
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If to the Company post-Business Combination Closing:
SeaStar Medical Holding Corporation
1200 West Platt Street, Suite 100
Tampa, Florida 33606
Telephone Number: (813) 222-8996
Email: eric@seastarmed.com
caryl@seastarmed.com
Attention: Eric Schlorff, CEO
Caryl Baron, Finance Controller
With a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
1400 Page Mill Road
Palo Alto, CA 94304
Telephone Number: (650) 843-4000
Email: albert.lung@morganlewis.com
Attention: Albert Lung, Esq.
If to the Investor:
Tumim Stone Capital LLC
140 Broadway, 38th Floor
New York, NY 10005
Telephone Number: (646) 845-0040
Email: mjtarlow@3ifund.com
Attention: Maier Joshua Tarlow
With a copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019
Telephone Number: (212) 415-9214
Email: marsico.anthony@dorsey.com
Attention: Anthony J. Marsico, Esq.
Any party hereto may from time to time change its address for notices by giving at least five (5) days advance written notice of such changed address to the other parties hereto.
Section 10.5. Waivers. No provision of this Agreement may be waived by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises thereof or of any other right, power or privilege.
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Section 10.6. Amendments. No provision of this Agreement may be amended by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto.
Section 10.7. Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms including, includes, include and words of like import shall be construed broadly as if followed by the words without limitation. The terms herein, hereunder, hereof and words of like import refer to this entire Agreement instead of just the provision in which they are found.
Section 10.8. Construction. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents. In addition, each and every reference to share prices and number of shares of Common Stock in any Transaction Document shall, in all cases, be subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations, reorganizations and other similar transactions that occur on or after the date of this Agreement. Any reference in this Agreement to Dollars or $ shall mean the lawful currency of the United States of America. Any references to Section or Article in this Agreement shall, unless otherwise expressly stated herein, refer to the applicable Section or Article of this Agreement.
Section 10.9. Binding Effect. This Agreement, as it may be amended at or prior to the Closing, shall be binding upon and inure to the benefit of the parties hereto and their respective successors. Neither the Company nor the Investor may assign this Agreement, as so amended, or any of their respective rights or obligations hereunder to any Person.
Section 10.10. No Third Party Beneficiaries. Except as expressly provided in Article IX, this Agreement, as it may be amended at or prior to the Closing, is intended only for the benefit of the parties hereto and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 10.11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal procedural and substantive laws of the State of New York, without giving effect to the choice of law provisions of such state that would cause the application of the laws of any other jurisdiction.
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Section 10.12. Survival. The representations, warranties, covenants and agreements of the Company and the Investor contained in this Agreement shall survive the execution and delivery hereof until the termination of this Agreement; provided, however, that (i) provisions of Subsection II of Article V of this Agreement (LMFAO Representations and Warranties) and Subsection III of Article V of this Agreement (SeaStar Medical Representations and Warranties) shall survive the execution and delivery of this Agreement until the Business Combination Closing, at which time such representations and warranties shall have no further force or effect and shall be superseded in their entirety by the representations, warranties and covenants of the Company set forth in Subsection I of Article V (Representations, Warranties and Covenants of the Company), (ii) the provisions of Subsection I of Article V (Representations, Warranties and Covenants of the Company), Article IX (Indemnification), Article X (Miscellaneous) and this Article VIII (Termination) shall remain in full force and effect indefinitely notwithstanding such termination, and, (iii) so long as the Investor owns any Securities, the covenants and agreements of the Company contained in Article VI (Additional Covenants) shall remain in full force and notwithstanding such termination for a period of six (6) months following such termination.
Section 10.13. Counterparts. This Agreement, and any amendments hereto, may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a .pdf format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.
Section 10.14. Publicity. LMFAO and SeaStar Medical (as applicable and prior to the Business Combination Closing) and the Company (as applicable from and after the Business Combination Closing) shall afford the Investor and its counsel with a reasonable opportunity to review and comment upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration to all such comments from the Investor or its counsel on, any press release, Commission filing or any other written public disclosure made by or on behalf of such party and relating to the Investor, its purchases hereunder or any aspect of this Agreement or the transactions contemplated thereby, prior to the issuance, filing or public disclosure thereof. For the avoidance of doubt, the Company shall not be required to submit for review any such disclosure (i) contained in reports filed with the Commission under the Exchange Act if it shall have previously provided the same disclosure to the Investor or its counsel for review in connection with a previous filing or (ii) any Prospectus Supplement if it contains disclosure that does not reference the Investor, its purchases hereunder or any aspect of this Agreement, the Registration Rights Agreement or the transactions contemplated hereby or thereby.
Section 10.15. Severability. The provisions of this Agreement, as it may be amended hereunder, are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.
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Section 10.16. Further Assurances. From and after the Closing Date, upon the request of the Investor or the Company, each of the Company and the Investor shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement, as it may be amended hereunder.
Section 10.17. Trust Account Waiver. The Investor hereby irrevocably waives any and all right, title, interest, causes of action and claims of any kind (each, a Claim) in or to, and any and all right to seek payment of any amounts due to it out of, the Trust Account, and hereby irrevocably waives any Claim it may have in the future as a result of, or arising out of, this Agreement, which Claim would reduce, encumber or otherwise adversely affect the Trust Account or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction of any Claim against the Trust Account or any monies or other assets in the Trust Account for any reason whatsoever.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the date first above written.
LMFAO: | ||
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | /s/ Richard Russell | |
Name: Richard Russell | ||
Title: Chief Financial Officer | ||
SEASTAR MEDICAL: | ||
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: Eric Schlorff | ||
Title: Chief Executive Officer | ||
THE INVESTOR: | ||
TUMIM STONE CAPITAL LLC: | ||
By: | /s/ Maier Tarlow | |
Name: Maier Tarlow | ||
Title: Manager on Behalf of the GP |
ANNEX I TO THE
COMMON STOCK PURCHASE AGREEMENT
DEFINITIONS
2021 Form 10-K shall have the meaning assigned to such term in the definition of Commission Document.
Accountant shall have the meaning assigned to such term in Section 5.6(e).
Action means any claim, charge, action, suit, complaint, grievance, audit, investigation, inquiry, assessment, arbitration or legal, judicial or administrative proceeding (whether at law or in equity).
Affiliate means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144.
Aggregate Limit shall have the meaning assigned to such term in Section 2.1.
Agreement shall have the meaning assigned to such term in the preamble of this Agreement. For the avoidance of doubt, the term Agreement shall include any and all amendments hereto that may be effected by the parties pursuant to Section 10.6.
Allowable Grace Period shall have the meaning assigned to such term in the Registration Rights Agreement.
Anti-Corruption Laws means all U.S. and applicable non-U.S. Laws relating to the prevention of corruption and bribery, including the U.S. Foreign Corrupt Practices Act of 1977, as amended.
Average Price means a price per Share (rounded to the nearest tenth of a cent) equal to the quotient obtained by dividing (i) the aggregate gross purchase price paid by the Investor for all Shares purchased pursuant to this Agreement, by (ii) the aggregate number of Shares issued pursuant to this Agreement.
Bankruptcy Law means Title 11, U.S. Code, or any similar U.S. federal or state law for the relief of debtors.
Base Price means a price per Share equal to the sum of (i) the Minimum Price and (ii) $[●]10 (subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the date of this Agreement).
10 | To be calculated as of the Closing and inserted by amendment to this Agreement signed at the Closing, post-merger effective time. |
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Beneficial Ownership Limitation shall have the meaning assigned to such term in Section 3.4.
Bloomberg means Bloomberg, L.P.
Breach shall have the meaning assigned to such term in Section 5.36.
Bring Down Opinion shall have the meaning assigned to such term in Section 6.15.
Broker-Dealer shall have the meaning assigned to such term in Section 6.13.
Business Combination shall have the meaning assigned to such term in the recitals of this Agreement.
Business Combination Closing shall have the meaning assigned to such term in the recitals of this Agreement.
Business Combination Closing Date shall have the meaning assigned to such term in Section 5.6(a).
Bylaws shall have the meaning assigned to such term in Section 5.3.
CARES Act means (i) the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) and any administrative or other guidance published with respect thereto by any Governmental Entity (including IRS Notices 2020-22 and 2020-65), or any other Law or executive order or executive memorandum (including the Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, dated August 8, 2020) intended to address the consequences of COVID-19 (in each case, including any comparable provisions of state, local or non-U.S. Law and including any related or similar orders or declarations from any Governmental Entity) and (ii) any extension of, amendment, supplement, correction, revision or similar treatment to any provision of the CARES Act contained in the Consolidated Appropriations Act, 2021, H.R. 133.
Charter shall have the meaning assigned to such term in Section 5.3.
Claim shall have the meaning assigned to such term in Section 10.17.
Closing shall have the meaning assigned to such term in Section 2.2.
Closing Date shall have the meaning assigned to such term in Section 2.2.
Closing Sale Price means, for the Common Stock as of any date, the last closing trade price for the Common Stock on the Trading Market (or if the Common Stock is then traded on an Eligible Market, on such Eligible Market), as reported by Bloomberg, or, if the Trading Market (or such Eligible Market, as applicable) begins to operate on an extended hours basis and does not designate the closing trade price for the Common Stock, then the last trade price for the Common Stock prior to 4:00 p.m., New York City time, as reported by Bloomberg, or, if the foregoing do not apply, the last trade price for the Common Stock in the over-the-counter market on the
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electronic bulletin board for the Common Stock as reported by Bloomberg, or, if no last trade price is reported for the Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported by OTC Markets Group Inc. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.
Code shall have the meaning assigned to such term in Section 5.24 hereof.
Commencement shall have the meaning assigned to such term in Section 3.1.
Commencement Date shall have the meaning assigned to such term in Section 3.1.
Commencement Irrevocable Transfer Agent Instructions shall have the meaning assigned to such term in Section 10.1(iv).
Commission means the U.S. Securities and Exchange Commission or any successor entity.
Commission Documents shall mean (1) LMF Acquisition Opportunities, Inc.s registration statement on Form S-4 (File No. 333-264993) initially filed with the Commission on May 16, 2022, including any related prospectus or prospectuses, for the registration of the Common Stock to be issued pursuant to the Agreement and Plan of Merger, dated as of April 21, 2022 (as the same may be amended from time to time), by and among LMF Acquisition Opportunities, Inc., LMF Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of LMF Acquisition Opportunities, Inc., and SeaStar Medical, Inc., on file with the Commission at the time such registration statement became effective, including the financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the effective date of such registration statement under the Securities Act (the Form S-4 Registration Statement), (2) LMF Acquisition Opportunities, Inc.s final proxy statement/prospectus included in the Form S-4 Registration Statement at the time of effectiveness, including the Annexes thereto and accompanying financial statements and all related soliciting materials under Rule 14a-12 under the Exchange Act, and all documents incorporated therein by reference, in the form in which such proxy statement/prospectus was filed with the Commission pursuant to Rule 424(b) under the Securities Act (the Merger Proxy Statement/Prospectus), (3) LMF Acquisition Opportunities, Inc.s annual report on Form 10-K for its fiscal year ended December 31, 2021 filed with the Commission on April 6, 2022 (the 2021 Form 10-K), (4) all reports, schedules, registrations, forms, statements, information and other documents filed with or furnished to the Commission by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act since the Business Combination Closing Date, including, without limitation, (A) the Companys current report on Form 8-K (as the same may be amended by Form 8-K/A) filed with the Commission by the Company to report the Business Combination Closing, including all documents, financial statements and other information attached thereto or incorporated by reference therein as Exhibits thereto (the Merger Form 8-K), and (B) the Current Report, (5) each Registration Statement, as the same may be amended from time to time, the Prospectus contained therein and each Prospectus Supplement thereto and (6) all information contained in such filings and all documents and disclosures that have been and heretofore shall be incorporated by reference therein.
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Commitment Fee means an amount in cash equal to $2,500,000.00 which, in the event of any purported termination of this Agreement by any of the parties hereto under Section 8.2 at any time after the date of this Agreement, but prior to the Closing under this Agreement, shall become immediately due and payable by the Company to the Investor upon the Business Combination Closing pursuant to the Business Combination Agreement, and shall be paid by wire transfer of immediately available funds to an account designated by the Investor to the Company, not later than one (1) Trading Day after the Business Combination Closing, and no such termination of this Agreement shall become effective unless and until such entire cash amount has been paid by the Company to the Investor pursuant to and in accordance with this Agreement.
Commitment Shares means such number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock (rounded up or down to the nearest whole share) equal to the quotient obtained by dividing (i) $2,500,000, by (ii) the lowest daily VWAP during the three (3) consecutive Trading Day period ending on (and including) the Trading Day immediately prior to the date on which the Initial Registration Statement is initially filed by the Company with the Commission, which the Company shall cause its transfer agent to issue and deliver to the Investor not later than 4:00 p.m. (New York City time) on the Trading Day on which the Initial Registration Statement is initially filed by the Company with the Commission, and in no event later than 4:00 p.m. (New York City time) on the Filing Deadline for the Initial Registration Statement as set forth in the Registration Rights Agreement.
Common Stock shall have the meaning assigned to such term in the recitals of this Agreement.
Common Stock Equivalents means any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
Company shall have the meaning assigned to such term in the recitals to this Agreement.
Company Benefit Plan shall have the meaning assigned to such term in Section 5.24.
Company Product shall have the meaning assigned to such term in Section 5.37.
Compliance Certificate shall have the meaning assigned to such term in Section 7.2(ii).
Contracts means any agreement, contract, license, lease, sublease, obligation, undertaking or other commitment or arrangement that is legally binding upon a Person or any of his, her or its properties or assets.
Copyrights shall have the meaning assigned to such term in the definition of Intellectual Property.
Cover Price shall have the meaning assigned to such term in Section 3.2.
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COVID-19 means SARS-CoV-2 or COVID-19, and any evolutions thereof or related or associated epidemics, pandemics or disease outbreaks.
COVID-19 Measures means any quarantine, shelter in place, stay at home, workforce reduction, social distancing, shut down, closure, sequester or any other Law, Governmental Order, Action, directive, guidelines or recommendations by any Governmental Authority in connection with or in response to COVID-19, including, but not limited to, the CARES Act.
Current Report shall have the meaning assigned to such term in Section 2.3.
Custodian shall mean any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
Data Security Requirements shall have the meaning assigned to such term in Section 5.17(c).
Damages shall have the meaning assigned to such term in Section 9.1.
Disclosure Schedule shall have the meaning assigned to such term in the preamble to Subsection I of Article V.
Disqualification Event shall have the meaning assigned to such term in Section 5.40.
DTC means The Depository Trust Company, a subsidiary of The Depository Trust & Clearing Corporation, or any successor thereto.
DWAC shall have the meaning assigned to such term in Section 5.33.
DWAC Shares means shares of Common Stock issued pursuant to this Agreement that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and without stop transfer instructions maintained against the transfer thereof, and (iii) timely credited by the Company to the Investors or its designees specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program, or any similar program hereafter adopted by DTC performing substantially the same function.
Effective Date means, with respect to the Initial Registration Statement filed pursuant to Section 2(a) of the Registration Rights Agreement (or any post-effective amendment thereto) or any New Registration Statement filed pursuant to Section 2(c) of the Registration Rights Agreement (or any post-effective amendment thereto), as applicable, the date on which the Initial Registration Statement (or any post-effective amendment thereto) or any New Registration Statement (or any post-effective amendment thereto) is declared effective by the Commission.
Effectiveness Deadline shall have the meaning assigned to such term in the Registration Rights Agreement.
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Eligible Market means the New York Stock Exchange, The Nasdaq Capital Market, The Nasdaq Global Select Market, the NYSE American, or the NYSE Arca (or any nationally recognized successor to any of the foregoing).
Environmental Laws shall have the meaning assigned to such term in Section 5.18 hereof.
ERISA shall have the meaning assigned to such term in Section 5.24 hereof.
ERISA Affiliate shall have the meaning assigned to such term in Section 5.24 hereof.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
Exchange Cap shall have the meaning assigned to such term in Section 3.3(a) hereof.
Exempt Issuance means the issuance of (a) Common Stock, options or other equity incentive awards to employees, officers, directors or vendors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by the Companys Board of Directors or a majority of the members of a committee of the Board of Directors established for such purpose, (b) (1) any Securities issued to the Investor pursuant to this Agreement, (2) any securities issued upon the exercise or exchange of or conversion of any shares of Common Stock or Common Stock Equivalents held by the Investor or any of its Affiliates at any time, or (3) any securities issued upon the exercise or exchange of or conversion of any Common Stock Equivalents issued and outstanding on the Closing Date, provided that such securities referred to in this clause (3) have not been amended since the Closing Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Companys Board of Directors or a majority of the members of a committee of directors established for such purpose, which acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions can have a Variable Rate Transaction component, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, or (d) shares of Common Stock issued and sold by the Company in any at the market offering or equity distribution program exclusively to or through one or more registered broker-dealers pursuant to one or more written agreements between the Company and such registered broker-dealer(s) at any time on or after the date on which the Company becomes eligible to use a registration statement on Form S-3 on a primary basis pursuant to General Instruction I.B.1. or General Instruction I.B.6. of Form S-3.
FDA shall have the meaning assigned to such term in Section 5.37.
FDCA shall have the meaning assigned to such term in Section 5.37.
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Filing Deadline shall have the meaning assigned to such term in the Registration Rights Agreement.
FINRA means the Financial Industry Regulatory Authority.
Form S-4 Registration Statement shall have the meaning assigned to such term in the definition of Commission Document.
Fundamental Transaction means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, with the result that the holders of the Companys capital stock immediately prior to such consolidation or merger together beneficially own less than 50% of the outstanding voting power of the surviving or resulting corporation, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (3) take action to facilitate a purchase, tender or exchange offer by another Person that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (excluding any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize, recapitalize or reclassify its Common Stock, or (ii) any person or group (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.
GAAP shall have the meaning assigned to such term in Section 5.6(b).
Government Official means any (i) employee or official of (A) a Governmental Authority, (B) instrumentality of a Governmental Authority, including any state-owned enterprise, government agency or government advisor or (C) public international organization, (ii) political party or party official, (iii) candidate for political office or (iv) any other Person acting in an official capacity on behalf of any of the foregoing.
Government Program means any federal healthcare program as defined in 42 U.S.C. §1320a-7b(f), including Medicare, Medicaid, TRICARE, the Medicare Advantage Program, Medicare Prescription Drug Benefit Programs, Maternal and Child Health Service Block Grant, Social Services Block Grant and any other similar or successor federal, state or local healthcare payment programs with or sponsored, in whole or in part, by any Governmental Authority.
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Governmental Authority means any federal, state, provincial, municipal, local or foreign government, governmental authority, arbiter or arbitral body (public or private), regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal, or any non-governmental regulatory authority or entity or quasi-governmental authority or entity of competent jurisdiction or any similar body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any contractors of a Governmental Authority, department or agency as authorized by Law (including any Healthcare Law), and acting pursuant to the terms and conditions of any such contract.
Governmental Order means any order, judgment, injunction, decree, writ, stipulation, ruling, determination or award, in each case, entered by or with any Governmental Authority.
Healthcare Laws means (a) all Laws applicable to the business of the Company relating to healthcare, including, without limitation: (i) Laws relating to the licensure, certification, qualification or authority to transact business in connection with the payment for, or arrangement of, healthcare benefits, including Laws that regulate managed care, third-party payors and persons bearing the financial risk for the provision or arrangement of healthcare services; (ii) Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395lll (the Medicare statute); Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396w-5 (the Medicaid statute); (iii) healthcare or insurance fraud or abuse Laws, including the following Laws: the Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), the Federal False Claims Act (31 U.S.C. §§ 3729-3733), the Federal Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a and 1320a-7b), the Federal Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.) and the Federal Health Care Fraud Law (18 U.S.C. § 1347), and the Exclusion Laws, 42 U.S.C. § 1320a 7; (iv) Laws relating to billings to insurance companies, health maintenance organizations and other managed care plans; (v) the Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. § 263a et seq.; (vi) any applicable state and federal controlled substance and drug diversion Laws, including, the Federal Controlled Substances Act, 21 U.S.C. § 801, et seq.; (vii) any state Law concerning the splitting of healthcare professional fees; (viii) Laws relating to informed consent, Healthcare Permits, the hiring of employees or acquisition of services or supplies from Persons excluded from participation in Government Programs, mandated reporting of incidents, occurrences, diseases and events and advertising or marketing of healthcare services; (ix) the United States Federal Food, Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.); (x) the Deficit Reduction Act of 2005; (xi) HIPAA (as defined below); (xii) the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152); (xiii) the Travel Act, 18 U.S.C. § 1952; (xiv) any similar state and local Laws that address the subject matter of the foregoing and (b) any and all amendments or modifications made from time to time to the items referenced in subsection (a) above.
Healthcare Permits means any and all licenses, permits, certifications, authorizations, approvals, registrations, accreditations, consents, qualifications, and/or any other permit or permission which are material to or legally required for the operation of the business of the Company as currently conducted or in connection with the Companys ability to own, lease, operate or manage any of its property or the business, in each case that are issued or enforced by a Governmental Authority with jurisdiction over any Healthcare Law.
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HIPAA means the following, as the same may be amended, modified or supplemented from time to time, any successor statute thereto, and together with any and all Laws promulgated from time to time thereunder: (i) the Health Insurance Portability and Accountability Act of 1996; (ii) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and (iii) applicable state Laws regarding patient privacy and the security, use or disclosure of healthcare records.
Indebtedness means, with respect to any Person as of any time, without duplication, all obligations (including all obligations in respect of principal, interest, penalties, breakage costs, fees and premiums) of such Person for or in respect of: (i) indebtedness for borrowed money or indebtedness issued in substitution or exchange for borrowed money; (ii) indebtedness evidenced by any note, bond, debenture or other debt security; (iii) the deferred purchase price of property or other services (other than trade payables incurred in the ordinary course of business); (iv) any lease obligations that are capitalized or are required to be capitalized in accordance with GAAP; (v) the reimbursement of any obligor on any line or letter of credit, bankers acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against; (vi) interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made, whether periodically or upon the happening of a contingency; (vii) unfunded pension or retirement agreements, programs, policies, or other similar arrangements, including any employer portion of Taxes due in respect thereof; (viii) all applicable employment taxes (as defined in Section 2302(d)(1) of the CARES Act) that the Company has elected to defer pursuant to Section 2302 of the CARES Act, (ix) all Taxes (including withholding Taxes) deferred pursuant to Internal Revenue Service Notice 2020-65 or any related or similar order or declaration from any Governmental Authority (including, without limitation, the Presidential Memorandum, dated August 8, 2020, issued by the President of the United States); (x) dividends declared but not yet paid or other distributions payable; and (xi) any obligation of the type referred to in clauses (i)-(x) of this definition of any other Person, for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations.
Indemnifying Party shall have the meaning assigned to such term in Section 9.2.
Initial Registration Statement shall have the meaning assigned to such term in the Registration Rights Agreement.
Intellectual Property 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, or 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 any of the foregoing (collectively, Copyrights); (d) trade secrets, know-how and confidential and proprietary information, whether or not
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patentable, including invention disclosures, inventions, formulae, designs, discoveries, processes, research and development information, technical information, methods, techniques, procedures, specifications, operating and maintenance manuals, methods, and engineering drawings; (e) rights in or to Software or other technology; (f) Internet domain names, social media accounts, social media handles or social media identifiers; and (g) any other intellectual or proprietary rights protectable, arising under or associated with any of the foregoing, including those protected by any Law anywhere in the world.
Investment Period means the period commencing on the Effective Date of the Initial Registration Statement and expiring on the date this Agreement is terminated pursuant to Article VIII.
Investor shall have the meaning assigned to such term in the preamble of this Agreement.
Investor Expense Reimbursement shall have the meaning assigned to such term in Section 10.1(i) hereof.
Investor Party shall have the meaning assigned to such term in Section 9.1.
Issuer Covered Person shall have the meaning assigned to such term in Section 5.40.
IT Systems means any and all of the following owned, leased, licensed or used by or for, or otherwise relied on by, the Company and its Subsidiaries: information technology and computers systems, networks and infrastructure (including Software, databases, facilities and equipment) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information, whether or not in electronic format.
Knowledge means the actual knowledge of any of the Companys Chief Executive Office or the Companys Finance Controller, after reasonable inquiry of all officers, directors and employees of the Company and its Subsidiaries under such Persons direct supervision who would reasonably be expected to have knowledge or information with respect to the matter in question.
Law means any statute, law (including common law), code, act, ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
Lease shall have the meaning assigned to such term in Section 5.12.
Leased Real Property means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures or other interest in real property held by the Company or any of its Subsidiaries.
Licensed Intellectual Property shall have the meaning assigned to such term in Section 5.17(a).
Lien means any mortgage, deed of trust, pledge, hypothecation, encumbrance, easement, license, option, right of first refusal, security interest or other lien of any kind.
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LMFAO shall have the meaning assigned to such term in the preamble of this Agreement.
LMFAO Material Adverse Effect means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of the Transaction Documents or the transactions contemplated thereby, (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any effect on the business, operations, properties or financial condition of LMFAO that is material and adverse to LMFAO and its Subsidiaries, taken as a whole, and/or (iii) any condition, occurrence, state of facts or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability of LMFAO to perform any of its obligations under any of the Transaction Documents to which it is a party; provided, however, that no facts, circumstances, changes or effects exclusively and directly resulting from, relating to or arising out of the following, individually or in the aggregate, shall be taken into account in determining whether a Material Adverse Effect has occurred or insofar as reasonably can be foreseen would likely occur: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in the availability of capital or currency exchange rates, provided such changes shall not have affected LMFAO in a materially disproportionate manner as compared to other similarly situated companies; (b) changes generally affecting the industries in which LMFAO and its Subsidiaries operate, provided such changes shall not have affected LMFAO and its Subsidiaries, taken as a whole, in a materially disproportionate manner as compared to other similarly situated companies; (c) any effect of the announcement of, or the consummation of the transactions contemplated by, this Agreement and the other Transaction Documents on LMFAOs relationships, contractual or otherwise, with customers, suppliers, vendors, bank lenders, strategic venture partners or employees; (d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof; (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, sheltering-in-place or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement; (f) any action taken by the Investor with respect to the transactions contemplated by this Agreement; and (g) the effect of any changes in applicable laws or accounting rules, provided such changes shall not have affected LMFAO in a materially disproportionate manner as compared to other similarly situated companies.
LMFAO SEC Reports shall have the meaning assigned to such term in Section 5.45(a).
Marks shall have the meaning assigned to such term in the definition of Intellectual Property.
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Material Adverse Effect means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of the Transaction Documents or the transactions contemplated thereby, (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any effect on the business, operations, properties or financial condition of the Company that is material and adverse to the Company and its Subsidiaries, taken as a whole, and/or (iii) any condition, occurrence, state of facts or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability of the Company to perform any of its obligations under any of the Transaction Documents to which it is a party; provided, however, that no facts, circumstances, changes or effects exclusively and directly resulting from, relating to or arising out of the following, individually or in the aggregate, shall be taken into account in determining whether a Material Adverse Effect has occurred or insofar as reasonably can be foreseen would likely occur: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in the availability of capital or currency exchange rates, provided such changes shall not have affected the Company in a materially disproportionate manner as compared to other similarly situated companies; (b) changes generally affecting the industries in which the Company and its Subsidiaries operate, provided such changes shall not have affected the Company and its Subsidiaries, taken as a whole, in a materially disproportionate manner as compared to other similarly situated companies; (c) any effect of the announcement of, or the consummation of the transactions contemplated by, this Agreement and the other Transaction Documents on the Companys relationships, contractual or otherwise, with customers, suppliers, vendors, bank lenders, strategic venture partners or employees; (d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof; (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, sheltering-in-place or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement; (f) any action taken by the Investor with respect to the transactions contemplated by this Agreement; and (g) the effect of any changes in applicable laws or accounting rules, provided such changes shall not have affected the Company in a materially disproportionate manner as compared to other similarly situated companies.
Material Agreements shall have the meaning assigned to such term in Section 5.19.
Merger shall have the meaning assigned to such term in the recitals of this Agreement.
Merger Agreement shall have the meaning assigned to such term in the recitals of this Agreement.
Merger Form 8-K shall have the meaning assigned to such term in the definition of Commission Document.
Merger Proxy Statement/Prospectus shall have the meaning assigned to such term in the definition of Commission Document.
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Merger Sub shall have the meaning assigned to such term in the recitals of this Agreement.
Minimum Price means $[], representing [the Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) on [the Trading Day immediately preceding]11 the Closing Date] [the average Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) for the five (5) consecutive Trading Days ending on [the Trading Day immediately preceding]12 the Closing Date]13 (subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the Closing Date).14
New Registration Statement shall have the meaning assigned to such term in the Registration Rights Agreement.
Notice of Effectiveness shall have the meaning assigned to such term in Section 10.1(iv).
OFAC shall have the meaning assigned to such term in the definition of Sanctioned Person.
Owned Intellectual Property means all Intellectual Property that is owned or purported to be owned by the Company or any of its Subsidiaries.
Patents shall have the meaning assigned to such term in the definition of Intellectual Property.
PEA Period means the period commencing at 9:30 a.m., New York City time, on the fifth (5th) Trading Day immediately prior to the filing of any post-effective amendment to the Initial Registration Statement or any New Registration Statement, and ending at 9:30 a.m., New York City time, on the Trading Day immediately following, the Effective Date of such post-effective amendment.
Permits shall have the meaning assigned to such term in Section 5.14.
Permitted Liens means (i) mechanics, materialmens, carriers, repairers and other similar statutory Liens for labor, materials or supplies provided with respect to any Leased Real Property arising or incurred in the ordinary course of business for amounts that are not yet delinquent or are being contested in good faith by appropriate proceedings and for which sufficient reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iii) Liens for Taxes not yet due and payable or which are being contested in good faith through appropriate Actions for which appropriate reserves have been
11 | Use if Agreement is signed prior to market close at 4:00 p.m., Eastern Standard Time. |
12 | Use if Agreement is signed prior to market close at 4:00 p.m., Eastern Standard Time. |
13 | Use the lower of the two. |
14 | To be edited as appropriate based on market prices as of the Closing and inserted in amendment to this Agreement signed at the Closing. |
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established in accordance with GAAP, (iv) restrictions, easements, covenants, conditions, rights of way and other similar matters of record affecting title to any Leased Real Property that that do not prohibit, materially interfere with or impair any of the Companys use or occupancy of any such Leased Real Property in the operation of the business conducted thereon, (v) non-exclusive licenses of Owned Intellectual Property granted by the Company to customers in the ordinary course of business, and (vi) the Liens that would not, individually or in the aggregate, have a Material Adverse Effect.
Person means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.
Personal Information means, in addition to any definition for personal information or any similar term (e.g., personal data or personally identifiable information) provided by applicable Law, or by the Company in any of its privacy policies, notices or Contracts, all information that directly or indirectly can be used to identify, is related to, describes, is reasonably capable of being associated with, or could reasonably be linked with, a particular individual or household.
Prospectus shall have the meaning assigned to such term in the Registration Rights Agreement.
Prospectus Supplement shall have the meaning assigned to such term in the Registration Rights Agreement.
Registered Intellectual Property shall have the meaning assigned to such term in Section 5.17(a).
Registrable Securities shall have the meaning assigned to such term in the Registration Rights Agreement.
Registration Rights Agreement shall have the meaning assigned to such term in the recitals hereof.
Registration Statement shall have the meaning assigned to such term in the Registration Rights Agreement.
Regulation D shall have the meaning assigned to such term in the recitals of this Agreement.
Restricted Period shall have the meaning assigned to such term in Section 6.9.
Restricted Person shall have the meaning assigned to such term in Section 6.9.
Restricted Persons shall have the meaning assigned to such term in Section 6.9.
I-14
Rule 144 means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect.
Sanctioned Country means any country or region that is, or has been in the last five years, the subject or target of a comprehensive embargo under Trade Controls (including Cuba, Iran, North Korea, Sudan, Syria, Venezuela, and the Crimea region of Ukraine).
Sanctioned Person means any Person that is the subject or target of sanctions or restrictions under Trade Controls, including: (i) any Person listed on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including the U.S. Department of the Treasury Office of Foreign Assets Controls (OFAC) Specially Designated Nationals and Blocked Persons List and the EU Consolidated List; (ii) any entity that is, in the aggregate, 50 percent or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (i); or (iii) any national of a Sanctioned Country.
SeaStar Medical shall have the meaning assigned to such term in the preamble of this Agreement.
SeaStar Medical Financial Statements shall have the meaning assigned to such term in Section 5.69(a).
SeaStar Medical Holding Corporation shall have the meaning assigned to such term in the recitals of this Agreement.
SeaStar Medical Material Adverse Effect means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of the Transaction Documents or the transactions contemplated thereby, (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any effect on the business, operations, properties or financial condition of SeaStar Medical that is material and adverse to SeaStar Medical and its Subsidiaries, taken as a whole, and/or (iii) any condition, occurrence, state of facts or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability of SeaStar Medical to perform any of its obligations under any of the Transaction Documents to which it is a party; provided, however, that no facts, circumstances, changes or effects exclusively and directly resulting from, relating to or arising out of the following, individually or in the aggregate, shall be taken into account in determining whether a Material Adverse Effect has occurred or insofar as reasonably can be foreseen would likely occur: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in the availability of capital or currency exchange rates, provided such changes shall not have affected SeaStar Medical in a materially disproportionate manner as compared to other similarly situated companies; (b) changes generally affecting the industries in which SeaStar Medical and its Subsidiaries operate, provided such changes shall not have affected SeaStar Medical and its Subsidiaries, taken as a whole, in a materially disproportionate manner as compared to other similarly situated companies; (c) any effect of the announcement of, or the consummation of the transactions contemplated by, this Agreement and the other Transaction Documents on SeaStar Medicals relationships, contractual or otherwise, with customers,
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suppliers, vendors, bank lenders, strategic venture partners or employees; (d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof; (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, sheltering-in-place or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement; (f) any action taken by the Investor with respect to the transactions contemplated by this Agreement; and (g) the effect of any changes in applicable laws or accounting rules, provided such changes shall not have affected SeaStar Medical in a materially disproportionate manner as compared to other similarly situated companies.
Section 4(a)(2) shall have the meaning assigned to such term in the recitals of this Agreement.
Securities means, collectively, the Shares and the Commitment Shares.
Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
Shares shall mean the shares of Common Stock that are and/or may be purchased by the Investor under this Agreement pursuant to one or more VWAP Purchase Notices, but not including the Commitment Shares.
Short Sales shall mean short sales as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act.
Software means any and all (i) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow charts and other work products 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 (iv) all documentation including user manuals and other training documentation relating to any of the foregoing.
Subsidiary shall mean any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary voting power for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.
Tax Return means any return, declaration, report, statement, information statement or other document filed or required to be filed with any Governmental Authority with respect to Taxes, including any claims for refunds of Taxes, any information returns and any amendments or supplements of any of the foregoing.
I-16
Taxes means all federal, state, local, foreign or other taxes imposed by any Governmental Authority, including all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, alternative or add-on minimum, or estimated taxes, and including any interest, penalty, or addition thereto.
Total Commitment shall have the meaning assigned to such term in Section 2.1.
Trade Controls means all U.S. and applicable non-U.S. Laws relating to (i) economic, trade, and financial sanctions, including those administered and enforced by OFAC, the U.S. Department of State and the United Nations; (ii) export, import, reexport, transfer, and retransfer controls, including those administered and enforced by the U.S. Department of Commerce Bureau of Industry and Security, U.S. Customs and Border Protection and the United Nations; (iii) anti-boycott requirements; and (iv) the prevention of money laundering.
Trading Day shall mean a full trading day (beginning at 9:30:01 a.m., New York City time, and ending at 4:00 p.m., New York City time) on the Trading Market or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market.
Trading Market means The Nasdaq Global Market (or any nationally recognized successor thereto).
Transaction Documents means, collectively, this Agreement, as it may be amended by the parties pursuant to Section 10.06 (and as it may be qualified by the Disclosure Schedule) and the exhibits hereto, the Registration Rights Agreement and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.
TRICARE means, collectively, a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, which program was formerly known as CHAMPUS (Civilian Health and Medical Program of the Uniformed Services), and all Laws, rules, regulations, manuals, orders and administrative, reimbursement or other guidelines of all Governmental Authorities promulgated in connection with such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.
Trust Account shall have the meaning assigned to such term in Section 5.50.
Trust Agreement shall have the meaning assigned to such term in Section 5.50.
Trustee shall have the meaning assigned to such term in Section 5.50.
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Variable Rate Transaction means a transaction in which the Company (i) issues or sells any equity or debt securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock or Common Stock Equivalents either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such equity or debt securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such equity or debt security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock (including, without limitation, any full ratchet or weighted average anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) issues or sells any equity or debt securities, including without limitation, Common Stock or Common Stock Equivalents, either (A) at a price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock (other than standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), or (B) that are subject to or contain any put, call, redemption, buy-back, price-reset or other similar provision or mechanism (including, without limitation, a Black-Scholes put or call right, other than in connection with a fundamental transaction) that provides for the issuance of additional equity securities of the Company or the payment of cash by the Company, or (iii) enters into any agreement, including, but not limited to, an equity line of credit (other than with the Investor) or at the market offering or other continuous offering or similar offering of Common Stock or Common Stock Equivalents, whereby the Company may sell Common Stock or Common Stock Equivalents at a future determined price.
VWAP means, for the Common Stock as of any Trading Day, the dollar volume-weighted average price for the Common Stock on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market) during the period beginning at 9:30:01 a.m., New York City time, or such other time publicly announced by the Trading Market (or by such Eligible Market, as applicable) as the official open (or commencement) of trading on the Trading Market (or on such Eligible Market, as applicable) on such Trading Day, and ending at 4:00 p.m., New York City time, or such other time publicly announced by the Trading Market (or by such Eligible Market, as applicable) as the official close of trading on the Trading Market (or on such Eligible Market, as applicable) on such Trading Day, as reported by Bloomberg through its AQR function. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
VWAP Purchase shall have the meaning assigned to such term in Section 3.1.
VWAP Purchase Condition Satisfaction Time means, with respect to a VWAP Purchase made pursuant to Section 3.1, 9:00 a.m., New York City time, on the Trading Day immediately following the applicable VWAP Purchase Exercise Date for such VWAP Purchase.
VWAP Purchase Confirmation shall have the meaning assigned to such term in Section 3.1.
I-18
VWAP Purchase Commencement Time means, with respect to a VWAP Purchase made pursuant to Section 3.1, 9:30:01 a.m., New York City time, on the Trading Day immediately following the applicable VWAP Purchase Exercise Date, or such other time publicly announced by the Trading Market as the official open (or commencement) of trading on the Trading Market on such Trading Day.
VWAP Purchase Ending Time means, with respect to a VWAP Purchase made pursuant to Section 3.1, 4:00:00 p.m., New York City time, on the third (3rd) consecutive Trading Day immediately following the applicable VWAP Purchase Exercise Date, or such other time publicly announced by the Trading Market as the official close of trading on the Trading Market on such third (3rd) consecutive Trading Day immediately following the applicable VWAP Purchase Exercise Date.
VWAP Purchase Exercise Date means, with respect to a VWAP Purchase made pursuant to Section 3.1, the Trading Day on which the Investor timely receives, after 4:00 p.m., New York City time, but prior to 6:30 p.m., New York City time, on such Trading Day, a valid VWAP Purchase Notice for such VWAP Purchase in accordance with this Agreement.
VWAP Purchase Maximum Amount means, with respect to a VWAP Purchase made pursuant to Section 3.1, such number of shares of Common Stock equal to the lowest of: (i) 100% of the average daily trading volume in the Common Stock on the Trading Market (or, in the event the Common Stock is then listed on an Eligible Market, 100% of the average daily trading volume in the Common Stock on such Eligible Market) for the five (5) consecutive Trading Day period ending on (and including) the Trading Day immediately preceding the applicable VWAP Purchase Exercise Date for such VWAP Purchase; (ii) the product (rounded up or down to the nearest whole number) obtained by multiplying (A) the daily trading volume in the Common Stock on the Trading Market (or Eligible Market, as applicable) on the applicable VWAP Purchase Exercise Date for such VWAP Purchase by (B) 0.25; and (iii) the quotient (rounded up or down to the nearest whole number) obtained by dividing (A) $15,000,000 by (B) the VWAP on the Trading Market (or Eligible Market, as applicable) on the Trading Day immediately preceding the applicable VWAP Purchase Exercise Date for such VWAP Purchase (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable period), provided, that clause (iii)(A) hereof shall be adjusted, as of 8:30 a.m., New York City time, on the first (1st) Trading Day immediately following the last day of each fiscal quarter of the Company ending after the Closing Date (the first of which adjustments shall be made on [●], 202[●]15) to the dollar amount (rounded up or down to the nearest whole dollar) equal to the product obtained by multiplying (X) the dollar value of the average daily trading volume in the Common Stock on the Trading Market (or Eligible Market, as applicable) for all of the Trading Days included in the Companys fiscal quarter most recently ended prior to the Trading Day on which the applicable adjustment hereunder is to be made as set forth herein, by (Y) five (5), provided, further, that in no event shall such dollar amount be lesser than $5,000,000, nor greater than $15,000,000 (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable fiscal quarter of the Company with respect to which an adjustment hereunder is to be made as set forth herein).
15 | To be inserted by amendment to this Agreement signed at the Closing. |
I-19
VWAP Purchase Notice means, with respect to a VWAP Purchase made pursuant to Section 3.1, an irrevocable written notice timely delivered by the Company to the Investor on a VWAP Purchase Exercise Date directing the Investor to purchase a VWAP Purchase Share Amount (such specified VWAP Purchase Share Amount subject to adjustment as set forth in Section 3.1 as necessary to give effect to the VWAP Purchase Maximum Amount), at the applicable VWAP Purchase Price therefor in accordance with this Agreement.
VWAP Purchase Price means, with respect to a VWAP Purchase made pursuant to Section 3.1, the purchase price per Share to be purchased by the Investor in such VWAP Purchase, which shall equal the product obtained by multiplying (i) the lowest daily VWAP during the applicable VWAP Purchase Valuation Period for such VWAP Purchase by (ii) 0.97 (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable period); provided, however, that if such lowest daily VWAP during the applicable VWAP Purchase Valuation Period for such VWAP Purchase referred to in clause (i) hereof is less than $[●]16, then the purchase price per Share to be purchased by the Investor in such VWAP Purchase shall equal the product obtained by multiplying (A) $[●]17 by (B) 0.97 (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable period).
VWAP Purchase Settlement Date shall have the meaning assigned to such term in Section 3.1.
VWAP Purchase Share Amount means, with respect to a VWAP Purchase made pursuant to Section 3.1, the number of Shares to be purchased by the Investor in such VWAP Purchase as specified by the Company in the applicable VWAP Purchase Notice, which number of Shares shall not exceed the applicable VWAP Purchase Maximum Amount.
VWAP Purchase Valuation Period means, with respect to a VWAP Purchase made pursuant to Section 3.1, the three (3) consecutive Trading-Day Period immediately following the applicable VWAP Purchase Exercise Date for such VWAP Purchase, beginning at the VWAP Purchase Commencement Time for such VWAP Purchase and ending at the applicable VWAP Purchase Ending Time for such VWAP Purchase.
16 | To be inserted by amendment to this Agreement signed at the Closing. |
17 | To be inserted by amendment to this Agreement signed at the Closing. |
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EXHIBIT A TO THE
COMMON STOCK PURCHASE AGREEMENT
[TO BE FURNISHED SEPARATELY]
A-1
EXHIBIT B TO THE
COMMON STOCK PURCHASE AGREEMENT
CERTIFICATE OF THE COMPANY
CLOSING CERTIFICATE
[●], 2022
The undersigned, the [●] of SeaStar Medical Holding Corporation, a Delaware corporation (f/k/a LMF Acquisition Opportunities, Inc., a Delaware corporation) (the Company), delivers this certificate in connection with the Common Stock Purchase Agreement, dated as of August 23, 2022 (as it may be amended at or prior to the Closing, the Agreement), by and among Tumim Stone Capital LLC, a Delaware limited liability company, LMF Acquisition Opportunities, Inc., a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, and SeaStar Medical, Inc., a Delaware corporation, and hereby certifies on the date hereof that (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):
1. Attached hereto as Exhibit A is a true, complete and correct copy of the Certificate of Incorporation of the Company, as amended through the date hereof, as filed with the Secretary of State of the State of Delaware. The Certificate of Incorporation of the Company has not been further amended or restated, and no document with respect to any amendment to the Certificate of Incorporation of the Company has been filed in the office of the Secretary of State of the State of Delaware since the date shown on the face of the state certification relating to the Companys Certificate of Incorporation, which is in full force and effect on the date hereof, and no action has been taken by the Company in contemplation of any such amendment or the dissolution, merger or consolidation of the Company.
2. Attached hereto as Exhibit B is a true and complete copy of the Amended and Restated Bylaws of the Company, as amended through, and as in full force and effect on, the date hereof, and no proposal for any amendment, repeal or other modification to the Amended and Restated Bylaws of the Company has been taken or is currently pending before the Board of Directors or stockholders of the Company.
3. The Business Combination Closing occurred on [●], 2022.
4. The Board of Directors of the Company has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof. Attached hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company via unanimous written consent on [●], 2022.
4. Each person who, as an officer of the Company, or as attorney-in-fact of an officer of the Company, signed the Transaction Documents to which the Company is a party, was duly elected, qualified and acting as such officer or duly appointed and acting as such attorney-in-fact, and the signature of each such person appearing on any such document is his genuine signature.
IN WITNESS WHEREOF, I have signed my name as of the date first above written.
|
Name: |
Title: |
B-1
EXHIBIT C TO THE
COMMON STOCK PURCHASE AGREEMENT
COMPLIANCE CERTIFICATE
The undersigned, the [●] of SeaStar Medical Holding Corporation, a Delaware corporation (f/k/a LMF Acquisition Opportunities, Inc., a Delaware corporation) (the Company), delivers this certificate in connection with the Common Stock Purchase Agreement, dated as of August 23, 2022 (as it may be amended at or prior to the Closing, the Agreement), by and among Tumim Stone Capital LLC, a Delaware limited liability company (the Investor), LMF Acquisition Opportunities, Inc., a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, and SeaStar Medical, Inc., a Delaware corporation, and hereby certifies on the date hereof that, to the best of his knowledge after reasonable investigation, on behalf of the Company (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):
1. The undersigned is the duly appointed [●] of the Company.
2. Except as set forth in the attached Disclosure Schedule, the representations and warranties of the Company set forth in Article V of the Agreement (i) that are not qualified by materiality or Material Adverse Effect are true and correct in all material respects as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct in all material respects as of such other date and (ii) that are qualified by materiality or Material Adverse Effect are true and correct as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct as of such other date.
3. The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company [at or prior to Commencement][on or prior to the date hereof].
4. The Shares issuable in respect of each VWAP Purchase Notice effected pursuant to the Agreement shall be delivered to the Investor electronically as DWAC Shares, and shall be freely tradable and transferable and without restriction on resale and without any stop transfer instructions maintained against such Shares. In accordance with Section 10.1(iv) of the Agreement, the Commitment Shares have been delivered to the Investor electronically as DWAC Shares, and the Commitment Shares are freely tradable and transferable and without restriction on resale and without any stop transfer instructions maintained against the Commitment Shares.
5. As of [the Commencement Date][the date hereof], the Company does not possess any material non-public information.
6. As of [the Commencement Date][the date hereof], the Company has reserved out of its authorized and unissued Common Stock, [●] shares of Common Stock solely for the purpose of effecting VWAP Purchases under the Agreement.
7. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus under the Securities Act has been issued and no proceedings for such purpose or pursuant to Section 8A of the Securities Act are pending before or, to the knowledge of the Company, threatened by the Commission.
The undersigned has executed this Certificate this [●] day of [●], 202[●].
By: |
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Name: |
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Title: |
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C-1
DISCLOSURE SCHEDULE
RELATING TO THE COMMON STOCK
PURCHASE AGREEMENT, DATED AS OF AUGUST 23, 2022 (AS MAY BE
AMENDED) BY AND AMONG LMF ACQUISITION OPPORTUNITIES, INC.,
SEASTAR MEDICAL, INC. AND TUMIM STONE CAPITAL LLC
This disclosure schedule is made and given pursuant to Subsection I of Article V of the Common Stock Purchase Agreement, dated as of August 23, 2022 (as it may be amended at or prior to the Closing, the Agreement), by and among Tumim Stone Capital LLC, a Delaware limited liability company, LMF Acquisition Opportunities, Inc., a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, and SeaStar Medical, Inc., a Delaware corporation. Unless the context otherwise requires, all capitalized terms are used herein as defined in the Agreement. The numbers below correspond to the section numbers of representations and warranties in the Agreement most directly modified by the below exceptions.
FORM OF OPINION OF OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 7.1(v)
[Company Counsels Letterhead]
Capitalized terms herein not otherwise defined herein will have the meaning given to such terms in the Common Stock Purchase Agreement, dated as of August 23, 2022, by and between SeaStar Medical Holding Corporation and Tumim Stone Capital LLC (as may be amended, the Purchase Agreement).
1. | The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to own its properties and to conduct its business as such business is presently conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in the State of Florida. |
2. | The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement and the Registration Rights Agreement. The execution and delivery by the Company of the Purchase Agreement and the Registration Rights Agreement, and the consummation by the Company of the transactions contemplated thereby (including, without limitation, the issuance of the Commitment Shares and the issuance and sale of the Shares) have been duly and validly authorized by all necessary corporate action. |
3. | Each of the Purchase Agreement and the Registration Rights Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). |
4. | The execution, delivery and performance by the Company of the Purchase Agreement and the Registration Rights Agreement and the consummation by the Company of the transactions contemplated thereby (including, without limitation, the issuance of the Securities) do not: (i) violate the Companys certificate of incorporation or bylaws (the Governing Documents); (ii) violate the General Corporation Law of the State of Delaware, or any U.S. federal or Florida state statute, rule or regulation applicable to the Company; (iii) require any consents, approvals, or authorizations to be obtained by the Company, or any registrations, declarations or filings to be made by the Company, in each case, under the General Corporation Law of the State of Delaware or any U.S. federal or Florida state statute, rule or regulation applicable to the Company that have not been obtained or made (other than any filings required to be made by the Company after the Closing Date with the Commission in order to enable the Company to perform its obligations under the Purchase Agreement and the Registration Rights Agreement); (iv) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, |
acceleration or cancellation of, any Material Contract; (v) create or impose a lien, charge or encumbrance on any property of the Company under the terms of any Material Contract; or (vi) result in a violation of any U.S. federal or Florida state order, judgment or decree applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound or affected.
5. | Assuming the accuracy of the representations and warranties made by you in the Purchase Agreement, the offering, sale and issuance of the Securities by the Company to you in accordance with the terms of the Purchase Agreement is exempt from the registration requirements of the Securities Act. |
6. | When issued in accordance with the Purchase Agreement, the Commitment Shares will be duly authorized and validly issued, fully paid and non-assessable, free and clear of all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances under the Companys Governing Documents, the General Corporation Law of the State of Delaware or any Material Contract. When issued and paid for in accordance with the Purchase Agreement, the Shares will be duly authorized and validly issued, fully paid and non-assessable, free and clear of all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances under the Companys Governing Documents, the General Corporation Law of the State of Delaware or any Material Contract. |
7. | The execution and delivery of the Purchase Agreement and the Registration Rights Agreement by the Company do not, and the performance by the Company of its obligations thereunder shall not, give rise to any rights of any other person that exist and are in effect as of the date of the Closing, for the registration under the Securities Act of any shares of Common Stock or other securities of the Company which have not been waived. |
8. | We are not representing the Company in any pending litigation in which it is a named defendant that challenges the validity or enforceability of, or seeks to enjoin the performance of, the Purchase Agreement or the Registration Rights Agreement. |
9. | The Company is not, and after giving effect to the issuance of the Commitment Shares and the issuance and sale of the Shares under the Purchase Agreement and the application of the proceeds therefrom as described in the Commission Documents, will not be, an investment company, as that term is defined in the Investment Company Act of 1940, as amended. |
FORM OF OPINION OF OUTSIDE COUNSEL TO BE DELIVERED ON THE
COMMENCEMENT DATE PURSUANT TO SECTION 7.2(xvi) AND FORM OF
BRING DOWN OPINION TO BE DELIVERED PURSUANT TO SECTION 6.15
[Company Counsels Letterhead]
Capitalized terms herein not otherwise defined herein will have the meaning given to such terms in the Common Stock Purchase Agreement, dated as of August 23, 2022, by and between SeaStar Medical Holding Corporation and Tumim Stone Capital LLC (as may be amended, the Purchase Agreement).
1. | The Registration Statement has become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to our knowledge, threatened by the Commission. The Prospectus has been filed in the manner and within the time period required by Rule 424(b) under the Securities Act. |
2. | We have reviewed the statements under Item 14 of the Registration Statement and under the caption Description of Capital Stock included in the Prospectus and, insofar as such statements constitute summaries of the legal matters, agreements, documents or proceedings referred to therein, fairly summarize, in all material respects, the matters referred to therein. |
3. | No facts have come to our attention that cause us to believe that any of the opinions expressed in our opinion letter to you dated [●], 202[●] are not true and correct as of the date hereof. |
[THE FOLLOWING MAY BE MADE IN A SEPARATE NEGATIVE ASSURANCES LETTER]
We confirm to you, on the basis of the information we gained in the course of performing the services referred to above, that (a) the Registration Statement, as of its effective date, and the Prospectus,18 as of its date and as of the date hereof (except in each case as to the financial statements, schedules and other financial and accounting data, as to which we make no comment), appeared or appears on its face to be appropriately responsive in all material respects to the applicable requirements of the Securities Act and Form S-1, and (b) each of the documents incorporated by reference in the Registration Statement and the Prospectus (except as to the financial statements, schedules and other financial and accounting data, as to which we make no comment), at the time such document was filed with the SEC, appeared on its face to be appropriately responsive in all material respects to the applicable requirements of the Exchange Act.
18 | Registration Statement and Prospectus should be defined to include all documents and information set forth or incorporated by reference therein. |
Furthermore, nothing came to our attention that caused us to believe that (i) the Registration Statement, as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) the Prospectus, as of its date or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that we do not express any belief with respect to the financial statements, schedules, notes, other financial and accounting information derived therefrom, contained in the Registration Statement or the Prospectus, as the case may be.
Exhibit 10.31
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this Agreement), dated as of August 23, 2022, is by and among Tumim Stone Capital LLC, a Delaware limited liability company (the Investor), LMF Acquisition Opportunities, Inc., a Delaware blank check company established for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (LMFAO), and SeaStar Medical, Inc., a Delaware corporation (SeaStar Medical).
RECITALS
A. On April 21, 2022, LMFAO, LMF Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of LMFAO (Merger Sub), and SeaStar Medical entered into that certain Agreement and Plan of Merger (as amended from time to time, the Merger Agreement), pursuant to which, among other things, Merger Sub will merge with and into SeaStar Medical (the Merger), with SeaStar Medical surviving the Merger as a wholly owned subsidiary of LMFAO (the Merger and each of the other transactions to be completed as a part of or at the same time as the Merger pursuant to the Merger Agreement, collectively, are referred to herein as the Business Combination).
B. Upon the closing of the Business Combination (the Business Combination Closing), among other things, (i) LMFAO will change its name to SeaStar Medical Holding Corporation and, therefore, all references in this Agreement to the Company shall mean SeaStar Medical Holding Corporation, a Delaware corporation from and after the Business Combination Closing, (ii) the Company shall be subject to the reporting requirements of the Exchange Act under Section 13(a) or Section 15(d) of the Exchange Act, (iii) the Companys common stock, par value $0.0001 per share (Common Stock), shall be registered under the Exchange Act pursuant to Section 12(b) of the Exchange Act, (iv) the Common Stock shall be listed and traded on the Trading Market under the symbol ICU, and (v) the Common Stock may be issued by the Company and transferred electronically to third parties via DTC through its Deposit/Withdrawal at Custodian delivery system.
C. Each of LMFAO, SeaStar Medical and the Investor are entering into a Common Stock Purchase Agreement on the date hereof and prior to the Business Combination Closing, which Purchase Agreement (as it may be amended at or prior to the Closing, the Purchase Agreement) provides that the Company shall issue to the Investor the Commitment Shares (as defined in the Purchase Agreement), and the Company may, from time to time in its sole discretion, issue and sell to the Investor up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued shares of Common Stock, and (ii) the Exchange Cap (to the extent applicable under Section 3.3 of the Purchase Agreement), as provided for therein, with the effectiveness of the Purchase Agreement delayed until the Business Combination Closing shall have occurred pursuant to the Merger Agreement and the Closing under the Purchase Agreement, as it may be amended at or prior to the Closing, shall have occurred on the Closing Date as set forth in Section 2.2 of the Purchase Agreement and subject to the satisfaction of the conditions set forth in Section 7.1 of the Purchase Agreement, it being acknowledged and agreed by each of LMFAO, SeaStar Medical and the Investor that the Purchase Agreement shall be of no force or effect prior to the Closing on the Closing Date (and as it may be amended at or prior to the Closing Date).
D. In consideration for the Investor entering into the Purchase Agreement, and to induce the Investor to execute and deliver the Purchase Agreement on the date hereof and prior to the Business Combination Closing, LMFAO, SeaStar Medical and the Investor desire to concurrently enter into this Agreement on the date hereof and prior to the Business Combination Closing, which shall become effective concurrently with the effectiveness of the Purchase Agreement, as it may be amended thereunder, at the Closing on the Closing Date (it being acknowledged and agreed by each of LMFAO, SeaStar Medical and the Investor that, as with the Purchase Agreement (as it may be amended at or prior to the Closing), this Agreement shall be of no force or effect prior to the Closing on the Closing Date) in accordance with Section 2(g) of this Agreement, and pursuant to which the Company shall register the resale of the Registrable Securities (as defined herein) and provide the Investor with certain registration rights with respect to the Registrable Securities, as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement (as it may be amended at or prior to the Closing), and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound hereby, the Company and the Investor hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
(a) Agreement shall have the meaning assigned to such term in the preamble of this Agreement.
(b) Allowable Grace Period shall have the meaning assigned to such term in Section 3(p).
(c) Blue Sky Filing shall have the meaning assigned to such term in Section 6(a).
(d) Business Combination shall have the meaning assigned to such term in the recitals of this Agreement.
(e) Business Combination Closing shall have the meaning assigned to such term in the recitals of this Agreement.
(f) Business Day means any day other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized or required by law to remain closed.
(g) Claims shall have the meaning assigned to such term in Section 6(a).
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(h) Commission means the U.S. Securities and Exchange Commission or any successor entity.
(i) Common Stock shall have the meaning assigned to such term in the recitals to this Agreement.
(j) Company shall have the meaning assigned to such term in the recitals to this Agreement.
(k) Company Party shall have the meaning assigned to such term in Section 6(b).
(l) Effective Date means the date that the applicable Registration Statement has been declared effective by the Commission.
(m) Effectiveness Deadline means (i) with respect to the Initial Registration Statement required to be filed to pursuant to Section 2(a), the earlier of (A) the ninetieth (90th) calendar day immediately after date on which the Initial Registration Statement is initially filed with the Commission, if the Initial Registration Statement is subject to review by the Commission, and (B) if the Company is notified (orally or in writing) by the Commission that the Initial Registration Statement will not be reviewed by the Commission, the fifth (5th) calendar day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Initial Registration Statement will not be reviewed by the Commission, and (ii) with respect to any New Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of (A) the sixtieth (60th) calendar day immediately after the Filing Deadline with respect to such New Registration Statement, if such New Registration Statement is subject to review by the Commission, and (B) if the Company is notified (orally or in writing) by the Commission that such New Registration Statement will not be reviewed by the Commission, the fifth (5th) calendar day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such New Registration Statement will not be reviewed by the Commission.
(n) Filing Deadline means (i) with respect to the Initial Registration Statement required to be filed to pursuant to Section 2(a), the thirtieth (30th) calendar day after the Closing Date (as defined in the Purchase Agreement) and (ii) with respect to any New Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the thirtieth (30th) calendar day following the sale of substantially all of the Registrable Securities included in the Initial Registration Statement or the most recent prior New Registration Statement, as applicable, or such other date as permitted by the Commission.
(o) Indemnified Damages shall have the meaning assigned to such term in Section 6(a).
(p) Indemnified Party shall have meaning assigned to such term in Section 6(c).
(q) Indemnifying Party shall have the meaning assigned to such term in Section 6(c).
(r) Initial Registration Statement shall have the meaning assigned to such term in Section 2(a).
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(s) Investor shall have the meaning assigned to such term in the preamble of this Agreement.
(t) Investor Party and Investor Parties shall have the meaning assigned to such terms in Section 6(a).
(u) Legal Counsel shall have the meaning assigned to such term in Section 2(b).
(v) LMFAO shall have the meaning assigned to such term in the preamble of this Agreement.
(w) Merger shall have the meaning assigned to such term in the recitals to this Agreement.
(x) Merger Agreement shall have the meaning assigned to such term in the recitals to this Agreement.
(y) Merger Sub shall have the meaning assigned to such term in the recitals to this Agreement.
(z) New Registration Statement shall have the meaning assigned to such term in Section 2(c).
(aa) Person means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.
(bb) Prospectus means the prospectus in the form included in a Registration Statement, as supplemented from time to time by any Prospectus Supplement, including the documents incorporated by reference therein.
(cc) Prospectus Supplement means any prospectus supplement to a Prospectus filed with the Commission from time to time pursuant to Rule 424(b) under the Securities Act, including the documents incorporated by reference therein.
(dd) Purchase Agreement shall have the meaning assigned to such term in the recitals to this Agreement. For the avoidance of doubt, the term Purchase Agreement shall include any and all amendments thereto that may be effected by the parties thereto pursuant to Section 10.6 thereof.
(ee) register, registered, and registration refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by the Commission.
(ff) Registrable Securities means all of (i) the Shares, (ii) the Commitment Shares, and (iii) any capital stock of the Company issued or issuable with respect to such Shares or Commitment Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event and (2) shares of capital stock of the Company into which the shares of Common Stock are converted or exchanged and shares of capital stock of a successor entity into which the shares of Common Stock are converted or exchanged.
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(gg) Registration Statement means a registration statement or registration statements of the Company filed under the Securities Act covering the resale by the Investor of Registrable Securities, as such registration statement or registration statements may be amended and supplemented from time to time, including all documents filed as part thereof or incorporated by reference therein.
(hh) Registration Period shall have the meaning assigned to such term in Section 3(a).
(ii) Rule 144 means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the Commission that may at any time permit the Investor to sell securities of the Company to the public without registration.
(jj) Rule 415 means Rule 415 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the Commission providing for offering securities on a delayed or continuous basis.
(kk) SeaStar Medical shall have the meaning assigned to such term in the preamble of this Agreement.
(ll) Staff shall have the meaning assigned to such term in Section 2(c).
(mm) Violations shall have the meaning assigned to such term in Section 6(a).
2. Registration.
(a) Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the Commission an initial Registration Statement on Form S-1 (or any successor form) covering the resale by the Investor of (i) all of the Commitment Shares and (ii) the maximum number of additional Registrable Securities as shall be permitted to be included thereon in accordance with applicable Commission rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor under Rule 415 under the Securities Act at then prevailing market prices (and not fixed prices) (the Initial Registration Statement). The Initial Registration Statement shall contain the Selling Stockholder and Plan of Distribution sections in substantially the form attached hereto as Exhibit B. The Company shall use its commercially reasonable efforts to have the Initial Registration Statement declared effective by the Commission as soon as reasonably practicable, but in no event later than the applicable Effectiveness Deadline.
(b) Legal Counsel. Subject to Section 5 hereof, the Investor shall have the right to select one legal counsel to review, solely on the Investors behalf, each Registration Statement filed with the Commission pursuant to this Section 2 (Legal Counsel), which shall be Dorsey & Whitney LLP, or such other counsel as thereafter designated by the Investor. Except as provided under Section 10.1(i) of the Purchase Agreement, the Company shall have no obligation to reimburse the Investor for any legal fees and expenses of the Legal Counsel incurred in connection with the transactions contemplated hereby.
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(c) Sufficient Number of Shares Registered. If at any time all Registrable Securities are not covered by the Initial Registration Statement filed pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its commercially reasonable efforts to file with the Commission one or more additional Registration Statements so as to cover all of the Registrable Securities not covered by the Initial Registration Statement, in each case, as soon as practicable (taking into account any position of the staff of the Commission (Staff) with respect to the date on which the Staff will permit such additional Registration Statement(s) to be filed with the Commission and the rules and regulations of the Commission) (each such additional Registration Statement, a New Registration Statement), but in no event later than the applicable Filing Deadline for such New Registration Statement(s). The Company shall use its commercially reasonable efforts to cause each such New Registration Statement to become effective as soon as practicable following the filing thereof with the Commission, but in no event later than the applicable Effectiveness Deadline for such New Registration Statement.
(d) No Inclusion of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement pursuant to Section 2(a) or Section 2(c).
(e) Offering. If the Staff or the Commission seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become effective and be used for resales by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed prices), or if after the filing of any Registration Statement pursuant to Section 2(a) or Section 2(c) hereof, the Company is otherwise required by the Staff or the Commission to reduce the number of Registrable Securities included in such Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such Registration Statement (after consultation with the Investor and Legal Counsel as to the specific Registrable Securities to be removed therefrom) until such time as the Staff and the Commission shall so permit such Registration Statement to become effective and be used as aforesaid. Notwithstanding anything in this Agreement to the contrary, if after giving effect to the actions referred to in the immediately preceding sentence, the Staff or the Commission does not permit such Registration Statement to become effective and be used for resales by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed prices), the Company shall not request acceleration of the Effective Date of such Registration Statement, the Company shall promptly (but in no event later than 48 hours) request the withdrawal of such Registration Statement pursuant to Rule 477 under the Securities Act, and the Effectiveness Deadline shall automatically be deemed to have elapsed with respect to such Registration Statement at such time as the Staff or the Commission has made a final and non-appealable determination that the Commission will not permit such Registration Statement to be so utilized (unless prior to such time the Company has received assurances from the Staff or the Commission that a New Registration Statement filed by the Company with the Commission promptly thereafter may be so utilized). In the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall use its commercially reasonable efforts to file one or more New Registration Statements with the Commission in accordance with Section 2(c) hereof until such time as all
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Registrable Securities have been included in Registration Statements that have been declared effective and the Prospectuses contained therein are available for use by the Investor. Notwithstanding any provision herein or in the Purchase Agreement to the contrary, the Companys obligations to register Registrable Securities (and any related conditions to the Investors obligations) shall be qualified as necessary to comport with any requirement of the Staff of the Commission as addressed in this Section 2(e).
(f) Statutory Underwriter Status. The Investor acknowledges that it will be disclosed as an underwriter and a selling stockholder in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law and to the extent the Prospectus is related to the resale of Registrable Securities by the Investor.
(g) Effectiveness. This Agreement shall become effective concurrently with the effectiveness of the Purchase Agreement (as it may be amended thereunder) at the Closing on the Closing Date as set forth in Section 2.2 of the Purchase Agreement (as so amended) and subject to the satisfaction of the conditions set forth in Section 7.1 of the Purchase Agreement (as so amended), it being acknowledged and agreed by each of LMFAO, SeaStar Medical and the Investor that this Agreement shall be of no force or effect prior to the Closing on the Closing Date.
3. Related Obligations.
The Company shall use its commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:
(a) The Company shall promptly prepare and file with the Commission the Initial Registration Statement pursuant to Section 2(a) hereof and one or more New Registration Statements pursuant to Section 2(c) hereof with respect to the Registrable Securities, but in no event later than the applicable Filing Deadline therefor, and the Company shall use its commercially reasonable efforts to cause each such Registration Statement to become effective by the applicable Effectiveness Deadline. Subject to Allowable Grace Periods, the Company shall use commercially reasonable efforts to keep each Registration Statement effective (and the Prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investor on a continuous basis at then-prevailing market prices (and not fixed prices) at all times until the earliest of (i) the date on which the Investor shall have sold all of the Registrable Securities covered by such Registration Statement, (ii) the date that is 180 days after the effective date of the termination of the Purchase Agreement in accordance with Article VIII of the Purchase Agreement, if as of such effective date the Investor holds any Registrable Securities, and (iii) the effective date of the termination of the Purchase Agreement in accordance with Article VIII of the Purchase Agreement, if as of such effective date the Investor holds no Registrable Securities (the Registration Period).
(b) Subject to Section 3(p) of this Agreement, the Company shall use its commercially reasonable efforts to prepare and file with the Commission such amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the Prospectus used in connection with each such Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep each
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such Registration Statement effective (and the Prospectus contained therein current and available for use) at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the Investor as set forth in such Registration Statement. Without limiting the generality of the foregoing, the Company covenants and agrees that (i) at or before 5:30 p.m. (New York City time) on the Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule 424(b) under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement (or post-effective amendment thereto), and (ii) if the transactions contemplated by any VWAP Purchase are material to the Company (individually or collectively with all other prior VWAP Purchases, the consummation of which have not previously been reported in any Prospectus Supplement filed with the Commission under Rule 424(b) under the Securities Act or in any report, statement or other document filed by the Company with the Commission under the Exchange Act), or if otherwise required under the Securities Act (or the interpretations of the Commission thereof), in each case as reasonably determined by the Company, then, at or before 9:00 a.m. (New York City time) on the first (1st) Trading Day of the applicable VWAP Purchase Valuation Period for such VWAP Purchase, the Company shall file with the Commission a Prospectus Supplement pursuant to Rule 424(b) under the Securities Act with respect to the applicable VWAP Purchase(s), disclosing the total number of Shares that are to be (and, if applicable, have been) issued and sold to the Investor pursuant to such VWAP Purchase(s), the total purchase price for the Shares subject to such VWAP Purchase(s), the applicable purchases price(s) for such Shares and the net proceeds that are to be (and, if applicable, have been) received by the Company from the sale of such Shares. To the extent not previously disclosed in the Prospectus or a Prospectus Supplement, the Company shall disclose in its Quarterly Reports on Form 10-Q and in its Annual Reports on Form 10-K the information described in the immediately preceding sentence relating to all VWAP Purchase(s) consummated during the relevant fiscal quarter and shall file such Quarterly Reports and Annual Reports with the Commission within the applicable time period prescribed for such report under the Exchange Act. In the case of amendments and supplements to any Registration Statement on Form S-1 or Prospectus related thereto which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement and Prospectus, if applicable, or shall file such amendments or supplements to the Registration Statement or Prospectus with the Commission on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement or Prospectus, for the purpose of including or incorporating such report into such Registration Statement and Prospectus. The Company consents to the use of the Prospectus (including, without limitation, any supplement thereto) included in each Registration Statement in accordance with the provisions of the Securities Act and with the securities or Blue Sky laws of the jurisdictions in which the Registrable Securities may be sold by the Investor, in connection with the resale of the Registrable Securities and for such period of time thereafter as such Prospectus (including, without limitation, any supplement thereto) (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required by the Securities Act to be delivered in connection with resales of Registrable Securities.
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(c) The Company shall (A) permit Investor and Legal Counsel an opportunity to review and comment upon each Registration Statement and all amendments and supplements thereto at least two (2) Business Days prior to its filing with the Commission and (B) shall reasonably consider any reasonable comments of the Investor and Legal Counsel on any such Registration Statement or amendment or supplement thereto or to any Prospectus contained therein. Investor shall use its reasonable best efforts to comment, and cause Legal Counsel to comment, upon any such Registration Statement or amendment or supplement thereto provided by the Company within one (1) Business Day of receipt. The Company shall promptly furnish to Legal Counsel, without charge, electronic copies of any correspondence from the Commission or the Staff to the Company or its representatives relating to each Registration Statement (which correspondence shall be redacted to exclude any material, non-public information regarding the Company or any of its Subsidiaries).
(d) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall promptly furnish to the Investor, without charge, (i) after the same is prepared and filed with the Commission, at least one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor, all exhibits thereto, (ii) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto and (iii) such other documents, including, without limitation, copies of any final Prospectus and any Prospectus Supplement thereto, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor; provided, however, the Company shall not be required to furnish any document (other than the Prospectus, which may be provided in .PDF format) to the Investor to the extent such document is available on EDGAR.
(e) The Company shall take such action as is reasonably necessary to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by the Investor of the Registrable Securities covered by a Registration Statement under such other securities or Blue Sky laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and the Investor of the receipt by the Company of any written notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or Blue Sky laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
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(f) The Company shall notify Legal Counsel and the Investor in writing of the happening of any event, as promptly as reasonably practicable after becoming aware of such event, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(p), promptly prepare a supplement or amendment to such Registration Statement and such Prospectus contained therein to correct such untrue statement or omission and deliver one (1) electronic copy of such supplement or amendment to Legal Counsel and the Investor (or such other number of copies as Legal Counsel or the Investor may reasonably request). The Company shall also promptly notify Legal Counsel and the Investor in writing (i) when a Prospectus or any Prospectus Supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and the Investor by facsimile or e-mail on the same day of such effectiveness), (ii) of any request by the Commission for amendments or supplements to a Registration Statement or related Prospectus or related information, and (iii) of the Companys reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. The Company shall respond as promptly as reasonably practicable to any comments received from the Commission with respect to a Registration Statement or any amendment thereto.
(g) The Company shall (i) use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement or the use of any Prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible time and (ii) notify Legal Counsel and the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding.
(h) The Company shall hold in confidence and not disclose information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with applicable laws, including federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such Registration Statement pursuant to the Securities Act, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investors expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
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(i) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall use its commercially reasonable efforts either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on the Trading Market or (ii) secure designation and quotation of all of the Registrable Securities covered by each Registration Statement on another Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(i).
(j) The Company shall cooperate with the Investor and, to the extent applicable, facilitate the timely preparation and delivery of Registrable Securities, as DWAC Shares, to be offered pursuant to a Registration Statement and enable such DWAC Shares to be in such denominations or amounts (as the case may be) as the Investor may reasonably request from time to time and registered in such names as the Investor may request. Investor hereby agrees that it shall cooperate with the Company, its counsel and Transfer Agent in connection with any issuances of the DWAC Shares, and hereby represents, warrants and covenants to the Company that that it will resell such Shares only pursuant to the Registration Statement in which such DWAC Shares are included, in a manner described under the caption Plan of Distribution in such Registration Statement, and in a manner in compliance with all applicable U.S. federal and state securities laws, rules and regulations, including, without limitation, any applicable prospectus delivery requirements of the Securities Act. DWAC Shares shall be free from all restrictive legends may be transmitted by the Companys transfer agent to the Investor by crediting an account at DTC as directed in writing by the Investor.
(k) Upon the written request of the Investor, the Company shall as soon as reasonably practicable after receipt of notice from the Investor and subject to Section 3(p) hereof, (i) incorporate in a Prospectus Supplement or post-effective amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such Prospectus Supplement or post-effective amendment after being notified of the matters to be incorporated in such Prospectus Supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or Prospectus contained therein if reasonably requested by the Investor.
(l) The Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities in the United States as may be necessary to consummate the disposition of such Registrable Securities.
(m) The Company shall make generally available to its security holders (which may be satisfied by making such information available on EDGAR) as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning not later than the first day of the Companys fiscal quarter next following the applicable Effective Date of each Registration Statement.
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(n) The Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission in connection with any registration hereunder.
(o) Within one (1) Business Day after each Registration Statement which covers Registrable Securities is declared effective by the Commission, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the Commission in the form attached hereto as Exhibit A.
(p) Notwithstanding anything to the contrary contained herein or in the Purchase Agreement (but subject to the last sentence of this Section 3(p)), at any time after the Effective Date of a particular Registration Statement, the Company may, upon written notice to the Investor, suspend the Investors use of any prospectus that is a part of any Registration Statement (in which event the Investor shall discontinue sales of the Registrable Securities pursuant to such Registration Statement contemplated by this Agreement, but shall settle any previously made sales of Registrable Securities) if the Company (x) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Company determines in good faith that (A) the Companys ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (B) such transaction renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or inadvisable to cause any Registration Statement (or such filings) to be used by Investor or to promptly amend or supplement any Registration Statement contemplated by this Agreement on a post effective basis, as applicable, or (y) has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the Company, would materially adversely affect the Company (each, an Allowable Grace Period); provided, however, that in no event shall the Investor be suspended from selling Registrable Securities pursuant to any Registration Statement for a period that exceeds 20 consecutive Trading Days or an aggregate of 60 Trading Days in any 365-day period; and provided, further, the Company shall not effect any such suspension during (I) the first five (5) consecutive Trading Days after the Effective Date of the particular Registration Statement or (II) the six (6) consecutive Trading Day period commencing on each VWAP Purchase Exercise Date. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice, but in any event within one Business Day of such disclosure or termination, to the Investor and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement (including as set forth in the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable). Notwithstanding anything to the contrary contained in this Section 3(p), the Company shall cause its transfer agent to deliver DWAC Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which (i) the Company has made a sale to Investor and (ii) the Investor has entered into a contract for sale, and delivered a copy of the Prospectus included as part of the particular Registration Statement to the extent applicable, in each case prior to the Investors receipt of the notice of an Allowable Grace Period and for which the Investor has not yet settled.
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4. Obligations of the Investor.
(a) At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement (or such shorter period to which the parties agree), the Company shall notify the Investor in writing of the information the Company requires from the Investor with respect to such Registration Statement, and the Investor shall (i) promptly furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of such Registrable Securities, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and (ii) promptly execute such documents in connection with such registration as the Company may reasonably request.
(b) The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder.
(c) The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(p) or the first sentence of 3(f), the Investor shall immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until the Investors receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(p) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver DWAC Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Investor has entered into a contract for sale prior to the Investors receipt of a notice from the Company of the happening of any event of the kind described in Section 3(p) or the first sentence of Section 3(f) and for which the Investor has not yet settled.
(d) The Investor covenants and agrees that it shall comply with the prospectus delivery and other requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
5. Expenses of Registration.
All reasonable expenses of the Company, other than sales or brokerage commissions (and, except as required under Section 10.1(i) of the Purchase Agreement, the fees and disbursements of counsel for the Investor), and other expenses of the Investor, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.
6. Indemnification.
(a) In the event any Registrable Securities are included in any Registration Statement under this Agreement, to the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls the Investor within the meaning of the
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Securities Act or the Exchange Act and each of the directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an Investor Party and collectively, the Investor Parties), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys fees, costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, Claims) reasonably incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the Commission, whether pending or threatened, whether or not an Investor Party is or may be a party thereto (Indemnified Damages), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other Blue Sky laws of any jurisdiction in which Registrable Securities are offered (Blue Sky Filing), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented) or in any Prospectus Supplement or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading (the matters in the foregoing clauses (i) and (ii) being, collectively, Violations). Subject to Section 6(c), the Company shall reimburse the Investor Parties, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Investor Party arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Investor Party for such Investor Party expressly for use in connection with the preparation of such Registration Statement, Prospectus or Prospectus Supplement or any such amendment thereof or supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement); (ii) shall not be available to the Investor to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the Prospectus (as amended or supplemented) made available by the Company (to the extent applicable), including, without limitation, a corrected Prospectus, if such Prospectus (as amended or supplemented) or corrected Prospectus was timely made available by the Company pursuant to Section 3(d) and then only if, and to the extent that, following the receipt of the corrected Prospectus no grounds for such Claim would have existed; and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Investor Party and shall survive the transfer of any of the Registrable Securities by the Investor pursuant to Section 9.
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(b) In connection with any Registration Statement in which the Investor is participating, the Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, a Company Party), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information relating to the Investor furnished to the Company by the Investor expressly for use in connection with such Registration Statement, the Prospectus included therein or any Prospectus Supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement); and, subject to Section 6(c) and the below provisos in this Section 6(b), the Investor shall reimburse a Company Party any legal or other expenses reasonably incurred by such Company Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld or delayed; and provided, further that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Investor as a result of the applicable sale of Registrable Securities pursuant to such Registration Statement, Prospectus or Prospectus Supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Party and shall survive the transfer of any of the Registrable Securities by the Investor pursuant to Section 9.
(c) Promptly after receipt by an Investor Party or Company Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Investor Party or Company Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Investor Party or the Company Party (as the case may be); provided, however, an Investor Party or Company Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Investor Party or Company Party (as the case may be) in any such Claim; or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties) include both such Investor Party or Company Party (as the case may be) and the indemnifying party, and such Investor Party or such Company Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Investor Party or such Company Party and the indemnifying party (in which case,
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if such Investor Party or such Company Party (as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof on behalf of the indemnified party and such counsel shall be at the expense of the indemnifying party, provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for all Investor Parties or Company Parties (as the case may be). The Company Party or Investor Party (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Company Party or Investor Party (as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Company Party or Investor Party (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Company Party or Investor Party (as the case may be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Company Party or Investor Party (as the case may be) of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Company Party. For the avoidance of doubt, the immediately preceding sentence shall apply to Sections 6(a) and 6(b) hereof. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Company Party or Investor Party (as the case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Investor Party or Company Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.
(d) No Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation.
(e) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred; provided that any Person receiving any payment pursuant to this Section 6 shall promptly reimburse the Person making such payment for the amount of such payment to the extent a court of competent jurisdiction determines that such Person receiving such payment was not entitled to such payment.
(f) The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Company Party or Investor Party against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
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7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, the Investor shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by the Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that the Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue statement or omission or alleged omission.
8. Reports Under the Exchange Act.
With a view to making available to the Investor the benefits of Rule 144, the Company agrees to:
(a) use its reasonable best efforts to make and keep public information available, as those terms are understood and defined in Rule 144;
(b) use its reasonable best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit any of the Companys obligations under the Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144;
(c) furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144 and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the Commission if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and
(d) take such additional action as is reasonably requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Companys Transfer Agent as may be reasonably requested from time to time by the Investor and otherwise fully cooperate with Investor and Investors broker to effect such sale of securities pursuant to Rule 144.
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9. Assignment of Registration Rights.
Neither the Company nor the Investor shall assign this Agreement or any of their respective rights or obligations hereunder; provided, that any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby the Company remains the surviving entity immediately after such transaction shall not be deemed an assignment.
10. Amendment or Waiver.
No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
11. Miscellaneous.
(a) Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement shall be given in accordance with Section 10.4 of the Purchase Agreement.
(c) The Company and the Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.
(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of
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any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) The Transaction Documents set forth the entire agreement and understanding of the parties solely with respect to the subject matter thereof and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, solely with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to the subject matter hereof not expressly set forth in the Transaction Documents. Notwithstanding anything in this Agreement to the contrary and without implication that the contrary would otherwise be true, nothing contained in this Agreement shall limit, modify or affect in any manner whatsoever (i) the conditions precedent to a VWAP Purchase contained in Article VII of the Purchase Agreement or (ii) any of the Companys obligations under the Purchase Agreement (as it may be amended thereunder).
(f) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective successors and the Persons referred to in Sections 6 and 7 hereof (and in such case, solely for the purposes set forth therein).
(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms including, includes, include and words of like import shall be construed broadly as if followed by the words without limitation. The terms herein, hereunder, hereof and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(h) This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a .pdf format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.
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(i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(j) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.
12. Termination.
This Agreement shall terminate in its entirety upon the earlier of (i) the date on which the Investor shall have sold all the Registrable Securities and (ii) 180 days following the date of termination of the Purchase Agreement; provided, that the provisions of Sections 4, 6, 7, 9, 10 and 11 shall remain in full force and effect.
[Signature Pages Follow]
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IN WITNESS WHEREOF, Investor, LMFAO and SeaStar Medical have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
LMFAO: | ||
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | /s/ Richard Russell | |
Name: | Richard Russell | |
Title: | Chief Financial Officer | |
SEASTAR MEDICAL: | ||
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: | Eric Schlorff | |
Title: | Chief Executive Officer |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, Investor, LMFAO and SeaStar Medical have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
THE INVESTOR: | ||
TUMIM STONE CAPITAL LLC | ||
By: | /s/ Maier Tarlow | |
Name: Maier Tarlow | ||
Title: Manager on Behalf of the GP |
[Signature Page to Registration Rights Agreement]
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[NAME & ADDRESS]
Re: | SeaStar Medical Holding Corporation (f/k/a LMF Acquisition Opportunities, Inc.) |
Ladies and Gentlemen:
We are counsel to SeaStar Medical Holding Corporation, a Delaware corporation (f/k/a LMF Acquisition Opportunities, Inc., a Delaware corporation) (the Company), and have represented the Company in connection with that certain Common Stock Purchase Agreement, dated August 23, 2022 (as it may be amended thereunder, the Purchase Agreement), entered into by and among the Company, SeaStar Medical, Inc. (SeaStar Medical) and the Investor named therein (the Holder) pursuant to which the Company will issue to the Holder from time to time shares of the Companys common stock, par value $0.0001 per share (the Common Stock). Pursuant to the Purchase Agreement, the Company and SeaStar Medical also have entered into a Registration Rights Agreement, dated August 23, 2022, with the Holder (the Registration Rights Agreement), pursuant to which the Company agreed, among other things, to register the offer and sale by the Holder of the Registrable Securities (as defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the Securities Act). In connection with the Companys obligations under the Registration Rights Agreement, on [], 202[], the Company filed a Registration Statement on Form S-1 (File No. 333-[]) (the Registration Statement) with the Securities and Exchange Commission (the Commission) relating to the Registrable Securities which names the Holder as an underwriter and a selling stockholder thereunder.
In connection with the foregoing, based solely on our review of the Commissions EDGAR website, we advise you that the Registration Statement became effective under the Securities Act on [____, 20__]. In addition, based solely on our review of the information made available by the Commission at http://www.sec.gov/litigation/stoporders.shtml, we confirm that the Commission has not issued any stop order suspending the effectiveness of the Registration Statement. To our knowledge, based solely on our participation in the conferences mentioned above regarding the Registration Statement and our review of the information made available by the Commission at http://www.sec.gov/litigation/stoporders.shtml, no proceedings for that purpose are pending or have been instituted or threatened by the Commission.
This opinion letter is limited to the federal securities laws of the United States of America. We express no opinion as to matters relating to state securities laws or Blue Sky laws.
We assume no obligation to update or supplement this opinion letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the opinion and statements expressed above, including any changes in applicable law that may hereafter occur.
This opinion letter is being delivered solely for the benefit of the person to whom it is addressed; accordingly, it may not be quoted, filed with any governmental authority or other regulatory agency or otherwise circulated or utilized for any purposes without our prior written consent.
Very truly yours, | ||
[ISSUERS COUNSEL] | ||
By: |
cc: Tumim Stone Capital LLC
EXHIBIT B
SELLING STOCKHOLDER
This prospectus relates to the possible resale from time to time by Tumim Stone Capital of any or all of the shares of common stock that may be issued by us to Tumim Stone Capital under the Purchase Agreement. For additional information regarding the issuance of common stock covered by this prospectus, see the section titled Tumim Stone Capital Committed Equity Financing above. We are registering the shares of common stock pursuant to the provisions of the Registration Rights Agreement we entered into with Tumim Stone Capital on August 23, 2022 in order to permit the selling stockholder to offer the shares for resale from time to time. Except for the transactions contemplated by the Purchase Agreement and the Registration Rights Agreement, Tumim Stone Capital has not had any material relationship with us within the past three years. As used in this prospectus, the term selling stockholder means Tumim Stone Capital LLC.
The table below presents information regarding the selling stockholder and the shares of common stock that may be resold by the selling stockholder from time to time under this prospectus. This table is prepared based on information supplied to us by the selling stockholder, and reflects holdings as of [], 202[]. The number of shares in the column Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus represents all of the shares of common stock being offered for resale by the selling stockholder under this prospectus. The selling stockholder may sell some, all or none of the shares being offered for resale in this offering. We do not know how long the selling stockholder will hold the shares before selling them, and we are not aware of any existing arrangements between the selling stockholder and any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares of our common stock being offered for resale by this prospectus.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act, and includes shares of common stock with respect to which the selling stockholder has sole or shared voting or investment power, or the right to acquire sole or shard voting or investment power within sixty days. The percentage of shares of common stock beneficially owned by the selling stockholder prior to the offering shown in the table below is based on an aggregate of [] shares of our common stock outstanding on [], 202[]. Because the purchase price of the shares of common stock issuable under the Purchase Agreement is determined during the applicable VWAP Purchase Valuation Period for a VWAP Purchase, the number of shares that may actually be sold by the Company under the Purchase Agreement may be fewer than the number of shares being offered by this prospectus. The fourth column assumes the resale by the selling stockholder of all of the shares of common stock being offered for resale pursuant to this prospectus.
Name of Selling Stockholder Tumim Stone Capital LLC(4) This number represents the [] shares of common stock we issued to Tumim Stone Capital on [], 2022
as Commitment Shares in consideration for entering into the Purchase Agreement, as amended, with us. In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares
beneficially owned prior to the offering all of the shares that Tumim Stone Capital may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in
the Purchase Agreement, the satisfaction of which are entirely outside of Tumim Stone Capitals control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the VWAP Purchases of
common stock are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of our common stock to Tumim Stone Capital to the extent
such shares, when aggregated with all other shares of our common stock then beneficially owned by Tumim Stone Capital, would cause Tumim Stone Capitals beneficial ownership of our common stock to exceed the 4.99% Beneficial Ownership Cap. The
Purchase Agreement also prohibits us from issuing or selling shares of our common stock under the Purchase Agreement in excess of the 19.99% Exchange Cap, unless we obtain stockholder approval to do so, or unless the average price per share paid by
Tumim Stone Capital for all shares of common stock purchased by Tumim Stone Capital under the Purchase Agreement equals or exceeds $[] per share, in which case the Exchange Cap limitation would no longer apply under applicable Nasdaq rules.
Neither the Beneficial Ownership Limitation nor the Exchange Cap (to the extent applicable under Nasdaq rules) may be amended or waived under the Purchase Agreement. Applicable percentage ownership is based on [] shares of our common stock outstanding as of [],
202[]. Assumes the sale of all shares of common stock being offered pursuant to this prospectus.
The business address of Tumim Stone Capital LLC is 140 Broadway, 38th Floor, New York, NY 10005. Tumim Stone Capital LLCs principal business is that of a private investor. Maier Joshua Tarlow is the manager of 3i Management, LLC, the general partner of 3i, LP,
which is the sole member of Tumim Stone Capital, LLC, and has sole voting control and investment discretion over securities beneficially owned directly by Tumim Stone Capital LLC and indirectly by 3i Management, LLC and 3i, LP. 3i Management, LLC is
also the manager of Tumim Stone Capital LLC. We have been advised that none of Mr. Tarlow, 3i Management, LLC, 3i, LP or Tumim Stone Capital LLC is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent
broker-dealer, or an affiliate or associated person of a FINRA member or independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Mr. Tarlow as to beneficial ownership of the securities beneficially
owned directly by Tumim Stone Capital LLC and indirectly by 3i Management, LLC and 3i, LP.
PLAN OF DISTRIBUTION The shares of common stock offered by this prospectus are being offered by the selling stockholder, Tumim Stone Capital LLC. The shares may be
sold or distributed from time to time by the selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the
prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of the ordinary shares offered by this prospectus could be effected in one or more of the following methods: ordinary brokers transactions; transactions involving cross or block trades; through brokers, dealers, or underwriters who may act solely as agents; at the market into an existing market for the ordinary shares; in other ways not involving market makers or established business markets, including direct sales to purchasers
or sales effected through agents; in privately negotiated transactions; or any combination of the foregoing. In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed
brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the states registration or qualification requirement is available and
complied with. Tumim Stone Capital is an underwriter within the meaning of Section 2(a)(11) of the Securities Act. Tumim Stone Capital has informed us that it intends to use one or more registered broker-dealers to effectuate all sales, if any, of our
common stock that it has acquired and may in the future acquire from us pursuant to the Purchase Agreement. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market price. Each such registered
broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. Tumim Stone Capital has informed us that each such broker-dealer will receive commissions from Tumim Stone Capital that will not exceed customary
brokerage commissions. Brokers, dealers, underwriters or agents participating in the distribution of the shares of our common stock
offered by this prospectus may receive compensation in the form of commissions, discounts, or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by the selling stockholder through this prospectus. The
compensation paid to any such particular broker-dealer by any such purchasers of shares of our common stock sold by the selling stockholder may be less than or in excess of customary commissions. Neither we nor the selling stockholder can presently
estimate the amount of compensation that any agent will receive from any purchasers of shares of our common stock sold by the selling stockholder.
We know of no existing arrangements between the selling stockholder or any other
stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares of our common stock offered by this prospectus. We may from time to time file with the SEC one or more supplements to this prospectus or amendments to the registration statement of which
this prospectus forms a part to amend, supplement or update information contained in this prospectus, including, if and when required under the Securities Act, to disclose certain information relating to a particular sale of shares offered by this
prospectus by the selling stockholder, including the names of any brokers, dealers, underwriters or agents participating in the distribution of such shares by the selling stockholder, any compensation paid by the selling stockholder to any such
brokers, dealers, underwriters or agents, and any other required information. We will pay the expenses incident to the registration under
the Securities Act of the offer and sale of the shares of our common stock covered by this prospectus by the selling stockholder. As consideration for its irrevocable commitment to purchase our common stock under the Purchase Agreement, on the
Closing Date under the Purchase Agreement we issued to Tumim Stone Capital [] shares of our common stock as Commitment Shares. We also paid $75,000 in cash to Tumim Stone Capital as reimbursement for the fees and disbursements of its counsel
in connection with the transactions contemplated by the Purchase Agreement. We also have agreed to indemnify Tumim Stone Capital and
certain other persons against certain liabilities in connection with the offering of shares of our common stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts
required to be paid in respect of such liabilities. Tumim Stone Capital has agreed to indemnify us against liabilities under the Securities Act that may arise from certain written information furnished to us by Tumim Stone Capital specifically for
use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors,
officers, and controlling persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable. We estimate that the total expenses for the offering will be approximately $[]. Tumim Stone Capital has agreed that during the term of the Purchase Agreement, neither Tumim Stone Capital nor any of its affiliates nor any
entity managed or controlled by Tumim Stone Capital shall, directly or indirectly, (i) engage in or effect any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our common stock or (ii) execute any
stock pledge, forward sales contract, option, put, call, swap or similar hedging arrangement (including on a total return basis), which establishes a net short position with respect to our common stock.
We have advised the selling stockholder that it is required to comply with Regulation M
promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered by this prospectus. We have entered into an agreement with Maxim Group LLC, or Maxim Group, a registered broker-dealer and member of the Financial Industry
Regulatory Authority, Inc., or FINRA, dated [], 2022, pursuant to which Maxim Group agreed to act as the placement agent in connection with the transactions contemplated by the Purchase Agreement with the Investor, or the Placement Agent
Engagement Agreement. Pursuant to the Placement Agent Engagement Agreement, we have agreed to pay Maxim Group a placement fee of $[], representing []% of Tumims $100,000,000 total commitment under the Purchase Agreement. Maxim
Group shall not be entitled to any other compensation upon the closing of any subsequent stock sales effected pursuant to the Purchase Agreement. We have also agreed to provide indemnification and contribution to Maxim Group with respect to certain
civil liabilities, including liabilities under the Securities Act. This offering will terminate on the date that all shares of our common
stock offered by this prospectus have been sold by the selling stockholder. Our common stock is currently listed on The Nasdaq Capital
Market under the symbol ICU.
EXHIBIT C The business address of Tumim Stone Capital LLC is 140 Broadway, 38th Floor, New York, NY 10005. Tumim
Stone Capital LLCs principal business is that of a private investor. Maier Joshua Tarlow is the manager of 3i Management, LLC, the general partner of 3i, LP, which is the sole member of Tumim Stone Capital, LLC, and has sole voting control and
investment discretion over securities beneficially owned directly by Tumim Stone Capital LLC and indirectly by 3i Management, LLC and 3i, LP. 3i Management, LLC is also the manager of Tumim Stone Capital LLC. None of Mr. Tarlow, 3i Management,
LLC, 3i, LP or Tumim Stone Capital LLC is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent broker-dealer, or an affiliate or associated person of a FINRA member or independent broker-dealer. The foregoing should
not be construed in and of itself as an admission by Mr. Tarlow as to beneficial ownership of the securities beneficially owned directly by Tumim Stone Capital LLC and indirectly by 3i Management, LLC and 3i, LP.
Number of Shares of
Common Stock Owned
Prior to Offering
Maximum Number of
Shares of Common Stock
to be Offered Pursuant
to this Prospectus
Number of Shares of
Common Stock Owned
After Offering
Number(1)
Percent(2)
Number(3)
Percent(2)
[
]
[
]
[
]
[
]
[
]
(1)
(2)
(3)
(4)
Exhibit 10.32
FORM OF AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the Agreement) is made as of _______, 2022 by and between SeaStar Medical Holding Corporation (the Company), and Eric Schlorff (Executive).
WHEREAS, SeaStar Medical, Inc. and Executive previously entered into an Employment Agreement dated March 1, 2019, which was amended and restated on August 13, 2020 (Prior Employment Agreement);
WHEREAS, SeaStar Medical, Inc. has entered into an Agreement and Plan of Merger (the Merger Agreement) with LMF Acquisition Opportunities, Inc. (LMAO), pursuant to which SeaStar Medical, Inc. expects to complete a business combination with LMAO and become a publicly traded company listed on NASDAQ Stock Market (the SPAC Merger);
WHEREAS, upon completion of this SPAC Merger, SeaStar Medical, Inc. will become a wholly owned subsidiary of LMAO, and LMAO will be renamed SeaStar Medical Holding Corporation;
WHEREAS, the Company and Executive now desire to amend the Prior Employment Agreement to transfer Executives employment relationship from SeaStar Medical, Inc. to the Company, reflect changes to the Executives compensation, severance benefits, and to make certain other changes in connection with and contingent upon the closing of the SPAC Merger; and
WHEREAS, this Agreement shall become effective as of and contingent upon the closing of the SPAC Merger and supersedes and replaces all previous employment agreements or other written or oral agreements between Executive and either SeaStar Medical, Inc. or the Company, including the Prior Employment Agreement, with respect to the subject matter covered under this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties agree as follows:
1. Employment Period and Effective Date. The effective date of this Agreement shall be the closing date of the SPAC Merger (the Effective Date). Following the Effective Date, Executives employment with the Company pursuant to this Agreement shall be at will, and either the Company or Executive may terminate the employment relationship at any time in accordance with the provisions of Paragraph 7. The period during which Executive is in fact employed by the Company pursuant to this Agreement shall constitute the Employment Period hereunder, and shall commence on the Effective Date.
2. Duties and Responsibilities.
A. During the Employment Period, Executive shall serve as the Companys Chief Executive Officer (CEO), with a principal office in the Companys Denver, Colorado location, subject to reasonable business travel, and shall report to the Board of Directors of the Company (the Board). Executive agrees to perform in good faith and to the best of his ability all services that may be required of Executive hereunder and to be available to render such services at all reasonable times and places in accordance with such directions and requests as may be made from time to time by the Board.
B. Executive is expected and agrees to devote his full working time and attention to the business of the Company, and will not render services to any other business without the prior approval of the Board, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of the Company. Notwithstanding the foregoing and subject to the approval of the Board, to continue to build executive presence, Executive may participate in up to two board of director roles (excluding the board of the Company) at one time, subject to any limits or requirements of the Companys corporate governance policies (as in effect from time to time)_and to the extent such service does not conflict or interfere with Executives duties to the Company. Executive also may invest in up to one percent (1%) of the outstanding securities of any publicly-held corporation without approval of the Company, subject to any limits or requirements of the Companys corporate governance policies (as in effect from time to time). Moreover, in the sole discretion of, and upon approval from the , Executive may participate in other board or advisory positions that do not in any way negatively impact or conflict with the Company or Executives employment with the Company. The Executive agrees that Executive shall disclose any such directorship to the Board prior to the Effective Time or prior to commencing any such position, as applicable.
C. Executive understands and agrees that he must fully comply with the Companys standard operating policies, procedures, and practices that are from time to time in effect during the term of his employment.
3. Compensation.
A. During the Employment Period, Executive shall receive an annual gross base salary in the amount of Four Hundred Twenty Thousand Dollars ($420,000), to be paid in periodic installments in accordance with the Companys normal payroll procedures, less all applicable withholdings and deductions (Base Salary).
B. During the Employment Period, Executive will be eligible to participate in an executive annual cash bonus plan, to the extent established by the Compensation Committee of the Board (the Compensation Committee) from time to time for similarly-situated executives of the Company. The Executives participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity shall be in the sole and absolute discretion of the Compensation Committee.
4. Equity. Following the Effective Date, subject to approval of the Board, the Company will grant Executive an option under the Companys equity incentive plan then in effect (the Plan) to purchase a number of shares of the Companys Common Stock (the Option), which together with Executives existing equity in the Company (including restricted stock units covering shares of Company Common Stock and options to purchase shares of Company Common Stock, in each case whether vested or unvested), will equal 1.5% of the issued and outstanding capital stock of the Company, calculated on a fully-diluted basis, as of the Effective Date. The Option will have a per share exercise price equal to the fair market value of the Companys common stock on the date of grant and will be immediately exercisable, subject to the Companys right of repurchase of unvested shares upon Executives termination of employment. 25% of the shares of common stock subject to the Option will vest upon the first anniversary of the Effective Date, and the remaining 75% of such shares shall vest monthly in thirty six (36) equal monthly
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installments thereafter; vesting shall cease upon Executives cessation of employment with the Company. The Option will be subject to the terms and conditions of the Plan and the written Stock Option Agreement governing the Option. Notwithstanding the foregoing (i) in the event of certain separations from service from the Company, the vesting of the Option will be accelerated to the extent set forth in Paragraph 8 below; and (ii) Executive shall have up to twelve (12) months following any termination of employment (other than termination for Cause (as defined below)) to exercise any then-vested outstanding options to purchase Company Common Stock (and understands and assumes the burden for any modified tax treatment thereunder associated with the extended exercise period).
5. Benefits; Reimbursement.
A. Health Insurance. During the Employment Period, Executive shall be eligible to participate in all employee benefits and benefit plans generally made available to the Companys employees from time-to-time, including, but not limited to, medical, dental, vision and long-term disability insurance benefits and arrangements, subject to the terms, conditions and relevant qualification criteria for such benefits and benefit plans. The Company, in its discretion, may change from time-to-time the employee benefits and benefit plans it generally makes available to its employees.
B. Expense Reimbursement. During the Employment Period, Executive shall be entitled to reimbursement for all reasonable and necessary expenses incurred by Executive associated with the conduct of the Companys business in accordance with the Companys policies. Such reimbursements shall be subject to the Companys then-existing policies and procedures for reimbursement of business expenses, but in any event shall include submission of written requests for reimbursement within no more than thirty (30) days of incurring the expense, accompanied by vouchers, receipts or other details of such expenses in the form required by the Company, sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal and state taxing authorities. If such expense qualifies for reimbursement, then the Company will reimburse Executive for that expense in accordance with existing expense reimbursement policies and practices.
C. Vacation, Sick, and Holiday Pay. During the Employment Period, Executive shall be entitled to earn or receive vacation, sick, and holiday pay pursuant to the terms of the Companys generally applicable employee policies, as may exist from time to time.
6. Proprietary Information and Inventions Agreement. As a condition of employment and the benefits provided by this Agreement, Executive is required to timely execute and return the Companys form of Proprietary Information and Inventions Agreement, attached hereto as Exhibit A (the PIIA). Executive shall at all times remain subject to the terms and conditions of such PIIA, and nothing in this Agreement shall supersede, modify, or affect Executives obligations, duties, and responsibilities thereunder.
7. Termination of Employment. Executives employment pursuant to this Agreement is at will and may be terminated by either party at any time, with or without cause, in accordance with the following provisions:
A. Upon cessation of Executives employment for any reason, Executive, or his estate if applicable, shall be paid any unpaid Base Salary earned under Paragraph 3 for services rendered through the date of such termination.
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B. Executive may voluntarily separate from his employment under this Agreement at any time and for any reasons, but shall give the Company at least thirty (30) days prior written notice of such resignation.
C. The Company may terminate Executives employment with or without Cause under this Agreement at any time by providing notice of such termination to Executive. Such termination shall be effective immediately upon Executives receipt of such notice, unless otherwise indicated by the notice.
8. Severance Benefits
A. Resignation, Termination for Cause, or Death. If Executive resigns, is terminated for Cause (as defined below), or dies, then he (or his estate, as applicable) shall only be entitled to payment of his Base Salary payable through the date of termination, but shall not otherwise be entitled to any severance or separation pay from the Company.
B. Termination Without Cause. If the Company terminates Executives employment without Cause (as defined below) then, subject to Executive timely executing, returning, and not revoking a separation agreement and general release of claims acceptable to the Company in its discretion (Separation Agreement), the Company will pay Executive as severance an amount equivalent to twelve (12) months of Executives Base Salary in effect on the termination date (Severance Payment) and, subject to Executive timely and properly enrolling in continued health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), an additional cash amount equal to the monthly premium cost of Executives coverage under the Companys health plan, plus 2% of such amount (Benefits Payment), both payable in equal installments as salary and benefits continuation payments for a twelve (12)-month period following the termination date (or, with respect to the Benefits Payment, such shorter period as described below) (Severance Period), in accordance with the Companys normal payroll dates and practices, the first installment of which shall be made on the Companys first regular payroll period following the sixtieth (60th) day after the termination date (and will include any Severance Payment and Benefits Payment installment(s) that would have otherwise been paid during the period following the termination date through the date of the first Severance Payment and Benefits Payment installment); provided that, Executive has timely executed and delivered the Separation Agreement and the Separation Agreement has become irrevocable by its terms as of such date. Notwithstanding the foregoing, the Severance Payment shall be reduced by any amounts payable to Executive as a result of any subsequent employment or service to another employer or service recipient other than the Company during the Severance Period and, if Executive obtains another employment or service arrangement prior to the end of the Severance Period that offers Executive health coverage, then the Benefits Payment shall immediately cease as of such date Executive is eligible for such health coverage. Executive hereby agrees to notify the Company within five (5) business days of becoming aware that Executive will begin employment or provide service to another employer or service recipient. Notwithstanding the foregoing, the Company reserves the right to restructure the Benefits Payment at any time and in any manner necessary to comply with federal income tax law, as determined by the Company in its sole discretion. The Severance Payment and Benefits Payment shall be in lieu of any other severance benefits under any Company plan, program or policy, and Executive waives his rights, if any, to have such payment taken into account in computing any other vested benefits payable to or on behalf of Executive, by the Company, if any.
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C. Termination Without Cause Following Change in Control. If the Company terminates Executives employment without Cause (as defined below) within twelve (12) months following a Change of Control (as defined below), then, in addition to the Severance Payment set forth above, and similarly subject to Executive timely executing, returning, and not revoking the Separation Agreement, then 100% of any remaining balance of the Option shall immediately vest.
(1) For purposes of this Agreement, Cause means, in the Companys reasonable good faith belief that one of the following have occurred:
(i) Executives commission of any act of fraud, embezzlement, dishonesty, or sexual harassment (or attempt to do any of the foregoing);
(ii) Executives refusal or failure to comply in any material respect with any lawful direction of or written policies or procedures of the Company, , or the Board (including, without limitation, the Companys anti-discrimination and harassment policies and the Companys drug and alcohol policy);
(iii) any unauthorized use or disclosure by Executive of confidential information or trade secrets of the Company (or any parent or subsidiary of the Company); or
(iv) any other gross negligence or misconduct by Executive adversely affecting the business or affairs of the Company (or any parent or subsidiary of the Company) in a material manner.
(2) For purposes of this Agreement, Change of Control means a change in ownership or control of the Company effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved by the Companys stockholders, unless securities representing fifty percent (50%) or more of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Companys outstanding voting securities immediately prior to such transaction;
(ii) a sale, transfer, or other disposition of all or substantially all of the Companys assets;
(iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a group within the meaning of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the 1934 Act) (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) acquires directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) fifty percent (50%) or more of the total combined voting power of the Companys securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Companys existing stockholders; or
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(iv) a change in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
9. Benefit Limit. The benefit limitations of this Paragraph shall be applicable in the event Executive receives any benefits under this Agreement that are deemed to constitute parachute payments under Code Section 280G. In the event that any payments to which Executive becomes entitled in accordance with the provisions of this Agreement would otherwise constitute a parachute payment under Code Section 280G, then such payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment or (ii) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive under this Agreement (or on any other benefits to which Executive may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of his employment with the Company) under Code Section 4999.
10. Delayed Commencement of Benefits. Notwithstanding any provision to the contrary in this Agreement, no payments or benefits that are subject to the restrictions of Code Section 409A to which Executive becomes entitled under this Agreement shall be made or paid to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his separation from service with the Company or (ii) the date of his death, if Executive is deemed at the time of such separation from service a key employee within the meaning of that term under Code Section 416(i) and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein.
11. Compliance with Section 409A. It is the intent of the Company and Executive that the provisions of this Agreement comply with all applicable requirements of Code Section 409A. Accordingly, to the extent any provisions of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A, then the Company and Executive shall, within the remedial amendment period provided under the Treasury Regulations issued under Code Section 409A, effect through mutual agreement the appropriate amendments to those provisions which are necessary in order to bring the provisions of this Agreement into compliance with Code Section 409A. If any payment under this Agreement is subject to Code Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Code Section 409A, (ii) payments to be made upon a termination of employment or service shall only be made upon a separation from service under Code Section 409A, (iii) each installment of a payment shall be treated as a separate payment for purposes of Code Section 409A, (iv) if any payment is subject to the execution of a Separation Agreement, in no event shall the timing of Executives
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execution of the Separation Agreement result in Executive designating, directly or indirectly, the calendar year of payment, and if such a payment that is subject to execution of the Separation Agreement could be made in more than one taxable year, payment shall be made in the later taxable year, and (v) any reimbursements of costs and expenses or in-kind benefits shall be made on or before the last calendar day of the year following the calendar year in which the expense occurred, unless otherwise permitted by Section 409A.
12. Cessation of Benefits. In the event of a breach by Executive of any of his obligations of this Agreement or under the PIIA, he shall cease to be entitled to any further benefits under this Agreement. In no event shall Executive be entitled to any severance benefits under this Agreement if (i) his employment ceases by reason of a termination for Cause, or (ii) he voluntarily resigns from employment with the Company.
13. Successors and Assigns. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate, or successor, or in connection with any sale, transfer, or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Companys obligations hereunder.
14. Notices.
A. Any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if delivered either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand, or other communication shall be delivered personally, then such notice shall be conclusively deemed given at the time of such personal delivery.
B. If such notice, demand, or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after deposit in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
To the Company:
SeaStar Medical Holding Corporation
3513 Brighton Blvd
Ste 410
Denver, CO 80516
Attn: Rick Barnett, Chair of Compensation Committee
To Executive:
Eric Schlorff
[ ]
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C. Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party hereto.
15. General Creditor Status. The benefits to which Executive may become entitled under this Agreement shall be paid, when due, from the Companys general assets, and no trust fund, escrow arrangement or other segregated account shall be established as a funding vehicle for such payments. Accordingly, Executives right (or the right of the executors or administrators of Executives estate) to receive such benefits shall at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.
16. Governing Documents. This Agreement, together with (i) any equity award agreements, and (ii) the PIIA, shall constitute the entire agreement and understanding of the Company and Executive with respect to the terms and conditions of Executives employment with the Company and the eligibility for any potential severance payments and consulting payments following separation from employment with the Company, and this Agreement shall supersede all prior and contemporaneous written or verbal agreements and understandings between Executive and SeaStar Medical, Inc. or the Company relating to such subject matter, including, without limitation, the Prior Agreement. This Agreement, including but not limited to the at-will nature of the employment relationship as reflected herein, may only be amended by written instrument signed by Executive and the chairman of the Board.
17. Governing Law. The provisions of Agreement shall be construed and interpreted under the laws of the State of Colorado applicable to agreements executed and wholly performed within the State of Colorado. If any provision of this Agreement as applied to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. Should any provision of this Agreement become or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken, and the remainder of this Agreement shall continue in full force and effect.
18. Arbitration.
A. Except as provided herein and the PIIA, each party hereto agrees that any and all disputes which arise out of or relate to Executives employment, the termination of Executives employment, or the terms of this Agreement shall be resolved through final and binding arbitration. Such arbitration shall be in lieu of any trial before a judge and/or jury, and Executive and the Company expressly waive all rights to have such disputes resolved via trial before a judge and/or jury. Such disputes shall include, without limitation, claims for breach of contract or of the covenant of good faith and fair dealing, claims of discrimination, claims under any federal, state, or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way Executives employment with the Company or its termination. The only claims not covered by this Employment Agreement to arbitrate disputes, which shall instead be resolved pursuant to applicable law, are: (i) claims for benefits under the unemployment insurance benefits; (ii) claims for workers compensation benefits under any of the Companys workers compensation insurance policy or fund; (iii) claims under the National Labor Relations Act; and (iv) claims that may not be arbitrated as a matter of law.
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B. Arbitration will be conducted in Colorado. Arbitration shall be conducted in accordance with the Federal Arbitration Act (FAA) and the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA Rules available at www.adr.org) or any other discovery required by applicable law in arbitration proceedings, including, but not limited to, discovery available under the applicable state and/or federal arbitration statutes. Also, to the extent that any of the AAA Rules or anything in this arbitration section conflicts with any arbitration procedures required by applicable law, the arbitration procedures required by applicable law shall govern.
C. During the course of arbitration, the Company will bear the cost of (i) the arbitrators fee, and (ii) any other expense or cost Executive would not be required to bear if Executive were free to bring the dispute or claim in court. Each party shall bear such partys own attorneys fees incurred in connection with the arbitration. The arbitrator will not have authority to award attorneys fees unless a statute or contract at issue in the dispute authorizes the award of attorneys fees to the prevailing party. In such case, the arbitrator shall have the authority to make an award of attorneys fees as required or permitted by the applicable statute or contract.
D. The arbitrator shall issue a written award that sets forth the essential findings of fact and conclusions of law on which the award is based. The arbitrator shall have the authority to award any relief authorized by law in connection with the asserted claims or disputes. The arbitrators award shall be subject to correction, confirmation, or vacation, as provided by applicable law setting forth the standard of judicial review of arbitration awards. Judgment upon the arbitrators award may be entered in any court having jurisdiction thereof.
E. This arbitration provision does not prohibit Executive from pursuing an administrative claim with a local, state, or federal administrative agency such as the Equal Employment Opportunity Commission, but this arbitration agreement does prohibit Executive from seeking or pursuing court action regarding any such claim.
19. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
20. Construction. The language of this Agreement shall be construed as to its fair meaning, and not strictly for or against either party. Any rule of construction that any ambiguities in a contract shall be construed against the drafter of a contract shall not apply.
21. Indemnification. Executive will be provided indemnification to the maximum extent permitted by the Companys and its subsidiaries and affiliates Articles of Incorporation or Bylaws, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year written above.
SEASTAR MEDICAL HOLDING CORPORATION |
By: |
Title: |
EXECUTIVE |
|
Eric Schlorff |
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Exhibit 10.33
FORM OF AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the Agreement) is made as of _______, 2022 by and between SeaStar Medical Holding Corporation (the Company), and Caryl Baron (Executive).
WHEREAS, SeaStar Medical, Inc. and Executive previously entered into an employment agreement dated March 22, 2020 (Prior Employment Agreement);
WHEREAS, SeaStar Medical, Inc. has entered into an Agreement and Plan of Merger (the Merger Agreement) with LMF Acquisition Opportunities, Inc. (LMAO), pursuant to which SeaStar Medical, Inc. expects to complete a business combination with LMAO and become a publicly traded company listed on NASDAQ Stock Market (the SPAC Merger);
WHEREAS, upon completion of this SPAC Merger, SeaStar Medical, Inc. will become a wholly owned subsidiary of LMAO, and LMAO will be renamed SeaStar Medical Holding Corporation;
WHEREAS, the Company and Executive now desire to amend the Prior Employment Agreement to transfer Executives employment relationship from SeaStar Medical, Inc. to the Company, reflect changes to the Executives compensation, severance benefits, and to make certain other changes in connection with and contingent upon the closing of the SPAC Merger; and
WHEREAS, this Agreement shall become effective as of and contingent upon the closing of the SPAC Merger and supersedes and replaces all previous employment agreements or other written or oral agreements between Executive and either SeaStar Medical, Inc. or the Company, including the Prior Employment Agreement, with respect to the subject matter covered under this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties agree as follows:
1. Employment Period and Effective Date. The effective date of this Agreement shall be the closing date of the SPAC Merger (the Effective Date). Following the Effective Date, Executives employment with the Company pursuant to this Agreement shall be at will, and either the Company or Executive may terminate the employment relationship at any time in accordance with the provisions of Paragraph 7. The period during which Executive is in fact employed by the Company pursuant to this Agreement shall constitute the Employment Period hereunder, and shall commence on the Effective Date.
2. Duties and Responsibilities.
A. During the Employment Period, Executive shall serve as the Companys Finance Controller (Finance Controller), with a principal office in the Companys Denver, Colorado location, subject to reasonable business travel, and shall report to the Companys Chief Executive Officer (CEO). Executive agrees to perform in good faith and to the best of her ability all services that may be required of Executive hereunder and to be available to render such services at all reasonable times and places in accordance with such directions and requests as may be made from time to time by the Company or Board of Directors of the Company (the Board).
B. Executive is expected and agrees to devote her full working time and attention to the business of the Company, and will not render services to any other business without the prior approval of the Board, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of the Company. Executive may invest in up to one percent (1%) of the outstanding securities of any publicly-held corporation without approval of the Company, subject to any limits or requirements of the Companys corporate governance policies (as in effect from time to time). Moreover, in the sole discretion of, and upon approval from, the CEO, Executive may participate in other board or advisory positions that do not in any way negatively impact or conflict with the Company or Executives employment with the Company. The Executive agrees that Executive shall disclose any such directorship to the Board prior to the Effective Time or prior to commencing any such position, as applicable.
C. Executive understands and agrees that she must fully comply with the Companys standard operating policies, procedures, and practices that are from time to time in effect during the term of her employment.
3. Compensation.
A. During the Employment Period, Executive shall receive an annual gross base salary in the amount of Two Hundred Ten Thousand Dollars ($210,000), to be paid in periodic installments in accordance with the Companys normal payroll procedures, less all applicable withholdings and deductions (Base Salary).
B. During the Employment Period, Executive will be eligible to participate in an executive annual cash bonus plan to the extent established by the Compensation Committee of the Board (the Compensation Committee) from time to time for similarly-situated executives of the Company. The Executives participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity shall be in the sole and absolute discretion of the Compensation Committee.
4. Equity. Following the Effective Date, subject to approval of the Board, the Company will grant Executive an option under the Companys equity incentive plan then in effect (the Plan) to purchase a number of shares of the Companys Common Stock (the Option), which together with Executives existing equity in the Company (including restricted stock units covering shares of Company Common Stock and options to purchase shares of Company Common Stock, in each case whether vested or unvested), will equal 0.25% of the issued and outstanding capital stock of the Company, calculated on a fully-diluted basis, as of the Effective Date. The Option will have a per share exercise price equal to the fair market value of the Companys common stock on the date of grant and will be immediately exercisable, subject to the Companys right of repurchase of unvested shares upon Executives termination of employment. 25% of the shares of common stock subject to the Option will vest upon the first anniversary of the Effective Date, and the remaining 75% of such shares shall vest monthly in thirty six (36) equal monthly installments thereafter; vesting shall cease upon Executives cessation of employment with the Company. The Option will be subject to the terms and conditions of the Plan and the written Stock Option Agreement governing the Option. Notwithstanding the foregoing (i) in the event of certain separations from service from the Company, the vesting of the Option will be accelerated to the extent set forth in Paragraph 8 below; and (ii) Executive shall have up to twelve (12) months following any termination of employment (other than termination for Cause (as defined below)) to exercise any then-vested outstanding options to purchase Company Common Stock (and understands and assumes the burden for any modified tax treatment thereunder associated with the extended exercise period).
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5. Benefits; Reimbursement.
A. Health Insurance. During the Employment Period, Executive shall be eligible to participate in all employee benefits and benefit plans generally made available to the Companys employees from time-to-time, including, but not limited to, medical, dental, vision and long-term disability insurance benefits and arrangements, subject to the terms, conditions and relevant qualification criteria for such benefits and benefit plans. The Company, in its discretion, may change from time-to-time the employee benefits and benefit plans it generally makes available to its employees.
B. Expense Reimbursement. During the Employment Period, Executive shall be entitled to reimbursement for all reasonable and necessary expenses incurred by Executive associated with the conduct of the Companys business in accordance with the Companys policies. Such reimbursements shall be subject to the Companys then-existing policies and procedures for reimbursement of business expenses, but in any event shall include submission of written requests for reimbursement within no more than thirty (30) days of incurring the expense, accompanied by vouchers, receipts or other details of such expenses in the form required by the Company, sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal and state taxing authorities. If such expense qualifies for reimbursement, then the Company will reimburse Executive for that expense in accordance with existing expense reimbursement policies and practices.
C. Vacation, Sick, and Holiday Pay. During the Employment Period, Executive shall be entitled to earn or receive vacation, sick, and holiday pay pursuant to the terms of the Companys generally applicable employee policies, as may exist from time to time.
6. Proprietary Information and Inventions Agreement. As a condition of employment and the benefits provided by this Agreement, Executive is required to timely execute and return the Companys form of Proprietary Information and Inventions Agreement, attached hereto as Exhibit A (the PIIA). Executive shall at all times remain subject to the terms and conditions of such PIIA, and nothing in this Agreement shall supersede, modify, or affect Executives obligations, duties, and responsibilities thereunder.
7. Termination of Employment. Executives employment pursuant to this Agreement is at will and may be terminated by either party at any time, with or without cause, in accordance with the following provisions:
A. Upon cessation of Executives employment for any reason, Executive, or his estate if applicable, shall be paid any unpaid Base Salary earned under Paragraph 3 for services rendered through the date of such termination.
B. Executive may voluntarily separate from her employment under this Agreement at any time and for any reasons, but shall give the Company at least thirty (30) days prior written notice of such resignation.
C. The Company may terminate Executives employment with or without Cause under this Agreement at any time by providing notice of such termination to Executive. Such termination shall be effective immediately upon Executives receipt of such notice, unless otherwise indicated by the notice.
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8. Severance Benefits
A. Resignation, Termination for Cause, or Death. If Executive resigns, is terminated for Cause (as defined below), or dies, then she (or her estate, as applicable) shall only be entitled to payment of her Base Salary payable through the date of termination, but shall not otherwise be entitled to any severance or separation pay from the Company.
B. Termination Without Cause. If the Company terminates Executives employment without Cause (as defined below) then, subject to Executive timely executing, returning, and not revoking a separation agreement and general release of claims acceptable to the Company in its discretion (Separation Agreement), the Company will pay Executive as severance an amount equivalent to nine (9) months of Executives Base Salary in effect on the termination date (Severance Payment) and, subject to Executive timely and properly enrolling in continued health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), an additional cash amount equal to the monthly premium cost of Executives coverage under the Companys health plan, plus 2% of such amount (Benefits Payment), both payable in equal installments as salary continuation payments for a nine (9)-month period following the termination date (or, with respect to the Benefits Payment, such shorter period as described below) (Severance Period), in accordance with the Companys normal payroll dates and practices, the first installment of which shall be made on the Companys first regular payroll period following the sixtieth (60th) day after the termination date (and will include any Severance Payment and Benefits Payment installment(s) that would have otherwise been paid during the period following the termination date through the date of the first Severance Payment and Benefits Payment installment); provided that, Executive has timely executed and delivered the Separation Agreement and the Separation Agreement has become irrevocable by its terms as of such date. Notwithstanding the foregoing, the Severance Payment shall be reduced by any amounts payable to Executive as a result of any subsequent employment or service to another employer or service recipient other than the Company during the Severance Period and, if Executive obtains another employment or service arrangement prior to the end of the Severance Period that offers Executive health coverage, then the Benefits Payment shall immediately cease as of such date Executive is eligible for such health coverage. Executive hereby agrees to notify the Company within five (5) business days of becoming aware that Executive will begin employment or provide service to another employer or service recipient. Notwithstanding the foregoing, the Company reserves the right to restructure the Benefits Payment at any time and in any manner necessary to comply with federal income tax law, as determined by the Company in its sole discretion. The Severance Payment and Benefits Payment shall be in lieu of any other severance benefits under any Company plan, program or policy, and Executive waives her rights, if any, to have such payment taken into account in computing any other vested benefits payable to or on behalf of Executive, by the Company, if any.
C. Termination Without Cause Following Change in Control. If the Company terminates Executives employment without Cause (as defined below) within twelve (12) months following a Change of Control (as defined below), then, in addition to the Severance Payment set forth above, and similarly subject to Executive timely executing, returning, and not revoking the Separation Agreement, then 100% of any remaining balance of the Option shall immediately vest.
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(1) For purposes of this Agreement, Cause means, in the Companys reasonable good faith belief that one of the following have occurred:
(i) Executives commission of any act of fraud, embezzlement, dishonesty, or sexual harassment (or attempt to do any of the foregoing);
(ii) Executives refusal or failure to comply in any material respect with any lawful direction of or written policies or procedures of the Company, or the Board (including, without limitation, the Companys anti-discrimination and harassment policies and the Companys drug and alcohol policy);
(iii) any unauthorized use or disclosure by Executive of confidential information or trade secrets of the Company (or any parent or subsidiary of the Company); or
(iv) any other gross negligence or misconduct by Executive adversely affecting the business or affairs of the Company (or any parent or subsidiary of the Company) in a material manner.
(v)
(2) For purposes of this Agreement, Change of Control means a change in ownership or control of the Company effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved by the Companys stockholders, unless securities representing fifty percent (50%) or more of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Companys outstanding voting securities immediately prior to such transaction;
(ii) a sale, transfer, or other disposition of all or substantially all of the Companys assets;
(iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a group within the meaning of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the 1934 Act) (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) acquires directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) fifty percent (50%) or more of the total combined voting power of the Companys securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Companys existing stockholders; or
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(iv) a change in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
9. Benefit Limit. The benefit limitations of this Paragraph shall be applicable in the event Executive receives any benefits under this Agreement that are deemed to constitute parachute payments under Code Section 280G. In the event that any payments to which Executive becomes entitled in accordance with the provisions of this Agreement would otherwise constitute a parachute payment under Code Section 280G, then such payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment or (ii) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive under this Agreement (or on any other benefits to which Executive may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of her employment with the Company) under Code Section 4999.
10. Delayed Commencement of Benefits. Notwithstanding any provision to the contrary in this Agreement, no payments or benefits that are subject to the restrictions of Code Section 409A to which Executive becomes entitled under this Agreement shall be made or paid to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of her separation from service with the Company or (ii) the date of her death, if Executive is deemed at the time of such separation from service a key employee within the meaning of that term under Code Section 416(i) and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein.
11. Compliance with Section 409A. It is the intent of the Company and Executive that the provisions of this Agreement comply with all applicable requirements of Code Section 409A. Accordingly, to the extent any provisions of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A, then the Company and Executive shall, within the remedial amendment period provided under the Treasury Regulations issued under Code Section 409A, effect through mutual agreement the appropriate amendments to those provisions which are necessary in order to bring the provisions of this Agreement into compliance with Code Section 409A. If any payment under this Agreement is subject to Code Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Code Section 409A, (ii) payments to be made upon a termination of employment or service shall only be made upon a separation from service under Code Section 409A, (iii) each installment of a payment shall be treated as a separate payment for purposes of Code Section 409A, (iv) if any payment is subject to the execution of a Separation Agreement, in no event shall the timing of Executives execution of the Separation Agreement result in Executive designating, directly or indirectly, the calendar year of payment, and if such a payment that is subject to execution of the Separation Agreement could be made in more than one taxable year, payment shall be made in the later taxable year, and (v) any reimbursements of costs and expenses or in-kind benefits shall be made on or before the last calendar day of the year following the calendar year in which the expense occurred, unless otherwise permitted by Section 409A.
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12. Cessation of Benefits. In the event of a breach by Executive of any of her obligations of this Agreement or under the PIIA, she shall cease to be entitled to any further benefits under this Agreement. In no event shall Executive be entitled to any severance benefits under this Agreement if (i) her employment ceases by reason of a termination for Cause, or (ii) she voluntarily resigns from employment with the Company.
13. Successors and Assigns. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate, or successor, or in connection with any sale, transfer, or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Companys obligations hereunder.
14. Notices.
A. Any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if delivered either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand, or other communication shall be delivered personally, then such notice shall be conclusively deemed given at the time of such personal delivery.
B. If such notice, demand, or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after deposit in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
To the Company:
SeaStar Medical Holding Corporation
3513 Brighton Blvd
Ste 410
Denver, CO 80516
Attn: Chief Executive Officer
To Executive:
Caryl Baron
[ ]
C. Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party hereto.
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15. General Creditor Status. The benefits to which Executive may become entitled under this Agreement shall be paid, when due, from the Companys general assets, and no trust fund, escrow arrangement or other segregated account shall be established as a funding vehicle for such payments. Accordingly, Executives right (or the right of the executors or administrators of Executives estate) to receive such benefits shall at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.
16. Governing Documents. This Agreement, together with (i) any equity award agreements, and (ii) the PIIA, shall constitute the entire agreement and understanding of the Company and Executive with respect to the terms and conditions of Executives employment with the Company and the eligibility for any potential severance payments and consulting payments following separation from employment with the Company, and this Agreement shall supersede all prior and contemporaneous written or verbal agreements and understandings between Executive and SeaStar Medical, Inc. or the Company relating to such subject matter, including, without limitation, the Prior Agreement. This Agreement, including but not limited to the at-will nature of the employment relationship as reflected herein, may only be amended by written instrument signed by Executive and the CEO.
17. Governing Law. The provisions of Agreement shall be construed and interpreted under the laws of the State of Colorado applicable to agreements executed and wholly performed within the State of Colorado. If any provision of this Agreement as applied to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. Should any provision of this Agreement become or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken, and the remainder of this Agreement shall continue in full force and effect.
18. Arbitration.
A. Except as provided herein and the PIIA, each party hereto agrees that any and all disputes which arise out of or relate to Executives employment, the termination of Executives employment, or the terms of this Agreement shall be resolved through final and binding arbitration. Such arbitration shall be in lieu of any trial before a judge and/or jury, and Executive and the Company expressly waive all rights to have such disputes resolved via trial before a judge and/or jury. Such disputes shall include, without limitation, claims for breach of contract or of the covenant of good faith and fair dealing, claims of discrimination, claims under any federal, state, or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way Executives employment with the Company or its termination. The only claims not covered by this Employment Agreement to arbitrate disputes, which shall instead be resolved pursuant to applicable law, are: (i) claims for benefits under the unemployment insurance benefits; (ii) claims for workers compensation benefits under any of the Companys workers compensation insurance policy or fund; (iii) claims under the National Labor Relations Act; and (iv) claims that may not be arbitrated as a matter of law.
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B. Arbitration will be conducted in Colorado. Arbitration shall be conducted in accordance with the Federal Arbitration Act (FAA) and the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA Rules available at www.adr.org) or any other discovery required by applicable law in arbitration proceedings, including, but not limited to, discovery available under the applicable state and/or federal arbitration statutes. Also, to the extent that any of the AAA Rules or anything in this arbitration section conflicts with any arbitration procedures required by applicable law, the arbitration procedures required by applicable law shall govern.
C. During the course of arbitration, the Company will bear the cost of (i) the arbitrators fee, and (ii) any other expense or cost Executive would not be required to bear if Executive were free to bring the dispute or claim in court. Each party shall bear such partys own attorneys fees incurred in connection with the arbitration. The arbitrator will not have authority to award attorneys fees unless a statute or contract at issue in the dispute authorizes the award of attorneys fees to the prevailing party. In such case, the arbitrator shall have the authority to make an award of attorneys fees as required or permitted by the applicable statute or contract.
D. The arbitrator shall issue a written award that sets forth the essential findings of fact and conclusions of law on which the award is based. The arbitrator shall have the authority to award any relief authorized by law in connection with the asserted claims or disputes. The arbitrators award shall be subject to correction, confirmation, or vacation, as provided by applicable law setting forth the standard of judicial review of arbitration awards. Judgment upon the arbitrators award may be entered in any court having jurisdiction thereof.
E. This arbitration provision does not prohibit Executive from pursuing an administrative claim with a local, state, or federal administrative agency such as the Equal Employment Opportunity Commission, but this arbitration agreement does prohibit Executive from seeking or pursuing court action regarding any such claim.
19. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
20. Construction. The language of this Agreement shall be construed as to its fair meaning, and not strictly for or against either party. Any rule of construction that any ambiguities in a contract shall be construed against the drafter of a contract shall not apply.
21. Indemnification. Executive will be provided indemnification to the maximum extent permitted by the Companys and its subsidiaries and affiliates Articles of Incorporation or Bylaws, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year written above.
SEASTAR MEDICAL HOLDING CORPORATION | ||
By: |
| |
Title: |
| |
EXECUTIVE | ||
| ||
Caryl Baron |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the inclusion in this Registration Statement on Form S-4 (Amendment No. 2) of our report dated April 6, 2022 with respect to the audited financial statements of LMF Acquisition Opportunities, Inc. (the Company) for the year ended December 31, 2021 and the period from October 28, 2020 (inception) to December 31, 2020.
We also consent to the references to us under the heading Experts in such Registration Statement.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
August 24, 2022
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use of our report dated April 14, 2022 relating to the financial statements of SeaStar Medical, Inc. included in the Proxy Statement/Prospectus of LMF Acquisition Opportunities, Inc., which is part of this Registration Statement on Form S-4. We also consent to the reference to our firm under the heading Experts in such Registration Statement.
/s/ ArmaninoLLP
Bellevue, Washington
August 24, 2022
Exhibit 99.8
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY D88112-[TBD] LMF ACQUISITION OPPORTUNITIES, INC. 1200 W PLATT, SUITE 100 TAMPA, FL 33606 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Yes No The Board of Directors recommends you vote FOR Proposals 1 through 8. 2. Charter Approval Proposal To consider and vote upon a Proposal to approve the Second Amended and Restated Certificate of Incorporation of LMAO, a copy of which is attached to the proxy statement/prospectus as Annex B. 7. Director Election Proposal To consider and vote upon a Proposal to elect seven (7) directors as set forth below to serve staggered terms on the Board until the 2023, 2024 and 2025 annual meetings of our stockholders, as applicable, or until their respective successors are duly elected and qualified, or until their earlier death, resignation, retirement or removal. The proposed directors under the Director Election Proposal are: 1. Business Combination Proposal To consider and vote upon a Proposal to approve the transactions contemplated under the Merger Agreement, dated as of April 21, 2022, by and among LMAO, LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO and SeaStar Medical, Inc., a Delaware corporation, a copy of which is attached to the proxy statement/ prospectus as Annex A. LMF ACQUISITION OPPORTUNITIES, INC. 3. The Governance Proposals To consider and vote upon, on a non-binding advisory basis, four separate governance proposals relating to the following material differences between the Existing Charter and the Proposed Charter. 3a. Governance Proposal 3A ! ! ! For All Withhold All For All Except 3b. Governance Proposal 3B To change the classification of the Board from two classes of directors with staggered two-year terms to three classes of directors with staggered three-year terms. 3c. Governance Proposal 3C To require the vote of at least two-thirds (66 and 2/3%) of the outstanding shares of capital stock, voting together as a single class, rather than a simple majority, to remove a director from office. 5. ESPP Proposal To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Employee Stock Purchase Plan, a copy of which is to be attached to the proxy statement/prospectus as Annex E. 6. Nasdaq Proposal To consider and vote upon a Proposal to approve for purposes of complying with Nasdaq Listing Rule 5635, the issuance of shares of Common Stock and securities convertible into or exercisable for Common Stock in the Business Combination, the PIPE Incestment, and the Common Stock Investment. 8. Adjournment Proposal To consider and vote upon a Proposal to approve the adjournment of the meeting by the chairman thereof to a later date, if necessary. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please indicate if you plan to attend this meeting. 4. Stock Plan Proposal To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Omnibus Incentive Plan, a copy of which is to be attached to the proxy statement/prospectus as Annex D. 3d. Governance Proposal 3D To remove certain provisions related to LMAOs status as a special purpose acquisition company that will no longer be relevant following the Business Combination. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. For Against Abstain For Against Abstain To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. ! ! ! Class I Nominees: 01) Andres Lobo 02) Rick Barnett Class II Nominees: 03) Bruce Rodgers 04) Richard Russell 05) Allan Collins Class III Nominees: 06) Eric Schlorff 07) Kenneth Van Heel ! ! VOTE BY INTERNETwww.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the meeting. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. PRELIMINARY PROXY CARDSUBJECT TO COMPLETION, DATED [____], 2022 VIEW MA SCAN TO TERIALS & VOTE wï€ To (i) reclassify LMAOs existing 100,000,000 authorized shares of Class A Common Stock into 100,000,000 authorized shares of Common Stock (after giving effect to the conversion of each outstanding share of Class B Common Stock to Class A Common Stock under the terms of LMAOs current certificate of incorporation) and (ii) increase the number of shares of preferred stock LMAO is authorized to issue from 1,000,000 shares to 10,000,000 shares.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:The Notice and Proxy Statement is available at www.proxyvote.com D88113-[TBD] LMF ACQUISITION OPPORTUNITIES, INC. Special Meeting of Stockholders [TBD] PM This proxy is solicited by the Board of Directors The undersigned hereby appoints Bruce M. Rodgers and Richard Russell, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of LMF ACQUISITION OPPORTUNITIES, INC. that the undersigned is entitled to vote at the Special Meeting of Stockholders to be held at [TBD] p.m., Eastern Time on [TBD] at [TBD], and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors recommendations. Continued and to be signed on reverse side