8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of Earliest Event Reported): January 10, 2020

Ameri Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-38286	95-4484725
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5000 Research Court, Suite 750, Suwanee, Georgia	30024
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 935-4152

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

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock $0.01 par value per share	AMRH	The NASDAQ Stock Market LLC
Warrants to Purchase Common Stock	AMRHW	The NASDAQ Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Emerging growth company ☒

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

Item 1.01 Entry into a Material Definitive Agreement.

Spin-Off Transaction

Stock Purchase Agreement

On January 10, 2020, Ameri Holdings, Inc. (the “Company”) and Ameri100 Inc. (“Buyer”) entered into a Stock Purchase Agreement (the “Agreement”) pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, the Company will sell to Buyer and Buyer will purchase from the Company one hundred percent (100%) of the outstanding equity interests (the “Purchased Shares”) of Ameri100 Holdco, Inc. (“Holdco”) (the “Spin-Off”).

Prior to the Spin-Off Closing (as defined below), the Company will consummate a reorganization (the “Reorganization”) pursuant to which it will contribute, transfer and convey to Holdco all of the issued and outstanding equity interests of the existing subsidiaries of the Company, constituting the entire business and operations of the Company and its subsidiaries (the “Transferred Legacy Business”). At the Spin-Off Closing, in exchange for the Purchased Shares, all of the issued and outstanding shares of Series A preferred stock of the Company shall be redeemed for a number of shares of Series A preferred stock of Buyer (“Buyer Preferred Stock”) equal to equal to the sum of (a) 431,333 shares of Buyer Preferred Stock plus (b) an additional number of payable-in-kind shares of Buyer Preferred Stock based on a 2% annual interest rate, compounding quarterly, from January 1, 2020 through and including the date of the Spin-Off Closing on the number of shares set forth in clause (a).

Each party to the Agreement has made customary representations and warranties. The Company has agreed to customary covenants, including relating to the conduct of the Transferred Legacy Business from the date of the Agreement until the closing of the Spin-Off (the “Spin-Off Closing”).

Each party’s obligation to consummate the Spin-Off is subject to certain conditions including, but not limited to:

• the accuracy of the other party’s representations and warranties and the performance, in all material respects, by the other party of its obligations under the Agreement;

• the Company obtaining the approval of the Spin-Off from its stockholders at the Company Special Meeting (as defined below);

• the consummation of the Reorganization; and

• the consummation of the Amalgamation (as defined below).

The Agreement permits the Company for a period of 30 days after the signing of the Agreement to discuss with third parties alternative transactions to those contemplated by the Agreement.  After such 30 day period, the Company will not be permitted to discuss or provide confidential information to third parties relating to an alternative transaction.  The Company’s board of directors and its special committee will be required to recommend the Spin-Off transaction to the Company’s shareholders, except that it may change its recommendation to the extent required by its fiduciary duties and subject to certain requirements specified in the Agreement, including termination of the Agreement.

The Agreement may be terminated by the mutual written consent of the Company and the Buyer or by either party if (a) there is an outstanding law or order from a governmental authority prohibiting the transactions contemplated by the Agreement, (b) the Spin-Off is not consummated on or prior to the date that is 180 days from the date of the Agreement (the “Outside Date”) or (c) the other party materially breaches the Agreement such that its related closing condition would not be met and fails to cure within the earlier of 10 business days after receipt of notice of such breach or the Outside Date.  The Buyer can also terminate the Agreement for a Material Adverse Effect (as defined in the Agreement), which is continuing and uncured.  Additionally, the Company can terminate if it enters into a definitive agreement for an alternative transaction as permitted by the Agreement and pays the required termination fee, and the Buyer can terminate if the Company or its board of directors or special committee changes its recommendation as permitted by the Agreement.  If the Agreement is terminated, neither party will have any continuing obligations other than confidentiality requirements, the miscellaneous provisions and liability for any fraud, willful misconduct or intentional breach of the Agreement, except that if the agreement is terminated in connection with the fiduciary out as described in the preceding sentence, the Company will be required to pay to the Buyer a termination fee equal to the Buyer’s transaction expenses, up to a maximum of $300,000.

Each party agreed to provide indemnification to the other and its related parties for any breaches of covenants.  Additionally, the Company agreed to provide indemnification for any liabilities for taxes relating to pre-closing periods and any claims by any pre-closing security holders of any subsidiary of the Company, and the Buyer agreed to provide indemnification for any liabilities for taxes relating to post-closing periods.

The foregoing description of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Agreement attached hereto as Exhibit 2.1, which is incorporated herein by reference.

Exchange Agreements

In connection with the Agreement, on January 10, 2020, the Company entered into Exchange Agreements (each, an “Exchange Agreement”) with certain creditors of the Company and its subsidiaries (each, a “Converted Debt Holder”), pursuant to which the Company issued in a private offering a total of 599,600 shares of its common stock (the “Exchange Shares”) to such Converted Debt Holders at a price per share of $2.495 in satisfaction of $1,496,000 of the obligations owed by the Company to such Converted Debt Holders, with the remaining $1,000,000 owed to such Converted Debt Holders, plus interest (at an increased rate), due at the closing of the Amalgamation (or the earlier of the termination of the Amalgamation Agreement (as defined below) or 181 days after the date of the Amalgamation Agreement. The Converted Debt Holders have agreed to lock-up the Exchange Shares for a period from the date of issuance until six (6) months following the closing of the Amalgamation and have agreed to certain leak-out provisions for the three (3) months after the expiration of such lock-up, in each case, subject to earlier release if the Company’s stock price exceeds $7.50 per share for 20 consecutive trading days.

A copy of the form of Exchange Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference, and the foregoing description of the Exchange Agreement is qualified in its entirety by reference thereto.

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Amalgamation Transaction

Amalgamation Agreement

On January 10, 2020, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with Jay Pharma Merger Sub, Inc. a company organized under the laws of Canada and a wholly-owned subsidiary of the Company (“Merger Sub”), Jay Pharma Inc., a company organized under the laws of Canada (“Jay Pharma”), Jay Pharma ExchangeCo., Inc. a company organized under the laws of British Columbia and a wholly-owned subsidiary of the Company (“ExchangeCo”), and Barry Kostiner, as the Company Representative.

The Amalgamation Agreement provides that, upon the terms and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub and Jay Pharma will be amalgamated and will continue as one corporation (“AmalCo”) under the terms and conditions prescribed in the Amalgamation Agreement (the “Amalgamation”), AmalCo shall be a direct wholly-owned subsidiary of ExchangeCo and an indirect wholly-owned subsidiary of the Company.

At the effective time of the Amalgamation (the “Effective Time”), all outstanding shares of Jay Pharma (the “Jay Pharma Shares”) will be converted into the right to receive such number of shares of common stock of the Company representing approximately 84% of the post-closing company’s issued and outstanding shares of common stock (calculated prior to the issuance of those new shares of common stock) (“Resulting Issuer Common Stock”). The Jay Pharma Shares will initially be converted into either (a) ExchangeCo Exchangeable Shares (as defined in the Amalgamation Agreement) or (b) ExchangeCo Special Shares (as defined in the Amalgamation Agreement) which in turn will be exchangeable into freely-trading shares of Resulting Issuer Common Stock. Additionally, each outstanding Jay Pharma stock option will be converted into and become an option to purchase the number of shares of Resulting Issuer Common Stock equal to the Exchange Ratio (as defined in the Amalgamation Agreement) and each outstanding Jay Pharma warrant will be converted into and become a warrant to purchase the number of shares of Resulting Issuer Common Stock equal to the Exchange Ratio.

Each party to the Amalgamation Agreement has made customary representations and warranties.

The Company has made covenants, among others, relating to the conduct of its business prior to the closing of the Amalgamation, including:

• an undertaking to prepare and file with the SEC, as promptly as reasonably practicable following the date of the Amalgamation Agreement, (a) a proxy statement (the “Proxy Statement”) asking its shareholders to vote on and approve any and all required proposals (the “Company Shareholder Proposals”) necessary to consummate the transactions contemplated by the Amalgamation and the Spin-Off at a special meeting (the “Company Special Meeting”) and (b) a Registration Statement or Statements on Forms S-4, S-1, S-3 or S-8, as applicable (including all amendments thereto, and collectively, the “Registration Statement”) registering all shares of Resulting Issuer Capital Stock (as defined in the Amalgamation Agreement) issued in connection with the Amalgamation;

• an undertaking to prepare and submit a NASDAQ Listing Application and use commercially reasonable efforts to cause such NASDAQ Listing Application to be conditionally approved prior to the Effective Time; and

• an undertaking to consummate an equity financing that eliminates all of the outstanding liabilities of the Company prior to the Effective Time (the “Company Financing”).

Following the Effective Time, the Board of Directors of the Company (the “Board”) will consist of three (3) directors and will be comprised of two (2) members designated by Jay Pharma and one (1) member designated by the Company.

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The Company is not permitted to solicit, initiate, propose, seek or knowingly encourage, facilitate or support any alternative transaction proposals from third parties or to engage in discussions or negotiations with third parties regarding any alternative transaction proposals. Notwithstanding this limitation, prior to the Effective Time, the Company may under certain circumstances provide information to and participate in discussions or negotiations with third parties with respect to an unsolicited alternative transaction proposal that the Board has determined in good faith is or would reasonably be expected to lead to a superior proposal.

The Amalgamation Agreement also contains covenants regarding the Company and Jay Pharma using their respective reasonable best efforts to obtain all required governmental and regulatory consents and approvals.

Each party’s obligation to consummate the Amalgamation is subject to certain conditions including, but not limited to:

• the accuracy of the other parties representations and warranties and the performance, in all material respects, by the other parties of its obligations under the Amalgamation Agreement;

• the approval of the Company Shareholder Proposals at the Company Special Meeting;

• the consummation of the Spin-Off;

• the consummation of the Company Financing;

• the approval of the Jay Pharma stockholders;

• the entering into of certain ancillary agreements by and between the Company and ExchangeCo;

• the approval of the NASDAQ Listing Application; and

• the Company shall have effectuated the Stock Split (as defined in the Amalgamation Agreement), if necessary.

The Amalgamation Agreement contains certain customary termination rights by either the Company or Jay Pharma, including if the Amalgamation is not consummated within 180 days of the date of the Amalgamation Agreement.

If the Amalgamation Agreement is terminated under certain circumstances, the Company may be obligated reimburse Jay Pharma for expenses incurred in an amount not to exceed $500,000.

The Company has agreed to indemnify and hold harmless Jay Pharma and their respective successors and assigns for a period of one (1) year, from and against all losses arising out of or resulting from the inaccuracy or breach of any representation or warranty of, or the non-fulfillment or breach of any covenant or agreement of, the Company, Merger Sub or ExchangeCo contained in the Amalgamation Agreement. Indemnification claims will be paid by delivery of shares of Resulting Issuer Common Stock.

The foregoing description of the Amalgamation Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Agreement attached hereto as Exhibit 2.2, which is incorporated herein by reference.

Lock-Up Agreements

Prior to closing, certain holders of Jay Pharma securities will enter into lock-up agreements, pursuant to which they have agreed to certain restrictions on transfers of the shares of Resulting Issuer Capital Stock for the 180-day period following the effective time of the Amalgamation, with such restrictions being subject to customary exceptions.

Description of Jay Pharma

Jay Pharma was incorporated under the Business Corporations Act (Canada) on April 19, 2017 as Jay Resources Inc. Jay Pharma is a pharmaceutical company developing innovative, evidence-based cannabinoid medicines.

Simultaneously with the execution of the Amalgamation Agreement, Jay Pharma entered into a Secured Promissory Note, dated January 10, 2020 (the “Note”), by and among Jay Pharma and the lenders signatories thereto, pursuant to which, on January 10, 2020, Jay Pharma received aggregate gross proceeds of $1,500,000. Pursuant to the Note, the aggregate obligations of Jay Pharma under the Note are to automatically, immediately prior to the consummation of the Amalgamation, convert into shares of Jay Pharma common stock, subject to the terms and provisions of the Note. Pursuant to Note, upon conversion of the term loans made by the lenders subject to the terms of the Note, Jay Pharma is required to cause Ameri to issue each lender warrants to purchase Ameri Common Stock. Upon consummation of the Amalgamation, Jay Pharma has agreed to cause Ameri to register the resale of the warrant shares.

Prior to the execution and delivery of the Amalgamation Agreement, certain investors have entered into agreements with Jay Pharma pursuant to which such investors have agreed, subject to the terms and conditions of such agreements, to purchase, immediately prior to the consummation of the Amalgamation, shares of Jay Pharma’s common stock (or common stock equivalents) and warrants to purchase Jay Pharma’s common stock for an aggregate purchase price of $3.5 million (the “Jay Pre-Closing Financing”). The consummation of the transactions contemplated by such agreements is conditioned upon the satisfaction or waiver of the conditions set forth in the Amalgamation Agreement. After consummation of the Amalgamation, Jay Pharma has agreed to cause Ameri to register the resale of the Ameri Common Stock issued and issuable pursuant to the warrants issued to the investors in the Jay Pre-Closing Financing.

In connection with the Amalgamation, an accredited investor entered into an assignment agreement with a stockholder of Jay Pharma, pursuant to which, immediately prior to the Amalgamation, such stockholder of Jay Pharma will sell and assign an aggregate of 7,841,785 shares of Jay Pharma common stock for the nominal aggregate purchase price of $10.

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Item 3.02. Unregistered Sales of Equity Securities.

The information in Item 1.01 relating to the issuance of the Exchange Shares is incorporated by reference into this Item 3.02. The issuance of the Exchange Shares will be made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

Item 8.01. Other Events.

On January 13, 2020, the Company issued a press release with respect to the foregoing transactions, a copy of which is attached hereto as Exhibit 99.1.

Cautionary Statement Regarding Forward-Looking Statements

This report, including the exhibits attached hereto, contain forward-looking statements based upon the Company’s and Jay Pharma’s current expectations. Forward-looking statements involve risks and uncertainties, and include, but are not limited to, statements about the structure, timing and completion of the proposed Spin-Off and Amalgamation; the post-closing company’s listing on Nasdaq after closing of the proposed Amalgamation; expectations regarding the ownership structure of the post-closing company; the expected executive officers and directors of the post-closing company; the post-closing company’s expected cash position at the closing of the proposed Amalgamation; the future operations of the post-closing company; the nature, strategy and focus of the post-closing company; the development and commercial potential and potential benefits of any product candidates of the post-closing company; Jay Pharma having sufficient resources to advance its product pipeline; and other statements that are not historical fact. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: (i) the risk that the conditions to the closing of the proposed transactions are not satisfied, including the failure to timely obtain stockholder approval for the transactions, if at all; (ii) uncertainties as to the timing of the consummation of the proposed transactions and the ability of each of the Company and Jay Pharma to consummate the proposed transactions; (iii) risks related to the Company’s ability to manage its operating expenses and its expenses associated with the proposed transactions pending closing; (iv) risks related to the failure or delay in obtaining required approvals from any entity necessary to consummate the proposed transactions; (v) the risk that as a result of adjustments, Company stockholders and Jay Pharma stockholders could own more or less of the combined post-closing company than is currently anticipated; (vi) risks related to the market price of the Company’s common stock prior to the closings; (vii) unexpected costs, charges or expenses resulting from the transactions; (viii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transactions; (ix) the uncertainties associated with the development and regulatory approval of product candidates; (x) risks related to the inability of the post-closing company to obtain sufficient additional capital to continue to advance product candidates; (xi) unexpected costs that may result from development of product candidates; (xii) risks related to the failure to realize any value from product candidates being developed and anticipated to be developed in light of inherent risks and difficulties involved in successfully bringing product candidates to market; and (xiii) risks associated with the possible failure to realize certain anticipated benefits of the proposed transactions, including with respect to future financial and operating results. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. These and other risks and uncertainties are more fully described in periodic filings with the SEC, including the factors described in the section entitled “Risk Factors” in the Company’s Annual and Quarterly Reports filed with the SEC, and in other filings that the Company makes and will make with the SEC. You should not place undue reliance on these forward-looking statements, which are made only as of the date hereof or as of the dates indicated in the forward-looking statements. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

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Important Additional Information Will be Filed with the SEC

In connection with the proposed transactions, the Company intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including a registration statement that will contain a proxy statement and prospectus. THE COMPANY URGES INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT COMPANY, THE PROPOSED TRANSACTIONS AND RELATED MATTERS.  Investors and shareholders will be able to obtain free copies of the proxy statement, prospectus and other documents filed by the Company with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov.  In addition, investors and shareholders will be able to obtain free copies of the proxy statement, prospectus and other documents filed by the Company with the SEC by contacting Investor Relations by mail at 5000 Research Court, Suite 750, Suwanee, Georgia. Stockholders are urged to read the proxy statement, prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transactions.

Participants in the Solicitation

The Company and Jay Pharma, and each of their respective directors and executive officers and certain of their other members of management and employees, may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction.  Additional information regarding these persons and their interests in the transaction will be included in the proxy statement relating to the transactions when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above.

Disclaimer

This report and the exhibits hereto do not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The financial statements of Jay Pharma for the fiscal years ended December 31, 2018 and 2017 (audited), and for the nine months ended September 30, 2019 and 2018 (unaudited) are incorporated herein by reference to Exhibits 99.2 and 99.3, respectively, to this current report.

(b) Pro Forma Financial Information.

The required pro forma financial statements of the Company will be filed in accordance with Article 11 of Regulation S-X under cover of Form 8-K/A as soon as practicable, but in no event later than 71 days after the date on which this Current Report was required to be filed.

(d) Exhibits

2.1	Share Purchase Agreement, dated January 10, 2020, by and between AMERI Holdings, Inc. and Ameri100, Inc.*
2.2	Amalgamation Agreement, dated January 10, 2020, by and between AMERI Holdings, Inc., Jay Pharma Merger Sub, Inc., Jay Pharma Inc., Jay Pharma ExchangeCo., Inc. and Barry Kostiner.*
5.1	Opinion of Sheppard, Mullin, Richter & Hampton LLP
10.1	Form of Exchange Agreement, by and among AMERI Holdings, Inc., Ameri100, Inc. and each Converted Debt Holder*
23.1	Consent of Marcum LLP
99.1	Press Release, dated January 13, 2020
99.2	Audited financial statements of Jay Pharma for the fiscal years ended December 31, 2018 and 2017
99.3	Condensed financial statements of Jay Pharma for the nine months ended September 30, 2019 and 2018 (unaudited)

* The exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).  The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

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SIGNATURE

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

January 13, 2020	AMERI HOLDINGS, INC.
	By:	/s/ Barry Kostiner
		Name: Barry Kostiner
		Title: Chief Financial Officer

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EX-2.1

Exhibit 2.1

SHARE PURCHASE AGREEMENT

by and between

AMERI100 INC,
as Buyer,

and

AMERI HOLDINGS, INC.,
as Seller

Dated as of January 10, 2020

TABLE OF CONTENTS:

I. PURCHASE OF COMPANY SHARES		2
	1.1. Purchase of Company Shares	2
	1.2. Consideration for the Purchased Shares	2
II. CLOSING		2
	2.1. Closing	2
	2.2. Conditions to Obligations of Each Party	2
	2.3. Conditions to Obligations of Seller	3
	2.4. Conditions to the Obligations of Buyer	3
	2.5. Closing Deliveries by Seller	4
	2.6. Closing Deliveries by Buyer	5
	2.7. Frustration of Conditions	5
III. REPRESENTATIONS AND WARRANTIES OF SELLER		5
	3.1. Organization and Qualification	6
	3.2. Authorization and Binding Effect; Corporate Documentation	6
	3.3. Title to the Purchased Shares	6
	3.4. Capitalization	6
	3.5. Subsidiaries	7
	3.6. Non-Contravention	7
	3.7. SEC Filings and Financial Statements	7
	3.8. Absence of Liabilities	9
	3.9. Absence of Certain Changes	9
	3.10. Title to and Sufficiency of Assets	10
	3.11. Personal Property	10
	3.12. Real Property	10
	3.13. Intellectual Property	11
	3.14. Compliance with Laws	12
	3.15. Permits	12
	3.16. Litigation	13
	3.17. Contracts	13
	3.18. Tax Matters	14
	3.19. Environmental Matters	15
	3.20. Employee Benefit Plans	15
	3.21. Employees and Labor Matters	16
	3.22. Insurance	17
	3.23. Fairness Opinion	17
	3.24. Bank Accounts	17
	3.25. Suppliers and Customers	17
	3.26. No Brokers	18
	3.27. Investment Representations	18
	3.28. No Other Representations and Warranties	19
IV. REPRESENTATIONS AND WARRANTIES OF BUYER		19
	4.1. Organization and Qualification	19
	4.2. Authorization	20
	4.3. Non-Contravention	20
	4.4. Buyer Preferred Stock	20
	4.5. No Brokers	20
	4.6. Litigation	20
	4.7. Investment Intent	20
	4.8. Operations	20
	4.9. No Other Representations and Warranties	21

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V. OTHER AGREEMENTS		21
	5.1. Further Assurances	21
	5.2. Confidentiality	21
	5.3. Publicity	21
	5.4. Litigation Support	22
	5.5. Agreement Regarding Intellectual Property	22
	5.6. Release and Covenant Not to Sue	22
	5.7. Tax Matters	22
	5.8. Pre-Closing Management of the Ameri Companies	23
	5.9. Acquisition Proposals	25
	5.10. Access to Information	28
	5.11. Proxy Statement and Special Meeting	28
	5.12. Director and Officer Liability and Insurance	29
	5.13. Reorganization	29
VI. INDEMNIFICATION		29
	6.1. Survival	29
	6.2. Indemnification by Seller	30
	6.3. Indemnification by Buyer	30
	6.4. Indemnification Procedures	30
	6.5. General Indemnification Provisions	31
	6.6. Timing of Payment; Right to Set-Off	32
	6.7. Knowledge of Buyer	32
VII. TERMINATION		32
	7.1. Termination	32
	7.2. Effect of Termination	33
VIII. GENERAL PROVISIONS		33
	8.1. Expenses	33
	8.2. Notices	33
	8.3. Severability	34
	8.4. Assignment	35
	8.5. No Third-Party Beneficiaries	35
	8.6. Amendment; Waiver	35
	8.7. Entire Agreement	35
	8.8. Remedies	35
	8.9. Dispute Resolution	36
	8.10. Governing Law; Jurisdiction; Waiver of Jury Trial	36
	8.11. Interpretation	37
	8.12. Mutual Drafting	37
	8.13. Counterparts	37
	8.14. Attorney-Client Privilege	38

ANNEXES:
I	Definitions
EXHIBITS:
A	Form of Make Whole Letter
B	Form of Buyer Charter Amendment
C	Form of Buyer Bylaw Amendment
D	Form of Buyer Preferred Stock CoD
E	Form of Seller Amended Preferred Stock CoD

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SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of January 10, 2020, by and between Ameri100 Inc, a Delaware corporation (“Buyer”), and AMERI Holdings, Inc., a Delaware corporation (“Seller”).  Buyer and Seller are referred to in this Agreement individually as a “Party” and collectively, as the “Parties”.

RECITALS

WHEREAS, in contemplation of the transactions contemplated by this Agreement, prior to the execution of this Agreement Seller formed Ameri100 Holdco, Inc., a Delaware corporation and wholly-owned subsidiary of Seller (the “Company”);

WHEREAS, after the date hereof, but prior to the consummation of the transactions contemplated by this Agreement, Seller will consummate a reorganization (the “Reorganization”) pursuant to which it will contribute, transfer and convey to the Company all of the issued and outstanding equity interests of the subsidiaries of Seller and otherwise take such other actions as contemplated by Section 5.13 hereof;

WHEREAS, Seller desires to sell and convey to Buyer, and Buyer desires to purchase from Seller, all of the issued and outstanding equity interests of the Company, subject to the terms and conditions set forth herein (the “Purchase” and, together with the other transactions contemplated by this Agreement and the Ancillary Documents, the “Transactions”);

WHEREAS, the board of directors of Seller (the “Seller Board”) has duly formed a special transaction committee of disinterested directors (the “Special Committee”) of the Seller Board to evaluate, negotiate and recommend actions with respect to the Purchase and the other Transactions;

WHEREAS, the Special Committee has (the “Special Committee Approval”) (i) determined that the Purchase and the other Transactions are fair, advisable and in the best interests of Seller and its stockholders, (ii) approved this Agreement, the Ancillary Documents to which Seller is a party or by which it is bound, and the Transactions, and (iii) recommended to the Seller Board that it authorize and approve this Agreement, the Ancillary Documents to which Seller is a party or by which it is bound, and the Transactions (the “Special Committee Recommendation”);

WHEREAS, the Seller Board has (the “Seller Board Approval”) (i) determined that the Purchase and the other Transactions are fair, advisable and in the best interests of Seller and its stockholders, (ii) authorized and approved this Agreement, the Ancillary Documents to which Seller is a party or by which it is bound, the performance by Seller of its obligations hereunder and thereunder and the consummation of the Purchase and the other Transactions and (iii) determined to recommend to Seller’s stockholders the approval and adoption of this Agreement, the Ancillary Documents and the Purchase and the other Transactions (the “Seller Board Recommendation”);

WHEREAS, on or about the date hereof, Seller is entering into an Amalgamation Agreement (as it may be amended, the “Merger Agreement”) with Jay Pharma Inc. and the other parties named therein;

WHERAS, on or about the date hereof, in connection with the Merger Agreement and this Agreement, Seller is entering into certain Exchange Agreements (each, as amended, an “Exchange Agreement”) with certain creditors of Seller and its subsidiaries (each, a “Converted Debt Holder”), pursuant to which upon the execution and delivery of such Exchange Agreement, Seller will issue shares of common stock of Seller to each such Converted Debt Holder in satisfaction of the obligations owed by Seller to each such creditor;

WHEREAS, on or about the date hereof, Buyer entered into certain letter agreements, copies of which are attached as Exhibit A hereto (each, a “Make Whole Letter”), with the Converted Debt Holders in connection with the Exchange Agreements; and

WHEREAS, certain capitalized terms used herein are defined in Annex I.

NOW, THEREFORE, in consideration of the premises set forth above and the respective representations, warranties, covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I
PURCHASE OF COMPANY SHARES

1.1.        Purchase of Company Shares.  At the Closing, and on the terms and subject to all of the conditions of this Agreement, Seller will sell, transfer, assign and convey to Buyer, and Buyer will purchase and accept from Seller, one hundred percent (100%) of the issued and outstanding capital stock of the Company (the “Purchased Shares”), free and clear of any and all Liens.

1.2.        Consideration for the Purchased Shares.At the Closing, in exchange for the Purchased Shares, Buyer shall issue and deliver to Seller a number of shares of Series A Preferred Stock, par value $0.01 per share, of Buyer (“Buyer Preferred Stock”) having the terms set forth in the Buyer Preferred Stock CoD (as defined below) equal to the sum of (a) 431,333 shares plus (b) an additional number of payable-in-kind shares based on a 2% annual interest rate, compounding quarterly, from January 1, 2020 through and including the Closing Date on the number of shares set forth in clause (a).

ARTICLE II
CLOSING

2.1.        Closing.  The closing of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Ellenoff, Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York 10105, commencing at 10:00 am (New York City time) no later than on the second (2^nd) Business Day following full satisfaction or due waiver of all of the closing conditions set forth in ARTICLE II or on such other date as is mutually agreeable to by the Parties.  By mutual agreement of the Parties, the Closing may take place by conference call and facsimile (or other electronic transmission of signature pages) with exchange of original signatures by mail.  The date on which the Closing actually occurs will be referred to as the “Closing Date”.  The Parties agree that to the extent permitted by applicable Law and GAAP, the Closing will be deemed effective as of 11:59 p.m. (New York time) on the Closing Date.

2.2.        Conditions to Obligations of Each Party.  The obligations of each of Buyer and Seller to consummate, or cause to be consummated, the transactions contemplated herein is subject to the satisfaction, or waiver, at or prior to the Closing Date, of the following conditions:

(a)          Injunctions; Illegality.  No Governmental Authority shall have issued, enacted, entered, promulgated or enforced any Law or Order (that has not been vacated, withdrawn or overturned) restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement.

(b)         Governmental Approvals; Consents.  All consents, waivers and approvals from Governmental Entities or third parties, if any, disclosed in Schedule 3.6 of the Seller Disclosure Letter or that are otherwise required to consummate the transactions contemplated hereby shall have expired, been terminated, been made or been obtained.

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(c)          Litigation.  There shall not be any pending Action brought by a third-party non-Affiliate to enjoin or otherwise restrict the consummation of the Closing.

(d)          Merger Agreement Closing.  The transactions contemplated by the Merger Agreement shall have been consummated in accordance with the terms thereof simultaneously with the Closing hereunder (or immediately after the Closing hereunder, with the Closing hereunder being contingent upon such consummation).

(e)          Exchange Agreement Closings.  The transactions contemplated by the Exchange Agreements shall have been consummated in accordance with the terms thereof prior to the Closing hereunder.

2.3.        Conditions to Obligations of Seller.  The obligations of Seller to consummate the transactions contemplated under this Agreement are subject to the satisfaction or waiver by Seller, on or prior to the Closing Date, of each of the following conditions:

(a)          Performance.  All of the covenants, obligations and agreements of Buyer to be performed or complied with at or prior to the Closing pursuant to this Agreement shall have been duly performed or complied with in all material respects at or prior to the Closing.

(b)         Representations and Warranties.  The representations and warranties of Buyer contained in ARTICLE IV of this Agreement, without giving effect to any “material”, “materially”, “material adverse effect” or “Material Adverse Effect” qualification contained in such representations and warranties shall be true and correct in all material respects as of the date hereof and as of the Closing Date (except to the extent such representations and warranties specifically related to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(c)          Closing Deliveries.  Buyer shall have delivered or caused to be delivered to Seller the items set forth in Section 2.6.

(d)         Buyer Charter and Bylaws Amendment.  Buyer shall have amended and restated its certificate of incorporation in substantially the form attached as Exhibit B hereto (the “Buyer Charter Amendment”) and its bylaws in substantially the form attached as Exhibit C hereto (the “Buyer Bylaw Amendment”).

(e)         Buyer Preferred Stock Certificate of Designations.  The board of directors of Buyer shall have adopted and filed with the Secretary of State of the State of Delaware a Certificate of Designations of Series A Preferred Stock of Buyer in substantially the form attached as Exhibit D hereto (the “Buyer Preferred Stock CoD”).

(f)          Make Whole Letter.  Each Make Whole Letter shall be in full force and effect as of the Closing.

(g)          Seller Stockholder Approval.  The Seller Stockholder Approval shall have been duly obtained.

2.4.        Conditions to the Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated under this Agreement are subject to the satisfaction or waiver by Buyer, on or prior to the Closing Date, of each of the following conditions:

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(a)          Performance.  All of the covenants, obligations and agreements covenants of Seller to be performed or complied with at or prior to the Closing pursuant to this Agreement shall have been duly performed or complied with in all material respects at or prior to the Closing.

(b)         Representations and Warranties.  The representations and warranties of Seller contained in ARTICLE III of this Agreement, without giving effect to any “material,” “materially,” “material adverse effect” or “Material Adverse Effect” qualification contained in such representations and warranties, shall be true and correct in each case as of the date hereof and as of the Closing Date (except to the extent such representations and warranties specifically related to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(c)          Closing Deliveries.  Seller shall have delivered or caused to be delivered to Buyer the items set forth in Section 2.5.

(d)          Material Adverse Effect.  Since the date hereof, there shall not have occurred any Material Adverse Effect.

(e)          Seller Stockholder Approval.  The Seller Stockholder Approval shall have been duly obtained.

(f)          Reorganization.  The Reorganization shall have been completed and be in form and substance reasonably acceptable to Buyer.

(g)          Seller Preferred Stock Certificate of Designations.  The holders of Seller’s 9.00% Series A Cumulative Preferred Stock, par value $0.01 per share (the “Seller Series A Preferred Stock”), shall have approved, and Seller shall have filed with the Secretary of State of the State of Delaware, a Second Amended and Restated Certificate of Designation of Rights and Preferences of 9.00% Series A Cumulative Preferred Stock of Seller in substantially the form attached as Exhibit E hereto (the “Seller Amended Preferred Stock CoD”).

2.5.        Closing Deliveries by Seller.  At or prior to the Closing, Seller will deliver or cause to be delivered to Buyer the following, each in form and substance reasonably acceptable to Buyer:

(a)          original stock certificates representing all of the Purchased Shares, with a duly executed stock power, or powers of attorney duly executed and in a form reasonably acceptable to Buyer necessary to transfer the Purchased Shares to Buyer on the books and records of the Company;

(b)          the books and records of the Ameri Companies;

(c)         a good standing certificate for each Ameri Company certified as of a date no later than thirty (30) days prior to the Closing Date from the proper Governmental Authority in its jurisdiction of organization and each other jurisdiction in which such each Ameri Company is qualified to do business as a foreign entity as of the Closing;

(d)         a certificate from Seller’s secretary certifying to (A) copies of Seller’s Governing Documents as in effect as of the Closing, (B) the resolutions of the Seller Board authorizing the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which Seller is a party or by which it is bound, the transfer of the Purchased Shares from Seller to Buyer, and the consummation of each of the transactions contemplated hereby and thereby, and (C) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which Seller is or is required to be a party or by which Seller is or is required to be bound;

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(e)          resignations effective immediately upon the Closing of any directors and officers of the Ameri Companies in their capacities as directors and/or officers, as requested by Buyer;

(f)          suitable documentation to add any additional employees of Buyer or its Affiliates as signatories to the Bank Accounts of the Ameri Companies set forth on Schedule 3.24, as prescribed by Buyer;

(g)          evidence reasonably acceptable to Buyer that the transactions contemplated by the Merger Agreement and the Exchange Agreements have been consummated in accordance with their terms; and

(h)          such other documents, instruments and agreements as Buyer may reasonably request, which shall be in form and substance satisfactory to Buyer.

2.6.        Closing Deliveries by Buyer.  At or prior to the Closing, Buyer will deliver or cause to be delivered to Seller the following, each in form and substance reasonably acceptable to Seller:

(a)          evidence reasonably satisfactory to the Seller that the Buyer Preferred Stock to be delivered at the Closing has been duly issued to Seller and that Seller is reflected as the owner thereof on the books and record of Buyer;

(b)          a good standing certificate for the Buyer certified as of a date no later than thirty (30) days prior to the Closing Date from the proper Governmental Authority in its jurisdiction of organization; and

(c)          a certificate from Buyer’s secretary certifying to (A) copies of Buyer’s Governing Documents as in effect as of the Closing, (B) the resolutions of the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which Buyer is a party or by which it is bound, the acquisition of the Purchased Shares by Buyer from Seller, and the consummation of each of the transactions contemplated hereby and thereby, and (C) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which Buyer is or is required to be a party or by which Seller is or is required to be bound.

2.7.        Frustration of Conditions.  Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this ARTICLE II to be satisfied if such failure was caused by the failure of such Party or its Affiliates to comply with or perform any of its covenants or obligations set forth in this Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements contained in this ARTICLE III, and the information in the Seller Disclosure Letter, are true and correct as of the date of this Agreement and as of the Closing Date, except as disclosed by Seller in (i) the disclosure letter (the “Seller Disclosure Letter”) delivered by Seller to Buyer concurrently with the execution of this Agreement, which Seller Disclosure Letter identifies items of disclosure by reference to a particular section or subsection of this Agreement (it being understood and agreed that any information set forth in one section or subsection of the Seller Disclosure Letter also shall be deemed to apply to each other section and subsection of this Agreement to which its applicability is reasonably apparent from the text of the disclosure), or (ii) the SEC Reports that were available at least one Business Day prior to the date hereof on the SEC’s website through EDGAR (other than disclosures in the “Risk Factors” or “Cautionary Note Regarding Forward-Looking Statements” sections of such reports and other disclosures that are generally cautionary, predictive or forward-looking in nature).

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3.1.        Organization and Qualification.  Each Ameri Company is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was organized and has full power and authority to own the assets owned by it and conduct its business as and where it is being conducted by it.  Each Ameri Company is duly licensed or qualified to do business, and is in good standing as a foreign entity, in all jurisdictions in which its assets or the operation of its business makes such licensing or qualification necessary, all of which jurisdictions are listed on Schedule 3.1 of the Seller Disclosure Letter.  Each Ameri Company has all requisite power and authority to own, lease or use, as the case may be, its properties and business.  During the past five (5) years, no Ameri Company has been known by or used any corporate, fictitious or other name in the conduct of its business or in connection with the use or operation of its assets.  Schedule 3.1 of the Seller Disclosure Letter lists all current directors and officers of each Ameri Company, showing each such Person’s name and positions.

3.2.       Authorization and Binding Effect; Corporate Documentation.  Subject to obtaining the Seller Stockholder Approval, Seller has full power and authority to enter into this Agreement and the Ancillary Documents to which it is or is required to be a party and to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder.  The Seller has received the Special Committee Approval and the Seller Board Approval, and the Special Committee has made the Special Committee Recommendation and the Seller Board has made the Seller Board Recommendation.  Subject to obtaining the Seller Stockholder Approval, the execution and delivery of this Agreement and the Ancillary Documents to which Seller is or is required to be a party, the performance by Seller of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of Seller.  Each of this Agreement and each Ancillary Document to which Seller is or is required to be a party has been duly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as the enforceability thereof may be limited by the Enforceability Exceptions.  The copies of the Governing Documents of each Ameri Company, as amended to date, copies of which have heretofore been delivered to Buyer, are true, complete and correct copies of the Governing Documents of such Ameri Company, as amended through and in effect on the date hereof.  The minute books and records of the proceedings of each Ameri Company, copies of which have been delivered to Buyer, are true, correct and complete in all material respects.

3.3.       Title to the Purchased Shares.  Seller owns good, valid and marketable title to the Purchased Shares, free and clear of any and all Liens, and upon delivery of the Purchased Shares to Buyer on the Closing Date in accordance with this Agreement, the entire legal and beneficial interest in the Purchased Shares and good, valid and marketable title to the Purchased Shares, free and clear of all Liens (other than those imposed by applicable securities Laws or those incurred by Buyer), will pass to Buyer.

3.4.        Capitalization. Prior to giving effect to the transactions contemplated by this Agreement, Seller is the legal, beneficial and record owner of all of the issued and outstanding equity interests of the Company, with Seller owning the equity interests in the Company set forth on Schedule 3.4 of the Seller Disclosure Letter.  The Purchased Shares to be delivered by Seller to Buyer constitute all of the issued and outstanding equity interests of the Company.  All of the issued and outstanding equity interests of the Company (i) have been duly and validly issued, (ii) are fully paid and non-assessable (to the extent applicable) and (iii) were not issued in violation of any preemptive rights or rights of first refusal or first offer.  There are no issued or outstanding options, warrants or other rights to subscribe for or purchase any equity interests of the Company or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any equity securities of the Company, or preemptive rights or rights of first refusal or first offer with respect to the equity securities of the Company, nor are there any Contracts, commitments, understandings, arrangements or restrictions to which Seller is a party or bound relating to any equity securities of the Company, whether or not outstanding.  There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company, nor are there any voting trusts, proxies, shareholder agreements or any other agreements or understandings with respect to the voting of the equity securities of the Company.  All of the equity securities of the Company have been granted, offered, sold and issued in compliance with all applicable corporate and securities Laws.

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3.5.        Subsidiaries. Schedule 3.5of the Seller Disclosure Letter sets forth the name of each Subsidiary of Seller, and with respect to each such Subsidiary (a) its jurisdiction of organization, (b) its authorized capital stock or other equity interests (if applicable), (c) the number of issued and outstanding shares of capital stock or other equity interests and the record holders and beneficial owners thereof and (d) its Tax election to be treated as a corporate or a disregarded entity under the Code and any state or applicable non-U.S. Tax laws, if any.  All of the outstanding equity securities of each Subsidiary of Seller are duly authorized and validly issued, were offered, sold and delivered in compliance with all applicable Laws governing the issuance of securities and are fully paid and non-assessable.  All of the outstanding equity securities of each Subsidiary of Seller are owned, (i) as of the date of this Agreement, by one or more of Seller or its Subsidiaries, and (ii) as of the Closing, upon the consummation of the Reorganization, by one or more of the Company or its Subsidiaries, in each case of clauses (i) and (ii) free and clear of all Liens (other than those, if any, imposed by such Subsidiary’s Governing Documents and applicable securities Laws).  There are no Contracts to which the Seller or any Ameri Company or any of their respective Affiliates is a party or bound with respect to the voting (including voting trusts or proxies) of the equity interests of any Ameri Company other than the Governing Documents of such Ameri Company.  There are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which any Ameri Company is a party or which are binding upon any Ameri Company providing for the issuance or redemption of any equity interests of any Ameri Company.  There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by any Ameri Company.  No Ameri Company owns or has any rights to acquire, directly or indirectly, any capital stock or other equity interests of any Person.  No Ameri Company is a participant in any joint venture, partnership or similar arrangement.  There are no outstanding contractual obligations of any Ameri Company to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.

3.6.       Non-Contravention.  Neither the execution, delivery and performance of this Agreement or any Ancillary Documents by Seller, nor the consummation of the transactions contemplated hereby or thereby, will (a) violate or conflict with, any provision of the Governing Documents of any Ameri Company, (b) violate or conflict with any Law or Order to which any Ameri Company or Seller, their respective assets or the Purchased Shares are bound or subject, (c) with or without giving notice or the lapse of time or both, breach or conflict with, constitute or create a default under, or give rise to any right of termination, cancellation or acceleration of any obligation or result in a loss of a material benefit under, or give rise to any obligation of any Ameri Company or Seller to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, any of the terms, conditions or provisions of any Contract, agreement, or other commitment to which Seller or any Ameri Company is a party or by which Seller or any Ameri Company, their respective assets or the Purchased Shares may be bound, (d) result in the imposition of a Lien (other than a Permitted Lien) on any Purchased Shares or any assets of any Ameri Company or (e) require any filing with, or Permit, consent or approval of, or the giving of any notice to, any Governmental Authority or other Person.

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3.7.        SEC Filings and Financial Statements.

(a)          Seller has timely filed all forms, reports, schedules, statements, registration statements, prospectuses and other documents required to be filed or furnished by Seller with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements or supplements thereto. Except to the extent available on the SEC’s website through EDGAR, Seller has delivered to Buyer copies in the form filed with the SEC of all of the following: (i) Seller’s annual reports on Form 10-K for each fiscal year of Seller beginning with the first year Seller was required to file such a form, (ii) Seller’s quarterly reports on Form 10-Q for each fiscal quarter that Seller filed such reports to disclose its quarterly financial results in each of the fiscal years of Seller referred to in clause (i) above, (iii) all other forms, reports, registration statements, prospectuses and other documents (other than preliminary materials) filed by Seller with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, prospectuses and other documents referred to in clauses (i) and (ii) above and this clause (iii), whether or not available through EDGAR, collectively, the “SEC Reports”) and (iv) all certifications and statements required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of SOX) with respect to any report referred to in clause (i) above (collectively, the “Public Certifications”).  The SEC Reports (x) were prepared in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (in the case of all other SEC Reports) 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 made therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof, there are no material outstanding or unresolved comments in comment letters from the SEC staff with respect to Seller or the SEC Reports. As of the date hereof, (i) none of the SEC Reports is the subject of ongoing SEC review or outstanding SEC comments and (ii) neither the SEC nor any other Governmental Authority is conducting any investigation or review of any SEC Report. The Public Certifications are each true as of their respective dates of filing. As used in this Section 3.7, the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC.

(b)         The consolidated financial statements and notes of Seller contained or incorporated by reference in the SEC Reports (the “Seller Financials”), fairly present in all material respects the financial position and the results of operations, changes in shareholders’ equity, and cash flows of Seller at the respective dates of and, for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).

(c)          Seller has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 and paragraph (e) of Rule 15d-15 under the Exchange Act) as required by Rules 13a-15 and 15d-15 under the Exchange Act. Seller’s disclosure controls and procedures are designed to ensure that all information (both financial and non-financial) required to be disclosed by Seller in the reports that it files or furnishes 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 Seller’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Seller’s management has completed an assessment of the effectiveness of Seller’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable SEC Report, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation. Based on Seller’s management’s most recently completed evaluation of Seller’s internal control over financial reporting, (i) Seller had no significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting that would reasonably be expected to adversely affect Seller’s ability to record, process, summarize and report financial information and (ii) Seller does not have knowledge of any fraud, whether or not material, that involves management or other employees who have a significant role in Seller’s internal control over financial reporting.

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(d)          Except as and to the extent reflected or reserved against in the Seller Financials, Seller has not incurred any Liabilities or obligations of the type required to be reflected on a balance sheet in accordance with GAAP that are not adequately reflected or reserved on or provided for in the Seller Financials, other than Liabilities incurred in the Ordinary Course of Business since the date of the last Seller Financials.

3.8.        Absence of Liabilities.

(a)          Neither Seller nor any Ameri Company has any Liabilities except (a) Liabilities that are accrued and reflected in the Seller Financials as of December 31, 2018, (b) Liabilities that are listed on Schedule 3.8 of the Seller Disclosure Letter or in the SEC Reports, (c) immaterial Liabilities that have arisen in the Ordinary Course of Business (other than liabilities for breach of any Contract or violation of any Law) since December 31, 2018 and (d) obligations to be performed after the date hereof under any Contracts which are disclosed in the Seller Disclosure Letter or in the SEC Reports.

(b)          The Ameri Companies have no outstanding Indebtedness.  Seller shall be responsible for all Transaction Expenses incurred by Seller and the Ameri Companies in connection with the transactions contemplated under this Agreement, and the Ameri Companies shall have no liability for any Transaction Expenses.  Seller and the Ameri Companies have not incurred any liability or obligation for any Transaction Bonus (including any liability for any Taxes associated therewith) except as set forth in Section 3.8(b) of the Seller Disclosure Letter, which identifies each party entitled to receive a Transaction Bonus, the amount thereof and any liability for Taxes associated therewith.  Prior to the Closing, Seller shall pay or shall have caused each Ameri Company to pay and satisfy in full all liabilities and obligations arising out of or related to each Transaction Bonus, if any, including any liability for Taxes associated therewith.

3.9.       Absence of Certain Changes.  Since December 31, 2018:  (a) each Ameri Company has conducted its business only in the Ordinary Course of Business, and (b) there has not been any change in or development with respect to such Ameri Company’s business, operations, condition (financial or otherwise), results of operations, prospects, assets or Liabilities, except for changes and developments which have not had, and are not likely to have to have a Material Adverse Effect.  Without limiting the foregoing, since December 31, 2018, no Ameri Company has: (i) suffered any loss, damage, destruction or other casualty in excess of $100,000 in the aggregate, whether or not covered by insurance; (ii) incurred, assumed or become subject to, whether directly or by way of guarantee or otherwise, any Liability in excess of $500,000 except for trade or business obligations incurred in the Ordinary Course of Business in connection with the purchase of goods and services; (iii) sold, transferred, leased or otherwise disposed of any material assets (other than in the Ordinary Course of Business) or permitted or allowed any of its material assets to be subject to any Lien (other than the Permitted Liens); (iv) instituted, settled or agreed to settle any Action before any Governmental Authority; (v) entered into or terminated any material transaction or Contract other than in the Ordinary Course of Business; (vi) instituted any increase in the compensation payable to any of their employees or under any Benefit Plan other than in the Ordinary Course of Business, or as otherwise required by law or Contract, or adopted any new Benefit Plans; (vii) made any capital expenditure or commitment therefore for additions to its property, facilities or equipment outside of the Ordinary Course of Business; (viii) made any change in any method of its accounting or accounting practices or any change in its depreciation or amortization policies or rates theretofore adopted or revalued any of its assets; or (ix) agreed or committed, whether in writing or otherwise, to take any action described in this Section 3.9.

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3.10.      Title to and Sufficiency of Assets.  Each Ameri Company has good and marketable title to all of its assets, free and clear of all Liens other than Permitted Liens.  The assets of each Ameri Company constitute all of the material assets, rights and properties that are used in the operation of such Ameri Company’s business as it is now conducted and presently proposed to be conducted or that are used or held by such Ameri Company for use in the operation of such Ameri Company’s business, and taken together, are adequate and sufficient for the operation of such Ameri Company’s business as currently conducted and as presently proposed to be conducted.  Immediately following the Closing, all of the assets of each Ameri Company will be owned, leased or available for use by such Ameri Company on terms and conditions substantially identical to those under which, immediately prior to the Closing, such Ameri Company owns, leases, uses or holds available for use such assets.

3.11.      Personal Property.   All items of Personal Property of each Ameri Company are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items), and are suitable for their intended use in such Ameri Company’s business.  Schedule 3.11 of the Seller Disclosure Letter contains an accurate and complete list and description of leases in respect of the Personal Property (collectively, the “Personal Property Leases”).  The Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect.  With respect to the Personal Property Leases, there are no existing defaults under the applicable lease by any Ameri Company or, to the Knowledge of Seller, any other party thereto, and no event of default on the part of any Ameri Company or, to the Knowledge of Seller, on the part of any other party thereto has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a default thereunder.  Seller has delivered to Buyer true and correct copies of the Personal Property Leases (along with any amendments thereto).

3.12.     Real Property.  The SEC Reports contain a complete and accurate list of all premises leased or subleased or otherwise used or occupied by each Ameri Company (the “Leased Premises”), and of all leases, lease guarantees, agreements and documents related thereto, including all amendments, terminations and modifications thereof (collectively, the “Leases”), as well as the current annual rent and term under each Lease.  Seller has provided to Buyer a true and complete copy of each of the Leases, and in the case of any oral Lease, a written summary of the material terms of such Lease.  Subject to the Enforceability Exceptions, the Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect.  No event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of any Ameri Company under any Lease.  To the Knowledge of Seller, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default by any other party under any Lease, and no Ameri Company has received notice of any such condition.  No Ameri Company has waived any rights under any Lease which would be in effect at or after the Closing.  The Ameri Companies are in quiet possession of the Leased Premises.  All leasehold improvements and fixtures located on the Leased Premises are (i) to the Knowledge of Seller, structurally sound with no material defects, (ii) in good operating condition and repair, subject to ordinary wear and tear, (iii) not in need of maintenance or repair except for ordinary routine maintenance and repair, (iv) in conformity in all material respects with all applicable Laws relating thereto currently in effect and (v) are located entirely on the Leased Premises.  No Ameri Company has ever owned any real property or any interest in real property (other than the leasehold interests in the Leases).

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3.13.      Intellectual Property.

(a)          Schedule 3.13(a) of the Seller Disclosure Letter sets forth a true and complete list of:  (i) all registrations of Intellectual Property (and applications therefor) owned by an Ameri Company or otherwise used or held for use by an Ameri Company in which an Ameri Company is the owner or applicant, specifying as to each item, as applicable: (A)  the title, (B) the owner, (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed and the status of each such registration or application, and (D) the issuance, registration or application numbers and dates; and (ii) all unregistered material Intellectual Property that is owned by an Ameri Company (clauses (i) and (ii), collectively, “Owned IP”).  All registered Owned IP has been duly registered with, filed in, issued by or applied for with, as the case may be, the United States Patent and Trademark Office or such other appropriate filing offices, domestic or foreign, and all such registrations, filings, issuances, applications and other actions remain valid, in full force and effect, and are current, not abandoned and not expired along with all applicable maintenance fees having been paid, in each case, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b)          Schedule 3.13(b) of the Seller Disclosure Letter sets forth a true and complete list of all material Software developed in whole or in part by or on behalf of an Ameri Company (collectively, “Company Software”).  Except for “shrink wrapped” or “off-the-shelf” software that is generally available to the public for use for a license of $50,000 or less (“Shrink Wrapped Software”), the Company Software is the only computer software that is used or held for use by or otherwise material to any Ameri Company’s businesses.

(c)          Schedule 3.13(c) of the Seller Disclosure Letter sets forth a true and complete list of all licenses, sublicenses and other agreements pertaining to Intellectual Property and Company Software to which an Ameri Company is a party or bound (other than Shrink Wrapped Software) (collectively, “Licensed IP”).

(d)          Each Ameri Company’s ownership and use in the Ordinary Course of Business of the Owned IP, Company Software and, to the Knowledge of Seller, Licensed IP do not infringe upon or misappropriate the valid Intellectual Property rights of any third party.  Each Ameri Company is the owner of the entire and unencumbered right, title and interest in and to each item of Owned IP and Company Software, and the Ameri Companies are entitled to use, and are using in their respective businesses, the Owned IP, Company Software and Licensed IP in the Ordinary Course of Business, in each case, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)          The Owned IP, Company Software and the Licensed IP include all of the material Intellectual Property used in the ordinary day-to-day conduct of each Ameri Company’s business except for Shrink Wrapped Software, and there are no other items of Intellectual Property that are material to such ordinary day-to-day conduct of business.

(f)          No Actions have been asserted against any Ameri Company and are not disposed of, or are pending or, to the Knowledge of Seller, threatened against any Ameri Company: (i)  alleging that an Ameri Company’s products or services provided by an Ameri Company infringe upon or misappropriate any Intellectual Property right of any third party; (ii) challenging an Ameri Company’s ownership of the Owned IP, Company Software or use of any Licensed IP; or (iii) challenging the validity of the Owned IP, Company Software or Licensed IP.  To the Knowledge of Seller, no Person is engaged in any activity that infringes upon the Owned IP, the Licensed IP or Company Software.  Except as disclosed in Schedule 3.13(f) of the Seller Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not result in the termination or impairment of any of the Owned IP, Licensed IP or Company Software.

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(g)          Seller has delivered to Buyer correct and complete copies of all Contracts concerning Licensed IP scheduled in Schedule 3.13(c) of the Seller Disclosure Letter.  With respect to each such Contract, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) no Ameri Company has (A) received any written notice of termination or cancellation under such Contract, (B) received any written notice of a breach or default under such Contract, which breach has not been cured, or (C) granted to any other third party any rights, adverse or otherwise, under such Contract that would constitute a breach of such Contract; and (ii) no Ameri Company nor, to the Knowledge of Seller, any other party to such Contract is in breach or default in any material respect under such Contract and, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such Contract.

(h)          Each Ameri Company has the right to use all Software development tools, processing tools, library functions, compilers and other third party Software, source code, object code and documentation that is material to such Ameri Company’s business or that is required to operate or modify the Company Software.  No Ameri Company has embedded any Software code in the Company Software or the Licensed IP that: (i) contains, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software, shareware (e.g., Linux), or similar licensing or distribution models; and (ii) is subject to any agreement with terms requiring that such software code be disclosed, distributed or licensed for the purpose of making derivative works, and/or redistributable.

(i)          Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) there has been no misappropriation of any Trade Secrets or other material confidential Intellectual Property of any Ameri Company, to the Knowledge of Seller, by any other Person; and (ii) no current or former employee, independent contractor or agent of an Ameri Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement, work-for-hire agreement, non-compete obligation or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of Intellectual Property.  All Owned IP and Company Software was developed under a valid assignment of invention agreement, work-for-hire agreement or similar Contract.

(j)          Except in each case as would not have a Material Adverse Effect, each Ameri Company’s collection, storage, use and dissemination of personally identifiable information in connection with its businesses has been conducted in accordance with all applicable Laws relating to privacy, data security and data protection that are binding on such Ameri Company and all applicable privacy policies adopted by or on behalf of such Ameri Company.

3.14.     Compliance with Laws.  Each Ameri Company is in compliance with, and has complied, in all material respects with all Laws and Orders applicable to such Ameri Company, its assets, employees or business or the Purchased Shares.  None of the operation, activity, conduct and transactions of any Ameri Company or the ownership, operation, use or possession of its assets or the employment of its employees materially violates, or with or without the giving of notice or passage of time, or both, will materially violate, conflict with or result in a material default, right to accelerate or loss of rights under, any terms or provisions of any Lien, Contract or any Law or Order to which any Ameri Company is a party or by which any Ameri Company or its assets, business or employees or the Purchased Shares may be bound or affected.  Neither Seller nor any Ameri Company has received any written or, to the Knowledge of Seller, oral notice of any actual or alleged violation of or non-compliance with applicable Laws by an Ameri Company.

3.15.     Permits.  Each Ameri Company owns or possesses all right, title and interest in all Permits required to own its assets and conduct its business as now being conducted and as presently proposed to be conducted, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  All material Permits of each Ameri Company are listed on Schedule 3.15 of the Seller Disclosure Letter and are valid and in full force and effect, and Ameri Companies are in compliance in all material respects with the terms and conditions of all Permits.  No loss, revocation, cancellation, suspension, termination or expiration of any Permit is pending or, to the Knowledge of Seller, threatened from an authorized representative of a Governmental Agency other than expiration or termination in accordance with the terms thereof.  No Ameri Company has received any written or, to the Knowledge of Seller, oral notice from any Governmental Authority of any actual or alleged violation or non-compliance regarding any such Permit.

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3.16.      Litigation.  There is no (a) Action of any nature pending or, to the Knowledge of Seller, threatened, nor is there any reasonable basis for any Action to be made, or (b) Order now pending or previously rendered by a Governmental Authority, in either case of clauses (a) or (b), by or against any Ameri Company, any of their respective current or former directors, officers or equity holders (provided, that any such litigation involving the directors, officers or equity holders of an Ameri Company must be related to such Ameri Company’s business or assets or the Purchased Shares), business or assets or the Purchased Shares.  The Actions listed on Schedule 3.16 of the Seller Disclosure Letter, (i) are fully covered (subject to deductibles) under the insurance policies of the Ameri Companies and (ii) if finally determined adverse to any Ameri Company, will not have, either individually or in the aggregate, a Material Adverse Effect.  During the past five (5) years, no Ameri Company’s current or former officers, senior management or directors have been convicted of any felony or any crime involving fraud.  No Ameri Company has any material Action pending against any other Person.

3.17.      Contracts.

(a)          Schedule 3.17(a) of the Seller Disclosure Letter contains a complete, current and correct list of all of the following types of Contracts (including oral Contracts) to which an Ameri Company is a party, by which any of its properties or assets are bound, or under which an Ameri Company otherwise has material obligations, with each such responsive Contract identified by each corresponding category (i) – (ix) below: (i) any Contract with any Top Customer or Top Supplier; (ii) any Contract or group of related Contracts which involve expenditures or receipts by the Ameri Companies that require payments or yield receipts of more than $100,000 in any twelve (12) month period or more than $100,000 in the aggregate; (iii) any power of attorney; (iv) any partnership, joint venture, profit-sharing or similar agreement entered into with any Person; (v) all Contracts relating to any merger, consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business, its equity securities or its material assets or the sale of an Ameri Company, its business, its equity securities or its material assets (other than in the Ordinary Course of Business); (vi) any loan agreement, agreement of indebtedness, credit, note, security agreement, guarantee, mortgage, indenture or other document relating to Indebtedness, borrowing of money or extension of credit by or to an Ameri Company in excess of $100,000; (vii) any material settlement agreement entered into within three (3) years prior to the date of this Agreement or under which an Ameri Company has outstanding obligations (other than customary obligations of confidentiality); (viii) any Contract granting, licensing, sublicensing or otherwise transferring any Intellectual Property of an Ameri Company other than licenses of an Ameri Company’s Intellectual Property included in such Ameri Company’s form customer agreements entered into in the Ordinary Course of Business; or (ix) any agreement entered into outside the Ordinary Course of Business and presently in effect, involving payment to or obligations of in excess of $100,000 or otherwise material to an Ameri Company, not otherwise described in this Section 3.17(a).

(b)         Except as set forth on Schedule 3.17(b) of the Seller Disclosure Letter, no Ameri Company is a party to or bound by any Contract containing any covenant (i) limiting in any respect the right of any Ameri Company or its Affiliates to engage in any line of business, to make use of any of its Intellectual Property or compete with any Person in any line of business or in any geographic region, (ii) imposing non-solicitation restrictions on any Ameri Company or its Affiliates, (iii) granting to the other party any exclusivity or similar provisions or rights, including any covenant by an Ameri Company that includes an organizational conflict of interest prohibition, restriction, representation, warranty or notice provision or any other restriction on future contracting, (iv) providing “most favored customers” or other preferential pricing terms for the services of any Ameri Company or its Affiliates, or (v) otherwise limiting or restricting the right of an Ameri Company to sell or distribute any Intellectual Property of any Ameri Company or to purchase or otherwise obtain any software or Intellectual Property license.

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(c)        All of the Contracts to which any Ameri Company is a party, by which any of its properties or assets are bound, or under which any Ameri Company otherwise has material obligations are in full force and effect, and are valid, binding, and enforceable in accordance with their terms, subject to performance by the other party or parties to such Contract, except as the enforceability thereof may be limited by the Enforceability Exceptions.  There exists no breach, default or violation on the part of an Ameri Company or, to the Knowledge of Seller, on the part of any other party to any such Contract nor has any Ameri Company received written or, to the Knowledge of Seller, oral notice of any breach, default or violation.  No Ameri Company has received notice of an intention by any party to any such Contract that provides for a continuing obligation by any party thereto on the date hereof to terminate such Contract or amend the terms thereof, other than modifications in the Ordinary Course of Business that do not adversely affect any Ameri Company.  No Ameri Company has waived any rights under any such Contract.  To the Knowledge of Seller, no event has occurred which either entitles, or would, with notice or lapse of time or both, entitle any party to any such Contract to declare breach, default or violation under any such Contract or to accelerate, or which does accelerate, the maturity of any Indebtedness of any Ameri Company under any such Contract.

3.18.     Tax Matters.  Except as set forth on Schedule 3.18 of the Seller Disclosure Letter: (i) each Ameri Company has timely filed all Tax Returns required to have been filed by it; (ii) all such Tax Returns are accurate and complete in all material respects; (iii) each Ameri Company has paid all Taxes owed by it which were due and payable (whether or not shown on any Tax Return); (iv) the charges, accruals and reserves with respect to Taxes included within the Seller Financials are accurate in all material respects; (v) each Ameri Company has complied with all applicable Laws relating to Tax; (vi) no Ameri Company is currently the beneficiary of any extension of time within which to file any Tax Return; (vii) there is no current Action against any Ameri Company by a Governmental Authority in a jurisdiction where such Ameri Company does not file Tax Returns that such Ameri Company is or may be subject to taxation by that jurisdiction; (viii) there are no pending or ongoing audits or assessments of an Ameri Company’s Tax Returns by a Governmental Authority; (ix) no Ameri Company has requested or received any ruling from, or signed any binding agreement with, any Governmental Authority, that would apply to any Tax periods ending after the Closing Date; (x) there are no Liens on any of the assets of an Ameri Company that arose in connection with any failure (or alleged failure) to pay any Tax; (xi) no unpaid Tax deficiency has been asserted in writing against or with respect to any Ameri Company by any Governmental Authority which Tax remains unpaid; (xii) each Ameri Company has collected or withheld all Taxes currently required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due; (xiii) no Ameri Company has granted or is subject to, any waiver of the period of limitations for the assessment of Tax for any currently open taxable period; (xiv) no Ameri Company is a party to any Tax allocation, sharing or indemnity agreement or otherwise has any potential or actual material Liability for the Taxes of another Person, whether by applicable Tax Law, as a transferee or successor or by contract, indemnity or otherwise; (xv) there is no arrangement exists pursuant to which an Ameri Company or Buyer will be required to “gross up” or otherwise compensate any Person because of the imposition of any Tax on a payment to such Person; (xvi) no Ameri Company has taken any action not in accordance with past practice that would have the effect of deferring a measure of Tax from a period (or portion thereof) ending on or before the Closing Date to a period (or portion thereof) beginning after the Closing Date; (xvii) each Ameri Company is materially in compliance with the terms and conditions of any applicable Tax exemptions, Tax agreements or Tax orders of any Taxing Authority to which it may be subject or which it may have claimed, and the transactions contemplated by this Agreement will not have any material and adverse effect on such compliance; (xviii) no written power of attorney which is currently in force has been granted by or with respect to an Ameri Company with respect to any matter relating to Taxes; and (xviii) there has not been any change in Tax accounting method by any Ameri Company and no Ameri Company has received a ruling from, or signed an agreement with, any Taxing Authority that would reasonably be expected to have a material impact on Taxes of any Ameri Company or the equity owners of the Company following the Closing.

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3.19.     Environmental Matters.  Each Ameri Company has complied in all respects with all applicable Environmental Laws, and no Ameri Company has received notice of any Actions pending or threatened against any Ameri Company or is assets (including the Leased Premises) relating to applicable Environmental Laws, Environmental Permits or Environmental Conditions.  No Ameri Company has any environmental audits, environmental assessments, reports, sampling results, correspondence with Governmental Authorities or other environmental documents relating to an Ameri Company’s past or current properties, facilities or operation.  There are no Hazardous Materials that are being stored or are otherwise present on, under or about the Leased Premises, or, to the Knowledge of Seller, any real property formerly owned, leased or operated by any Ameri Company.  No Ameri Company has disposed of, or arranged to dispose of, Hazardous Materials at a disposal facility in a manner or to a location that has resulted or will result in liability to any Ameri Company under or relating to Environmental Laws.  No Ameri Company has assumed, contractually or by operation of Law, any liabilities or obligations under any Environmental Laws.  No Ameri Company has operated any above-ground or underground tanks, drum storage areas, disposal sites, or landfills, or created any Environmental Conditions at the Leased Premises.  To the Knowledge of Seller, no Ameri Company has released any Hazardous Materials on, under or about any real property constituting or connected with the Leased Premises, that requires investigation or remediation pursuant to Environmental Law or that otherwise is in violation of any requirement of any Environmental Law.  Each Ameri Company holds and is in compliance with all Environmental Permits required to conduct its business and operations.

3.20.      Employee Benefit Plans.

(a)          No Ameri Company nor any ERISA Affiliate has ever sponsored, maintained or contributed to (or had an obligation to contribute to) any Benefit Plan that is subject to ERISA.

(b)        Schedule 3.20(b) of the Seller Disclosure Letter sets forth a list of all material Benefit Plans.  Seller has made available to Buyer all material documents embodying such Benefit Plans, including each such plan’s text and any modification thereto, funding agreement, trust agreement, actuarial evaluation and, if applicable, financial report for the last available year, and Form 5500 for the last available year.

(c)          Except as set forth in Schedule 3.20(c) of the Seller Disclosure Letter, the execution, delivery and performance of this Agreement does not, and the consummation of the transactions contemplated hereby (either alone or upon the occurrence of any additional or subsequent event) will not result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any current, former or retired employees, officers, consultants, independent contractors, agents or directors of any Ameri Company.

(d)          Except as set forth on Schedule 3.20(d) of the Seller Disclosure Letter, no Benefit Plan provides healthcare coverage, life insurance coverage or other welfare benefit coverage to retirees or other terminated employees other than as required by applicable Law, other than any death benefit or disability plan, and other than in connection with severance.

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(e)          All contributions, premiums, and other payments (including any special contribution, interest, or penalty) required to be made to, or in respect of, any material Benefit Plan have been made, in all material respects, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued, or otherwise adequately reserved in accordance with GAAP and are reflected in the Seller Financials, in each case in all material respects.

3.21.      Employees and Labor Matters.

(a)          Schedule 3.21(a) of the Seller Disclosure Letter sets forth a complete and accurate list of all employees of the Ameri Companies as of the Closing Date showing for each as of that date (i) the employee’s name, employer, job title or description, location, and current base salary or hourly pay rate, (ii) any bonus, commission or other remuneration other than salary paid during the calendar year ending December 31, 2019 and during the calendar year 2020 prior to the Closing Date and (iii) any bonus, commission or other remuneration other than salary due and owing to each employee for the calendar year ending December 31, 2020.  Except as set forth on Schedule 3.21(a) of the Seller Disclosure Letter, no employee is a party to a written employment agreement or contract with an Ameri Company and each is employed “at will”.  Each Ameri Company has paid in full to all employees or properly accrued in accordance with GAAP all wages, salaries, commission, bonuses and other compensation due, in all material respects, including overtime compensation, and there are no severance payments which are or could become payable by an Ameri Company to any employees under the terms of any written or, to the Knowledge of Seller, oral agreement, or commitment or any Law, custom, trade or practice.  Each such employee has entered into the applicable Ameri Company’s standard form of employee non-disclosure, inventions and restrictive covenants agreement with the employing Ameri Company, true and correct copies of which have been provided to Buyer.

(b)          Schedule 3.21(b) of the Seller Disclosure Letter contains a list of all independent contractors (including consultants) currently engaged by an Ameri Company, along with the position, date of retention and rate of remuneration for each such Person.  All of such independent contractors are a party to a written agreement or contract with the engaging Ameri Company, copies of which have been provided to the Buyer.

(c)          No Ameri Company is or has been a party to any collective bargaining agreement or other Contract with any group of employees or any labor organization or other Representative of any of employees of any Ameri Company, and to the Knowledge of Seller, there are and have been no activities or proceedings of any labor union or other party to organize or represent any employees of any Ameri Company.  Except as set forth on Schedule 3.21(c) of the Seller Disclosure Letter or as would not be material to an Ameri Company: (i) each Ameri Company is and has been in compliance with all employment Contracts and all applicable Laws and Orders respecting employment and employment practices, terms and conditions of employment and wages and hours, including any Laws respecting employment discrimination and occupational safety and health requirements, and is not and has not been engaged in any unfair labor practice; (ii) there is no labor strike, dispute, slowdown or stoppage actually pending or, to the Knowledge of Seller, threatened against or directly affecting any Ameri Company; (iii) no Ameri Company has experienced any work stoppage or other labor difficulty; (iv) no Ameri Company is delinquent in payments to any of their respective employees for any wages, salaries, commissions, bonuses or other direct compensation for any services performed by them or amounts required to be reimbursed to such employees; (v) there are no pending or, to the Knowledge of Seller, threatened unfair or discriminatory employment practice charges pending before any Governmental Authority; and (vi) there are no wrongful discharge claims nor any other type of Actions brought by or on behalf of any past or present employees of any Ameri Company pending or, to the Knowledge of Seller, threatened against any Ameri Company, arising out of any employees’ employment with an Ameri Company.  Each Ameri Company has complied with all applicable Laws and Orders relating to the payment and withholding of Taxes and statutory deductions and has timely withheld from employee wages and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over for all periods under all such Laws and Orders.  No Ameri Company has incurred any Liability under any federal, provincial, state, local or foreign plant closing and severance laws or regulations.  There has been no “mass layoff” or “plant closing” as defined by the Worker Adjustment and Retraining Notification Act or any similar applicable law with respect to the current or former employees of the Ameri Companies.

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3.22.      Insurance.  Schedule 3.22 of the Seller Disclosure Letter lists all material insurance policies (by policy number, insurer, location of property insured, annual premium, premium payment dates, expiration date, type (i.e., “claims made” or an “occurrences” policy), amount and scope of coverage) held by an Ameri Company relating to an Ameri Company or the business, assets, properties, directors, officers or employees of an Ameri Company, copies of which have been provided to Buyer.  Each such insurance policy (i) is legal, valid, binding, enforceable and in full force and effect as of the Closing and (ii) will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms immediately following the Closing.  No Ameri Company is in default with respect to its obligations under any insurance policy, nor has any Ameri Company ever been denied insurance coverage for any reason.  No Ameri Company has any self-insurance or co-insurance programs.  In the three (3) year period ending on the date hereof, no Ameri Company has received any written or, to the Knowledge of Seller, oral notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the Ordinary Course of Business, in the conditions of insurance, any refusal to issue an insurance policy or non-renewal of a policy.  No Ameri Company has made any claim against an insurance policy as to which the insurer is denying coverage.  Schedule 3.22 of the Seller Disclosure Letter identifies each individual insurance claim made by an Ameri Company since January 1, 2018.  Each Ameri Company has reported to its insurers all Actions and pending circumstances that would reasonably be expected to result in an Action, except where such failure to report such an Action would not be reasonably likely to be material to any Ameri Company.  To the Knowledge of Seller, no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) give rise to or serve as a basis for the denial of any such insurance claim.

3.23.      Fairness Opinion.  The Seller Board has received the written opinion of Gemini Partners, dated as of the date of this Agreement, a true and correct copy of which has been provided to Buyer (solely for informational purposes).

3.24.      Bank Accounts.  Schedule 3.24 of the Seller Disclosure Letter lists the names and locations of all banks and other financial institutions with which an Ameri Company maintains an account (or at which an account is maintained to which an Ameri Company has access as to which deposits are made on behalf of an Ameri Company) (each, a “Bank Account”), in each case listing the type of Bank Account, the Bank Account number therefor, and the names of all Persons authorized to draw thereupon or have access thereto and lists the locations of all safe deposit boxes used by an Ameri Company.  All cash in such Bank Accounts is held on demand deposit and is not subject to any restriction or limitation as to withdrawal.

3.25.     Suppliers and Customers.  Schedule 3.25 of the Seller Disclosure Letter lists for each of (i) the fiscal year ended December 31, 2018 and (ii) the period from January 1, 2019 through September 30, 2019, the ten (10) largest suppliers of goods or services by dollar volume paid (the “Top Suppliers”) and the ten (10) largest customers of the Ameri Companies by dollar volume received (the “Top Customers”). The relationships of the Ameri Companies with such suppliers and customers are good commercial working relationships and (i) no Top Supplier or Top Customer within the last twelve (12) months has threatened to cancel or otherwise terminate, or, to the Knowledge of Seller, intends to cancel or otherwise terminate, any relationships of such Person with any Ameri Company, (ii) no Top Supplier or Top Customer has during the last twelve (12) months decreased materially or, to the Knowledge of Seller, (A) threatened to stop, decrease or limit materially, (B) intends to modify materially its relationships with any Ameri Company or (C) intends to stop, decrease or limit materially its products or services to any Ameri Company or its usage or purchase of the products or services of any Ameri Company, (iii) to the Knowledge of Seller, no Top Supplier or Top Customer intends to refuse to pay any amount due to any Ameri Company or seek to exercise any remedy against any Ameri Company, and (iv) no Ameri Company has within the past year been engaged in any material dispute with any Top Supplier or Top Customer.

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3.26.      No Brokers.  Neither Seller, any Ameri Company, nor any of their respective Representatives on their behalf, has employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions, finders’ fees or similar fees in connection with the transactions contemplated by this Agreement.

3.27.      Investment Representations.

(a)          Seller:  (i) is an “accredited investor” as defined in Rule 501(a) of Regulation D as promulgated by the SEC under the Securities Act; (ii) is acquiring the Buyer Preferred Stock hereunder for itself for investment purposes only, and not with a view towards any resale or distribution thereof, other than a distribution to the existing holders of Seller’s outstanding preferred stock (the “Seller Distribution”), which such Seller Distribution shall be done in compliance with all applicable securities laws and for which Seller will obtain similar representations from such holders to those set forth in this Section 3.27; (iii) has been advised and understands that the Buyer Preferred Stock and any shares of common stock of Buyer issuable upon conversion thereof (together, the “Buyer Shares”) (x) are being sold in reliance upon one or more exemptions from the registration requirements of the Securities Act and any applicable state securities Laws, and (y) have not been and shall not be registered under the Securities Act or any applicable state securities Laws and, therefore, must be held indefinitely and cannot be resold unless the Buyer Shares are registered under the Securities Act and all applicable state securities Laws, unless exemptions from registration are available; (iv) is aware that an investment in Buyer is a speculative investment that has limited liquidity and is subject to the risk of complete loss; and (v) has not seen, received, been presented with, or been solicited by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement relating to Buyer.  Seller fully understands and agrees that it must bear the economic risk of its acquisition of the Buyer Shares for an indefinite period of time because, among other reasons, (A) there is no established market for any of the Buyer Shares and (B) the Buyer Shares cannot be readily resold, pledged, assigned or otherwise disposed of to the extent registration under the Securities Act and under applicable state securities Laws is required or unless an exemption from such registration is available.  Seller acknowledges that Buyer is under no obligation hereunder to register any Buyer Shares under the Securities Act.

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(b)          By reason of Seller’s business or financial experience, or by reason of the business or financial experience of Seller’s “purchaser representatives” (as that term is defined in Rule 501(h) under the Securities Act), Seller is capable of evaluating the risks and merits of an investment in Buyer and of protecting its interests in connection with this investment.  Seller has carefully read and understands all materials provided by Buyer to Seller pertaining to an investment in Buyer through the acquisition of the Buyer Preferred Stock, including the Buyer Charter Amendment, the Buyer Bylaw Amendment and the Buyer Preferred Stock CoD, and has consulted, as Seller has deemed advisable, with its own attorneys, accountants or investment advisors with respect to the investment contemplated hereby and its suitability for Seller.  Seller understands that no United States federal or state agency or other Governmental Authority has passed on or made recommendations or endorsement of the Buyer Shares or other securities of Buyer or the suitability of the investment in the Buyer Shares or other securities of Buyer nor have such authorities passed upon or endorsed the merits of the offering of the Buyer Shares.  Seller has had a reasonable opportunity to ask questions of and receive information and answers from a Person or Persons acting on behalf of Buyer concerning information about Buyer, its business, operations, financial condition, prospects and the offering of the Buyer Shares, and all questions have been answered and all such information has been provided to the full satisfaction of Seller.  Seller acknowledges that all documents, records and books pertaining to Seller’s acquisition of the Buyer Shares have been made available for inspection as requested by Seller or its representatives, and Seller has considered all factors Seller deems material in deciding on the advisability of investing in the Buyer Shares.  Seller (i) has completed its independent inquiry and has relied fully upon the advice of its own legal counsel, accountant, financial and other advisors in determining the legal, tax, financial and other consequences of this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby and the suitability of this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby for Seller and its particular circumstances, and, except as set forth herein, has not relied upon any representations or advice by Buyer or any of its Representatives and (ii) is able, without impairing its financial condition, to hold the Buyer Shares for an indefinite period and to suffer a complete loss of its investment in Buyer through the Buyer Shares.  Seller is not barred or suspended from membership in or barred or suspended from association with a member of any self-regulatory or regulatory securities or futures exchange or agency, and Seller is not otherwise barred from taking a direct or indirect ownership interest in Buyer.

(c)          Seller acknowledges that pursuant to the Buyer Charter Amendment, the Buyer Bylaw Amendment and the Buyer Preferred Stock CoD, the Buyer Shares may be subject to dilution for events not under the control of Seller.  Other than the Seller Distribution, Seller does not have any Contract with any Person to sell, transfer, or grant participations to such Person, or to any third Person, with respect to any Buyer Shares.

(d)          Seller acknowledges that the Buyer Shares shall bear the following or similar legend:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS ISSUER, IS AVAILABLE.”

3.28.     No Other Representations and Warranties.  Except for the representations and warranties contained in this Agreement or the Ancillary Documents, Seller make no express or implied representations or warranties, and hereby disclaims any other representations and warranties, whether made orally or in writing, by or on behalf of Seller by any Person.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller the following matters as of the date hereof and as of the Closing Date:

4.1.        Organization and Qualification.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Buyer is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification or license is required, except where the failure to be so qualified or be so licensed would not have a material adverse effect on the ability of Buyer to consummate the transactions contemplated by, and discharge its obligations under, this Agreement and the Ancillary Documents to which Buyer is a party (a “Buyer Material Adverse Effect”).

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4.2.       Authorization.  Buyer has full corporate power and authority to enter into this Agreement and the Ancillary Documents to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Ancillary Documents to which Buyer is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Buyer.  This Agreement has been duly executed and delivered by Buyer.  This Agreement and each Ancillary Document to which Buyer is a party constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as the enforceability thereof may be limited by the Enforceability Exceptions.

4.3.       Non-Contravention.  Neither the execution and delivery of this Agreement or any Ancillary Document by Buyer, nor the consummation of the transactions contemplated hereby or thereby, will violate or conflict with or (with or without notice or the passage of time or both) constitute a breach or default under (a) any provision of the Governing Documents of Buyer, (b) any Law or Order to which Buyer or any of its business or assets are bound or subject or (c) any Contract or Permit to which Buyer is a party or by which Buyer or any of its properties may be bound or affected, other than, in the cases of clauses (a) through (c), such violations and conflicts which would not reasonably be expected to have a Buyer Material Adverse Effect.

4.4.        Buyer Preferred Stock.  When issued by Buyer to Seller in accordance with the terms of this Agreement, assuming the accuracy of the representations and warranties of Seller contained in this Agreement and the Ancillary Documents, the Buyer Preferred Stock will be (a) issued free and clear of all Liens except those imposed by applicable securities Laws, and (b) validly and duly issued and fully paid and non-assessable.

4.5.        No Brokers.  Neither Buyer, nor any Representative of Buyer on its behalf, has employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions, finders’ fees or similar fees in connection with the transactions contemplated by this Agreement.

4.6.        Litigation.  There is no Action pending or, to the Knowledge of Buyer, threatened, nor any Order of any Governmental Authority is outstanding, against or involving Buyer or any of its officers, directors, stockholders, properties, assets or businesses, whether at law or in equity, before or by any Governmental Authority, which would reasonably be expected to have a Buyer Material Adverse Effect.

4.7.       Investment Intent.  Buyer is acquiring the Purchased Shares for its own account and not with a view to its distribution within the meaning of Section 2(11) of the Securities Act, and the rules and regulations issued pursuant thereto.  Buyer is an “accredited investor” within the meaning of Rule 501 under the Securities Act and was not organized for the specific purpose of acquiring the Purchased Shares.  Buyer understands that the Purchased Shares have not been registered under the Securities Act and cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.

4.8.       Operations.  Buyer (i) was formed solely for the purpose of engaging in the Transactions, (ii) has, and at the Closing will have, no liabilities or obligations of any nature other than those incurred incident to its formation or pursuant to the negotiation, implementation, consummation or performance of this Agreement, the Ancillary Documents and the Transactions (including any expenses incurred in connection herewith or therewith), and (iii) prior to the Closing, will not have engaged in any other business activities other than those relating to its formation and the Transactions.  Buyer’s obligations under this Agreement are only conditioned upon those items expressly set forth in this Agreement and the terms hereof.

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4.9.       No Other Representations and Warranties.  Except for the representations and warranties contained in this Agreement or the Ancillary Documents, Buyer make no express or implied representations or warranties, and hereby disclaim any other representations and warranties, whether made orally or in writing, by or on behalf of Buyer by any Person.

ARTICLE V
OTHER AGREEMENTS

5.1.        Further Assurances.  In the event that at any time from the date hereof and after the Closing any further action is reasonably necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as the other Party reasonably may request, at the sole cost and expense of the requesting party (unless otherwise specified herein or unless such requesting party is entitled to indemnification therefor under ARTICLE VI in which case, the costs and expense will be borne by the Parties as set forth in ARTICLE VI).  Seller acknowledges and agrees that from and after the Closing, Buyer will be entitled to possession of, and Seller will provide to Buyer, all documents, books, records (including Tax records), agreements, corporate minute books and financial data of any sort relating to the Ameri Companies.  The Parties agree to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with each other in doing, all things necessary, proper or advisable to consummate, as promptly as reasonably practicable, the Purchase and the other Transactions. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to require either Party to waive any provision of this Agreement or to make payments as consideration in order to obtain any third party consents required to consummate the Transactions.

5.2.       Confidentiality.  Seller will, and will cause its Affiliates and Representatives to: (a) treat and hold in strict confidence any Confidential Information, and will not use for any purpose (except in furtherance of their authorized duties on behalf of Buyer, the Ameri Companies or their respective Affiliates), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Confidential Information without Buyer’s prior written consent; (b) in the event that Seller becomes legally compelled to disclose any Confidential Information, to provide Buyer with prompt written notice of such requirement so that Buyer or an Ameri Company or their respective Affiliates may at its own expense, seek a protective order or other remedy or so that Buyer may waive compliance with this Section 5.2; (c) in the event that such protective order or other remedy is not obtained, or Buyer waives compliance with this Section 5.2, to furnish only that portion of such Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise their commercially reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information; and (d) to promptly furnish to Buyer any and all copies (in whatever form or medium) of all such Confidential Information and to destroy any and all additional copies of such Confidential Information and any analyses, compilations, studies or other documents prepared, in whole or in part, on the basis thereof.

5.3.        Publicity.  No Party hereto shall, and each shall cause their respective Representatives not to, disclose, make or issue, any statement or announcement concerning this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby (including the terms, conditions, status or other facts with respect thereto) to any third parties (other than its Representatives who need to know such information in connection with carrying out or facilitating the transactions contemplated hereby) without the prior written consent of the other parties (such consent not to be unreasonably withheld, delayed or conditioned), except (i) in the case of Seller, as required by applicable Law after conferring with the other Party concerning the timing and content of such required disclosure, and (ii) in the case of Buyer, as may be required of Seller or its Affiliates by applicable Law (including any SEC position) or securities listing or trading requirement.

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5.4.        Litigation Support.  Following the Closing, in the event that and for so long as any Party is actively contesting or defending against any third party or Governmental Authority Action in connection with any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction that existing on or prior to the Closing Date involving the Ameri Companies, at the sole expense of such Party, the other Party will (i) reasonably cooperate with the contesting or defending party and its counsel in the contest or defense, (ii) make available its personnel (at the applicable per diem rate for such personnel) at reasonable times and upon reasonable notice and (iii) provide (A) such testimony (at the applicable per diem rate for any person providing such testimony) and (B) access to its non-privileged books and records as may be reasonably requested in connection with the contest or defense, at the sole cost and expense of the contesting or defending party.

5.5.        Agreement Regarding Intellectual Property.  Seller has already disclosed or will disclose to the Company as of the Closing any and all material Intellectual Property developed by Seller or its Affiliates on behalf of an Ameri Company or relating to the business of an Ameri Company and which is required to be disclosed pursuant to Section 3.13 hereof.

5.6.        Release and Covenant Not to Sue.  Effective as of the Closing, Seller hereby releases and discharges each Ameri Company from and against any and all Actions, obligations, agreements, debts and Liabilities whatsoever, whether known or unknown, both at law and in equity, which Seller now has, has ever had or may hereafter have against such Ameri Company solely in Seller’s capacity as an equity holder of any Ameri Company and arising on or prior to the Closing Date or on account of or arising out of any matter occurring on or prior to the Closing Date, and whether or not relating to claims pending on, or asserted after, the Closing Date.  From and after the Closing, Seller hereby irrevocably covenants to refrain from, directly or indirectly, asserting any Action, or commencing or causing to be commenced, any Action of any kind against an Ameri Company or its Affiliates, based upon any matter purported to be released hereby.  Notwithstanding anything herein to the contrary, the releases and restrictions set forth herein shall not apply to any claims Seller may have against any party arising from a breach of or pursuant to the terms and conditions of this Agreement or any Ancillary Document.

5.7.        Tax Matters.

(a)          Seller will prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Ameri Companies for all periods ending on or prior to the Closing Date which are required to be filed after the Closing Date.  Any Tax Returns filed pursuant to this Section 5.7(a) must be consistent with the prior Tax Returns of the Ameri Companies unless otherwise required by applicable Laws.  No later than twenty (20) days prior to filing, Seller will deliver to Buyer all such Tax Returns and any related work papers and will permit Buyer to review and comment on each such Tax Return and will make such revisions to such Tax Returns as are reasonably requested by Buyer.  Seller will timely pay to the appropriate Taxing Authority any Taxes of the Ameri Companies with respect to such periods.

(b)          To the extent that any Tax Returns of the Ameri Companies relate to any Tax periods which begin on or before the Closing Date and end after the Closing Date, Buyer will prepare or cause to be prepared in a manner consistent with the prior Tax Returns of the Ameri Companies unless otherwise required by applicable Laws and file or cause to be filed any such Tax Returns.  Buyer will permit the Seller to review and comment on each such Tax Return described in the preceding sentence at least twenty (20) days prior to filing such Tax Returns and will make such revisions to such Tax Returns as are reasonably requested by Seller unless otherwise required by applicable Law.

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(c)         For purposes of this Agreement, in the case of any Taxes that are imposed on a periodic basis and are payable for a taxable period that includes but does not end on the Closing Date, the portion of such Tax which relates to the portion of such taxable period ending on the Closing Date will (i) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction (A) the numerator of which is the number of days in the taxable period ending on the Closing Date and (B) the denominator of which is the number of days in the entire taxable period, and (ii) in the case of any Tax based upon or related to income or receipts be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date.  Any credits relating to a taxable period that begins before and ends after the Closing Date will be taken into account as though the relevant taxable period ended on the Closing Date.  All determinations necessary to give effect to the foregoing allocations will be made in a manner consistent with GAAP and the prior practice of the applicable Ameri Company unless otherwise required by applicable Law.

(d)          All Tax sharing agreements or similar agreements with respect to or involving any Ameri Company and any Person will be terminated as of the Closing Date and, after the Closing Date, no Ameri Company will be bound thereby or have any Liability thereunder.

(e)          Seller will be responsible for any income Taxes payable by it in connection with Seller’s disposition of the Purchased Shares or incurred with respect to the Reorganization.  All Taxes imposed in connection with the transfer of the Purchased Shares (“Transfer Taxes”), whether such Transfer Taxes are assessed initially against Buyer, Seller or any of their respective Affiliates, shall be borne and paid by Seller.

5.8.        Pre-Closing Management of the Ameri Companies.  Seller hereby covenants and agrees with  Buyer that during the period from the date hereof to the Closing or the earlier termination of this Agreement in accordance with Section 7.1 (the “Interim Period”), except as otherwise contemplated by this Agreement (including as contemplated by the Reorganization and including the transactions contemplated by the Merger Agreement) or agreed by Buyer, each Ameri Company shall conduct its business in the Ordinary Course of Business and shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without the prior written consent of Buyer (such consent not to be unreasonably withheld, conditioned or delayed):

(a)          liquidate, dissolve or wind-up the business and affairs of any Ameri Company, effect any merger or consolidation, or a merger or consolidation in which an Ameri Company is a constituent party and an Ameri Company issues shares of its capital stock, or any sale, lease, transfer or exclusive license or other disposition, in a single transaction or series of related transactions, by an Ameri Company, of all or substantially all of the assets of such Ameri Company, or consent to any of the foregoing;

(b)          amend, alter or repeal any provision of the Certificate of Incorporation, Bylaws, operating agreement or other Governing Document of an Ameri Company;

(c)          enter into, extend, modify, terminate or renew any material Contract, except in the Ordinary Course of Business;

(d)          issue, sell, deliver, pledge or amend the terms of any Ameri Company’s capital stock, membership interests or other equity securities or issue, sell or deliver any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe for, any of its capital stock, membership interests or other equity securities;

(e)         make any redemption, acquisition or purchase, or offer to redeem, acquire or purchase, any shares of an Ameri Company’s capital stock or other equity securities or any rights, warrants or options to acquire any such shares of capital stock or other equity securities of an Ameri Company, except as provided under this Agreement;

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(f)           declare or pay any dividends or make any distributions with respect to an Ameri Company’s capital stock or other equity securities;

(g)          create, or authorize the creation of, or issue, or authorize the issuance of any debt security or create any lien or security interest (except for purchase money liens or statutory liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the Ordinary Course of Business) or incur other Indebtedness for borrowed money, including but not limited to obligations and contingent obligations under guarantees, or permit any Ameri Company to take any such action with respect to any debt security lien, security interest or other Indebtedness for borrowed money, if the aggregate Indebtedness of Ameri Companies for borrowed money following such action would exceed $100,000, other than equipment leases, bank lines of credit or trade payables incurred in the Ordinary Course of Business (for the avoidance of doubt, this clause (g) shall not limit the ability of Seller to incur Indebtedness so long as no Ameri Company has any obligations or Liabilities, or is subject to any Liens upon such Ameri Company or its assets or properties, with respect thereto);

(h)          make any loans, advances or capital contributions to, or investments in, any other Person, or authorize any new capital expenditures or commitments for capital expenditures exceeding $100,000 in the aggregate for all such expenditures and commitments;

(i)           other than in the Ordinary Course of Business, (i) enter into any Contract that if existing on the date hereof would be listed on Schedule 3.17(a) or (ii) terminate, modify, amend or supplement in any material respect any Contract listed on Schedule 3.17(a);

(j)           cancel any debts or waive any material claims or rights (including the cancellation, compromise, release or assignment of any Indebtedness owed to, or claims held by, an Ameri Company);

(k)         increase, accelerate or provide for additional compensation, benefits (fringe or otherwise) or other rights to any present or former employee, contractor, officer or director of an Ameri Company, other than as specifically provided in this Agreement, in the Ordinary Course of Business, or as otherwise required by law or Contract;

(l)          enter into, agree to enter into, establish, agree to establish, grant, agree to grant, or amend or modify any arrangement, plan or agreement to grant or provide, any severance, termination, change of control, deferred compensation, incentive, bonus, retention or other similar benefit or payment to any present or former employee, contractor or director of an Ameri Company;

(m)         initiate, compromise or settle any Order or Action, whether civil, criminal, administrative, in law or equity;

(n)          increase  or decrease  the authorized number of directors constituting  the board of directors (or equivalent governing body) of any Ameri Company;

(o)          split, combine, reclassify or modify, or authorize any split, combination, reclassification or modification of the terms of any capital stock or equity interests of an Ameri Company;

(p)          sell, transfer or otherwise dispose of any of its assets not in the Ordinary Course of Business having a sale price exceeding $100,000 in the aggregate;

(q)          change the business of an Ameri Company or enter into any business materially different from the business of such Ameri Company;

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(r)          take any action that would reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation, cancellation or adverse modification of any Permits necessary for the Ameri Companies to conduct its business as presently conducted; or

(s)          enter into any Contract or commit or agreement (whether or not such Contract, commitment or agreement is legally binding) to take any of the aforementioned actions.

5.9.        Acquisition Proposals.

(a)         Notwithstanding anything to the contrary contained in this Agreement, during the period beginning on the date of this Agreement and continuing until 12:01 a.m. New York City time on the thirtieth (30^th) calendar day after the date of this Agreement (the “No-Shop Period Start Date”), the Seller and its Representatives shall have the right to (i) initiate, solicit and encourage any inquiry or the making of any proposal or offer that constitutes a Seller Acquisition Proposal, including by providing information (including non-public information and data) regarding, and affording access to the business, properties, assets, books, records and personnel of, the Seller and its Subsidiaries to any Person pursuant to (x) a confidentiality agreement entered into by such Person containing reasonable and customary confidentiality terms protecting the Confidential Information of the Ameri Companies or (y) to the extent applicable, the confidentiality agreement entered into with such Person prior to the date of this Agreement (any such confidentiality agreement, an “Acceptable Confidentiality Agreement”); provided that the Seller shall promptly (and in any event within forty-eight (48) hours) make available to Buyer any non-public information concerning the Seller or its Subsidiaries that is provided to any Person given such access that was not previously made available to Buyer, and (ii) engage in, enter into, continue or otherwise participate in any discussions or negotiations with any Persons or group of Persons with respect to any Seller Acquisition Proposals and cooperate with or assist or participate in or facilitate any such inquiries, proposals, discussions or negotiations or any effort or attempt to make any Seller Acquisition Proposals.  No later than two (2) Business Days after the No-Shop Period Start Date, the Seller shall notify Buyer in writing of the identity of each Person or group of Persons from whom the Seller received a written Seller Acquisition Proposal after the execution of this Agreement and prior to the No-Shop Period Start Date and provide to Buyer (x) a copy of any Seller Acquisition Proposal made in writing and (y) a written summary of the material terms of any Seller Acquisition Proposal not made in writing (including any terms proposed orally or supplementally).

(b)          Except as may relate to any Excluded Party (for so long as such Person or group is an Excluded Party) or as expressly permitted by this Section 5.9, after the No-Shop Period Start Date, the Seller shall, and shall cause its Representatives to, immediately cease any activities permitted by Section 5.9(a) and any discussions or negotiations with any Person that may be ongoing with respect to any Seller Acquisition Proposal. With respect to any Person with whom such discussions or negotiations have been terminated, the Seller shall use its reasonable best efforts to promptly require such Person or group to promptly return or destroy in accordance with the terms of the applicable confidentiality agreement any information furnished by or on behalf of the Seller.

(c)         Except as may relate to any Excluded Party (for so long as such Person or group is an Excluded Party) or as expressly permitted by this Section 5.9, from the No-Shop Period Start Date until the Closing or, if earlier, the termination of this Agreement in accordance with Section 7.1, the Seller shall not, and shall cause its Representatives not to, (i) initiate, solicit or knowingly encourage any inquiry or the making of any proposal or offer that constitutes, or would reasonably be expected to result in, a Seller Acquisition Proposal, (ii) engage in, enter into, continue or otherwise participate in any discussions or negotiations with any Person with respect to, or provide any non-public information or data concerning the Seller or its Subsidiaries to any Person relating to, any proposal or offer that constitutes, or could reasonably be expected to result in, a Seller Acquisition Proposal, or (iii) enter into any acquisition agreement, merger agreement or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle, or any other agreement relating to a Seller Acquisition Proposal (an “Alternative Acquisition Agreement”).

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(d)          Notwithstanding anything to the contrary contained in Sections 5.9(b) or 5.9(c), at any time following the No-Shop Period Start Date and prior to the Special Meeting, if the Seller receives an unsolicited written Seller Acquisition Proposal from any Person that was not obtained by the Seller in violation of Sections 5.9(b) or 5.9(c), the Seller and its Representatives may contact such Person to clarify the terms and conditions thereof and (i) the Seller and its Representatives may provide information (including non-public information and data) regarding, and afford access to the business, properties, assets, books, records and personnel of, the Seller and its Subsidiaries to such Person if the Seller receives from such Person (or has received from such Person) an executed Acceptable Confidentiality Agreement; provided that the Seller shall promptly (and in any event within forty-eight (48) hours) make available to Buyer any non-public information concerning the Seller or its Subsidiaries that is provided to any Person given such access that was not previously made available to Buyer, and (ii) the Seller and its Representatives may engage in, enter into, continue or otherwise participate in any discussions or negotiations with such Person with respect to such Seller Acquisition Proposal, if and only to the extent that prior to taking any action described in clauses (i) or (ii), the Seller Board determines in good faith (after consultation with its financial advisors and outside legal counsel) that such Seller Acquisition Proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal.  For the avoidance of doubt, notwithstanding the commencement of the No-Shop Period Start Date, the Seller may continue to engage in the activities described in Section 5.9(a) (subject to the limitations and obligations set forth therein) with respect to, and the restrictions in Sections 5.9(b) and 5.9(c) shall not apply to, any Excluded Party (but only for so long as such Person or group is an Excluded Party), including with respect to any amended or modified Seller Acquisition Proposal submitted by any Excluded Party following the No-Shop Period Start Date.

(e)          Following the No-Shop Period Start Date, the Seller shall promptly (and in any event within forty-eight (48) hours after receipt), notify Buyer in writing of the receipt of any Seller Acquisition Proposal or any request for information from, or any negotiations sought to be initiated or resumed with, either the Seller or its Representatives concerning a Seller Acquisition Proposal, which notice shall include a copy of any Seller Acquisition Proposal made in writing.  Following the No-Shop Period Start Date, the Seller shall keep Buyer reasonably informed on a prompt basis (and in any event within forty-eight (48) hours) of any material developments, material discussions or material negotiations regarding any Seller Acquisition Proposal, inquiry that would reasonably be expected to result in a Seller Acquisition Proposal, or request for non-public information and, upon the reasonable request of Buyer, shall promptly apprise Buyer of the status of any discussions or negotiations with respect to any of the foregoing.  None of the Seller or any of its Subsidiaries shall, after the date of this Agreement, enter into any Contract that would prohibit them from providing such information or the information contemplated by the last sentence of Section 5.9(a) to Buyer.

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(f)          Except as set forth in this Section 5.9(f), neither the Seller Board nor the Special Committee or any other committee of the Seller Board shall (i)(A) change, withhold, withdraw, qualify or modify (or publicly propose or resolve to change, withhold, withdraw, qualify or modify), in a manner adverse to Buyer, the Special Committee Recommendation or the Seller Board Recommendation, (B) approve or recommend, or publicly propose to approve or recommend to the Seller’s stockholders, a Seller Acquisition Proposal or (C) if a tender offer or exchange offer for shares of capital stock of the Seller that constitutes a Seller Acquisition Proposal is commenced, fail to recommend against acceptance of such tender offer or exchange offer by the Seller’s stockholders (including, for these purposes, by disclosing that it is taking no position with respect to the acceptance of such tender offer or exchange offer by its stockholders, which shall constitute a failure to recommend against acceptance of such tender offer or exchange offer, provided that a customary “stop, look and listen” communication by the board of directors pursuant to Rule 14d-9(f) of the Exchange Act shall not be prohibited), within ten (10) Business Days after commencement (any of the foregoing, a “Change of Recommendation”) or (ii) authorize, adopt or approve or propose to authorize, adopt or approve, a Seller Acquisition Proposal, or cause or permit the Seller or any of its Subsidiaries to enter into any Alternative Acquisition Agreement.  Notwithstanding anything to the contrary set forth in this Agreement, prior to the Special Meeting (but not after), the Seller Board may effect a Change of Recommendation (I) if the Seller Board determines in good faith (after consultation with its financial advisors and outside legal counsel) that, as a result of a material development or change in circumstances that occurs or arises after the execution and delivery of this Agreement relating to Seller or its Subsidiaries (other than a Superior Proposal or any of the events or occurrences of the nature described in clauses (A) through (E) of the proviso of the definition of Material Adverse Effect) that was not reasonably foreseeable or known to the Seller Board prior to the execution and delivery of this Agreement  (an “Intervening Event”), failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law and (II) if the Seller receives a Seller Acquisition Proposal that the Seller Board determines in good faith (after consultation with outside counsel and its financial advisors) constitutes a Superior Proposal, authorize, adopt, or approve such Superior Proposal and cause or permit the Seller to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal; provided, however, that the Seller Board may only effect a Change of Recommendation and take the actions described in (1) clauses (I) or (II) if the Seller terminates this Agreement pursuant to ARTICLE VII concurrently with entering into such Alternative Acquisition Agreement and pays the Termination Fee in compliance with Section 7.2 and (2) clauses (I) or (II) if:

(i)           the Seller shall have provided prior written notice to Buyer of its or the Seller Board’s intention to take such actions at least four (4) Business Days in advance of taking such action, which notice shall specify, as applicable, the details of such Intervening Event or the material terms of the Seller Acquisition Proposal received by the Seller that constitutes a Superior Proposal, including a copy of the relevant proposed transaction agreements with, and the identity of, the party making the Seller Acquisition Proposal;

(ii)          after providing such notice and prior to taking such actions, the Seller shall have, and shall have caused its Representatives to, negotiate with Buyer in good faith (to the extent Buyer desires to negotiate) during such four (4) Business Day period to make such adjustments in the terms and conditions of this Agreement as would permit the Seller or the Seller Board not to take such actions without being in violation of the fiduciary duties of Seller’s directors; and

(iii)          Seller Board shall have considered in good faith any changes to this Agreement or other arrangements that may be offered in writing by Buyer by 5:00 p.m. New York City time on the fourth (4th) Business Day of such four (4) Business Day period and shall have determined in good faith (A) with respect to the actions described in clause (II), after consultation with outside counsel and its financial advisors, that the Seller Acquisition Proposal no longer constitutes a Superior Proposal after giving effect to Buyer’s revised offer and (B) with respect to the actions described in each case of clauses (I) and (II), after consultation with its financial advisors and outside counsel, that it would not be inconsistent with the directors’ fiduciary duties under applicable Law not to effect the Change of Recommendation, in each case, if such changes offered in writing by Buyer were given effect.

After compliance with the foregoing clause (2) with respect to any Superior Proposal, the Seller shall have no further obligations under the foregoing clause (2), and the Seller Board shall not be required to comply with such obligations with respect to any other Superior Proposal.  After compliance with the foregoing clause (2) with respect to an Intervening Event that is not a Seller Acquisition Proposal, the Seller shall have no further obligations under the foregoing clause (2), and the Seller Board shall not be required to comply with such obligations with respect to any other Intervening Event that is not a Seller Acquisition Proposal.  For the avoidance of doubt, with respect to an Intervening Event that is a Seller Acquisition Proposal (and is not a Superior Proposal), the Seller’s obligation to comply with the foregoing clause (2) will not be limited.

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(g)         Subject to the proviso in this Section 5.9, nothing contained in this Section 5.9 shall be deemed to prohibit the Seller, the Seller Board or any committee of the Seller Board from (i) complying with its disclosure obligations under U.S. federal or state Law with regard to a Seller Acquisition Proposal, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the Exchange Act (or any similar communication to stockholders in connection with the making or amendment of a tender offer or exchange offer), or (ii) making any “stop-look-and-listen” communication to the stockholders of the Seller pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communications to the stockholders of the Seller); provided, that neither the Seller Board nor any committee thereof (including the Special Committee) shall effect a Change of Recommendation unless the applicable requirements of Section 5.9(f) shall have been satisfied.

5.10.     Access to Information.   During the Interim Period, Seller will cooperate with, and provide Buyer and its Representatives, during normal business hours, with customary access to the records, Contracts, and assets of all the Ameri Companies, and to the suppliers, customers, officers and employees of each Ameri Company, and furnish to the Buyer and its Representatives information with respect to the Ameri Companies as Buyer or its Representatives may reasonably request; provided, however, that the provision of such access will not be required to the extent that the provision of such access would unreasonably disrupt the normal business operations of the Ameri Companies or violate the terms of any confidentiality arrangement in any material respect.

5.11.      Proxy Statement and Special Meeting.

(a)          Except as specifically permitted by Section 5.11(b), Seller shall, in accordance with applicable Law and Seller’s certificate of incorporation and by-laws: (i) prepare and file with the SEC, as promptly as practicable after the date of this Agreement, a preliminary proxy statement relating to the solicitation of proxies from the stockholders of Seller for the Seller Stockholder Approval and (A) respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and promptly cause a definitive proxy statement (the “Proxy Statement”) to be mailed to Seller’s stockholders and (B) solicit proxies from its stockholders for the Seller Stockholder Approval and (ii) cause a special meeting of its stockholders (the “Special Meeting”) to be duly called, noticed and held as promptly as practicable after the date of this Agreement for the purpose of obtaining the Seller Stockholder Approval.  Except as specifically permitted by Section 5.11(b), the Proxy Statement shall include the recommendation of the Seller Board that stockholders vote in favor of this Agreement and the other Ancillary Documents and the Purchase and the other Transactions.  Buyer shall furnish to Seller all information concerning Buyer as Seller may reasonably request in connection with the preparation of the Proxy Statement.

(b)         Seller shall comply with all applicable provisions of and rules under the Exchange Act and all applicable provisions of the Delaware General Corporation Law in the preparation, filing and distribution of the Proxy Statement, the solicitation of proxies thereunder, and the calling and holding of the Special Meeting.  Without limiting the foregoing, Seller shall use all commercially reasonable efforts to ensure that the Proxy Statement will not, as of the filing date of the Proxy Statement (or any amendment or supplement thereto) or as of the date of the Special Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading (provided that Seller shall not be responsible for the accuracy or completeness of any information relating to Buyer furnished by Buyer for inclusion in the Proxy Statement). Seller covenants and agrees that the information relating to Seller or Ameri Companies, as applicable, supplied by Seller for inclusion in the Proxy Statement will not, as of the filing date of the Proxy Statement (or any amendment or supplement thereto) or as of the date of the Special Meeting, contain any statement which, at such time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statement therein, in the light of the circumstances under which they were made, not false or misleading.

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5.12.      Director and Officer Liability and Insurance.

(a)          Prior to the Closing, if requested by Buyer and then only to the extent that each Indemnified Person is not already fully covered for such periods by an insurance policy of Seller, Seller shall purchase prepaid “tail” or runoff coverage on the existing policies of directors’ and officers’ liability insurance, which policy will provide such directors and officers of Seller and the Ameri Companies (each, an “Indemnified Person”) with coverage for an aggregate period of six (6) years following the Closing for acts or omissions occurring at or prior to the Closing Date pertaining to the fact that the Indemnified Person is or was a director or officer of an Ameri Company, including with respect to claims arising from facts or events that occurred on or before the Closing Date, including in respect of the Purchase and the other Transactions.

(b)          The rights and obligations under this Section 5.12 shall not be terminated or modified in such a manner as to adversely affect any Indemnified Person to whom this Section 5.12 applies without the express written consent of such affected Indemnified Person.

(c)         This Section 5.12 shall survive the Closing, is intended to benefit the directors and officers of the Ameri Companies and shall be binding on Seller and the Ameri Companies and their respective successors and assigns, and shall be in addition to, and not in substitution for, any other rights to indemnification that any Indemnified Person may have by contract or otherwise.

5.13.          Reorganization.  As promptly as practicable after the date hereof, and in any event prior to the Closing, Seller will consummate the Reorganization in form and substance reasonably acceptable to Buyer, pursuant to which (i) all of the issued and outstanding equity interests of each Subsidiary of Seller (other than the Company) will be transferred to the Company free and clear of any and all Liens (other than those imposed by such Subsidiary’s Governing Documents or by applicable securities Laws, (ii) all existing Benefit Plans of Seller that are not currently held by a Subsidiary will be transferred to the Company and (iii) Seller will transfer to an Ameri Company any and all of the properties, assets and rights used in the conduct or operation of the business of the Ameri Companies and any and all other assets of Seller other than its rights under this Agreement, the Ancillary Documents, the Merger Agreement and any ancillary documents entered in connection therewith, and the Exchange Agreements.

ARTICLE VI
INDEMNIFICATION

6.1.       Survival.  All covenants, obligations and agreements of the parties contained in this Agreement (including all Schedules, Exhibits and Annexes hereto and all certificates, documents, instruments and undertakings furnished pursuant to this Agreement), including any indemnification obligations, shall survive the Closing and continue until fully performed in accordance with their terms.  For the avoidance of doubt, a claim for indemnification under any subsection of Section 6.2 or 6.3 other than clause (a) thereof may be made at any time.

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6.2.        Indemnification by Seller.  Except as otherwise limited by this ARTICLE VI, Seller shall indemnify, defend and hold harmless Buyer and its Representatives and any assignee or successor thereof (collectively, the “Buyer Indemnified Parties”) from and against, and pay or reimburse the Buyer Indemnified Parties for, any and all losses, Actions, Orders, Liabilities, damages (including consequential damages), diminution in value, Taxes, interest, penalties, Liens, amounts paid in settlement, costs and expenses (including reasonable expenses of investigation and court costs and reasonable attorneys’ fees and expenses), (any of the foregoing, a “Loss”) suffered or incurred by, or imposed upon, any Buyer Indemnified Party arising in whole or in part out of or resulting directly or indirectly from: (a) any non-fulfillment or breach of any unwaived covenant, obligation or agreement made by or on behalf of Seller contained in this Agreement or in any certificate to be delivered by Seller in connection herewith; (b) any and all Liabilities for Taxes in connection with or arising out of any Ameri Company’s assets, employees, securities, activities or business on or prior to the Closing Date; (c) any Action by Person(s) who were holders of equity securities of any Ameri Company, including options, warrants, convertible debt or other convertible securities or other rights to acquire equity securities of any Ameri Company, prior to the Closing arising out of the sale, purchase, termination, cancellation, expiration, redemption or conversion of any such securities; or (d) any matter described on Schedule 6.2.

6.3.        Indemnification by Buyer.  Except as otherwise limited by this ARTICLE VI, Buyer shall indemnify, defend and hold harmless Seller and its Representatives and any assignee or successor thereof (collectively, the “Seller Indemnified Parties”) from and against, and pay or reimburse the Seller Indemnified Parties for, any and all Losses, suffered or incurred by, or imposed upon, Seller Indemnified Party arising in whole or in part out of or resulting directly or indirectly from (a) any non-fulfillment or breach of any unwaived covenant, obligation or agreement made by or on behalf of Buyer contained in this Agreement or in any certificate to be delivered by Buyer in connection herewith, and (b) any and all Liabilities for Taxes in connection with or arising out of any Ameri Company’s assets, employees, securities, activities or business on or after to the Closing Date.

6.4.        Indemnification Procedures.

(a)         For the purposes of this Agreement, (i) the term “Indemnitee” shall refer to the Person or Persons indemnified, or entitled, or claiming to be entitled, to be indemnified, pursuant to the provisions of Section 6.2 or 6.3, as the case may be, and (ii) the term “Indemnitor” shall refer to the Person having the actual or alleged obligation to indemnify pursuant to such provisions.  Notwithstanding anything to the contrary contained in this Agreement, the Seller will have the sole and exclusive right to act on behalf of the Seller Indemnified Parties with respect to any indemnification claims made pursuant to this ARTICLE VI, including bringing, defending, controlling and settling any claims hereunder and receiving any notices on behalf of the Seller Indemnified Parties.

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(b)         In the case of any claim for indemnification under this Agreement arising from a claim of a third party (including any Governmental Authority), an Indemnitee must give prompt written notice and, subject to the following sentence, in no case later than thirty (30) days after the Indemnitee’s receipt of notice of such claim, to the Indemnitor of any claim of which such Indemnitee has knowledge and as to which it may request indemnification hereunder.  The failure to give such notice will not, however, relieve an Indemnitor of its indemnification obligations except to the extent that the Indemnitor is actually harmed thereby.  The Indemnitor will have the right to defend and to direct the defense against any such claim in its name and at its expense, and with counsel selected by the Indemnitor unless: (i) the Indemnitor fails to acknowledge fully its obligations to the Indemnitee within fifteen (15) days after receiving notice of such third party claim or contests, in whole or in part, its indemnification obligations therefor; (ii) if the Indemnitor is Seller, the applicable third party claimant is a Governmental Authority or a then-current customer of Buyer, any Ameri Company or any of their respective Affiliates; (iii) there is a material conflict of interest between the Indemnitee and the Indemnitor in the conduct of such defense where the Indemnitor’s counsel would not be permitted by professional standards applicable to such counsel to represent both parties; (iv) the applicable third party alleges claims of fraud, willful misconduct or intentional misrepresentation; (v) such claim is criminal in nature, could reasonably be expected to lead to criminal proceedings, or seeks an injunction or other equitable relief against the Indemnitee; or (vi) the claim seeks or is reasonably expected to seek damages or other amounts that would result in all or any portion of the Indemnitee’s right to indemnification for such claim being limited by the Indemnification Cap.  If the Indemnitor elects, and is entitled, to compromise or defend such claim, it will within fifteen (15) days (or sooner, if the nature of the claim so requires) notify the Indemnitee of its intent to do so, and the Indemnitee will, at the request and expense of the Indemnitor, cooperate in the defense of such claim.  If the Indemnitor elects not to, or is not entitled under this Section 6.4(b) to, compromise or defend such claim, fails to notify the Indemnitee of its election as herein provided or refuses to acknowledge or contests its obligation to indemnify under this Agreement, the Indemnitee may pay, compromise or defend such claim.  Notwithstanding anything to the contrary contained herein, the Indemnitor will have no indemnification obligations with respect to any such claim which has been or will be settled by the Indemnitee without the prior written consent of the Indemnitor (which consent will not be unreasonably withheld, delayed or conditioned); provided, however, that notwithstanding the foregoing, the Indemnitee will not be required to refrain from paying any claim which has matured by a court judgment or decree, unless an appeal is duly taken therefrom and exercise thereof has been stayed, nor will it be required to refrain from paying any claim where the delay in paying such claim would result in the foreclosure of a Lien upon any of the property or assets then held by the Indemnitee or where any delay in payment would cause the Indemnitee material economic loss.  The Indemnitor’s right to direct the defense will include the right to compromise or enter into an agreement settling any claim by a third party; provided that no such compromise or settlement will obligate the Indemnitee to agree to any settlement that that requires the taking or restriction of any action (including the payment of money and competition restrictions) by the Indemnitee (other than the delivery of a release for such claim and customary confidentiality obligations), except with the prior written consent of the Indemnitee (such consent to be withheld, conditioned or delayed only for a good faith reason).  The Indemnitee will have the right to participate in the defense of any claim with counsel selected by it subject to the Indemnitor’s right to direct the defense.  The fees and disbursements of such counsel will be at the expense of the Indemnitee.

(c)          Any indemnification claim that does not arise from a third party claim must be asserted by a written notice to the Indemnitor setting forth with reasonable specificity the amount claimed and the underlying facts supporting such claim to the extent then known by the Indemnitee.  The Indemnitor will have a period of thirty (30) days after receipt of such notice within which to accept or dispute such claim by providing written notice to the Indemnitee.  If the recipient does not respond within such thirty (30) days, the recipient will be deemed to have accepted responsibility for the Losses set forth in such notice and will have no further right to contest the validity of such notice.  If the recipient responds within such thirty (30) days after the receipt of the notice and rejects such claim in whole or in part, the party delivering will be free to pursue such remedies as may be available to it under this Agreement, any other Ancillary Documents or applicable Law.

6.5.        General Indemnification Provisions.  The amount of any Losses suffered or incurred by any Indemnitee shall be reduced by the amount of any insurance proceeds or other cash receipts paid to the Indemnitee or any Affiliate thereof as a reimbursement with respect to such Losses (and no right of subrogation shall accrue to any insurer hereunder, except to the extent that such waiver of subrogation would prejudice any applicable insurance coverage), including any indemnification received by the Indemnitee or such Affiliate from an unrelated party with respect to such Losses, net of the costs of collection and any related anticipated future increases in insurance premiums resulting from such Loss or insurance payment.  Seller will not have any right to seek contribution from any Ameri Company with respect to all or any part of Seller’s indemnification obligations under this ARTICLE VI.  The Buyer Indemnified Parties will not be required to make any claim against any Ameri Company in respect of any representation, warranty, covenant or any other obligation of an Ameri Company to Buyer hereunder or under any Ancillary Document to which an Ameri Company is a party, and may solely seek action against Seller.  Any Losses under this Agreement and the Ancillary Documents shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant or agreement.  Unless otherwise required by applicable Law, all indemnification payments will constitute adjustments to the consideration for all Tax purposes, and no party may take any position inconsistent with such characterization.

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6.6.       Timing of Payment; Right to Set-Off.  Any indemnification obligation of an Indemnitor under this ARTICLE VI will be paid promptly (but in any event within five (5) Business Days) after the determination of such obligation in accordance with Section 6.4.  The provisions of this ARTICLE VI notwithstanding, at its sole discretion and without limiting any other rights of the Buyer Indemnified Parties under this Agreement or any Ancillary Document or at law or equity, to the extent that a Buyer Indemnified Party is determined in accordance with this Agreement to be entitled to indemnification hereunder, if Seller fails or refuses to promptly indemnify such Buyer Indemnified Party as provided herein then Buyer (or any other Buyer Indemnified Party) may offset the full amount to which such Buyer Indemnified Party is entitled, in whole or in part, by reducing the amount of any payment or other obligation due to Seller pursuant to this Agreement or any Ancillary Document, including any amounts owed by Buyer pursuant to any outstanding indemnification claim. 

6.7.        Knowledge of Buyer.  Notwithstanding any other provision of this Agreement to the contrary, Buyer shall not have the right to terminate this Agreement pursuant to Section 7.1(d)(i) due to, and Seller shall not be liable to provide indemnification for Losses under this ARTICLE VI to the extent resulting from, an event or circumstance constituting a breach of a representation or warranty of Seller under this Agreement of which a Buyer Knowledge Party had actual knowledge at or prior to the date of this Agreement; provided, that on or prior to the date of this Agreement, Seller made due inquiry regarding the accuracy of the representations and warranties of Seller set forth in this Agreement and none of the Seller or any of its Affiliates, or their respective officers, directors, members or employees (other than Buyer Knowledge Parties) hadactual knowledge on or prior to the date of this Agreement with respect to such event or circumstance.  As used herein, “Buyer Knowledge Party” means the individuals listed on Schedule 6.7.

ARTICLE VII
TERMINATION

7.1.        Termination.  This Agreement may be terminated and the transactions hereby may be abandoned, at any time prior to the Closing as follows:

(a)          By mutual written consent of Buyer and Seller.

(b)          By either Seller or Buyer, if:

(i)          Any court or other Governmental Authority shall have issued, enacted, entered, promulgated or entered any Law or Order (that is final and non-appealable and that has not been vacated, withdrawn or overturned) restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or

(ii)          The Closing Date shall not have occurred on or prior to 11:59 p.m. (Eastern Time) on the one hundred and eightieth (180^th) day after the date of this Agreement, or such other date mutually agreed by Buyer and Seller (the “Outside Date”); provided, that no Party may terminate this Agreement pursuant to this Section 7.1(b)(ii) if such Party is in material breach of this Agreement.

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(c)          By Seller, if (i) there shall have occurred a breach, inaccuracy in or failure to perform of any of Buyer’s representations, warranties, covenants or agreements contained in this Agreement and where such breach, inaccuracy or failure would give rise to the failure or non-fulfillment of the Closing conditions set forth in clauses (a) or (b) of Section 2.3, except that if such breach, inaccuracy or failure is capable of being remedied by Buyer, it shall have continued unremedied until 5:00 p.m. (Eastern Time) on the earlier of the Outside Date or the date which is ten (10) Business Days after Buyer has received written notice from Seller of the occurrence of such breach, inaccuracy or failure; or (ii) if Seller shall have entered into a definitive binding agreement with respect to a Superior Proposal pursuant to and in compliance with Section 5.9, and Seller shall have paid Buyer the Termination Fee described in Section 7.2.

(d)          By Buyer, if (i) there shall have occurred a breach, inaccuracy in or failure to perform of any of Seller’s representations, warranties, covenants or agreements contained in this Agreement and where such breach, inaccuracy or failure would give rise to the failure or non-fulfillment of the Closing conditions set forth in clauses (a) or (b) of Section 2.4, except that if such breach, inaccuracy or failure is capable of being remedied by Seller, it shall have continued unremedied until 5:00 p.m. (Eastern Time) on the earlier of the Outside Date or the date which is ten (10) Business Days after Seller has received written notice from Buyer of the occurrence of such breach, inaccuracy of failure; (ii) if there has been a Material Adverse Effect which is continuing and uncured; or (iii) the Seller or the Seller Board (or any committee thereof, including the Special Committee) shall have effected a Change of Recommendation.

7.2.        Effect of Termination.  In the event of the termination of this Agreement in accordance with Section 7.1, this Agreement shall immediately become void and of no further force and effect (other than Section 5.2, ARTICLE VII and ARTICLE VIII) and there shall be no liability on the part of any Party hereto except, if Buyer terminates pursuant to Section 7.1(d)(i) or Seller terminates pursuant to Section 7.1(c)(i) then the terminating party shall have the right to pursue its remedies with respect to the breach or breaches giving rise to such termination.  If Seller terminates this Agreement pursuant to Section 7.1(c)(ii), or Buyer terminates this Agreement pursuant to Section 7.1(d)(iii) then Seller shall promptly pay to Buyer, in addition to any other amounts payable by Seller pursuant to this Agreement, cash in an amount equal to the documented out-of-pocket fees and expenses incurred or paid by or on behalf of Buyer in connection with this Agreement or the Ancillary Documents or the consummation of any of the Transactions in an amount that will not exceed $300,000 (the “Termination Fee”), which shall be made via wire transfer of immediately available funds to an account designated by Buyer, not later than two (2) Business Days following such termination. Nothing herein shall preclude any Party hereto from liability for any fraud, willful misconduct or intentional breach of this Agreement.

ARTICLE VIII
GENERAL PROVISIONS

8.1.        Expenses.  Except as otherwise expressly set forth elsewhere in this Agreement, each Party will bear its legal and other fees and expenses incurred in connection with their negotiating, executing and performing this Agreement, including any related broker’s or finder’s fees, for periods on or before the Closing Date; provided, that the fees and expenses of the Ameri Companies for periods on or before the Closing Date (including those incurred in connection with the Reorganization) will be paid by or on behalf of Seller.

8.2.        Notices.  Any notice, request, instruction or other document to be given hereunder by a party hereto shall be in writing and shall be deemed to have been given, (i) when received if given in person or by courier or a courier service, (ii) on the date of transmission if sent by facsimile or email (with affirmative confirmation of receipt, and provided, that the Party providing notice shall within two (2) Business Days provide notice by another method under this Section 8.2) or (iii) three (3) Business Days after being deposited in the U.S. mail, certified or registered mail, postage prepaid:

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If to Seller, to: AMERI Holdings, Inc. 5000 Research Court, Suite 750 Suwanee, Georgia  30024 Attention: Barry Kostiner Facsimile No.:  (770) 952-4513 Telephone No.:  (770) 935-4153 Email: barry.kostiner@ameri100.com

with a copy (which will not constitute notice) to: Sheppard, Mullin, Richter & Hampton LLP 30 Rockefeller Plaza New York, New York 10112 Attention:  Richard Friedman, Esq. Facsimile No.:  (212) 655-1729 Telephone No.:  (212) 634-3031 Email:  rafriedman@sheppardmullin.com and Dimitrios Angelis Email:  dangelis@yahoo.com and Thoranath Sukumaran Email:  suku@oakwoodstrategy.com and Weinberg Zareh Malkin Price LLP 45 Rockefeller Plaza, 20th Floor New York, New York 10111 Attention:  Adam Price Telephone No.:  (212) 899-5473 Email:  aprice@wzmplaw.com

If to Buyer: Ameri100 Inc 7950 Legacy Drive One Legacy West, Suite 650 Plano, Texas 75024 Attention:  Srinidhi Devanur Telephone No.:  (415) 619-1919 Email:  dev@ameri100.com

with a copy (which will not constitute notice) to: Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York  10105 Attention:  Ari Edelman, Esq. Matthew A. Gray, Esq. Facsimile No.:  (212) 370-7889 Telephone No.:  (212) 370-1300 Email:    aedelman@egsllp.com and mgray@egsllp.com

or to such other individual or address as a Party hereto may designate for itself by notice given as herein provided.

8.3.       Severability.  In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions will not in any way be affected or impaired.  Any illegal or unenforceable term will be deemed to be void and of no force and effect only to the minimum extent necessary to bring such term within the provisions of applicable Law and such term, as so modified, and the balance of this Agreement will then be fully enforceable.  The Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

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8.4.        Assignment.  This Agreement may not be assigned by any Party without the prior written consent of the other Party hereto, and any attempted assignment in violation of this Section 8.4 will be null and void ab initio; provided, however, that after the Closing, Buyer may assign its rights and benefits hereunder (i) to any Affiliate of Buyer (provided, that Buyer shall remain primarily responsible for its obligations hereunder), or (ii) as security to any Person providing debt financing to Buyer or its Affiliates for the transactions contemplated hereby.  Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of each Party hereto.

8.5.       No Third-Party Beneficiaries.  Except for the indemnification rights of the Buyer Indemnified Parties and the Seller Indemnified Parties set forth herein, this Agreement is for the sole benefit of the parties hereto and their successors and permitted assigns and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such successors and permitted assigns, any legal or equitable rights hereunder.

8.6.        Amendment; Waiver.  This Agreement may not be amended or modified except by an instrument in writing signed by each of the Parties hereto; provided, that any amendment or modification to the Buyer Preferred Stock CoD from the form attached as Exhibit D hereto will also require the consent of the holders of a majority of the issued and outstanding shares of Seller Series A Preferred Stock.  Notwithstanding anything to the contrary contained herein: (a) the failure of any Party at any time to require performance by the other of any provision of this Agreement will not affect such Party’s right thereafter to enforce the same; (b) no waiver by any Party of any default by any other Party will be valid unless in writing and acknowledged by an authorized representative of the non-defaulting party, and no such waiver will be taken or held to be a waiver by such Party of any other preceding or subsequent default; and (c) no extension of time granted by any Party for the performance of any obligation or act by any other Party will be deemed to be an extension of time for the performance of any other obligation or act hereunder.

8.7.        Entire Agreement.  This Agreement (including the Exhibits, Annexes and Schedules hereto, which are hereby incorporated herein by reference and deemed part of this Agreement), together with the Ancillary Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, with respect to the subject matter hereof.

8.8.        Remedies.  Except as specifically set forth in this Agreement, any Party having any rights under any provision of this Agreement will have all rights and remedies set forth in this Agreement and all rights and remedies which such party may have been granted at any time under any other contract or agreement and all of the rights which such party may have under any applicable Law.  Except as specifically set forth in this Agreement, any such Party will be entitled to (a) enforce such rights specifically, without posting a bond or other security or proving damages or that monetary damages would be inadequate, (b) to recover damages by reason of a breach of any provision of this Agreement and (c) to exercise all other rights granted by applicable Law.  The exercise of any remedy by a Party will not preclude the exercise of any other remedy by such Party.

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8.9.        Dispute Resolution.  Any and all disputes, controversies and claims (other than applications for a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or an application for enforcement of a resolution under this Section 8.9) arising out of, related to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be governed by this Section 8.9.  A Party must, in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must provide a reasonably detailed description of the matters subject to the Dispute.  The parties involved in such Dispute shall seek to resolve the Dispute on an amicable basis within ten (10) Business Days of the notice of such Dispute being received by such other parties subject to such Dispute (the “Resolution Period”); provided, that if any Dispute would reasonably be expected to have become moot or otherwise irrelevant if not decided within sixty (60) days after the occurrence of such Dispute, then there shall be no Resolution Period with respect to such Dispute.  Any Dispute that is not resolved during the Resolution Period may immediately be referred to and finally resolved by arbitration pursuant to the then-existing Expedited Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the American Arbitration Association (the “AAA”).  Any Party involved in such Dispute may submit the Dispute to the AAA to commence the proceedings after the Resolution Period.  To the extent that the AAA Procedures and this Agreement are in conflict, the terms of this Agreement shall control.  The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any event within three (3) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each Party subject to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition agreements.  The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within three (3) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute.  The proceedings shall be streamlined and efficient.  The arbitrator shall decide the Dispute in accordance with the substantive law of the state of New York.  Time is of the essence.  Each Party shall submit a proposal for resolution of the Dispute to the arbitrator within ten (10) Business Days after confirmation of the appointment of the arbitrator.  The arbitrator shall have the power to order any Party to do, or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power (and, for the avoidance of doubt, shall order) the relevant Party (or Parties, as applicable) to comply with only one or the other of the proposals.  The arbitrator’s award shall be in writing and shall include a reasonable explanation of the arbitrator’s reason(s) for selecting one or the other proposal.  The seat of arbitration shall be in the State of New York, County of New York.  The language of the arbitration shall be English.

8.10.      Governing Law; Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to its choice of law principles that would result in the applications of the laws of a jurisdiction other than the State of New York).  Subject to Section 8.9, or purposes of any Action arising out of or in connection with this Agreement or any transaction contemplated hereby, each of the Parties hereto (a) irrevocably submits to the exclusive jurisdiction and venue of any state or federal court located within New York County, State of New York (or in any court in which appeal from such courts may be taken), (b) agrees that service of any process, summons, notice or document by Canadian or U.S. registered mail to such Party’s respective address set forth in Section 8.2 shall be effective service of process for any Action with respect to any matters to which it has submitted to jurisdiction in this Section 8.10, (c) waives and covenants not to assert or plead, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of such court, that the Action is brought in an inconvenient forum, that the venue of the Action is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and hereby agrees not to challenge such jurisdiction or venue by reason of any offsets or counterclaims in any such Action, and (d) waives any bond, surety or other security that might be required of any other Party with respect thereto.  Each Party hereto agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law or in equity.  The parties hereto hereby knowingly, voluntarily and intentionally waive the right any may have to a trial by jury in respect to any litigation based hereon, or arising out of, under, or in connection with this Agreement and any agreement contemplated to be executed in connection herewith, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party in connection with such agreements, in each case whether now existing or hereafter arising and whether sounding in tort or contract or otherwise.  Each party hereto acknowledges that it has been informed by the other parties hereto that this Section 8.10 constitutes a material inducement upon which they are relying and will rely in entering into this Agreement.  Any party hereto may file an original counterpart or a copy of this Section 8.10 with any court as written evidence of the consent of each such party to the waiver of its right to trial by jury.

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8.11.      Interpretation.  The table of contents and the headings and subheadings of this Agreement are for reference and convenience purposes only and in no way modify, interpret or construe the meaning of specific provisions of the Agreement.  In this Agreement, unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this 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) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (iii) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP; (iv) “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”; (v) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (vi) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vii) the term “or” means “and/or”; (viii) reference to “dollars” or “$” shall mean United States Dollars; (ix) reference to any statute includes any rules and regulations promulgated thereunder; (x) any agreement, instrument, insurance policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; and (xi) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article”, “Schedule”, “Exhibit” and “Annex” are intended to refer to Sections, Articles, Schedules, Exhibits and Annexes to this Agreement.

8.12.      Mutual Drafting.  The parties acknowledge and agree that: (a) this Agreement and the Ancillary Documents are the result of negotiations between the parties and will not be deemed or construed as having been drafted by any one party, (b) each Party and its counsel have reviewed and negotiated the terms and provisions of this Agreement (including any, Exhibits, Annexes and Schedules attached hereto) and the Ancillary Documents and have contributed to their revision, (c) the rule of construction to the effect that any ambiguities are resolved against the drafting party will not be employed in the interpretation of this Agreement or the Ancillary Documents, and (d) neither the drafting history nor the negotiating history of this Agreement or the Ancillary Documents may be used or referred to in connection with the construction or interpretation thereof.

8.13.      Counterparts.  This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  A photocopy, faxed, scanned and/or emailed copy of this Agreement or any Ancillary Document or any signature page to this Agreement or any Ancillary Document, shall have the same validity and enforceability as an originally signed copy.  This Agreement and the Ancillary Documents may be accepted, executed or agreed to through the use of an electronic signature in accordance with the Electronic Signatures in Global and National Commerce Act, Title 15, United States Code, Sections 7001 et seq., the Uniform Electronic Transaction Act and any applicable state Law. Any document accepted, executed or agreed to in conformity with such Laws will be binding on each party as if it were physically executed.

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8.14.     Attorney-Client Privilege.  IN THIS AGREEMENT, FROM AND AFTER THE CLOSING, (I) ALL COMMUNICATIONS PRIOR TO THE CLOSING BETWEEN ANY AMERI COMPANY OR ANY OF ITS REPRESENTATIVES, ON ONE HAND, AND SHEPPARD, MULLIN, RICHTER & HAMPTON LLP (THE “COMPANY’S COUNSEL”) OR WEINBERG ZAREH MALKIN PRICE LLP  (THE “SPECIAL COMMITTEE’S COUNSEL”), ON THE OTHER HAND, RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (A “PRE-CLOSING TRANSACTION COMMUNICATION”), SHALL BE DEEMED TO BE ATTORNEY-CLIENT CONFIDENCES THAT BELONG SOLELY TO THE MEMBERS OF THE COMPANY’S BOARD OF DIRECTORS AS OF IMMEDIATELY PRIOR TO THE CLOSING (THE “TRANSACTION BOARD MEMBERS”), (II) NEITHER BUYER NOR ANY OF ITS REPRESENTATIVES SHALL HAVE ACCESS TO ANY SUCH PRE-CLOSING TRANSACTION COMMUNICATIONS, OR TO ANY OF THE FILES OR OTHER DOCUMENTS DELIVERED OR PREPARED IN CONNECTION THEREWITH, (III) THE TRANSACTION BOARD MEMBERS SHALL BE THE SOLE HOLDERS OF THE ATTORNEY-CLIENT PRIVILEGE WITH RESPECT TO SUCH PRE-CLOSING TRANSACTION COMMUNICATIONS, AND NONE OF THE AMERI COMPANIES, BUYER NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES SHALL BE A HOLDER THEREOF, (IV) TO THE EXTENT THAT ANY FILES OF COMPANY’S COUNSEL OR SPECIAL COMMITTEE’S COUNSEL IN RESPECT OF ANY PRE-CLOSING TRANSACTION COMMUNICATION CONSTITUTE PROPERTY OF THE CLIENT THEREOF, ONLY TRANSACTION BOARD MEMBERS SHALL HOLD SUCH PROPERTY RIGHTS THERETO, AND (V) UNLESS DIRECTED TO DO SO BY THE TRANSACTION BOARD MEMBERS OR BY A COURT OF COMPETENT JURISDICTION OR OTHER GOVERNMENTAL AUTHORITY (AND THEN IN EACH CASE ONLY TO THE EXTENT OF SUCH DIRECTION), COMPANY’S COUNSEL AND SPECIAL COMMITTEE’S COUNSEL SHALL NOT HAVE ANY DUTY WHATSOEVER TO REVEAL OR DISCLOSE ANY SUCH PRE-CLOSING TRANSACTION COMMUNICATIONS OR RELATED FILES TO ANY AMERI COMPANY OR BUYER OR ANY OF THEIR RESPECTIVE REPRESENTATIVES BY REASON OF ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN COMPANY’S COUNSEL OR SPECIAL COMMITTEE’S COUNSEL, ON THE ONE HAND, AND ANY AMERI COMPANY, ON THE OTHER HAND.

[Remainder of Page Intentionally Left Blank; Signatures Appear on Following Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

Buyer:
AMERI100 INC
By:	/s/ Dev Nhidi

Name:	Dev Nhidi
Title:	President

Seller:
AMERI HOLDINGS, INC.
By:	/s/ Barry Kostiner

Name:	Barry Kostiner
Title:	Chief Financial Officer

{Signature Page to Share Purchase Agreement}

ANNEX I

Definitions

1.           Certain Defined Terms.  As used in the Agreement, the following terms shall have the following meanings:

“Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations under the Securities Exchange Act of 1934, as amended.

“Ameri Company” means any of the Company or any of the other Subsidiaries of Seller.

“Ancillary Documents” means each agreement, instrument or document attached hereto as an Exhibit, including the Make Whole Letters, the Buyer Charter Amendment, the Buyer Bylaw Amendment, the Buyer Preferred Stock CoD and the Seller Amended Preferred Stock CoD, and the other agreements, certificates and instruments to be executed or delivered by any of the parties hereto in connection with or pursuant to this Agreement.

“Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA, including any: (a) non-qualified deferred compensation or retirement plan or arrangement (whether or not funded or registered); (b) qualified defined contribution retirement plan or arrangement which is an employee pension benefit plan (as defined in Section 3(2) of ERISA); (c) qualified defined benefit retirement plan or arrangement which is an employee pension benefit plan (including any “multiemployer plan” (as defined in Section 3(37) of ERISA); (d) “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), or fringe benefit plan or program; and (e) stock purchase, stock ownership, phantom stock, restricted stock, stock appreciation right, phantom unit, restricted unit, stock option, severance pay, termination pay, employment, change in control, vacation pay, company awards, salary continuation, disability, sick leave, cafeteria, deferred compensation, excess benefit, bonus, incentive, commissions or other compensation, life insurance, or other employee benefit plan, agreement, program, policy or other arrangement, whether or not subject to ERISA or other applicable Law, whether for the benefit of one individual or more than one individual, whether written or oral, in each case, sponsored, administered, maintained or contributed to (or required to be contributed to) by any Ameri Company or any ERISA Affiliate thereof, or to which any Ameri Company or any ERISA Affiliate is a party or has or may have current or future Liabilities.

“Business Day” means any day that is not a Saturday, Sunday or any other day on which banks are required or authorized by Law to be closed in New York City, New York.

“Code” means the Internal Revenue Code of 1986 and any successor statute thereto, as amended.  Reference to a specific section of the Code shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

I-1

“Confidential Information” means the terms and provisions of this Agreement any information concerning the business and affairs of any Ameri Company or Buyer or their respective Affiliates that is not generally available to the public, including know-how, trade secrets, customer lists, details of customer or consultant contracts, pricing policies, operational methods and marketing plans or strategies, and any information disclosed to any Ameri Company or Buyer or their respective Affiliates by third parties to the extent that they have an obligation of confidentiality in connection therewith; provided, however, that “Confidential Information” shall not include any information which, at the time of disclosure by Seller or its Representatives, is generally available publicly  not due to a breach of this Agreement by Seller or its Representatives.

“Contract” means any contract, agreement, binding arrangement, commitment or understanding, bond, note, indenture, mortgage, debt instrument, license (or any other contract, agreement or binding arrangement concerning Intellectual Property), franchise, lease or other instrument or obligation of any kind, written or oral (including any amendments or other modifications thereto).

“Copyrights” means all works of authorship, mask works and all copyrights therein, including all renewals and extensions, copyright registrations and applications for registration and renewal, and non-registered copyrights.

“Enforceability Exceptions” means bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

“Environmental Condition” means any contamination or damage to the environment caused by or relating to the use, handling, storage, treatment, recycling, generation, transportation, release, spilling, leaching, pumping, pouring, emptying, discharging, injection, escaping, disposal, dumping or threatened release of Hazardous Materials by any Person.  With respect to claims by employees or other third parties, Environmental Condition also includes the exposure of Persons to amounts of Hazardous Materials.

“Environmental Laws” means all Laws relating to pollution or protection of the environment, natural resources and health, safety and fire prevention, including those relating to emissions, discharges, releases or threatened releases of Hazardous Material into the environment (including ambient air, surface water, groundwater or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Material.

“Environmental Permits” means all permits, approvals, agreements, identification numbers, licenses and other authorizations required under any applicable Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974 and any successor statute thereto, as amended.  Reference to a specific section of ERISA shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

“ERISA Affiliate” means any Person who is, or at any time was, a member of a controlled group (within the meaning of Section 414(b), (c), (m) or (o) of the Code that includes, or at any time included, an Ameri Company or any Affiliate thereof, or any predecessor of any of the foregoing.

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

I-2

“Excluded Party” means any Person or group of Persons from whom the Seller or any of its Representatives has received prior to the No-Shop Period Start Date a written Seller Acquisition Proposal that the Seller Board determines in good faith such determination to be made no later than two (2) Business Days after the No-Shop Period Start Date), after consultation with outside counsel and its financial advisors, is or would reasonably be expected to result in a Superior Proposal; provided, such Person or group of Persons will no longer be an Excluded Party if at any time it revokes or abandons its Seller Acquisition Proposal, or if such Seller Acquisition Proposal at any time no longer constitutes, or would not reasonably be expected to result in, a Superior Proposal.

“GAAP” means United States generally accepted accounting principles applied on a consistent basis.

“Governing Documents” means, with respect to any entity, its certificate of incorporation, certificate of formation or similar charter document and its bylaws, articles, operating agreement or similar governing document.

“Governmental Authority” means any federal, provincial, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.  The term “Governmental Authority” includes any Person acting on behalf of a Governmental Authority.

“Hazardous Material” means (a) all substances, materials, chemicals, compounds, pollutants or wastes regulated by, under or pursuant to any Environmental Laws; and (b) asbestos, petroleum, any fraction or product of crude oil or petroleum, radioactive materials and polychlorinated biphenyls.

“Indebtedness” means, without duplication, (a) the outstanding principal of, and accrued and unpaid interest on, all bank or other third party indebtedness for borrowed money of any Ameri Company, including indebtedness under any bank credit agreement and any other related agreements and all obligations of any Ameri Company evidenced by notes, debentures, bonds or other similar instruments for the payment of which any Ameri Company is responsible or liable, (b) all obligations of any Ameri Company for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (c) all obligations of any Ameri Company issued or assumed for deferred purchase price payments, (d) all obligations of an Ameri Company under leases required to be capitalized in accordance with GAAP, (e) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by any Ameri Company, whether periodically or upon the happening of a contingency, (f) all obligations of any Ameri Company secured by a Lien (other than a Permitted Lien) on any asset of any Ameri Company, whether or not such obligation is assumed by an Ameri Company, (g) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness and (h) all obligation described in clauses (a) through (g) above of any other Person which is directly or indirectly guaranteed by any Ameri Company or which any Ameri Company has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.

“Intellectual Property” means all of the following, including any applications to register any of the following, as they exist in any jurisdiction throughout the world: (a) Patents; (b) Trademarks; (c) Copyrights; (d) Trade Secrets; (e) all domain name and domain name registrations, web sites and web pages and related rights, registrations, items and documentation related thereto; (f) Software; (g) rights of publicity and privacy, and moral rights; and (h) all licenses, sublicenses, permissions, and other agreements related to the preceding property.

I-3

“Knowledge” means: (i) with respect to Seller, the actual present knowledge of a particular matter by any executive officer or director of Seller, and the knowledge that any such Person would reasonably be expected to have if diligently performing their duties on behalf of the Ameri Companies; and (ii) with respect to Buyer, the actual present knowledge of a particular matter by any of the directors or executive officers of Buyer, without independent inquiry.

“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Permit or Order that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

“Liabilities” means any and all debts, liabilities and obligations of any nature whatsoever, whether accrued or fixed, absolute or contingent, mature or unmatured or determined or determinable, including those arising under any Law, Action, Order or Contract.

“Lien” means any interest (including any security interest), pledge, mortgage, lien, encumbrance, charge, claim or other right of third parties, including any spousal interests (community or otherwise), whether created by law or in equity, including any such restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.

“Material Adverse Effect” means any event, fact, condition, change, circumstance, occurrence or effect, which, either individually or in the aggregate with all other events, facts, conditions, changes, circumstances, occurrences or effects, (a) has had, or would reasonably be expected to have, a material adverse effect on the business, properties, prospects, assets, Liabilities, condition (financial or otherwise), operations, licenses or other franchises or results of operations of any Ameri Company or the Purchased Shares, or (b) does or would reasonably be expected to materially impair or delay the ability of Seller to perform its obligations under this Agreement and the Ancillary Documents or to consummate the transactions contemplated hereby and thereby; provided, however, that for purposes of clause (a) above, a Material Adverse Effect will not include any adverse effect or change resulting from any change, circumstance or effect relating to (A) the economy in general, (B) securities markets, regulatory or political conditions in the United States (including terrorism or the escalation of any war, whether declared or undeclared or other hostilities), (C) changes in applicable Laws or GAAP or the application or interpretation thereof, (D) with respect to the each Ameri Company and Seller, the industries in which such Ameri Company or Seller primarily operates and not specifically relating to such Ameri Company or (E) a natural disaster (provided, that in the cases of clauses (A) through (E), the applicable Ameri Company is not disproportionately affected by such event as compared to other similar companies and businesses in similar industries and geographic regions as such Ameri Company).

“Order” means any order, writ, rule, judgment, injunction, decree, stipulation, determination or award that is or has been made, entered, rendered or otherwise put into effect by, with or under the authority of any Governmental Authority.

“Ordinary Course of Business” means, with respect to a Person, an action taken by such Person if (a) such action is recurring in nature, is consistent with the past practices of the Person and is taken in the ordinary course of the normal day-to-day operations of the Person; and (b) such action is not required to be authorized by the equity holders of such Person, the board of directors (or equivalent) of such Person or any committee of the board of directors (or equivalent) of such Person and does not require any other special authorization of any nature.  Unless the context or language herein requires otherwise, each reference to Ordinary Course of Business will be deemed to be a reference to Ordinary Course of Business of an Ameri Company.

I-4

“Patents” means all patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights (including any divisionals, continuations, continuations-in-part, substitutions, or reissues thereof, whether or not patents are issued on any such applications and whether or not any such applications are amended, modified, withdrawn, or refiled).

“Permit” means any federal, state, local, foreign or other third-party permit, grant, easement, consent, approval, authorization, exemption, license, franchise, concession, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration or qualification that is or has been issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or other Person.

“Permitted Liens” means any (a) statutory Liens of landlords, carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by Law in the Ordinary Course of Business for sums not yet due and payable; and (b) Liens for current taxes not yet due and payable.

“Person” shall include any individual, trust, firm, corporation, limited liability company, partnership, Governmental Authority or other entity or association, whether acting in an individual, fiduciary or any other capacity.

“Personal Property” means all of the machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, spare parts, and other tangible personal property which are owned, used or leased by any Ameri Company and used or useful, or intended for use, in the conduct or operations of an Ameri Company’s business.

“Representative” means, as to any Person, such Person’s Affiliates and its and their managers, directors, officers, employees, agents and advisors (including financial advisors, counsel and accountants).

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

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

“Seller Acquisition Proposal” means a written proposal or offer from any Person (other than Buyer and its subsidiaries) providing for, in a single transaction or a series of transactions, any (i) merger, consolidation, share exchange, business combination, recapitalization or similar transaction involving the Seller or any of its Subsidiaries, pursuant to which any such Person would own or control, directly or indirectly, twenty percent (20%) or more of the voting power of the Seller, (ii) sale, lease, license, dissolution or other disposition, directly or indirectly, of assets of the Seller (including the Ameri Companies), (iii) issuance or sale or other disposition of equity interests representing twenty percent (20%) or more of the ownership interests of the Seller, (iv) tender offer, exchange offer or any other transaction in which any person will acquire, directly or indirectly, beneficial ownership or the right to acquire beneficial ownership of equity interests representing twenty percent (20%) or more of the ownership interests of the Seller or (v) a combination of any of the foregoing.

“Seller Stockholder Approval” means the approval of the stockholders of Seller of this Agreement and the Ancillary Documents and the Purchase and the other Transactions by a majority of the votes cast in the proposal set forth in the Proxy Statement.

I-5

“Software” means all computer software, including all source code, object code, and documentation related thereto and all software modules, assemblers, applets, compilers, flow charts or diagrams, tools and databases.

“Subsidiary” means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity.  Unless the context otherwise requires, any reference to a Subsidiary in this Agreement will mean a Subsidiary of Seller.

“Superior Proposal” means a written Seller Acquisition Proposal (provided, that for purposes of this definition references to twenty percent (20%) in the definition of “Seller Acquisition Proposal” shall be deemed to be references to fifty percent (50%)) that was not solicited in violation of Section 5.9, and which the Seller Board determines in its good faith judgment after consultation with its outside counsel and its financial advisors (i) to be reasonably likely to be consummated in accordance with its terms if accepted and (ii) to be more favorable to the Seller’s stockholders than the Purchase and the other Transactions, in each case, taking into account at the time of determination all relevant circumstances, including the various legal, financial and regulatory aspects of the proposal, all the terms and conditions of such proposal and this Agreement (including the requirement to pay the Termination Fee hereunder) and any changes to the terms of this Agreement offered by Buyer in response to such Seller Acquisition Proposal pursuant to Section 5.9(f).

“Tax” means any federal, provincial, state, local or foreign income, gross receipts, license, payroll, parking, employment, excise, social services, severance, stamp, occupation, premium, windfall profits, environmental, natural resources, customs duties, capital stock, franchise, profits, withholding, social security (or similar), payroll, unemployment, disability, real property, personal property, goods and services, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated tax, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, including such item for which Liability arises from the application of U.S. Treasury Regulation 1.1502-6 under the Code, as a transferee or successor-in-interest, by contract or otherwise, and any Liability assumed or arising as a result of being, having been, or ceasing to be a member of any Affiliated Group (as defined in Section 1504(a) of the Code) (or being included or required to be included in any Tax Return relating thereto) or as a result of any Tax indemnity, Tax sharing, Tax allocation or similar Contract.

“Tax Return” means any return, report, information return, schedule, certificate, statement or other document (including any related or supporting information) filed or required to be filed with a Taxing Authority in connection with any Tax, or, where none is required to be filed with a Taxing Authority, the statement or other document issued by a Taxing Authority in connection with any Tax.

“Taxing Authority” means any Governmental Authority responsible for the imposition or collection of any Tax.

I-6

“Trademarks” means, as they exist in any jurisdiction throughout the world, all trademarks, service marks, trade dress, trade names, brand names, Internet domain names, designs, logos, or corporate/company names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration and renewal thereof.

“Trade Secrets” means, as they exist in any jurisdiction throughout the world, any trade secrets, confidential business information, concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary rights (whether or not patentable or subject to copyright, trademark, or trade secret protection).

“Transaction Bonuses” means the aggregate of all amounts payable as a result of the change in control of any Ameri Company or as a result of the sale of the Purchased Shares or other similar provisions contained in any agreements binding upon any Ameri Company, including all bonuses and severance payments, retention obligations for retention agreements entered into in contemplation of a potential change of control of any Ameri Company or the sale of the Purchased Shares, termination payments to consultants or independent contractors and any settlement of any such bonus or severance payment obligations, obligations related to terminated equity options, or obligations related to terminated equity appreciation, phantom equity, profit participation and/or similar rights entered into by any Ameri Company at or prior to the Closing, and including any Ameri Company’s portion of any withholding Taxes on such amounts.

“Transaction Expenses” means the aggregate of (i) all fees, commissions, costs and expenses incurred by or on behalf of Seller or any Ameri Company in connection with the negotiation, execution or performance of this Agreement or the Ancillary Documents or the consummation of the transactions contemplated hereby or thereby (or incurred in connection with the transactions hereunder or thereunder) including any of the foregoing payable to legal counsel, accountants, investment bankers, financial advisors, brokers, finders, or consultants, and (ii) any Transfer Taxes, whether such Taxes are assessed initially against Buyer, Seller, any Ameri Company or any of their respective Affiliates.

2.           Other Defined Terms.  The following capitalized terms, as used in the Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:

Term	Section
AAA	8.9
AAA Procedures	8.9
Acceptable Confidentiality Agreement	5.9(a)
Alternative Acquisition Agreement	5.9(c)
Agreement	Preamble
Bank Account	3.24
Buyer	Preamble
Buyer Bylaw Amendment	2.3(d)
Buyer Charter Amendment	2.3(d)
Buyer Indemnified Parties	6.2
Buyer Knowledge Party	6.7
Buyer Material Adverse Effect	4.1
Buyer Preferred Stock	1.2
Buyer Preferred Stock CoD	2.3(e)
Buyer Shares	3.27(a)

Term	Section
Change of Recommendation	5.9(f)
Closing	2.1
Closing Date	2.1
Company	Recitals
Company Software	3.13(b)
Company’s Counsel	8.14
Converted Debt Holder	Recitals
Dispute	8.9
Exchange Agreement	Recitals
Indemnified Person	5.12(a)
Indemnitee	6.4(a)
Indemnitor	6.4(a)
Interim Period	5.8
Intervening Event	5.9(f)
Leased Premises	3.12
Leases	3.12

I-7

Term	Section
Licensed IP	3.13(c)
Loss	6.2
Make Whole Letter	Recitals
Merger Agreement	Recitals
No-Shop Period Start Date	5.9(a)
Owned IP	3.13(a)
Outside Date	7.1(b)(ii)
Party(ies)	Preamble
Personal Property Leases	3.11
Pre-Closing Transaction Communication	8.14
Proxy Statement	5.11(a)
Public Certifications	3.7(a)
Purchase	Recitals
Purchased Shares	1.1
Reorganization	Recitals
Resolution Period	8.9
SEC Reports	3.7(a)
Seller	Preamble
Seller Amended Preferred Stock CoD	2.4(g)

Term	Section
Seller Board	Recitals
Seller Board Approval	Recitals
Seller Board Recommendation	Recitals
Seller Disclosure Letter	ARTICLE III
Seller Distribution	3.27(a)
Seller Financials	3.7(b)
Seller Indemnified Parties	6.3
Seller Series A Preferred Stock	2.4(g)
Shrink Wrapped Software	3.13(b)
Special Committee	Recitals
Special Committee Approval	Recitals
Special Committee Recommendation	Recitals
Special Committee’s Counsel	8.14
Special Meeting	5.11(a)
Termination Fee	7.2
Top Customers	3.25
Top Suppliers	3.25
Transaction Board Members	8.14
Transactions	Recitals
Transfer Taxes	5.7(e)

I-8

EX-2.2

Exhibit 2.2

AMERI HOLDINGS, INC.

and

JAY PHARMA MERGER SUB, INC.

and

JAY PHARMA INC.

and

1236567 B.C. UNLIMITED LIABILITY COMPANY

and

BARRY KOSTINER

AMALGAMATION AGREEMENT

Dated effective as of January 10, 2020

AMALGAMATION AGREEMENT

THIS AMALGAMATION AGREEMENT is made effective as of January 10, 2020 (the “Execution Date”)

BETWEEN:

AMERI HOLDINGS, INC., a corporation existing under the laws of the State of Delaware

(“Parent”)

AND:

JAY PHARMA MERGER SUB, INC., a corporation existing under the laws of Canada

(“Purchaser”)

AND:

JAY PHARMA INC., a corporation existing under the laws of Canada

(“Company”)

AND:

1236567 B.C. UNLIMITED LIABILITY COMPANY, an unlimited liability corporation existing under the laws of British Columbia

(“ExchangeCo”)

AND:

BARRY KOSTINER, not individually but solely in his capacity as the Parent Representative

WHEREAS:

A. Purchaser is a wholly-owned subsidiary of Parent;

B. Parent, through Purchaser, wishes to acquire all of the outstanding securities of Company by way of a three-cornered amalgamation under the CBCA (as defined herein), upon the terms and conditions set forth herein such that, upon completion of the Amalgamation (as defined herein), the amalgamated corporation will be a wholly-owned subsidiary of Parent; and

C. The Parties (as defined herein) wish to enter into this Agreement (as defined herein) to set out the terms and conditions of the Amalgamation and matters related thereto.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties covenant and agree as follows:

ARTICLE 1
INTERPRETATION

1.1          Defined Terms

In this Agreement and in the recitals hereto, unless there is something in the context or subject matter inconsistent therewith, the following terms will have the following meanings:

“1933 Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

“Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry (written or oral) from any Person or group of Persons other than the Parties after the date of this Agreement relating to: (a) any direct or indirect sale, disposition, alliance or joint venture (or any lease, long-term supply agreement or other arrangement having the same economic effect as a sale), in a single transaction or a series of related transactions, of assets representing 20% or more of the consolidated assets or contributing 20% or more of the consolidated revenue of the Company or the Parent and their respective Subsidiaries or of 20% or more of the voting, equity or other securities of the Company, the Parent, or any of their respective Subsidiaries (or rights or interests therein or thereto); (b) any direct or indirect take-over bid, tender offer, exchange offer, treasury issuance or other transaction that, if consummated, would result in a Person or group of Persons beneficially owning 20% or more of any class of voting, equity or other securities or any other equity interests (including securities convertible into or exercisable or exchangeable for securities or equity interests) of the Company, the Parent, or any of their respective Subsidiaries; (c) any plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or exclusive license involving the Company, the Parent, or any of their respective Subsidiaries; (d) any other similar transaction or series of transactions involving the Company, the Parent, or any of their respective Subsidiaries; or (e) any other transaction, the consummation of which could reasonably be expected to impede, prevent or delay the transactions contemplated by this Agreement, including the Amalgamation.

“Affiliate” with respect to any specified Person at any time, means each Person that, directly or indirectly, alone or through one or more intermediaries, controls, is controlled by, or is under direct or indirect common control with, such specified Person at such time.

“Agreement”means this amalgamation agreement, the Company Disclosure Letter and the Parent Disclosure Letter, each as may be supplemented, amended, restated or otherwise modified from time to time in accordance with the terms hereof.

“Amalco” means the corporation resulting from the Amalgamation.

“Amalco Shares” means common shares in the capital of Amalco.

“Amalgamation” means the amalgamation of Company and Purchaser pursuant to the provisions of the CBCA as of the Closing Date.

“Amalgamation Resolution” means the special resolution of the Company Shareholders with respect to the approval of the Amalgamation, this Agreement and the transactions contemplated thereby and hereby, to be considered by the Company Shareholders at the Company Meeting.

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“Applicable Laws” means, with respect to any Person, any and all applicable law (statutory, civil, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person or its business, property or securities, and to the extent that they have (or are applied as if they have) the force of law, policies, guidelines, notices and protocols of any Governmental Authority, as amended.

“Articles of Amalgamation” means the articles of amalgamation to be submitted by Company and Purchaser to the Director under the CBCA with respect to the Amalgamation.

“Authorization” means, with respect to any Person, any order, permit, approval, consent, waiver, license, registration, qualification, certificate or other similar authorization of or from any Governmental Authority having jurisdiction over the Person.

“Bankruptcy and Equity Exceptions” has the meaning set forth in Section 4.1(d).

“Breaching Party” has the meaning specified in Section 7.10(c).

“Bridge Loan Financing” shall mean a financing by the Company of up to $1,500,000 in exchange for the issuance of equity or debt by the Company prior to the consummation of the Transaction.

“Business Day” means any day other than a Saturday, Sunday or a day observed as a holiday in the Province of Ontario or New York, New York.

“Canadian Resident” means a beneficial owner of Company Common Shares immediately prior to the Effective Time who is (a) a resident of Canada for purposes of the Tax Act (other than a Tax Exempt Person), or (b) a partnership any member of which is (i) a resident of Canada for purposes of the Tax Act and (ii) not a Tax Exempt Person.

“CBCA” means the Canada Business Corporations Act, as amended.

“Certificate of Amalgamation” means the certificate of amalgamation to be issued by the Director under the CBCA to Amalco pursuant to Sections 185(4) and 262 of the CBCA.

“Certifications” has the meaning set forth in Section 5.1(l)(i).

“Closing” means the closing of the Transaction.

“Closing Date” means the date of the completion of the Amalgamation.

“COBRA” means the health care continuation and notice provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and the regulations thereunder.

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

“Collective Agreements” means collective agreements and related documents including benefit agreements, letters of understanding, letters of intent and other written communications (including arbitration awards).

3

“Company” has the meaning set forth on the first page of this Agreement.

“Company Authorized Action” has the meaning set forth in Section 11.21(c).

“Company Board” means the board of directors of Company.

“Company Board Approval” has the meaning set forth in Section 4.1(v).

“Company Change in Recommendation” has the meaning set forth in Section 9.2(a)(iv)(C)(1).

“Company Common Shares” means the common shares in the capital of the Company.

“Company Disclosure Letter” means the disclosure letter of the Company to be signed and delivered by Company to Parent: (a) on or prior to the Execution Date, and (b) at the Effective Time as updated to the Effective Time.

“Company Employees” means the officers and employees of the Company.

“Company Expense Reimbursement” has the meaning set forth in Section 11.16(a)(i).

“Company Expense Reimbursement Event” has the meaning set forth in Section 11.16(a)(ii).

“Company Financial Statements” means the (a) audited annual consolidated financial statements of the Company as at, and for the years ended, December 31, 2018 and 2017, and the notes thereto, and (b) unaudited consolidated financial statements of the Company as at, and for the six months ended September 30, 2019, consisting of consolidated statements of financial position and the accompanying consolidated statements of operations and comprehensive loss, consolidated statements of cash flows and consolidated statements of shareholders’ equity of the Company, and all notes in respect thereof.

“Company Indemnified Parties” has the meaning set forth in Section 10.2(a).

“Company LTIP” means the Jay Pharma Inc. 2019 Long-Term Incentive Plan.

“Company Meeting” means the meeting of the Company Shareholders, including any adjournment or postponement thereof, for the purpose of, among other things, considering and, if thought fit, approving the Amalgamation Resolution and for any other purpose as may be set out in the notice of the Company Meeting and agreed to in writing by the Parent and the Purchaser.

“Company Optionholders” means the holders of Company Options.

“Company Options” means the outstanding options of the Company to purchase Company Common Shares issued pursuant to the Company LTIP.

“Company Representative” has the meaning set forth in Section 11.21(a).

“Company Securityholders” means, collectively, the Company Shareholders, the Company Optionholders and the Company Warrantholders.

“Company Shareholders” means the holders of Company Common Shares.

4

“Company Warrantholders” means the holders of Company Warrants.

“Company Warrants” means the outstanding common share purchase warrants of the Company to purchase Company Common Shares as set forth in the Company Disclosure Letter.

“Confidentiality Agreement” means the non-disclosure agreement dated July 24, 2019 between the Parent and the Company.

“Consideration” means (a) the aggregate number shares of ExchangeCo Special Shares or ExchangeCo Exchangeable Shares, as the case may be, to be issued in exchange for Company Common Shares, (b) the Resulting Issuer Options to be exchanged for Company Options, and (c) the Resulting Issuer Warrants to be exchanged for Company Warrants, in each case, pursuant to the Amalgamation and as adjusted to reflect the Stock Split and Exchange Ratio.

“Consideration Shares” means the ExchangeCo Special Shares or the ExchangeCo Exchangeable Shares, as the case may be, to be issued in exchange for Company Common Shares pursuant to the Amalgamation.

“Contract” means any contract, agreement, license, franchise, lease, arrangement, commitment, understanding or other right or obligation to which a Party or any Affiliate thereof is a party, or is bound or affected by, or to which any of their respective properties or assets is subject.

“Conversion Percentages” has the meaning set forth in Section 2.5(f).

“Damages” has the meaning set forth in Section 10.2(a).

“Determination Date” has the meaning set forth in Section 10.4.

“Director” means the director appointed under the CBCA, as applicable.

“Dissent Rights” means the rights of dissent available under the CBCA in respect of the Amalgamation.

“Dissenting Shareholders” means any Company Shareholder who exercises Dissent Rights.

“DTC” means the Depository Trust Company.

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system of the United States Securities and Exchange Commission.

“Effective Time” means the time of completion of the Amalgamation.

“Eligible Holder” means a Company Shareholder who is a Canadian Resident.

“Employee Plans” has the meaning set forth in Section 4.1(ii)(i).

“End Date” means the date that is 180 days after the date of this Agreement.

“Environmental Laws” means all Applicable Laws and agreements with Governmental Authorities and all other statutory requirements relating to public health and safety, noise control, pollution or the protection of the environment or to the generation, production, installation, use, storage, treatment, transportation, Release or threatened Release of Hazardous Substances, including civil responsibility for acts or omissions with respect to the environment, mine reclamation, restoration or rehabilitation and all Authorizations issued pursuant to such laws, agreements or other statutory requirements.

5

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

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is or at any relevant time was treated as a single employer with any Person within the meaning of Section 414 of the Code.

“Exchange Ratio” means the following ratio (rounded to four decimal places): the quotient obtained by dividing (a) the Company Merger Shares by (b) the Company Outstanding Shares, in which:

(i) “Company Allocation Percentage” means eighty-four percent (84%).

(ii) “Company Merger Shares” means the product determined by multiplying (a) the Post-Closing Parent Shares by (b) the Company Allocation Percentage.

(iii) “Company Outstanding Shares” means the total number of shares of Company Common Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted basis; provided however, that for purposes of this definition of “Company Outstanding Shares” the Company’s fully diluted share count shall only take into account two-thirds of the number of shares of Company Common Stock underlying Company Options and Company Warrants.

(iv) “Parent Allocation Percentage” means sixteen percent (16%).

(v) “Parent Outstanding Shares” means the total number of shares of Parent Common Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted basis, including, for the avoidance of doubt, any Parent Common Stock issued in connection with the Parent Financing.

(vi) “Post-Closing Parent Shares” means the quotient determined by dividing (a) the Parent Outstanding Shares by (b) the Parent Allocation Percentage.

“ExchangeCo” has the meaning set forth on the first page of this Agreement.

“ExchangeCo Exchangeable Shares” mean common shares in the capital of ExchangeCo, exchangeable at any time on a one-for-one basis directly for shares of freely-trading Resulting Issuer Common Stock, which common shares shall have substantially the rights, privileges, restrictions and conditions set out in Appendix I to this Agreement.

“Exchangeable Share Support Agreement” means the agreement to be made prior to the Effective Time between Parent and ExchangeCo.

“ExchangeCo Special Shares” mean special shares in the capital of ExchangeCo, all of which shall be exchanged on a one-for-one basis directly for shares of freely-trading Resulting Issuer Common Stock, as more particularly described in Section 2.8(a).

“Execution Date” has the meaning set forth on the first page of this Agreement.

6

“Fair Market Value” has the meaning set forth in Section 10.4.

“Fundamental Representations” means the representations and warranties contained in Sections 4.1(a) (first sentence), 4.1(b), 4.1(c), 4.1(d), 4.1(i), 4.1(u), 4.1(v), 4.1(kk), 4.1(ll), 5.1(a) (first sentence), 5.1(b), 5.1(c), 5.1(d), 5.1(e), 5.1(g), 5.1(k), 5.1(l), 5.1(m), 5.1(n), 5.1(u), 5.1(v), 5.1(hh), 5.1(ii), 5.2(a), 5.2(b), 5.2(c), 5.2(d), 5.2(e), and 5.2(f).

“Governmental Authority” means any: (a) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, ministry, central bank, court, tribunal, arbitral body, commission, commissioner, board, tribunal, official, minister, bureau or agency, domestic or foreign; (b) subdivision, agent, commission, board or authority of any of the foregoing, including the Securities Authorities; or (c) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under, or for the account of, any of the foregoing, including any stock exchange.

“Hazardous Substances” means any element, waste or other substance, whether natural or artificial and whether consisting of gas, liquid, solid or vapor that is prohibited, listed, defined, judicially interpreted, designated or classified as dangerous, hazardous, radioactive, explosive or toxic or a pollutant or a contaminant under or pursuant to any applicable Environmental Laws, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials or any substance which is deemed under Environmental Laws to be deleterious to natural resources or worker or public health and safety.

“Indemnification Statement” has the meaning set forth in Section 10.3(a).

“Intellectual Property” means all of the following, worldwide, whether registered, unregistered or registrable: (a) trademarks and service marks, trade dress, product configurations, trade names and other indications of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (b) inventions, discoveries, improvements, ideas, know-how, methodology, models, algorithms, formulae, systems, processes, technology, whether patentable or not, and all patents, industrial designs, and utility models, and all applications pertaining to the foregoing, in any jurisdiction, including re-issues, continuations, divisionals, continuations-in-part, re-examinations, renewals and extensions; (c) trade secrets and other rights in confidential and other nonpublic information; (d) software, including interpreted or compiled Source Code, object code, development documentation, programming tools, drawings, specifications, metadata and data; (e) copyrights in writings, designs, mask works, software, content and any other original works of authorship in any medium, including applications or registrations in any jurisdiction for the foregoing and all moral rights in the foregoing; (f) data and database rights; (g) internet websites, domain names and registrations pertaining thereto; (h) social media accounts, the usernames and passwords associated therewith, and all content contained therein; (i) any other intellectual property or proprietary rights of any kind, nature or description; and (j) any tangible embodiments of the foregoing (in whatever form or medium).

“Intellectual Property Rights” has the meaning set forth in Section 4.1(cc).

“IRS” means the United States Internal Revenue Service.

“Joinder Agreements” has the meaning set forth in Section 2.8(a).

“Leased Properties” has the meaning set forth in Section 4.1(x)(ii).

7

“Liability” or “Liabilities” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

“Lien” means any mortgage, charge, pledge, hypothecation, security interest, prior claim, encroachment, option, right of first refusal or first offer, occupancy right, covenant, assignment, lien (statutory or otherwise), defect of title, or restriction or adverse right or claim, or other third party interest or encumbrance of any kind, in each case, whether contingent or absolute.

“Lock-Up Agreement” has the meaning set forth in Section 7.3(h).

“Material Adverse Effect” when used in connection with a Party means any change, event, occurrence, effect, state of facts or circumstance that, either individually or in the aggregate, is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, condition (financial or otherwise) or liabilities (contingent or otherwise) or prospects of that Party and its Subsidiaries, taken as a whole, and would, or would be reasonably expected to, prevent or materially delay either Party from consummating the transactions contemplated by this Agreement by the End Date, except any such change, event, occurrence, effect, state of facts or circumstance resulting from: (a) any change in general political, economic, financial, currency exchange, securities, capital or credit market conditions in Canada or the United States; (b) any change or proposed change in Applicable Laws or United States GAAP; (c) any change affecting the industries or markets in which such Party operates; (d) any natural disaster or the commencement or continuity of any act of war, armed hostilities or acts of terrorism; (e) the announcement of this Agreement or the transactions contemplated hereby; (f) any action taken (or omitted to be taken) by a Party or its Subsidiaries which is required to be taken (or omitted to be taken) pursuant to this Agreement;  (g) change in the market price or trading volume of any securities of a Party (it being understood that the causes underlying such change in market price or trading volume may be taken into account in determining whether a Material Adverse Effect has occurred); provided, however, that with respect to clauses (a) through to and including (c), such matters do not have a materially disproportionate effect on such Party and its Subsidiaries, taken as a whole, relative to companies of similar size operating in the industries or markets in which such Party operates (in which case the incremental disproportionate effect may be taken into account in determining whether there has been, or is reasonably expected to be, a Material Adverse Effect), and provided further, however, that unless expressly provided in any particular section of this Agreement, references in certain sections of this Agreement to dollar amounts are not intended to be, and shall be deemed not to be, illustrative or interpretive for the purpose of determining whether a “Material Adverse Effect” has occurred.

“Material Contract” means each Contract to which a Party or any Affiliate thereof is a party that is, or will be as at the Effective Time, in force by which any such Party or Affiliate thereof is bound, or to which it or its respective assets are subject, which: (a) have total payment obligations on the part of such Party or Affiliate thereof which reasonably can be expected to exceed $50,000; (b) are for a term extending at least one year after the Effective Time; (c) have been entered into out of the Ordinary Course; or (d) are otherwise material to such Party.

“Misrepresentation” has the meaning specified under Securities Laws.

“Name Change” means a change of the name of the Parent from “Ameri Holdings, Inc.” to “Jay Pharma Inc.”, or such other name as is determined by the Company.

8

“NASDAQ” means The Nasdaq Stock Market LLC.

“NASDAQ Listing Application” has the meaning set forth in Section 3.1.

“Note” has the meaning set forth in Section 2.5(f).

“Noteholder” has the meaning set forth in Section 2.5(f).

“Objection Statement” has the meaning set forth in Section 10.3(b).

“Objection Dispute” has the meaning set forth in Section 10.3(b).

“Ordinary Course” means, with respect to an action taken by a Person, that such action is consistent with the past practices of the Person and is taken in the ordinary course of the normal day-to-day operations of the Person.

“Organizational Documents” means, with respect to a Person, (i) the certificate or articles of incorporation, amalgamation, organization or formation and the by-laws, the partnership agreement or operating or limited liability company agreement (as applicable), and (ii) any documents comparable to those described in clause (i) as may be applicable pursuant to any Applicable Laws.

“Other Filings” has the meaning set forth in Section 7.15(a).

“Owned Properties” has the meaning set forth in Section 4.1(x)(i).

“Parent” has the meaning set forth on the first page of this Agreement.

“Parent Authorized Action” has the meaning set forth in Section 11.20(c).

“Parent Board” means the board of directors of the Parent.

“Parent Board Approval” has the meaning set forth in Section 5.1(v).

“Parent Capital Stock” means Parent Common Stock and Parent Preferred Stock.

“Parent Change in Recommendation” has the meaning specified in Section 9.2(a)(iii)(B)(1).

“Parent Charter Amendment” means the amendment of the Parent’s charter required to reflect the Name Change, Stock Split, Parent Special Voting Preferred Stock and any other items that may require the Parent to amend its charter.

“Parent Common Stock” means the common stock, par value $0.01 per share, of the Parent.

“Parent Disclosure Letter” means the disclosure letter of the Parent to be signed and delivered by Parent to Company (a) on or prior to the Execution Date, and (b) at the Effective Time as updated to the Effective Time.

“Parent Employee Plans” has the meaning set forth in Section 5.1(ff)(i).

9

“Parent Employees” means the officers and employees of the Parent and its Subsidiaries.

“Parent Expense Reimbursement” has the meaning set forth in Section 11.16(a)(i).

“Parent Expense Reimbursement Event” has the meaning set forth in Section 11.16(a)(iii).

“Parent Fairness Opinion” means an opinion of Gemini Partners, Inc. delivered to the Parent Board prior to the execution of this Agreement.

“Parent Financial Statements” means the (a) audited condensed consolidated financial statements of the Parent as at, and for the years ended, December 31, 2018 and 2017, including the notes thereto, and (b) unaudited condensed consolidated financial statements of the Parent as at, and for the six months ended June 30, 2019 and 2018, consisting of the unaudited condensed consolidated balance sheets, the unaudited condensed consolidated statements of operations and comprehensive income (loss), the unaudited condensed consolidated statements of cash flows and the consolidated statement of changes in shareholders’ equity, including all notes in respect thereof, in each case as contained or incorporated by reference in the Parent SEC Documents.

“Parent Financing” shall mean a financing by Parent of up to $3,000,000 in exchange for the issuance of equity of the Parent prior to the consummation of the Transaction.

“Parent Intellectual Property Rights” has the meaning set forth in Section 5.1(z).

“Parent Leased Properties” has the meaning set forth in Section 5.1(x)(ii).

“Parent Legacy Business Disposition” has the meaning set forth in Section 7.11.

“Parent Legacy Business Valuation” has the meaning set forth in Section 7.11.

“Parent Meeting” means the meeting of the Parent Stockholders, including any adjournment or postponement thereof, for the purpose of, among other things, considering and, if thought fit, approving the Parent Stockholder Approval Resolutions.

“Parent Options” means the outstanding options to purchase Parent Common Stock issued pursuant to the Parent Stock Incentive Plan.

“Parent Owned Properties” has the meaning set forth in Section 5.1(x)(i).

“Parent Representative” has the meaning set forth in Section 11.20(a).

“Parent Preferred Stock” means the preferred stock, par value $0.01 per share, of Parent.

“Parent SEC Documents” has the meaning set forth in Section 5.1(l)(i).

“Parent Share Purchase Agreement” has the meaning set forth in Section 7.11.

“Parent Special Voting Preferred Stock”means the special voting preferred stock, par value $0.01 per share, of Parent to be created pursuant to the Parent Charter Amendment.

“Parent Stock Incentive Plan” means that certain Ameri Holdings, Inc. 2015 Equity Incentive Award Plan, as amended to the date of this Agreement.

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“Parent Stockholder Approval” means the approval by the Parent Stockholders of the Parent Stockholder Approval Resolution.

“Parent Stockholder Approval Resolution” means the special resolution of the Parent Stockholders approving the Amalgamation, the issuance of Parent Common Stock on exchange of the Consideration Shares, the issuance of Parent Special Voting Preferred Stock to Eligible Holders in accordance with Section 2.8(b), the Parent Charter Amendment and the Resulting Issuer Incentive Stock Plan.

“Parent Stockholders” means the holders of Parent Common Stock as of immediately prior to the Effective Time.

“Parent Subsidiaries” has the meaning set forth in Section 5.1(k)(i).

“Parent Technology” has the meaning set forth in Section 5.1(z).

“Parent Warrants” means the outstanding common stock purchase warrants of the Parent to purchase Parent Common Stock.

“Parties” means, collectively, the Parent, the Company and the Purchaser, and “Party” means any one of them.

“PCAOB” means the Public Company Accounting Oversight Board.

“Permitted Liens” means, in respect of a Party or any of its Subsidiaries, any one or more of the following:

(a) Liens for Taxes which are not delinquent or that are being disputed in good faith;

(b) inchoate or statutory Liens of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others arising in the Ordinary Course, provided that such Liens are related to obligations not due or delinquent, are not registered against title to any assets of such Party or its Subsidiaries and in respect of which adequate holdbacks are being maintained as required by Applicable Law and under United States GAAP;

(c) the right reserved to or vested in any Governmental Authority by any statutory provision or by the terms of any lease, license, franchise, grant or permit of such Party or its Subsidiaries, to terminate any such lease, license, franchise, grant or permit, or to require annual or other payments as a condition of their continuance;

(d) easements, including rights of way for, or reservations or rights of others relating to, sewers, water lines, gas lines, pipelines, electric lines, telegraph and telephone lines and other similar services and any registered restrictions or covenants that run with the land, provided that there has been compliance with the material provisions thereof and that they do not in the aggregate materially detract from the ability to use any leased properties and would not reasonably be expected to materially and adversely affect the ability of such Party to carry on its business in the Ordinary Course; and

(e) in the case of the Company or Parent, Liens listed and described in the Company or Parent Disclosure Letter, as applicable and, in the case of Parent, the SEC Document.

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“Person” is to be construed broadly and includes any natural person, estate, partnership, limited partnership, limited liability partnership, body corporate, limited liability company, unlimited liability company, joint stock company, trust, estate, unincorporated association, joint venture or other entity or Governmental Authority.

“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority.

“Proxy Statement/Prospectus” has the meaning set forth in Section 7.15(a).

“Purchaser” has the meaning set forth on the first page of this Agreement.

“Purchaser Shares” means all of the common shares in the capital of the Purchaser.

“Regulatory Approval” means any consent, waiver, permit, exemption, review, order, decision or approval of, or any registration and filing with, any Governmental Authority having authority over a party hereto, or the expiry, waiver or termination of any waiting period imposed by Applicable Law or a Governmental Authority having authority over a Party hereto, in each case that is required in connection with the Transaction.

“Release” has the meaning prescribed in any Environmental Law and includes any sudden, intermittent or gradual release, spill, leak, pumping, addition, pouring, emission, emptying, discharge, migration, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction of a Hazardous Substance, whether accidental or intentional, into the environment.

“Representatives” has the meaning set forth in Section 6.1(a).

“Resulting Issuer” means Parent as it exists upon completion of the Amalgamation and the Name Change.

“Resulting Issuer Capital Stock” means (a) the shares of Resulting Issuer Common Stock or Resulting Issuer Preferred Stock, as applicable, issuable upon the exchange of ExchangeCo Special Shares and ExchangeCo Exchangeable Shares, (b) the shares of Resulting Issuer Common Stock issuable upon the exercise of Resulting Issuer Options, (c) the shares of Resulting Issuer Common Stock issuable upon the exercise of Resulting Issuer Warrants, (d) the shares of Resulting Issuer Common Stock issuable pursuant to the Resulting Issuer Incentive Stock Plan, and (e) the shares of Resulting Issuer Special Voting Stock issuable to Eligible Holders in accordance with Section 2.8(b).

“Resulting Issuer Common Stock” means the outstanding shares of Parent Common Stock upon completion of the Stock Split, the Amalgamation and the Name Change.

“Resulting Issuer Incentive Stock Plan” has the meaning set forth in Section 7.5(p).

“Resulting Issuer Options” means the common share purchase options of the Resulting Issuer for which Company Options shall be exchanged as provided in Section 2.5.

“Resulting Issuer Special Voting Stock” means the shares of Parent Special Voting Preferred Stock, as they exist upon completion of the Amalgamation and the Name Change.

 

“Resulting Issuer Preferred Stock” has the meaning set forth in Section 2.5(f).

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“Resulting Issuer Warrants” means the common share purchase warrants of the Resulting Issuer for which Company Warrants shall be exchanged as provided in Section 2.5.

“S-4 Registration Statement” has the meaning set forth in Section 7.15(a).

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

“Securities Acts” means, collectively, the Securities Act (Ontario), the 1933 Act, and the United States Exchange Act.

“Securities Authorities” means the Ontario Securities Commission, the applicable securities commissions and other securities regulatory authorities in each of the other provinces of Canada, the SEC and the applicable securities commissions in each of the states of the United States.

“Securities Laws” means the Securities Acts, all other applicable Canadian provincial securities laws (including MI 61-101), all other applicable United States state securities or “blue sky” laws, and the rules and regulations and published policies under the foregoing securities laws and applicable exchange rules and listing standards.

“Series A Warrants” means those certain Series A Warrants to be issued to Noteholder on or immediately prior to the Effective Time pursuant to the terms of a Securities Purchase Agreement dated January ___, 2020, between the Company and Noteholder.

“Signing Form 8-K” has the meaning set forth in Section 7.12(d).

“SMRH” has the meaning set forth in Section 11.19.

“Source Code” means, collectively, any software source code, including any portion or aspect of the software source code, or any proprietary information or algorithm contained in or relating to any software source code, including related documentation.

“Stock Split” means a reverse stock split of the issued and outstanding shares of Parent Common Stock at a ratio sufficient to increase the then-current trading price per share of Parent Common Stock to at least $6.00.

“Subsidiary” means, with respect to a Person, any entity in which such Person directly or indirectly owns, beneficially or of record, (a) an amount of voting securities of or other interests in such entity that is sufficient to enable such Person to elect at least a majority of the members of such entity’s board of directors or other governing body, or (b) at least 50% of the outstanding equity or financial interests of such entity.

“Superior Proposal” means a written Acquisition Proposal which the Parent Board determines in its good faith judgment (a) to be reasonably likely to be consummated if accepted and (b) to be more favorable to the Parent’s stockholders from a financial point of view than the Transaction, in each case, taking into account at the time of determination all relevant circumstances, including the various legal, financial and regulatory aspects of the proposal, all the terms and conditions of such proposal and this Agreement and any changes to the terms of this Agreement offered by Company in response to such Superior Proposal. For the purposes of the term “Superior Proposal,” references to the term “Acquisition Proposal” shall have the meaning specified in this Section 1.1, except that references to “20% or more” in the definition of “Acquisition Proposal” in Section 1.1 shall be deemed to be references to “50% or more.”

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“Survival Period” has the meaning set forth in Section 10.1.

“Tax Act” means the Income Tax Act, R.S.C. 1985 (5th Supp.) c.1, and the regulations thereunder, as amended.

“Tax Exempt Person” means a person who is exempt from Tax under Part I of the Tax Act.

“Tax Returns” means any and all returns, reports, declarations, elections, notices, forms, designations, filings, and statements (including estimated tax returns and reports, withholding tax returns and reports, and information returns and reports) filed or required to be filed in respect of Taxes.

“Taxes” means: (a) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Authority, whether computed on a separate, consolidated, unitary, combined or other basis, including all license and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions, (b) all interest, penalties, fines, additions or other additional amounts imposed by any Governmental Authority on or in respect of amounts of the type described herein, (c) any Liability for the payment of any amounts of the type described herein as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, and (d) any Liability for the payment of any amounts of the type described herein as a result of any express or implied obligation to indemnify any other Person or as a result of being a transferee or successor in interest to any party.

“Technology” has the meaning set forth in Section 4.1(cc).

“Terminating Party” has the meaning set forth in Section 7.10(c).

“Termination Notice” has the meaning set forth in Section 7.10(c).

“Transaction” means, collectively, the Amalgamation and all transactions undertaken by the Parties in connection therewith including, for greater certainty, the exchange of ExchangeCo Special Shares for shares of Resulting Issuer Common Stock pursuant to Section 2.8(a) and the Parent Legacy Business Disposition.

“Transaction Board Members” has the meaning set forth in Section 11.19.

“Transaction Documents” means this Agreement, the Articles of Amalgamation, the Joinder Agreements, the Company Disclosure Letter, the Parent Disclosure Letter and all such further documents, agreements and instruments required to be executed or filed by any Party or any Affiliate thereof to effect the consummation of the Amalgamation (all of which will be in form and content reasonably satisfactory to each Party) pursuant to the requirements of Applicable Laws relating to the Amalgamation, or by any other Governmental Authority having jurisdiction, in order to carry out the terms and objectives of this Agreement, including, without limitation, those required by the Securities Authorities.

“Transaction Engagements” has the meaning set forth in Section 11.19.

“Treasury Regulations” has the meaning set forth in Section 2.12.

“United States Exchange Act” means the United States Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

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“United States GAAP” means United States Generally Accepted Accounting Principles.

“Voting and Exchange Trust Agreement”means the agreement to be made prior to the Effective Time between Parent, ExchangeCo and the Trustee (as defined in the provisions governing the ExchangeCo Exchangeable Shares).

1.2         Interpretation Not Affected by Headings

The division of this Agreement into articles, sections and subsections, and the insertion of headings herein, are for convenience of reference only and will not affect in any way the meaning or interpretation of this Agreement. The terms “hereof”, “herein”, “hereto”, “hereunder” and similar expressions refer to this Agreement and not to any particular article, section or other portion hereof, and include any agreement, schedule or instrument supplementary or ancillary hereto.

1.3         Meaning of “including”

The word “including”, when following a general statement or term, is not to be construed as limiting the general statement or term to any specific item or matter set forth or to similar items or matters, but rather as permitting the general statement or term to refer also to all other items or matters that could reasonably fall within its broadest possible scope.

1.4         Extended Meanings

In this Agreement, unless the context otherwise requires, words importing the singular include the plural and vice versa, words importing the use of either gender include both genders and neuter, and a reference to a Person includes any successor to that Person.

1.5         Date for Any Action

If the date on which any action is required to be taken hereunder is not a Business Day, such action will be required to be taken by the applicable Party on the next succeeding Business Day.

1.6         Statutory References

Unless otherwise expressly stated, any reference in this Agreement to a statute includes each regulation and rule made thereunder, all amendments to such statute, regulation or rule in force from time to time, and any statute, regulation or rule that supplements or supersedes such statute, regulation or rule.

1.7         Currency

Unless otherwise stated, all references in this Agreement to amounts of money are expressed in lawful money of the United States of America.

1.8         Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof.

1.9         Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement have the meaning attributable thereto under United States GAAP and all determinations of an accounting nature required to be made hereunder will be made in a manner consistent with United States GAAP.

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1.10       Interpretation Not Affected by Party Drafting

The Parties acknowledge that their respective legal counsel have reviewed and participated in settling the terms of this Agreement and the Parties hereby agree that any rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be applicable to the interpretation of this Agreement.

1.11       Company Disclosure Letter

For the purposes of the representations and warranties in Article 4, Company will deliver the Company Disclosure Letter, arranged in sections corresponding with the sections of Article 4, to Parent. The disclosure in any section of the Company Disclosure Letter will qualify the corresponding section of Article 4. Each section of the Company Disclosure Letter shall be deemed to be disclosed and incorporated by reference in any other section of the Company Disclosure Letter as though fully set forth in such section of the Company Disclosure Letter for which applicability of such information and disclosure is reasonably apparent on its face.  The fact that any item of information is disclosed in any section of the Company Disclosure Letter: (a) shall not be construed to mean that such information is required to be disclosed by this Agreement; (b) shall not be construed as or constitute an admission, evidence or agreement that a violation, right of termination, default, non-compliance, liability or other obligation of any kind exists with respect to any item; (c) with respect to the enforceability of Contracts with third parties, the existence or non-existence of third party rights, the absence of breaches or defaults by third parties, or similar matters or statements, is intended only to allocate rights and risks among the Parties and is not intended to be admissions against interests, give rise to any inference or proof of accuracy, be admissible against the Company by any Person who is not a Party, or give rise to any claim or benefit to any Person who is not a Party; (d) shall not be deemed or interpreted to broaden the representations and warranties, obligations, covenants, conditions or agreements of the Company contained in this Agreement; and (e) does not waive any attorney-client privilege associated with such item or information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed herein.  Neither the specifications of any dollar amount in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Company Disclosure Letter is intended to imply that such amount, or higher or lower amounts, or the item so included or other items, are or are not material, and no Person shall use the fact of the setting forth of any such amount or the inclusion of any such item in any dispute or controversy between the Parties as to whether any obligation, item or matter not described herein or included in the Company Disclosure Letter is or is not material for purposes of this Agreement.

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1.12       Parent Disclosure Letter

For the purposes of the representations and warranties in Article 5, Parent will deliver the Parent Disclosure Letter, arranged in sections corresponding with the sections of Article 5, to Company. The disclosure in any section of the Parent Disclosure Letter will qualify the corresponding section of Article 5. Each section of the Parent Disclosure Letter shall be deemed to be disclosed and incorporated by reference in any other section of the Parent Disclosure Letter as though fully set forth in such section of the Parent Disclosure Letter for which applicability of such information and disclosure is reasonably apparent on its face.  The fact that any item of information is disclosed in any section of the Parent Disclosure Letter: (a) shall not be construed to mean that such information is required to be disclosed by this Agreement; (b) shall not be construed as or constitute an admission, evidence or agreement that a violation, right of termination, default, non-compliance, liability or other obligation of any kind exists with respect to any item; (c) with respect to the enforceability of Contracts with third parties, the existence or non-existence of third party rights, the absence of breaches or defaults by third parties, or similar matters or statements, is intended only to allocate rights and risks among the Parties and is not intended to be admissions against interests, give rise to any inference or proof of accuracy, be admissible against the Parent, the Purchaser or their respective Subsidiaries by any Person who is not a Party, or give rise to any claim or benefit to any Person who is not a Party; (d) shall not be deemed or interpreted to broaden the representations and warranties, obligations, covenants, conditions or agreements of the Parent, the Purchaser or their respective Subsidiaries contained in this Agreement; and (e) does not waive any attorney-client privilege associated with such item or information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed herein.  Neither the specifications of any dollar amount in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Parent Disclosure Letter is intended to imply that such amount, or higher or lower amounts, or the item so included or other items, are or are not material, and no Person shall use the fact of the setting forth of any such amount or the inclusion of any such item in any dispute or controversy between the Parties as to whether any obligation, item or matter not described herein or included in the Parent Disclosure Letter is or is not material for purposes of this Agreement.

1.13       Knowledge

Where any representations or warranty contained in this Agreement is expressly qualified by reference to the knowledge of a Party, it refers to the actual knowledge of the Chief Executive Officer and Chief Financial Officer of the Party after due inquiry.

ARTICLE 2
THE AMALGAMATION

2.1         Amalgamation

As soon as reasonably practicable after all requisite approvals of the Company Shareholders and each applicable Governmental Authority with respect to the Transaction are obtained, and the conditions set forth herein have been satisfied, waived or released, each of the Parties covenants to take all such actions as are within its power to control, and use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to complete the Amalgamation as set forth in this Article 2 and otherwise on the terms, and subject to the conditions, set forth in this Agreement.

2.2         Amalco

(a) Name. The name of Amalco shall be Jay Opco Inc. or such other name as to be agreed by the Parties hereto.

(b) Registered Office. The registered office of Amalco shall be 181 Bay Street, Suite 4400, Brookfield Place, Toronto, Ontario M5J 2T3, Canada.

(c) Authorized Capital and Rights Attaching to Shares. The authorized capital of Amalco shall consist of an unlimited number of common shares, which shall have the rights, privileges, restrictions and conditions set out in the Organizational Documents of Amalco. No shares of Amalco may be transferred except in compliance with the restrictions set out in its Articles.

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(d) Number of Directors. The number of directors of Amalco shall be a minimum of one (1) and a maximum of ten (10).

(e) First Directors. The first directors of Amalco shall consist of two (2) directors selected by the Company and one (1) director selected by the Parent, with each such director to hold office until the first annual meeting of shareholders of Amalco or until their successors are elected or appointed. The subsequent directors shall be elected each year thereafter in accordance with the Organizational Documents of Amalco. The management and operation of the business and affairs of Amalco shall be under the control of the board of directors of Amalco as it is constituted from time to time.

(f) Initial Officers. The first officers of Amalco shall be appointed by the board of directors of Amalco in accordance with the Organizational Documents of Amalco.

(g) Restrictions on Business. There shall be no restrictions on the business which Amalco is authorized to carry on.

(h) Fiscal Year End. The fiscal year end of Amalco shall be December 31 of each calendar year.

(i) By-Laws. The by-laws of Amalco shall, so far as applicable, be the by-laws of Company until repealed, amended or altered.

(j) Capitalization.  Immediately following the Closing, the Resulting Issuer shall own 100% of the issued and outstanding Amalco Shares.

2.3         Reserved.

2.4         Effect of Amalgamation

At the Effective Time:

(a) The Company and the Purchaser will be amalgamated and continue as one corporation under the terms and conditions prescribed in this Agreement;

(b) each of the Company and the Purchaser shall cease to exist as entities separate from Amalco;

(c) the property of each of the Company and the Purchaser will continue to be the property of Amalco;

(d) Amalco will continue to be liable for the obligations of each of the Company and the Purchaser;

(e) any existing cause of action, claim or liability to prosecution with respect to the Company and the Purchaser will be unaffected;

(f) any civil, criminal or administrative action or Proceeding pending by or against the Company or the Purchaser may be continued to be prosecuted by or against Amalco;

(g) any conviction against, or ruling, order or judgment in favour of or against, the Company or the Purchaser may be enforced by or against Amalco;

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(h) the Articles of Amalgamation will be deemed to be the articles of incorporation of Amalco and the Certificate of Amalgamation will be deemed to be the certificate of incorporation of Amalco; and

(i) Amalco shall be a wholly-owned subsidiary of ExchangeCo.

2.5         Treatment of Issued Capital

Upon the terms and subject to the conditions set forth in this Agreement at the Effective Time:

(a) each Company Common Share held by a Company Shareholder that is an Eligible Holder (other than those held by Dissenting Shareholders) shall be converted into the right to receive a number of ExchangeCo Exchangeable Shares equal to the Exchange Ratio;

(b) each Company Common Share held by a Company Shareholder that is not an Eligible Holder (other than those held by Dissenting Shareholders) shall be converted into the right to receive a number of ExchangeCo Special Shares equal to the Exchange Ratio;

(c) each Purchaser Share issued and outstanding immediately before the Effective Time will be cancelled and exchanged into an aggregate of one Amalco Share;

(d) each outstanding Company Option shall be converted into the right to receive Resulting Issuer Options to purchase a number of shares of Resulting Issuer Common Stock equal to the Exchange Ratio on substantially the same terms as those contained in the stock option plan of the Resulting Issuer and each such Company Option shall be cancelled. The exercise price for each share of Resulting Issuer Common Stock underlying a Resulting Issuer Option will be equal to the exercise price per Company Common Share under the Company Option in effect immediately prior to the Amalgamation, as adjusted to reflect the Stock Split and Exchange Ratio and applicable currency exchange ratio. For greater certainty, the Parties intend that the exchange of all Company Options for Resulting Issuer Options will occur on a rollover basis pursuant to subsection 7(1.4) of the Tax Act and that any relevant adjustments to the exercise price of the Resulting Issuer Options shall be made to reflect this intention, and that the foregoing treatment of Company Options is fair and reasonable in light of the circumstances of the Transaction;

(e) each outstanding Company Warrant shall be converted into the right to receive Resulting Issuer Warrants to purchase the number of shares of Resulting Issuer Common Stock equal to the Exchange Ratio on substantially economically equivalent terms and each such Company Warrant shall be cancelled. The exercise price for each share of Resulting Issuer Common Stock underlying a Resulting Issuer Warrant will be equal to the exercise price per Company Common Share under the Company Warrant in effect immediately prior to the Amalgamation, as adjusted to reflect the Stock Split and Exchange Ratio and the applicable currency exchange ratio;

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(f) that certain Secured Promissory Note (the “Note”), issued by the Company in favor of Alpha Capital Anstalt (the “Noteholder”) shall, automatically without further action on the part of Noteholder, be converted into the right to receive ExchangeCo Special Shares which shall have the same rights, including but not limited to anti-dilution and reset rights and maximum beneficial ownership limitations in connection with ExchangeCo Special Shares otherwise deliverable to the Noteholder, and Resulting Issuer Warrants identical to the Resulting Issuer Warrants deliverable to the Noteholder in connection with agreements with the Company with respect to an investment of $3,500,000 in the Company’s Common Stock, Warrants and Pre-Funded Warrants simultaneously with the Closing, which ExchangeCo Special Shares will be further exchanged for non-voting preferred stock of the Resulting Issuer which is convertible into Resulting Issuer Capital Stock in accordance with the Conversion Percentages (as defined below), as applicable, by virtue of Section 2.8 of this Agreement, in a form acceptable to the Noteholder in its absolute discretion (the “Resulting Issuer Preferred Stock”), it being understood that any such exchange of securities held by the Noteholder shall be automatic and that the Noteholder shall not be deemed to exercise “control” within the meaning of Rule 144 of the 1933 Act prior to its receipt of Resulting Issuer Capital Stock.  The number of ExchangeCo Special Shares that the Noteholder will receive upon the Closing by virtue of this Section 2.5(f) shall (i) with respect to the $1,500,000 provided in the Bridge Loan Financing, be equal to the number of ExchangeCo Special Shares exchangeable into Resulting Issuer Preferred Stock convertible into Resulting Issuer Capital Stock equal to 3.11% of the Resulting Issuer Capital Stock and (ii) with respect to the $3,500,000 provided in connection with the investment provided in this Section 2.5(f), be equal to the number of ExchangeCo Special Shares exchangeable into Resulting Issuer Preferred Stock convertible into Resulting Issuer Capital Stock equal to 7.26% of the Resulting Issuer Capital Stock (in each case of (i) and (ii), the “Conversion Percentages”).  In any case, for purposes of all calculations of the number shares of Resulting Issuer Preferred Stock issued to Noteholder upon conversion of the Note, the Note shall be deemed to have not less than 180 days of accrued and unpaid interest thereon; and

(g) the stated capital of the Amalco Shares will be an amount equal to the aggregate of the “paid up capital”, as that term is defined in the Tax Act, of the Purchaser Shares and the Company Common Shares immediately prior to the Effective Time.

(h) For the avoidance of all doubt, in the event that the issuance of any securities of Parent of ExchangeCo to Noteholder would cause Noteholder’s aggregate “beneficial ownership” (within the meaning of Section 13 of the United States Exchange Act), together with all other securities of Parent or ExchangeCo then beneficially owned by Noteholder, to exceed 9.99% of Parent’s outstanding shares, then Parent and ExchangeCo shall issue to Noteholder, in lieu of such securities that would cause its beneficial ownership to exceed 9.99%, a common stock equivalent preferred stock containing a customary “9.99% blocker” (but otherwise gives Noteholder identical economic and voting rights and that is otherwise acceptable to Noteholder in all respects). For the further avoidance of doubt, in no event shall any securities of Parent or ExchangeCo owned at any time by Noteholder be subject to any voting agreements unless Noteholder otherwise expressly agrees in a writing executed by Noteholder.

2.6         Fractional Shares

No fractional ExchangeCo Special Shares or ExchangeCo Exchangeable Shares, as the case may be, will be issued to Company Shareholders. In lieu of such fractional shares, (a) the number of ExchangeCo Special Shares or ExchangeCo Exchangeable Shares, as the case may be, to be received by a Company Shareholder will be rounded up to the nearest whole ExchangeCo Special Share or ExchangeCo Exchangeable Share, as the case may be, in the event that a Company Shareholder is entitled to receive a fractional share representing one-half (1/2) or more of an ExchangeCo Special Share or ExchangeCo Exchangeable Share, or (b) the number of ExchangeCo Special Shares or ExchangeCo Exchangeable Shares, as the case may be, to be received by a Company Shareholder will be rounded down to the nearest whole ExchangeCo Special Share or ExchangeCo Exchangeable Share, as the case may be, in the event that a Company Shareholder is entitled to receive a fractional share representing less than one-half (1/2) of an ExchangeCo Special Share or ExchangeCo Exchangeable Share.

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2.7         Exchange of Certificates

At the Effective Time:

(a) the original share certificate of the Purchaser registered in the name of ExchangeCo shall be cancelled and ExchangeCo shall be issued a share certificate for the number of common shares of Amalco to be issued to ExchangeCo as provided in Section 2.5(c);

(b) subject to the treatment of Dissenting Shareholders, certificates or other evidence representing the Company Common Shares, Company Options and Company Warrants shall cease to represent any claim upon or interest in Company other than the right of the holder to receive, pursuant to the terms hereof, ExchangeCo Special Shares, ExchangeCo Exchangeable Shares, Resulting Issuer Options and Resulting Issuer Warrants, as the case may be, in accordance with Section 2.5; and

(c) upon the delivery and surrender by the holder thereof to ExchangeCo and the Resulting Issuer of certificates representing, or evidence of ownership on the Company’s share or securities register of, Company Common Shares, Company Options and Company Warrants, which have been exchanged for ExchangeCo Special Shares, ExchangeCo Exchangeable Shares, Resulting Issuer Options and Resulting Issuer Warrants, respectively, in accordance with the provisions of Section 2.5, ExchangeCo and the Resulting Issuer shall, as soon as practicable following the date of receipt by ExchangeCo and the Resulting Issuer of the certificates referred to above, deliver to each such holder certificates representing the number of ExchangeCo Special Shares, the number of ExchangeCo Exchangeable Shares, the number of Resulting Issuer Options and/or the number of Resulting Issuer Warrants to which such holder is entitled.

2.8         Exchange of ExchangeCo Special Shares; Issuance of Resulting Issuer Shares

Immediately following the Effective Time:

(a) each holder of ExchangeCo Special Shares will, without the need for the taking of any further actions or the execution of any further documents or instruments (other than the Joinder Agreements), transfer and exchange (and be deemed to transfer and exchange) all ExchangeCo Special Shares held by such holder in exchange for an equal number of freely-trading shares of Resulting Issuer Common Stock or Resulting Issuer Preferred Stock, as applicable, and each holder of ExchangeCo Special Shares will become (and will be deemed to become) a Party to this Agreement solely for the purposes of consenting to and effecting the aforementioned exchange pursuant to the terms of a joinder agreement to be executed and delivered by each holder of ExchangeCo Special Shares to the Resulting Issuer in a form satisfactory to the Parties and Noteholder (the “Joinder Agreements”). Effective as the completion of the aforementioned exchange, the holders of ExchangeCo Special Shares so exchanged will cease to be the holders of such ExchangeCo Special Shares, or to have any rights as a holder thereof other than the right to receive the shares of Resulting Issuer Common Stock or Resulting Issuer Preferred Stock, as applicable, issuable in respect thereof, and legal and beneficial title to each such ExchangeCo Special Share will vest in the Resulting Issuer and the Resulting Issuer will be (and will be deemed to be) the transferee and legal and beneficial owner of each such ExchangeCo Special Shares (free and clear of any Liens) and will be entered in the central securities register of ExchangeCo as the sole holder thereof; and

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(b) the Resulting Issuer will issue to the Voting Trustee in certificated form, for no additional consideration, one share of Resulting Issuer Special Voting Stock to be held of record by the Voting Trustee as trustee for and on behalf of, and for the use and benefit of, the Eligible Holders in accordance with the terms of the Voting and Exchange Trust Agreement.

2.9         Dissenting Shareholders

Company Shareholders entitled to vote at the Company Meeting will be entitled to exercise Dissent Rights with respect to their Company Common Shares in connection with the Amalgamation. The Company shall give the Parent notice of any written notice of dissent, withdrawal of such notice, and any other instruments served pursuant to such Dissent Rights and received by the Company and shall provide the Parent with copies of such notices and written objections. If a Dissenting Shareholder is ultimately entitled to be paid fair value for his, her or its Company Common Shares, such shares shall be deemed to have been surrendered to the Company for cancellation immediately prior to the Effective Time. If a Dissenting Shareholder is ultimately determined not to be entitled, for any reason, to be paid fair value for his, her or its Company Common Shares, such Dissenting Shareholder shall be deemed to have participated in the Amalgamation, as of the Effective Time, on the same basis as a holder of Company Common Shares who did not exercise Dissent Rights in respect of the Amalgamation.

2.10       Completion of the Amalgamation and Effective Time

Upon the satisfaction or waiver of the conditions herein contained in favor of each Party, the Company and the Purchaser shall immediately deliver to the Director the Articles of Amalgamation and such other documents as may be required to give effect to the Amalgamation. The Amalgamation shall become effective at the Effective Time.

2.11       Parent Guarantee

The Parent unconditionally and irrevocably guarantees the due and punctual performance by the Purchaser of each and every covenant and obligation of the Purchaser and ExchangeCo arising under the Amalgamation. The Parent agrees that the Company shall not have to proceed first against the Purchaser or ExchangeCo before exercising its rights under this guarantee against the Parent.

2.12       Intended United States Tax Consequences

The Parties intend that, for United States federal income tax purposes, the Transaction qualify as a reorganization within the meaning of Section 368(a) of the Code, and the rules and regulations promulgated thereunder (the “Treasury Regulations”).  The Parties shall adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the Treasury Regulations. Unless otherwise required by Applicable Laws, each Party agrees to treat: (a) the ExchangeCo Exchangeable Shares as voting shares of the Parent for all United States federal income tax purposes; and (b) the Transaction as a tax-deferred reorganization within the meaning of Section 368(a) of the Code for all purposes to which such treatment is pertinent, including without limitation for the purpose of reporting on any United States Tax Return that such Party may be required to file. Each Party agrees to act in a manner that is consistent with the Parties’ intention that the Transaction be treated as a tax-deferred reorganization within the meaning of Section 368(a) of the Code for all United States federal income tax purposes. In the event that the Transaction does not qualify as a tax-deferred reorganization under Section 368(a) of the Code, the Parties intend to treat the Transaction as a single integrated transaction which qualifies as a tax-deferred transaction under Section 351 of the Code.

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2.13       Registration of the Resulting Issuer Capital Stock

The shares of Resulting Issuer Capital Stock and any other securities required to be registered under the 1933 Act will be registered under the 1933 Act pursuant to an S-1 Registration Statement, an S-4 Registration Statement, S-3 Registration Statement or a newly filed S-8 Registration Statement.  For the avoidance of doubt, all securities of Parent to be issued pursuant this Agreement shall be covered by the S-4 Registration Statement, except that the resale of Common Shares issuable upon any cash-exercise of the Series A Warrants will be covered by the S-1 Registration Statement or S-3 Registration Statement.

2.14       Closing Date

The Closing Date will be the date that the Articles of Amalgamation are filed with the Director under the CBCA, which will be such date as is mutually agreed on by Parent and Company upon the occurrence of the Company and Parent Stockholder Approval, but not later than the End Date.

2.15       Closing

The Closing will take place at the offices of Haynes and Boone, LLP (or at such other place as may be mutually agreed to by the Parties), at a time to be mutually agreed on by the Parties.

ARTICLE 3
SHAREHOLDER INFORMATION, LISTING APPLICATION AND MEETING

3.1         Listing Application

The Parent shall use its commercially reasonable efforts, (a) to prepare and submit to NASDAQ a notification form for the listing of the shares of Resulting Issuer Capital Stock (other than Resulting Issuer Special Voting Stock), and use commercially reasonable efforts to cause such shares to be approved for listing (subject to official notice of issuance) and (b) in accordance with NASDAQ Marketplace Rule 5110, to file an initial listing application for the Resulting Issuer Capital Stock (other than Resulting Issuer Special Voting Stock) (the “NASDAQ Listing Application”) and to use commercially reasonable efforts to cause such NASDAQ Listing Application to be conditionally approved prior to the Effective Time. The Parties will use commercially reasonable efforts to coordinate with respect to compliance with NASDAQ rules and regulations. The Parent agrees to pay all NASDAQ fees associated with the NASDAQ Listing Application. The Company will cooperate with the Parent as reasonably requested by the Parent with respect to the NASDAQ Listing Application and promptly furnish to the Parent all information concerning the Company and its shareholders that may be required or reasonably requested in connection with any action contemplated by this Section 3.1.

3.2         Company Meeting

The Company will convene and conduct the Company Meeting on or before sixty (60) days after the date the SEC has indicated that it has no further comments to the S-4 registration Statement, or such later date as may be mutually agreed to by the Parent and the Company, and not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Company Meeting without the prior written consent of the Parent, except in the case of an adjournment, as required for quorum purposes.

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3.3         Parent Meeting

The Parent will convene and conduct the Parent Meeting on or before sixty (60) days after the date the SEC has indicated that it has no further comments to the S-4 Registration Statement, or such later date as may be mutually agreed to by the Parent and the Company, and not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Parent Meeting without the prior written consent of the Company, except in the case of an adjournment, as required for quorum purposes.

3.4         Preparation of Filings

The Parties will co-operate in the preparation of any application for any required Authorization and any other orders, registrations, consents, filings, rulings, exemptions, and approvals, and in the preparation of any documents, reasonably deemed by any of the Parties to be necessary to discharge its respective obligations under this Agreement or otherwise advisable under Applicable Laws, including, without limitation, in connection with the preparation of the S-4 Registration Statement as provided in Section 7.15.  The Parties shall obtain the written consent of the Noteholder prior to filing any S-4 Registration Statement, which written consent shall not be unreasonably withheld delayed or conditioned.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPANY

4.1         Representations and Warranties of Company

Except as set forth in the Company Disclosure Letter, the Company represents and warrants to the Parent and the Purchaser as follows:

(a) Organization and Qualification. The Company is a corporation duly incorporated and validly existing under the laws of Canada, and has all necessary corporate power, authority and capacity to own its property and assets as now owned and to carry on its business as it is now being conducted. The Company:

(i) has all Authorizations necessary to conduct its business substantially as now conducted, except where the failure to hold such Authorizations would not individually or in the aggregate have a Material Adverse Effect on the Company; and

(ii) is duly registered or otherwise authorized and qualified to do business and is in good standing in each jurisdiction in which the character of its properties, owned, leased, licensed or otherwise held, or the nature of its activities, makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect on the Company.

(b) Authorized and Issued Capital.

(i) The authorized capital of Company consists of an unlimited number of Company Common Shares.  As of the close of business on the date of this Agreement, there were (A) 27,626,061 Company Common Shares issued and outstanding, (B) outstanding Company Options to purchase 2,626,039 Company Common Shares and (C) outstanding Company Warrants to purchase 2,554,903 Company Common Shares.

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(ii) All outstanding Company Common Shares have been duly authorized and validly issued, and are fully paid and non-assessable and have not been issued in violation of any pre-emptive rights or in violation of Applicable Laws.

(iii) All of the Company Common Shares issuable upon the exercise of rights under the Company LTIP, including outstanding Company Options, have been duly authorized and, upon issuance in accordance with their respective terms, will be validly issued as fully paid and non-assessable and are not and will not be subject to, or issued in violation of, any pre-emptive rights.  No Company Options have been granted in violation of Applicable Laws.

(iv) All of the Company Common Shares issuable upon the exercise of rights under the Company Warrants have been duly authorized and, upon issuance in accordance with their respective terms, will be validly issued as fully paid and non-assessable and are not and will not be subject to, or issued in violation of, any pre-emptive rights.  No Company Warrants have been granted in violation of Applicable Laws.

(c) Corporate Authorization. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of, and performance by, the Company of this Agreement and the consummation of the Amalgamation and the other transactions contemplated hereby have been, or will at Closing be, duly authorized by all necessary corporate action on the part of the Company and, subject to obtaining the approval of the Amalgamation Resolution, no other corporate actions on the part of the Company are necessary to authorize this Agreement or to consummate the Amalgamation and the other transactions contemplated hereby.

(d) Execution and Binding Obligation. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting or relating to creditors’ rights generally and general equitable principles (the “Bankruptcy and Equity Exceptions”).

(e) No Conflict. The execution and delivery of, and performance by the Company of its obligations under, this Agreement, the completion of the transactions contemplated hereby, and the performance of its obligations hereunder and thereunder, do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition):

(i) constitute or result in a violation or breach of, or conflict with, any of the terms or provisions of its Organizational Documents;

(ii) except as disclosed in the Company Disclosure Letter, require any consent or other action by any Person under, constitute or result in a breach or violation of or conflict with, or, with or without notice or lapse of time or both, allow any Person to exercise any rights under any of the terms or provisions of any Material Contracts, licenses, leases or instruments to which the Company is a party or pursuant to which any of its assets or properties may be affected;

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(iii) result in a breach of, or cause the termination or revocation of, any Authorization held by the Company, or necessary to the ownership of the Company Common Shares or the operation of the business of Company; or

(iv) result in the violation of any Applicable Law,

except as would not, individually or in the aggregate, have a Material Adverse Effect on Company.

(f) Financial Statements. The Company Financial Statements are, or will when completed be, prepared in accordance with United States GAAP, consistently applied, and fairly present in all material respects the financial condition of the Company at the respective dates indicated and for the periods covered.

(g) Compliance with Laws. The Company is, and since January 1, 2018, has been, in compliance in all material respects with Applicable Laws. Since January 1, 2018, the Company is not, nor has been, under any investigation with respect to, is not nor has been charged or threatened to be charged with, nor has received notice of, any violation or potential violation of any Applicable Laws or disqualification by a Governmental Authority.

(h) Shareholders’ and Similar Agreements.  Except as disclosed in the Company Disclosure Letter,the Voting and Exchange Trust Agreement and the Exchangeable Share Support Agreement, the Company is not subject to, or affected by, any unanimous shareholders agreement and is not a party to any shareholder, pooling, voting, or other similar arrangement or agreement relating to the ownership or voting of the securities of the Company or pursuant to which any Person may have any right or claim in connection with any existing or past equity interest in the Company.

(i) Subsidiaries and Affiliates. The Company does not have any Subsidiaries or Affiliates.

(j) Internal Accounting Controls.  The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with United States GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(k) Auditors.  The Company Financial Statements have been audited by a PCAOB registered accounting firm.

(l) No Undisclosed Liabilities.  Except as disclosed in the Company Disclosure Letter, the Company does not have any Liability, whether accrued, absolute, contingent or otherwise, not reflected in the Company Financial Statements, except Liabilities (i) incurred in connection with this Agreement or the Transaction, (ii) incurred since December 31, 2018, in the Ordinary Course consistent with past practices or (iii) that would not have, individually or in the aggregate, a Material Adverse Effect with respect to the Company. An itemized list setting forth the principal amount of all indebtedness for borrowed money of the Company (and all accrued interest thereon) as of the date hereof, including capital leases, is disclosed in the Company Disclosure Letter.

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(m) Absence of Certain Changes or Events.  Since December 31, 2018, other than the transactions contemplated in this Agreement and as disclosed in the Company Disclosure Letter, the business of the Company has been conducted in the Ordinary Course and there has not been any event, circumstance or occurrence which has had or would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.

(n) Ordinary Course.  Since December 31, 2018, other than as disclosed in the Company Disclosure Letter:

(i) the Company has conducted its business only in the Ordinary Course;

(ii) no liability or obligation of any nature (whether absolute, accrued, contingent or otherwise), which has had, or is reasonably likely to have, a Material Adverse Effect with respect to the Company, has been incurred by the Company;

(iii) there has not been any change in the accounting practices used by the Company;

(iv) except for Ordinary Course adjustments to employee compensation (other than directors or officers), there has not been any increase in the salary, bonus, or other remuneration payable to any employees of the Company;

(v) there has not been any redemption, repurchase or other acquisition of Company Common Shares by the Company, or any declaration, setting aside or payment of any dividend or other distribution (whether in cash or otherwise) with respect to the Company Common Shares;

(vi) there has not been a material change in the level of accounts receivable or payable, inventories or employees of the Company, other than those changes in the Ordinary Course;

(vii) the Company has not entered into, or amended, any Material Contract other than in the Ordinary Course;

(viii) there has not been any satisfaction or settlement of any material claims or material liabilities of the Company that were not reflected in the Company’s Financial Statements, other than the settlement of claims or liabilities incurred in the Ordinary Course; and

(ix) except for Ordinary Course adjustments, there has not been any increase in the salary, bonus, or other remuneration payable to any officers or directors of the Company or any amendment or modification to the vesting or exercisability schedule or criteria, including any acceleration, right to accelerate or acceleration event or other entitlement under any stock option, restricted stock, deferred compensation or other compensation award of any officer or director of the Company.

(o) Reserved

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(p) Related Party Transactions.  Except as disclosed in the Company Disclosure Letter, the Company is not indebted to any director, officer, employee or agent of, or independent contractor to, the Company (except for amounts due in the Ordinary Course as salaries, bonuses and director’s fees or the reimbursement of Ordinary Course expenses). Except as disclosed in the Company Disclosure Letter, there are no Contracts (other than employment arrangements) with, or advances, loans, guarantees, liabilities or other obligations to, on behalf or for the benefit of, any shareholder, officer or director of the Company.

(q) No “Collateral Benefit.”  Except as disclosed in the Company Disclosure Letter, no Person will receive a “collateral benefit” (within the meaning of MI 61-101) from the Company as a consequence of the transactions contemplated by the Amalgamation.

(r) Reserved

(s) Authorizations and Licenses.

(i) The Company owns, possesses or has obtained all Authorizations that are required by Applicable Laws in connection with the operation of the business of the Company as presently or previously conducted, or in connection with the ownership, operation or use of the assets of the Company.

(ii) The Company lawfully holds, owns or uses, and has complied with, all such Authorizations. Each Authorization is valid and in full force and effect, and is renewable by its terms or in the Ordinary Course without the need for the Company to comply with any special rules or procedures, agree to any materially different terms or conditions or pay any amounts other than routine filing fees.

(iii) No action, investigation or proceeding is pending in respect of or regarding any such Authorization and neither the Company nor, to the knowledge of the Company, any of its officers or directors has received notice, whether written or oral, of revocation, non-renewal or material amendments of any such Authorization, or of the intention of any Person to revoke, refuse to renew or materially amend any such Authorization.

(iv) Neither the Company nor, to the knowledge of the Company, any of its officers or directors, own or have any proprietary, financial or other interests (direct or indirect) in any such Authorization.

(t) Reserved

(u) Finders’ Fees.  No investment banker, broker, finder, financial adviser or other intermediary has been retained by or is authorized to act on behalf of the Company or any of its officers, directors or employees, or is entitled to any fee, commission or other payment from the Company or any of its officers, directors or employees, in connection with this Agreement.

(v) Company Board Approval.  The Company Board has unanimously (A) determined that the Consideration to be received by the Company Securityholders pursuant to the Amalgamation and this Agreement is fair to such holders and that the Amalgamation is in the best interests of the Company and the Company Securityholders; (B) resolved to unanimously recommend that the Company Securityholders vote in favour of the Amalgamation Resolution; and (C) authorized the entering into of this Agreement and the performance by the Company of its obligations under this Agreement, and no action has been taken to amend, or supersede such determinations, resolutions, or authorizations (the “Company Board Approval”).

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(w) Material Contracts.

(i) The Company Disclosure Letter sets out a complete and accurate list of all Material Contracts of the Company. True and complete copies of the Material Contracts of the Company have been made available to the Parent and no such Contract has been modified, rescinded or terminated.

(ii) Each Material Contract is legal, valid, binding and in full force and effect and is enforceable by the Company in accordance with its terms (subject to the Bankruptcy and Equity Exceptions).

(iii) The Company has performed in all material respects all respective obligations required to be performed by it to date under the Material Contracts and the Company is not in breach or default under any Material Contract, nor does the Company have knowledge of any condition that, with the passage of time or the giving of notice or both, would result in such a breach or default.

(iv) To the knowledge of the Company, the Company has not received any notice (whether written or oral), that any party to a Material Contract intends to cancel, terminate or otherwise modify or not renew its relationship with the Company, and, to the knowledge of the Company, no such action has been threatened.

(x) Real Property.

(i) except as disclosed in the Company Disclosure Letter, the Company has valid, good and marketable title to all of the real or immovable property owned by the Company (the “Owned Properties”) free and clear of any Liens, except for Permitted Liens, and there are no outstanding options or rights of first refusal to purchase the Owned Properties, or any portion thereof or interest therein; in addition, all buildings, structures, fixtures, building systems, and equipment located on the Owned Properties are in good condition and repair, and the Owned Properties are in compliance with Applicable Laws in all material respects;

(ii) except as disclosed in the Company Disclosure Letter, each lease, sublease, license or occupancy agreement (in each case, together with any amendments, supplements, notices or ancillary agreements thereto) for real or immovable property leased, subleased, licensed or occupied by the Company (the “Leased Properties”) is valid, legally binding and enforceable against the Company in accordance with its terms and in full force and effect, true and complete copies of which (including all related amendments, supplements, notices and ancillary agreements) have been made available to the Parent, and the Company is not in breach of, or default under, such lease, sublease, license or occupancy agreement, and, to the knowledge of the Company, no event has occurred which, with notice, lapse of time or both, would constitute such a breach or default by the Company or permit termination, modification or acceleration by any third party thereunder;

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(iii) the Company Disclosure Lettercontains a list of all Owned Properties and Leased Properties;

(iv) reserved;

(v) except as disclosed in the Company Disclosure Letter, the Company has not collaterally assigned or granted any other security interest in any of the Leased Properties;

(vi) except as disclosed in the Company Disclosure Letter, no third party has repudiated or has the right to terminate or repudiate any such lease, sublease, license or occupancy agreement (except for the normal exercise of remedies in connection with a default thereunder or any termination rights set forth in the lease, sublease, license or occupancy agreement) or any provision thereof; and

(vii) except as disclosed in the Company Disclosure Letter, none of the leases, subleases, licenses or occupancy agreements has been assigned by the Company in favor of any Person or sublet or sublicensed.

(y) Personal Property; Condition of Personal Property.  The Company has good title to all material personal or movable property of any kind or nature which the Company purports to own, free and clear of all Liens (other than Permitted Liens). The Company, as lessee, has the right under valid and subsisting leases to use, possess and control all personal or movable property leased by and material to the Company as used, possessed and controlled by the Company. All real and tangible personal property of the Company is in generally good repair and is operational and usable in the manner in which it is currently being utilized, subject to normal wear and tear and technical obsolescence, repair or replacement.

(z) Reserved

(aa) Reserved

(bb) Reserved

(cc) Intellectual Property.  Except as would not and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company: (i) the Company owns all right, title and interest, or has valid licenses (and is not in material breach of such licenses), in and to all Intellectual Property that is material to the conduct of the business, as presently conducted, of the Company (collectively, the “Intellectual Property Rights”); (ii) all such Intellectual Property Rights that are owned by or licensed to the Company are sufficient, in all material respects, for conducting the business, as presently conducted, of the Company; (iii) to the knowledge of the Company, all Intellectual Property Rights owned or leased by the Company are valid and enforceable, and the carrying on of the business of the Company and the use by the Company of any of the Intellectual Property Rights or Technology (as defined below) owned by or licensed to the Company does not breach, violate, infringe or interfere with any rights of any other Person, except that the foregoing representation is given to the knowledge of the Company with respect to patents, and no proceeding is currently pending or, to the knowledge of Company, threatened, with respect to any of the foregoing; (iv) to the knowledge of the Company, no third party is infringing upon the Intellectual Property Rights owned or licensed by the Company, and no proceeding is currently pending or threatened with respect to the foregoing; (v) all computer hardware and associated firmware and operating systems, application software, database engines and processed data, technology infrastructure and other computer systems used in connection with the conduct of the business, as presently conducted, of the Company (collectively, the “Technology”) are sufficient, in all material respects, for conducting the business, as presently conducted, of the Company; and (vi) the Company owns, or has validly licensed or leased (and is not in material breach of such licenses or leases), such Technology.

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(dd) Restrictions on Conduct of Business.  The Company is not a party to or bound by any non-competition agreement, any non-solicitation agreement, or any other agreement, obligation, judgment, injunction, order or decree which purports to: (i) limit in any material respect the manner or the localities in which all or any portion of the business of the Company is conducted; (ii) limit any business practice of the Company in any material respect; or (iii) restrict any acquisition or disposition of any property by the Company in any material respect. Neither the Company nor any of its properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that would have or would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company or that would or would be reasonably expected to prevent or delay the consummation of the Amalgamation or the transactions contemplated hereby.

(ee) Litigation.  Except as set out in the Company Disclosure Letter, there are no claims, actions, suits, arbitrations, inquiries, audits, investigations or proceedings pending, or, to the knowledge of the Company, threatened against or relating to the Company, the business of the Company or affecting any of its current or former properties or assets by or before any Governmental Authority that, if determined adverse to the interests of the Company, could potentially result in criminal sanction, or would be reasonably expected to prevent or delay the consummation of the Amalgamation or the transactions contemplated hereby, or would, or would be reasonably expected to, materially affect the Purchaser’s ability to own or operate the business of the Company, nor, to the knowledge of the Company, are there any events or circumstances which could reasonably be expected to give rise to any such claim, action, suit, arbitration, inquiry, investigation or proceeding. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of the Company, threatened against or relating to the Company before any Governmental Authority.

(ff) Corrupt Practices Legislation.  Neither the Company nor any of its officers, directors or employees acting on behalf of the Company, has taken, committed to take or been alleged to have taken any action which would cause the Company to be in violation of the Corruption of Foreign Public Officials Act or any law of similar effect of any other jurisdiction, and to the knowledge of the Company, no such action has been taken by any of its agents, representatives or other Persons acting on behalf of the Company.

(gg) Environmental Matters.

(i) No written notice, order, complaint or penalty has been received by the Company alleging that the Company is in violation of, or has any liability or potential liability under, any applicable Environmental Law, including any health and safety requirements applicable thereto, and there are no judicial, administrative or other actions, suits or proceedings pending or, to the knowledge of the Company, threatened against the Company which allege a violation of, or any liability or potential liability under, any applicable Environmental Laws, including any health and safety requirements applicable thereto, and, to the knowledge of the Company, no fact or circumstance exists that reasonably could be expected to give rise to any such notice, claim, order, complaint or penalty.

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(ii) The Company has all environmental permits necessary for the operation of its business and to comply in all material respects with all applicable Environmental Laws, including any health and safety requirements applicable thereto.

(iii) The operations of the Company are, and since January 1, 2018, have been, in compliance in all material respects with applicable Environmental Laws, including any health and safety requirements applicable thereto.

(hh) Employment Matters.  Except as disclosed in the Company Disclosure Letter:

(i) (A) the Company has not entered into any written or oral agreement or understanding providing for a retention or change of control bonus or severance or termination payments to any director or Company Employee in connection with the termination of their position or their employment as a direct result of a change in control of the Company (including as a result of the Amalgamation), and (B) no Company Employee has any agreement as to length of notice or severance payment required to terminate his or her employment, other than such as results by Applicable Laws from the employment of an employee without an agreement as to notice or severance;

(ii) (A) the Company is not a party to any Collective Agreement with respect to any Company Employees, (B) no Person holds bargaining rights with respect to any Company Employees and (C) to the knowledge of the Company, no Person has applied or threatened to be certified as the bargaining agent of any Company Employees;

(iii) no trade union has applied to have the Company declared a common or related employer pursuant to Applicable Laws;

(iv) the Company is in material compliance with all terms and conditions of employment and all Applicable Laws respecting employment;

(v) the Company is not subject to any pending or, to the knowledge of the Company, threatened claim or action relating to employment or termination of employment of employees or independent contractors;

(vi) the Company has not and is not engaged in any unfair labor practice and no unfair labor practice complaint, grievance or arbitration proceeding is pending, or to the knowledge of the Company, threatened against the Company;

(vii) no labor strike, lock-out, slowdown or work stoppage is pending or to the knowledge of the Company, threatened against or directly affecting the Company and no such event has occurred in the last two years;

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(viii) each independent contractor and consultant has been properly classified by the Company as an independent contractor and the Company has not received notification from any Governmental Authority challenging the classification of any individual who performs services for the Company’s business as an independent contractor or consultant; and

(ix) there are no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workplace safety and insurance legislation and there are no orders under applicable occupational health and safety legislation relating to the Company which are currently outstanding.

(ii) Employee Plans.

(i) The Company Disclosure Letter lists and describes all the pension, benefit, insurance, retirement, compensation, deferred compensation, incentive, bonus, employee loan, collective bargaining, profit sharing, commission, performance award, option, phantom equity, stock or stock-based, stock purchase, restricted stock, change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, whether or not Tax-qualified, which is or has been maintained, sponsored, contributed to, or required to be contributed to by the Company for the benefit of any current or former Company Employee or director, or under which the Company has or may have any Liability, contingent or otherwise (collectively, the “Employee Plans”). The Company has furnished to the Purchaser true, correct and complete copies of all the Employee Plans as of the date hereof, together with all related documentation. Since December 31, 2018, no changes have occurred or are expected to occur which would materially affect the information required to be provided to the Purchaser pursuant to this provision.

(ii) No Employee Plan is or is intended to be a “registered pension plan,” a “deferred profit sharing plan,” a “retirement compensation arrangement,” a “registered retirement savings plan,” or a “tax-free savings account” as such terms are defined in the Tax Act.

(iii) Each Employee Plan is and has been operated in accordance with Applicable Laws, in all material respects. The Company has made all contributions and paid all premiums in respect of each Employee Plan in a timely fashion in accordance with Applicable Laws and the terms of each Employee Plan in all material respects.

(iv) Other than routine claims for benefits, no Employee Plan is subject to any pending action, investigation, examination, claim (including claims for income Taxes, interest, penalties, fines or excise Taxes) or any other proceeding initiated by any Person, and, to the knowledge of the Company, there exists no state of facts which could reasonably be expected to give rise to any such action, investigation, examination, claim or other proceeding.

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(v) No insurance policy or any other agreement affecting any Employee Plan requires or permits a retroactive increase in contributions, premiums or other payments due thereunder.  The level of insurance reserves under each Employee Plan which provides group benefits and contemplates the holding of such reserves is reasonable and sufficient to provide for all incurred but unreported claims.

(vi) None of the Employee Plans provide for retiree or post-termination benefits or for benefits to retired or terminated employees or to the beneficiaries or dependants of retired or terminated employees, except as required by Applicable Laws.

(vii) Subject to the requirements of Applicable Laws, no provision of any Employee Plan or of any agreement, and no act or omission of the Company in any way limits, impairs, modifies or otherwise affects the right of the Company to unilaterally amend or terminate any Employee Plan, and no commitments to improve or otherwise amend any Employee Plan have been made.

(viii) No advance tax rulings have been sought or received in respect of any Employee Plan.

(jj) Insurance.  A true and complete list of all material insurance policies currently in effect that insure the physical properties, business, operations and assets of the Company has made available to the Parent. To the knowledge of the Company, each material insurance policy currently in effect that insures the physical properties, business, operations and assets of the Company is valid and binding and in full force and effect and there is no material claim pending under any such policies as to which coverage has been questioned, denied or disputed by any insurer or as to which any insurer has made any reservation of rights or refused to cover all or any material portion of such claim.  All material proceedings covered by any insurance policy of the Company have been properly reported to and accepted by the applicable insurer.

(kk) Taxes.  The Company has made available to the Parent true, correct and complete copies of all Tax Returns, examination reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired. The Company represents each of the following:

(i) the Company has duly and timely filed all Tax Returns required to be filed prior to the date hereof and all such Tax Returns are complete and correct in all material respects;

(ii) the Company has paid on a timely basis all Taxes which are due and payable, all assessments and reassessments, and all other Taxes due and payable by the Company on or before the date hereof, other than those which are being or have been contested in good faith and in respect of which reserves have been provided in the Company Financial Statements;

(iii) the Company has provided adequate accruals in accordance with United States GAAP in the Company Financial Statements for any Taxes of the Company for the period covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns;

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(iv) since December 31, 2018, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued by the Company, other than in the Ordinary Course;

(v) the Company has not received a Tax refund to which it was not entitled;

(vi) no material deficiencies, litigation, proposed adjustments or matters in controversy exist or have been asserted with respect to Taxes of the Company, and the Company is not a party to any action or proceeding for assessment or collection of Taxes and no such event has been asserted or, to the knowledge of the Company, threatened against the Company or any of its assets;

(vii) no claim has been made by any Government Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to Tax by that jurisdiction;

(viii) there are no Liens (other than Permitted Liens) with respect to Taxes upon any of the assets of the Company;

(ix) the Company has withheld or collected all amounts required to be withheld or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Authority when required by Applicable Laws to do so;

(x) there are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of Taxes due from the Company for any taxable period and no request for any such waiver or extension is currently pending;

(xi) the terms and conditions made or imposed in respect of every transaction (or series of transactions) between the Company and any Person that is (x) a non-resident of Canada for purposes of the Tax Act, and (y) not dealing at arm’s length with the Company, for purposes of the Tax Act, do not differ from those that would have been made between persons dealing at arm’s length for purposes of the Tax Act, and all documentation or records as required by Applicable Law has been made or obtained in respect of such transactions (or series of transactions);

(xii) there are no circumstances existing which could result in the application of Section 78 or Sections 80 to 80.04 of the Tax Act, or any equivalent provision under provincial Applicable Law, to the Company;

(xiii) the Company has not participated in any “listed transaction” within the meaning of Section 1.6011-4 of the Treasury Regulations;

(xiv) the Company has not taken or agreed to take any action that would prevent the Amalgamation from constituting a reorganization qualifying under Section 368 of the Code; and

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(xv) the Company is not aware of any agreement, plan or other circumstance that would prevent the Amalgamation from qualifying as a reorganization under Section 368 of the Code.

(ll) Disclosure.  The information relating to Company to be supplied by or on behalf of Company for inclusion or incorporation by reference in the S-4 Registration Statement and the Proxy Statement/Prospectus will not, on the date of filing thereof or the date that it is first mailed to the Parent Stockholders, as applicable, or at the time of the Parent Meeting or at the time of any amendment or supplement thereof, contain any untrue statement of any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading at the time and in light of the circumstances under which such statement is made.  Notwithstanding the foregoing, no representation is made by the Company with respect to the information that has been or will be supplied by the Parent and the Purchaser or any of their Representatives for inclusion in the S-4 Registration Statement and the Proxy Statement/Prospectus.  

4.2         No Reliance

The Company represents, warrants, acknowledges and agrees that other than as expressly set forth in Article 5 of this Agreement, none of Parent, Purchaser, any of their affiliates or stockholders or any of their respective Representatives makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any information provided or made available to the Company, any of its affiliates or stockholders or any of their respective Representatives (collectively, “Company Related Persons”) or any other person in connection with this Agreement, the Amalgamation or any of the other transactions or with respect to any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations, future cash flows or future financial condition, or any component of the foregoing, or any other forward looking information, of Parent, Purchaser or any of their Affiliates, and no Company Related Person has relied on any information or statements made or provided (or not made or provided) to any Company Related Person other than the representations and warranties of Parent and Purchaser expressly set forth in Article 5 of this Agreement.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT, EXCHANGECO AND PURCHASER

5.1         Representations and Warranties of the Parent and the Purchaser

Except as set forth in the Parent Disclosure Letter or the SEC Documents, the Parent and the Purchaser represent and warrant to the Company as follows:

(a) Organization and Qualification. Each of the Parent and the Purchaser is a corporation duly incorporated and validly existing under the laws of the jurisdiction of its incorporation, and has all necessary power and authority to own its property and assets as now owned and to conduct its affairs as now conducted. Each of the Parent and the Purchaser:

(i) has all Authorizations necessary to conduct its business substantially as now conducted, except where the failure to hold such Authorizations would not individually or in the aggregate have a Material Adverse Effect on it; and

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(ii) is duly registered or otherwise authorized and qualified to do business and is in good standing in each jurisdiction in which the character of its properties, owned, leased, licensed or otherwise held or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect on the Parent or the Purchaser.

(b) Authorized and Issued Capital.

(i) The authorized capital stock of the Parent consists of 100,000,000 shares of Parent Common Stock and 1,000,000 shares of Parent Preferred Stock. As of the close of business on the date of this Agreement, 2,522,095 shares of Parent Common Stock were issued and outstanding and 424,938 shares of Parent Preferred Stock were issued and outstanding, and designated as 9.00% Series A Cumulative Preferred Stock. The shares of the Parent Common Stock trade on the NASDAQ and are able to be deposited through the DTC.

(ii) All of the Purchaser’s issued and outstanding capital stock is currently held by the Parent and no other person has any right to acquire shares of the Purchaser.

(iii) All Parent Capital Stock and all Purchaser Shares have been duly authorized and validly issued, and are fully paid and non-assessable and have not been issued in violation of any pre-emptive rights or in violation of Applicable Laws.

(iv) All of the Parent Capital Stock issuable upon the exercise of rights under the Parent Stock Incentive Plan, including outstanding Parent Options, have been duly authorized and, upon issuance in accordance with their respective terms, will be validly issued as fully paid and non-assessable and are not and will not be subject to or issued in violation of any pre-emptive rights.

(v) All of the Parent Capital Stock issuable upon the exercise of rights under the Parent Warrants have been duly authorized and, upon issuance in accordance with their respective terms, will be validly issued as fully paid and non-assessable and are not and will not be subject to, or issued in violation of, any pre-emptive rights.  No Parent Warrants have been granted in violation of Applicable Laws.

(vi) Except for rights under the Parent Stock Incentive Plan, the Voting and Exchange Trust Agreement and the Exchangeable Share Support Agreement, there are no issued, outstanding or authorized options, equity-based awards, warrants, calls, conversion, pre-emptive, redemption, repurchase, stock appreciation or other rights, or any other agreements, arrangements, instruments or commitments of any kind that obligate the Parent, the Purchaser or any of their respective Subsidiaries, as applicable, to, directly or indirectly, issue or sell any securities of the Parent, the Purchaser or of any of their respective Subsidiaries, as applicable, or give any Person a right to subscribe for or acquire, any securities of the Parent, the Purchaser or any of their respective Subsidiaries.

(vii) The authorized and unissued Parent Capital Stock is sufficient to consummate the Amalgamation, the Stock Split and the other transactions contemplated by this Agreement.

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(c) Corporate Authorization. Each of the Parent and the Purchaser has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of, and performance by, each of the Parent and the Purchaser of this Agreement and the consummation of the Amalgamation and the other transactions contemplated hereby have been, or will at Closing be, duly authorized by all necessary corporate action on the part of each of the Parent and the Purchaser and, subject to obtaining the Parent Stockholder Approval and approval by Parent in its capacity as sole stockholder of Purchaser, no other corporate actions on the part of each of the Parent and the Purchaser are necessary to authorize this Agreement or to consummate the Amalgamation and the other transactions contemplated hereby.

(d) Purchaser. The Purchaser was incorporated solely to effect the Amalgamation and it has not carried on any business.

(e) Execution and Binding Obligation. This Agreement has been duly executed and delivered by each of the Parent and the Purchaser, and constitutes a legal, valid and binding agreement of the Parent and the Purchaser, enforceable against it in accordance with its terms, except as enforceability may be limited by the Bankruptcy and Equity Exceptions and to the Parent Stockholder Approval.

(f) No Conflict. The execution and delivery of, and the performance by each of the Parent and the Purchaser of its respective obligations under, this Agreement, the completion of the transactions contemplated hereby, and the performance of their respective obligations hereunder and thereunder, do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition):

(i) constitute or result in a violation or breach of, or conflict with, any of the terms or provisions of their respective Organizational Documents;

(ii) require any consent or other action by any Person under, constitute or result in a breach or violation of or conflict with, or, with or without notice or lapse of time or both, allow any Person to exercise any rights under any of the terms or provisions of any Material Contracts, licenses, leases or instruments to which the Parent or the Purchaser is a party or pursuant to which any of their respective assets or properties may be affected;

(iii) result in a breach of, or cause the termination or revocation of, any Authorization held by the Parent or the Purchaser, or necessary to the ownership of the Parent Capital Stock or the Purchaser Shares, or the operation of the businesses of the Parent and the Purchaser; or

(iv) result in the violation of any Applicable Law,

except as would not, individually or in the aggregate, have a Material Adverse Effect on the Parent or the Purchaser.

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(g) Financial Statements. The Parent Financial Statements: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with United States GAAP (except as may be indicated in the notes to such financial statements or, in the case of unaudited financial statements, as permitted by the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that are not reasonably expected to be material in amount) applied on a consistent basis unless otherwise noted therein throughout the periods indicated; (iii) fairly present the condensed consolidated financial position of the Parent as of the respective dates thereof and the condensed consolidated statements of operations and cash flows of the Parent for the periods covered thereby. The Parent has not effected any securitization transactions or “off-balance sheet arrangements” (as defined in Item 303(c) of SEC Regulation S-K).  Other than as expressly disclosed in the Parent SEC Documents filed prior to the date hereof, there has been no material change in the Parent’s accounting methods or principles that would be required to be disclosed in the Parent Financial Statements in accordance with United States GAAP.

(h) Compliance with Laws. Each of the Parent, the Purchaser and their respective Subsidiaries is, and since January 1, 2018, has been, in compliance in all material respects with Applicable Laws. Since January 1, 2018, neither the Parent, the Purchaser nor any of its or their respective Subsidiaries is or has been under any investigation with respect to, is or has been charged or threatened to be charged with, or has received notice of, any violation or potential violation of any Applicable Law or disqualification by a Governmental Authority.

(i) Governmental Authorization.  The execution, delivery and performance by each of the Parent and the Purchaser of their respective obligations under this Agreement and the consummation by the Parent and the Purchaser of the Amalgamation and the other transactions contemplated hereby do not require any Authorization or other action by or in respect of, or filing with or notification to, any Governmental Authority by the Parent and the Purchaser other than filings with the Securities Authorities and NASDAQ.

(j) Shareholders’ and Similar Agreements.  Neither the Parent nor the Purchaser is subject to, or affected by, any unanimous shareholders agreement and is not a party to any shareholder, pooling, voting, or other similar arrangement or agreement relating to the ownership or voting of the securities of the Parent, the Purchaser or of any of their respective Subsidiaries or pursuant to which any Person may have any right or claim in connection with any existing or past equity interest in the Parent, the Purchaser or in any of their respective Subsidiaries.

(k) Subsidiaries.

(i) Other than the Purchaser and those Subsidiaries disclosed in the Parent SEC Documents (the “Parent Subsidiaries”), the Parent has no Subsidiaries.

(ii) Each Parent Subsidiary is a corporation, partnership, trust, limited liability company or limited partnership, as the case may be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as the case may be, and has all requisite corporate, trust, limited liability company or partnership power and authority, as the case may be, to own, lease and operate its properties and assets and to carry on its business as now being conducted, except where the failure to be so organized, validly existing, qualified or in good standing, or to have such power or authority, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to the Parent.

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(iii) The Parent is, directly or indirectly, the registered and beneficial owner of all of the outstanding common shares or other equity interests of each Parent Subsidiary, free and clear of any Liens. All such common shares or other equity interests so owned by the Parent have been validly issued and are fully paid and non-assessable, as the case may be, and no such shares or other equity interests have been issued in violation of any pre-emptive or similar rights or in violation of Applicable Laws.

(l) Securities Laws Matters.

(i) The Parent has made available to the Company accurate and complete copies of all registration statements, proxy statements, Certifications (as defined below) and other statements, reports, schedules, forms and other documents filed by the Parent with or furnished by the Parent to the SEC since January 1, 2018 (the “Parent SEC Documents”), other than such documents that can be obtained through EDGAR.  All Parent SEC Documents have been timely filed and, as of the time a Parent SEC Document was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing):  (A) each of the Parent SEC Documents complied in all material respects with the applicable requirements of the 1933 Act or the United States Exchange Act (as the case may be) and (B) none of the Parent SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  Each of the certifications and statements relating to the Parent SEC Documents required by:  (1) the SEC’s Order dated June 27, 2002 pursuant to Section 21(a)(1) of the United States Exchange Act (File No. 4-460); (2) Rule 13a-14 or 15d-14 under the United States Exchange Act; or (3) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act) is accurate and complete (the “Certifications”), and complied as to form and content with all Applicable Laws in effect at the time such Parent Certification was filed with or furnished to the SEC.  As used in this Section 5.1(l)(i), the term “file” and variations thereof will be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

(ii) Except for such comment letters or correspondence as can be obtained through EDGAR or which the Parent has made available for review by the Company, since January 1, 2018, the Parent has not received any comment letter from the SEC or the staff thereof or any correspondence from the NASDAQ or the staff thereof relating to the delisting or maintenance of listing of the Parent Common Stock on the NASDAQ. Except as disclosed in the Parent SEC Documents or documents that Parent has made available for review by the Company, Parent has no unresolved SEC comments. As of the date of this Agreement, Parent is in compliance in all material respects with the applicable listing and governance rules and regulations of the NASDAQ.

(iii) Since January 1, 2018, there have been no formal internal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the chief executive officer or chief financial officer of the Parent, the Parent Board or any committee thereof, other than ordinary course audits or reviews of accounting policies and practices or internal controls required by the Sarbanes-Oxley Act.

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(iv) Parent is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act that are effective as of the date of this Agreement.

(m) Disclosure Controls and Internal Control over Financial Reporting.  The Parent and the Parent Subsidiaries maintain a system of internal accounting controls designed to provide reasonable assurance that:  (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with United States GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Parent and the Parent Subsidiaries maintain internal controls over financial reporting that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States GAAP.

(n) Auditors. The Parent Financial Statements have been audited by a PCAOB registered accounting firm.

(o) No Undisclosed Liabilities.  None of the Parent, the Purchaser or any of their respective Subsidiaries have any Liability, whether accrued, absolute, contingent or otherwise, not reflected in the Parent Financial Statements, except Liabilities (i) incurred in connection with this Agreement or the Transaction, (ii) incurred since December 31, 2018, in the Ordinary Course consistent with past practices or (iii) that would not have, individually or in the aggregate, a Material Adverse Effect with respect to the Parent. An itemized list setting forth the principal amount of all indebtedness for borrowed money of the Parent, the Purchaser and any of their respective Subsidiaries (and all accrued interest thereon) as of the date hereof, including capital leases, is disclosed in the Parent Disclosure Letter or the SEC Documents.

(p) Absence of Certain Changes or Events.  Since December 31, 2018, other than the transactions contemplated in this Agreement and as disclosed in the Parent Disclosure Letter or the SEC Documents, the business of the Parent, the Purchaser and their respective Subsidiaries has been conducted in the Ordinary Course and there has not been any event, circumstance or occurrence which has had or would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Parent.

(q) Ordinary Course.  Since December 31, 2018, other than the transactions contemplated in this Agreement or as disclosed in the Parent Disclosure Letter or the SEC Documents:

(i) the Parent, the Purchaser and their respective Subsidiaries have conducted their respective businesses only in the Ordinary Course;

(ii) no liability or obligation of any nature (whether absolute, accrued, contingent or otherwise), which has had, or is reasonably likely to have, a Material Adverse Effect with respect to the Parent, has been incurred by the Parent, the Purchaser or their respective Subsidiaries;

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(iii) there has not been any change in the accounting practices used by the Parent, the Purchaser or their respective Subsidiaries;

(iv) except for Ordinary Course adjustments to employee compensation (other than directors or officers), there has not been any increase in the salary, bonus, or other remuneration payable to any employees of any of the Parent, the Purchaser or their respective Subsidiaries;

(v) there has not been any redemption, repurchase or other acquisition of Parent Common Stock by the Parent, or any declaration, setting aside or payment of any dividend or other distribution (whether in cash or otherwise) with respect to the Parent Common Stock;

(vi) there has not been a material change in the level of accounts receivable or payable, inventories or employees of the Parent, the Purchaser or their respective Subsidiaries, other than those changes in the Ordinary Course;

(vii) neither the Parent nor any Parent Subsidiary has entered into, or amended, any Material Contract other than in the Ordinary Course;

(viii) there has not been any satisfaction or settlement of any material claims or material liabilities of the Parent, the Purchaser or their respective Subsidiaries that were not reflected in the Parent Financial Statements, other than the settlement of claims or liabilities incurred in the Ordinary Course; and

(ix) except for Ordinary Course adjustments, there has not been any increase in the salary, bonus, or other remuneration payable to any officers or directors of the Parent, the Purchaser or their respective Subsidiaries or any amendment or modification to the vesting or exercisability schedule or criteria, including any acceleration, right to accelerate or acceleration event or other entitlement under any stock option, restricted stock, deferred compensation or other compensation award of any officer of the Parent or any Parent Subsidiary.

(r) Related Party Transactions.  Neither the Parent nor any Parent Subsidiary is indebted to any director, officer, employee or agent of, or independent contractor to, the Parent or any Parent Subsidiary (except for amounts due in the Ordinary Course as salaries, bonuses and director’s fees or the reimbursement of Ordinary Course expenses).  There are no Contracts (other than employment arrangements) with, or advances, loans, guarantees, liabilities or other obligations to, on behalf or for the benefit of, any shareholder, officer or director of the Parent or any Parent Subsidiary.

(s) Authorizations and Licenses.

(i) The Parent, the Purchaser and their respective Subsidiaries own, possess or have obtained all Authorizations that are required by Applicable Laws in connection with the operation of the business of the Parent, the Purchaser and their respective Subsidiaries as presently or previously conducted, or in connection with the ownership, operation or use of the assets of the Parent, the Purchaser and their respective Subsidiaries.

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(ii) The Parent, the Purchaser and their respective Subsidiaries lawfully hold, own or use, and have complied with, all such Authorizations. Each Authorization is valid and in full force and effect, and is renewable by its terms or in the Ordinary Course.

(iii) No action, investigation or proceeding is pending in respect of or regarding any such Authorization and neither the Parent, the Purchaser, their respective Subsidiaries nor, to the knowledge of the Parent, any of their respective officers or directors has received notice of revocation, non-renewal or material amendments of any such Authorization.

(t) Opinions of Parent Financial Advisor.  The Parent Board have received the Parent Fairness Opinion. A true and complete copy of the engagement letter between the Parent and Gemini Partners, Inc. has been provided to the Company and the Parent has made true and complete disclosure to the Company of all fees, commissions or other payments that may be incurred pursuant to such engagement or that may otherwise be payable to Gemini Partners, Inc.

(u) Finders’ Fees.  Except for the engagement letter between the Parent and Palladium Capital Advisors, LLC and the fees payable under or in connection with such engagement, no investment banker, broker, finder, financial adviser or other intermediary has been retained by or is authorized to act on behalf of the Parent or any of its Subsidiaries, or any of their respective officers, directors or employees, or is entitled to any fee, commission or other payment from the Parent or any of its Subsidiaries, or any of their respective officers, directors or employees, in connection with the Agreement.

(v) Parent Board Approval. The Parent Board, after consultation with its financial and legal advisors, has (A) determined that the Amalgamation, this Agreement the issuance of the Consideration Shares, the Parent Charter Amendment and the Stock Split are fair to the Parent Stockholders and in the best interests of the Parent, the Purchaser, their respective Subsidiaries and the Parent Stockholders; (B) resolved to recommend that the Parent Stockholders vote in favour of the Parent Stockholder Approval Resolution; and (C) authorized the entering into of this Agreement and the performance by the Parent of its obligations under this Agreement, and no action has been taken to amend, or supersede such determinations, resolutions, or authorizations (the “Parent Board Approval”).

(w) Material Contracts.

(i) All of the Parent’s Material Contracts are filed as exhibits to the Parent’s latest Annual Report on Form 10-K and the Parent is not a party to any other Material Contracts that are not so filed as exhibits to the Annual Report on Form 10-K. True and complete copies of the Material Contracts of the Parent, the Purchaser and their respective Subsidiaries have been made available to the Company or are filed as exhibits to the Parent’s latest Annual Report on Form 10-K and no such Contract has been modified, rescinded or terminated.

(ii) Each Material Contract is legal, valid, binding and in full force and effect and is enforceable by the Parent, the Purchaser or their respective Subsidiaries, as applicable, in accordance with its terms (subject to the Bankruptcy and Equity Exceptions).

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(iii) Each of the Parent, the Purchaser and their respective Subsidiaries has performed in all material respects all respective obligations required to be performed by them to date under the Material Contracts and neither the Parent, Purchaser nor any of their respective Subsidiaries is in breach or default under any Material Contract, nor does the Parent have knowledge of any condition that, with the passage of time or the giving of notice or both, would result in such a breach or default.

(iv) None of the Parent, the Purchaser or any of their respective Subsidiaries has received any notice, that any party to a Material Contract intends to cancel, terminate or otherwise modify or not renew its relationship with the Parent, the Purchaser or any of their respective Subsidiaries, as applicable, and, to the knowledge of the Parent, no such action has been threatened.

(x) Real Property. Except as disclosed in the Parent Disclosure Letter:

(i) the Parent, the Purchaser or their respective Subsidiaries, as applicable, have valid, good and marketable title to all of the real or immovable property owned by the Parent, the Purchaser or their respective Subsidiaries, as applicable (the “Parent Owned Properties”), free and clear of any Liens, except for Permitted Liens, and there are no outstanding options or rights of first refusal to purchase the Parent Owned Properties, or any portion thereof or interest therein;

(ii) each lease, sublease, license or occupancy agreement (in each case, together with any amendments, supplements, notices and ancillary agreements thereto) for real or immovable property leased, subleased, licensed or occupied by the Parent, the Purchaser or their respective Subsidiaries, as applicable (the “Parent Leased Properties”), is valid, legally binding and enforceable against the Parent, the Purchaser or their respective Subsidiaries, as applicable, in accordance with its terms and in full force and effect, true and complete copies of which (including all related amendments, supplements, notices and ancillary agreements) have been made available to the Company, and none of the Parent, the Purchaser or their respective Subsidiaries, as applicable, is in breach of, or default under, such lease, sublease, license or occupancy agreement, and, to the knowledge of the Parent, no event has occurred which, with notice, lapse of time or both, would constitute such a breach or default the Parent, the Purchaser or their respective Subsidiaries, as applicable, or permit termination, modification or acceleration by any third party thereunder;

(iii) no third party has repudiated or has the right to terminate or repudiate any such lease, sublease, license or occupancy agreement (except for the normal exercise of remedies in connection with a default thereunder or any termination rights set forth in the lease, sublease, license or occupancy agreement) or any provision thereof; and

(iv) none of the leases, subleases, licenses or occupancy agreements has been assigned by the Parent, the Purchaser or their respective Subsidiaries, as applicable, in favor of any Person or sublet or sublicensed.

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(y) Personal Property; Condition of Personal Property.  The Parent, the Purchaser or their respective Subsidiaries, as applicable, have good title to all material personal or movable property of any kind or nature which the Parent, the Purchaser or their respective Subsidiaries, as applicable, purport to own, free and clear of all Liens (other than Permitted Liens). The Parent, the Purchaser or their respective Subsidiaries, as applicable, as lessee, have the right under valid and subsisting leases to use, possess and control all personal or movable property leased by, and material to, the Parent, the Purchaser or their respective Subsidiaries, as applicable, as used, possessed and controlled by the Parent, the Purchaser or their respective Subsidiaries, as applicable. All real and tangible personal property of the Parent, the Purchaser or their respective Subsidiaries is in generally good repair and is operational and usable in the manner in which it is currently being utilized, subject to normal wear and tear and technical obsolescence, repair or replacement.

(z) Intellectual Property.  Except as would not and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Parent: (i) the Parent, the Purchaser or their respective Subsidiaries, as applicable, own all right, title and interest, or have valid licenses (and are not in material breach of such licenses), in and to all Intellectual Property that is material to the conduct of the business, as presently conducted, of the Parent, the Purchaser or their respective Subsidiaries, as applicable (collectively, the “Parent Intellectual Property Rights”); (ii) all such Parent Intellectual Property Rights that are owned by or licensed to the Parent, the Purchaser or their respective Subsidiaries, as applicable, are sufficient, in all material respects, for conducting the business, as presently conducted, of the Parent, the Purchaser or their respective Subsidiaries, as applicable; (iii) to the knowledge of the Parent, all Parent Intellectual Property Rights owned or leased by the Parent, the Purchaser or their respective Subsidiaries, as applicable, are valid and enforceable, and the carrying on of the business of the Parent, the Purchaser or their respective Subsidiaries, as applicable, and the use by the Parent, the Purchaser or their respective Subsidiaries, as applicable, of any of the Parent Intellectual Property Rights or Parent Technology (as defined below) owned by or licensed to the Parent, the Purchaser or their respective Subsidiaries, as applicable, does not breach, violate, infringe or interfere with any rights of any other Person, except that the foregoing representation is given to the knowledge of Parent with respect to patents, and no proceeding is currently pending or, to the knowledge of Parent, threatened, with respect to any of the foregoing; (iv) to the knowledge of the Parent, no third party is infringing upon the Parent Intellectual Property Rights owned or licensed by the Parent, the Purchaser or their respective Subsidiaries, as applicable, and no proceeding is currently pending or threatened with respect to the foregoing; (v) all computer hardware and associated firmware and operating systems, application software, database engines and processed data, technology infrastructure and other computer systems used in connection with the conduct of the business, as presently conducted, of the Parent, the Purchaser or their respective Subsidiaries, as applicable (collectively, the “Parent Technology”), are sufficient, in all material respects, for conducting the business, as presently conducted, of the Parent, the Purchaser or their respective Subsidiaries, as applicable; and (vi) the Parent, the Purchaser or their respective Subsidiaries, as applicable own, or have validly licensed or leased (and are not in material breach of such licenses or leases), such Parent Technology.

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(aa) Restrictions on Conduct of Business.  Neither the Parent, the Purchaser nor any of their respective Subsidiaries is a party to or bound by any non-competition agreement, any non-solicitation agreement, or any other agreement, obligation, judgment, injunction, order or decree which purports to: (i) limit in any material respect the manner or the localities in which all or any portion of the business of the Parent, the Purchaser or their respective Subsidiaries are conducted; (ii) limit any business practice of the Parent, the Purchaser or their respective Subsidiaries in any material respect; or (iii) restrict any acquisition or disposition of any property by the Parent, the Purchaser or their respective Subsidiaries in any material respect. Neither the Parent, the Purchaser nor any of their respective Subsidiaries or any of their respective properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that would have or would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Parent, or that would or would be reasonably expected to prevent or delay the consummation of the Amalgamation or the transactions contemplated hereby.

(bb) Litigation.  There are no claims, actions, suits, arbitrations, inquiries, audits, investigations or proceedings pending, or, to the knowledge of the Parent threatened, against or relating to the Parent, the Purchaser or their respective Subsidiaries, the business of the Parent, the Purchaser or their respective Subsidiaries or affecting any of their respective current or former properties or assets by or before any Governmental Authority that, if determined adverse to the interests of the Parent, the Purchaser or their respective Subsidiaries, could potentially result in criminal sanction, or would be reasonably expected to prevent or delay the consummation of the Amalgamation or the transactions contemplated hereby, or would, or would be reasonably expected to, materially affect the Parent’s ability to own or operate the business of the Parent, the Purchaser or their respective Subsidiaries, nor, to the knowledge of the Parent, are there any events or circumstances which could reasonably be expected to give rise to any such claim, action, suit, arbitration, inquiry, investigation or proceeding. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of the Parent, threatened against or relating to the Parent, the Purchaser or their respective Subsidiaries before any Governmental Authority.

(cc) Corrupt Practices Legislation. Neither the Parent, the Purchaser, their respective Subsidiaries nor any of their respective officers, directors or employees acting on behalf of any of them, has taken, committed to take or been alleged to have taken any action which would cause the Parent or any of its Subsidiaries to be in violation of 18 United States Code §201, the Foreign Corrupt Practices Act, or any law of similar effect of any other jurisdiction, and to the knowledge of the Parent, no such action has been taken by any of its agents, representatives or other Persons acting on behalf of the Parent, the Purchaser or their respective Subsidiaries.

(dd) Intentionally Omitted.

(ee) Employment Matters.

(i) (A) The Parent has not entered into any written or oral agreement or understanding providing for a retention or change of control bonus or severance or termination payments to any director, officer or Parent Employees in connection with the termination of their position or their employment as a direct result of a change in control of the Parent (including as a result of the Amalgamation), and (B) no Parent Employee has any agreement as to length of notice or severance payment required to terminate his or her employment, other than such as results by Applicable Law from the employment of an employee without an agreement as to notice or severance;

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(ii) (A) the Parent is not a party to any Collective Agreement with respect to any Parent Employees, (B) no Person holds bargaining rights with respect to any Parent Employees and (C) to the knowledge of the Parent, no Person has applied or threatened to be certified as the bargaining agent of any Parent Employees;

(iii) no trade union has applied to have the Parent declared a common or related employer pursuant to Applicable Laws;

(iv) the Parent is in material compliance with all terms and conditions of employment and all Applicable Laws respecting employment;

(v) the Parent is not subject to any pending or, to the knowledge of the Parent, threatened claim or action relating to employment or termination of employment of employees or independent contractors;

(vi) the Parent has not and is not engaged in any unfair labor practice and no unfair labor practice complaint, grievance or arbitration proceeding is pending, or to the knowledge of the Parent, threatened against the Parent;

(vii) no labor strike, lock-out, slowdown or work stoppage is pending or to the knowledge of the Parent, threatened against or directly affecting the Parent and no such event has occurred in the last two years;

(viii) each independent contractor and consultant has been properly classified by the Parent as an independent contractor and the Parent has not received notification from any Governmental Authority challenging the classification of any individual who performs services for the Parent’s business as an independent contractor or consultant; and

(ix) there are no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workplace safety and insurance legislation and there are no orders under applicable occupational health and safety legislation relating to the Parent which are currently outstanding.

(ff) Employee Plans.

(i) Set forth in the Parent Disclosure Letter is, as of the date of this Agreement, a complete and accurate list of each material pension, benefit, insurance, retirement, compensation, deferred compensation, incentive, bonus, employee loan, collective bargaining, profit sharing, commission, performance award, option, phantom equity, stock or stock-based, stock purchase, restricted stock, change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, whether or not Tax-qualified, which is or has been maintained, sponsored, contributed to, or required to be contributed to by the Parent or any ERISA Affiliate of Parent for the benefit of any current or former Parent Employee or director, or under which the Parent has or may have any Liability, contingent or otherwise (collectively, the “Parent Employee Plans”).  Neither the Parent nor, to the knowledge of the Parent, any other Person, has made any commitment to modify, change or terminate any Parent Employee Plan, other than with respect to a modification, change or termination required by Applicable Laws.  With respect to each material Parent Employee Plan, Parent has made available to the Company accurate and complete copies of the following documents: (A) the plan document and any related trust agreement, including amendments thereto; (B) any current summary plan descriptions and other material communications to participants relating to the plan; (C) each plan trust, insurance, annuity or other funding contract or service provider agreement related thereto; (D) the most recent plan financial statements and actuarial or other valuation reports prepared with respect thereto, if any; (E) the most recent IRS determination or opinion letter, if any; (F) copies of the most recent plan year nondiscrimination and coverage testing results for each plan subject to such testing requirements; and (G) the most recent annual reports (Form 5500) and all schedules attached thereto for each Parent Employee Plan that is subject to ERISA and Code reporting requirements.

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(ii) Each Parent Employee Plan is being, and has been, administered in accordance with its terms and in compliance with the requirements prescribed by any and all Applicable Laws (including ERISA and the Code), in all material respects.  The Parent is not in material default under or material violation of, and has no knowledge of any material defaults or material violations by any other party to, any Parent Employee Plans.  All contributions required to be made by the Parent or any ERISA Affiliate to any Parent Employee Plan have been timely paid or accrued on the most recent Parent Financial Statements, if required under United States GAAP, in each case, in all material respects.  Any Parent Employee Plan intended to be qualified under Section 401(a) of the Code has obtained from the IRS a favorable determination letter or opinion letter as to its qualified status under the Code, and to the knowledge of the Parent, no event has occurred and no condition exists with respect to the form or operation of such Parent Employee Plan that would cause the loss of such qualification.

(iii) No Parent Employee Plan provides retiree medical to any Person, except as required by COBRA.  No suit, administrative proceeding or action has been brought, or to the knowledge of the Parent, is threatened against or with respect to any such Parent Employee Plan, including any audit or inquiry by the IRS or other applicable Governmental Authority (other than routine claims for benefits arising under such plans).

(iv) Neither the Parent nor any ERISA Affiliate of the Parent has, during the past six (6) years from the date hereof, maintained, established, sponsored, participated in or contributed to, or is obligated to contribute to, or otherwise incurred any obligation or liability (including any contingent liability) under, any “multiemployer plan” (as defined in Section 3(37) of ERISA) or any “pension plan” (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA or Section 412 of the Code.  Neither the Parent nor any ERISA Affiliate has, as of the date of this Agreement, any actual or potential withdrawal liability (including any contingent liability) for any complete or partial withdrawal (as defined in Sections 4203 and 4205 of ERISA) from any multiemployer plan.

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(v) Consummation of the Amalgamation and the other transactions contemplated hereby will not (i) entitle any current or former employee or other service provider of the Parent or any ERISA Affiliate to any payment (including golden parachute, bonus or benefits under any Parent Employee Plan); (ii) accelerate the time of payment or vesting of any such benefits or increase the amount of compensation due any such employee or service provider; (iii) result in the forgiveness of any indebtedness; (iv) result in any obligation to fund future benefits under any Parent Employee Plan; or (v) result in the imposition of any restrictions with respect to the amendment or termination of any of Parent Employee Plans.  No benefit payable or that may become payable by the Parent pursuant to any Parent Employee Plan in connection with the Amalgamation or as a result of or arising under this Agreement will constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) subject to the imposition of an excise Tax under Section 4999 of the Code or the deduction for which would be disallowed by reason of Section 280G of the Code.

(gg) Insurance. A true and complete list of all material insurance policies currently in effect that insure the physical properties, business, operations and assets of the Parent, the Purchaser and their respective Subsidiaries has been made available to the Company. To the knowledge of the Parent, each material insurance policy currently in effect that insures the physical properties, business, operations and assets of the Parent, the Purchaser and their respective Subsidiaries is valid and binding and in full force and effect and there is no material claim pending under any such policies as to which coverage has been questioned, denied or disputed by any insurer or as to which any insurer has made any reservation of rights or refused to cover all or any material portion of such claims.  All material proceedings covered by any insurance policy of the Parent or its Subsidiaries have been properly reported to and accepted by the applicable insurer.

(hh) Taxes.  The Parent, the Purchaser and their respective Subsidiaries have made available to the Company true, correct and complete copies of all Tax Returns, examination reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired. Except as disclosed on the Parent Disclosure Letter:

(i) the Parent, the Purchaser and their respective Subsidiaries have duly and timely filed all Tax Returns required to be filed by them prior to the date hereof and all such Tax Returns are complete and correct in all material respects;

(ii) the Parent, the Purchaser and their respective Subsidiaries have paid on a timely basis all Taxes which are due and payable, all assessments and reassessments, and all other Taxes due and payable by them on or before the date hereof, other than those which are being or have been contested in good faith and in respect of which reserves have been provided in the Parent Financial Statements;

(iii) the Parent, the Purchaser and their respective Subsidiaries have provided adequate accruals in accordance with United States GAAP in the Parent Financial Statements for any Taxes of the Parent, the Purchaser and their respective Subsidiaries for the period covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns;

(iv) since January 1, 2018, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued by the Parent, the Purchaser and their respective Subsidiaries, other than in the Ordinary Course;

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(v) none of the Parent, the Purchaser and their respective Subsidiaries has received a Tax refund to which it was not entitled;

(vi) no material deficiencies, litigation, proposed adjustments or matters in controversy exist or have been asserted with respect to Taxes of the Parent, the Purchaser or their respective Subsidiaries, and neither the Parent, the Purchaser nor their respective Subsidiaries are a party to any action or proceeding for assessment or collection of Taxes and no such event has been asserted or, to the knowledge of the Parent, threatened against the Parent, the Purchaser or their respective Subsidiaries or any of their respective assets;

(vii) no claim has been made by any Government Authority in a jurisdiction where the Parent, the Purchaser and their respective Subsidiaries do not file Tax Returns that the Parent, the Purchaser or their respective Subsidiaries are or may be subject to Tax by that jurisdiction;

(viii) there are no Liens (other than Permitted Liens) with respect to Taxes upon any of the assets of the Parent, the Purchaser or their respective Subsidiaries;

(ix) the Parent, the Purchaser and their respective Subsidiaries have withheld or collected all amounts required to be withheld or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Authority when required by Applicable Law to do so;

(x) there are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of Taxes due from the Parent, the Purchaser or their respective Subsidiaries for any taxable period and no request for any such waiver or extension is currently pending;

(xi) no closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into by the Parent, the Purchaser or their respective Subsidiaries with any taxing authority or issued by any taxing authority to the Parent, the Purchaser or their respective Subsidiaries;

(xii) there are no outstanding rulings of, or request for rulings with, any Governmental Authority addressed to the Parent, the Purchaser or their respective Subsidiaries that are, or if issued would be, binding on the Parent, the Purchaser or their respective Subsidiaries;

(xiii) none of the Parent, the Purchaser or their respective Subsidiaries is a party to any Contract with any third party relating to allocating or sharing the payment of, or liability for, Taxes or Tax benefits (other than pursuant to customary provisions included in credit agreements, leases, and agreements entered with employees, in each case, not primarily related to Taxes and entered into in the Ordinary Course);

(xiv) none of the Parent, the Purchaser or their respective Subsidiaries has any liability for the Taxes of any third party under Section 1.1502-6 of the Treasury Regulations (or any similar provision under Applicable Laws) as a transferee or successor or otherwise by operation of Applicable Laws;

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(xv) none of the Parent, the Purchaser or their respective Subsidiaries have participated in any “listed transaction” within the meaning of Section 1.6011-4 of the Treasury Regulations;

(xvi) the Parent has disclosed on its respective United States federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of United States federal income Tax within the meaning of Section 6662 of the Code;

(xvii) none of the Parent, the Purchaser or their respective Subsidiaries are (and have not been for the five-year period ending at the Effective Time) a “United States real property holding corporation” as defined in Section 897(c)(2) of the Code and the applicable Treasury Regulations;

(xviii) none of the Parent, the Purchaser or their respective Subsidiaries have distributed stock of another Person, or have had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code;

(xix) none of the Parent, the Purchaser or their respective Subsidiaries has taken or agreed to take any action that would prevent the Amalgamation from constituting a reorganization qualifying under Section 368 of the Code; and

(xx) none of the Parent, the Purchaser or their respective Subsidiaries is aware of any agreement, plan or other circumstance that would prevent the Amalgamation from qualifying as a reorganization under Section 368 of the Code.

(ii) Disclosure.  The information relating to the Parent, the Purchaser or their respective Subsidiaries to be supplied by or on behalf of the Parent for inclusion or incorporation by reference in the S-4 Registration Statement and the Proxy Statement/Prospectus will not, on the date the its filed with the SEC or the date it is first mailed to the Parent Stockholders, as applicable, or at the time of the Parent Meeting, contain any untrue statement of any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading at the time and in light of the circumstances under which such statement is made.  The S-4 Registration Statement and the Proxy Statement/Prospectus will comply in all material respects as to form with the requirements of the United States Exchange Act and the rules and regulations thereunder.  Notwithstanding the foregoing, no representation is made by the Parent or the Purchaser with respect to the information that has been or will be supplied by the Company or any of its Representatives for inclusion in the S-4 Registration Statement and the Proxy Statement/Prospectus.

5.2          Representations and Warranties of ExchangeCo

ExchangeCo represents and warrants to the Company as follows:

(a) Organization and Qualification. ExchangeCo is an unlimited liability corporation duly incorporated and validly existing under the laws of British Columbia, and has all necessary power and authority to own its property and assets as now owned and to conduct its affairs as now conducted. ExchangeCo:

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(i) has all Authorizations necessary to conduct its business substantially as now conducted, except where the failure to hold such Authorizations would not individually or in the aggregate have a Material Adverse Effect on it; and

(ii) is duly registered or otherwise authorized and qualified to do business and is in good standing in each jurisdiction in which the character of its properties, owned, leased, licensed or otherwise held or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect on the Parent or the Purchaser.

(b) Authorized and Issued Capital.

(i) All of ExchageCo’s issued and outstanding capital stock is currently held by the Parent and no other person has any right to acquire shares of ExchangeCo.

(ii) All ExchangeCo Exchangeable Shares and all ExchangeCo Special Shares have been duly authorized and validly issued, and are fully paid and non-assessable and have not been issued in violation of any pre-emptive rights or in violation of Applicable Laws.

(iii) Except the Voting and Exchange Trust Agreement and the Exchangeable Share Support Agreement, there are no issued, outstanding or authorized options, equity-based awards, warrants, calls, conversion, pre-emptive, redemption, repurchase, stock appreciation or other rights, or any other agreements, arrangements, instruments or commitments of any kind that obligate ExchangeCo to, directly or indirectly, issue or sell any securities of ExchangeCo or give any Person a right to subscribe for or acquire, any securities of ExchangeCo.

(c) Corporate Authorization. ExchangeCo has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of, and performance by, ExchangeCo of this Agreement and the consummation of the Amalgamation and the other transactions contemplated hereby have been, or will at Closing be, duly authorized by all necessary corporate action on the part of each of ExchangeCo and no other corporate actions on the part of ExchangeCo are necessary to authorize this Agreement or to consummate the Amalgamation and the other transactions contemplated hereby.

(d) ExchangeCo. ExchangeCo was incorporated solely to effect the Amalgamation and ExchangeCo has no assets or liabilities and it has not carried on any business.

(e) No Conflict. The execution and delivery of, and the performance by ExchangeCo of its obligations under, this Agreement, the completion of the transactions contemplated hereby, and the performance of its obligations hereunder and thereunder, do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition):

(i) constitute or result in a violation or breach of, or conflict with, any of the terms or provisions of its Organizational Documents;

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(ii) require any consent or other action by any Person under, constitute or result in a breach or violation of or conflict with, or, with or without notice or lapse of time or both, allow any Person to exercise any rights under any of the terms or provisions of any Material Contracts, licenses, leases or instruments to which ExchangeCo is a party or pursuant to which any of its assets or properties may be affected;

(iii) result in a breach of, or cause the termination or revocation of, any Authorization held by ExchangeCo, or necessary to the ownership of the ExchangeCo Exchangeable Shares or ExchangeCo Special Shares, or the operation of the businesses of ExchangeCo; or

(iv) result in the violation of any Applicable Law,

except as would not, individually or in the aggregate, have a Material Adverse Effect on ExchangeCo.

(f) Disclosure.  The information relating to ExchangeCo to be supplied by or on behalf of ExchangeCo for inclusion or incorporation by reference in the S-4 Registration Statement and the Proxy Statement/Prospectus will not, on the date the its filed with the SEC or the date it is first mailed to the Parent Stockholders, as applicable, or at the time of the Parent Meeting, contain any untrue statement of any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading at the time and in light of the circumstances under which such statement is made.  The S-4 Registration Statement and the Proxy Statement/Prospectus will comply in all material respects as to form with the requirements of the United States Exchange Act and the rules and regulations thereunder.  Notwithstanding the foregoing, no representation is made by ExchangeCo with respect to the information that has been or will be supplied by the Parent, the Purchaser, the Company or any of their respective Representatives for inclusion in the S-4 Registration Statement and the Proxy Statement/Prospectus.

ARTICLE 6

ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

6.1          Superior Proposals

(a) Except as expressly provided in this Article 6 and for the Parent Legacy Business Disposition, the Company, the Parent, and their respective Subsidiaries shall not, directly or indirectly, through any officer, director, employee, representative (including any financial or other adviser) or other agent of the Company or the Parent or of any of their Subsidiaries (collectively “Representatives”), or otherwise, and shall not permit any such Person to:

(i) solicit, assist, initiate, encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of the Company, the Parent or any of their Subsidiaries or entering into any form of agreement, arrangement or understanding) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal for the Company or the Parent;

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(ii) enter into or otherwise engage or participate in any discussions or negotiations with any Person (other than the Parties) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal for the Company or the Parent;

(iii) make a Company Change in Recommendation or Parent Change in Recommendation;

(iv) accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend, or take no position or remain neutral with respect to, any Acquisition Proposal for the Company or the Parent; or

(v) accept or enter into or publicly propose to accept or enter into any agreement, understanding or arrangement in respect of an Acquisition Proposal for the Company or the Parent.

(b) The Company and Parent shall, and shall cause their Subsidiaries and Representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiations, or other activities commenced prior to the date of this Agreement with any Person (other than the Parties) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal for the Company or the Parent, and in connection therewith the Company and the Parent shall:

(i) immediately discontinue access to and disclosure of all information, including any data room, and any confidential information, properties, facilities, books and records of the Company, the Parent, or any of their respective Subsidiaries; and

(ii) promptly request, and exercise all rights either has to require: (A) the return or destruction of all copies of any confidential information regarding the Company, the Parent, or any of their respective Subsidiaries provided to any Person other than the Parties, and (B) the destruction of all material including or incorporating or otherwise reflecting such confidential information regarding the Company, the Parent, or any of their respective Subsidiaries, using their commercially reasonable efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements.

Except as expressly provided in this Article 6 and for the Parent Legacy Business Disposition, if the Company, the Parent, or any of their respective Subsidiaries accepts a Superior Proposal, the Company shall be required to repay the entire outstanding principal balance of the Bridge Loan Financing plus all accrued and unpaid interest thereon and any other sums payable to the Noteholder directly in connection with the Bridge Loan Financing immediately upon acceptance of a Superior Proposal.

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(c) The Company and the Parent represent and warrant that, since January 1, 2019, neither the Company nor the Parent has waived any confidentiality, standstill, non-disclosure, non-solicitation, use, business purpose or similar agreement, restriction or covenant to which the Company, the Parent, or any of their respective Subsidiaries is a party, and further covenant and agree that (A) the Company and the Parent shall take all necessary action to enforce each confidentiality, standstill, non-disclosure, non-solicitation, use, business purpose or similar agreement, restriction or covenant to which they or any of their respective Subsidiaries is a party, and (B) neither the Company, the Parent, nor any of their respective Subsidiaries, nor any of their respective Representatives have or will, without the prior written consent of the Parties (which may be withheld or delayed in the Parties’ sole and absolute discretion), release any Person from, or waive, amend, suspend or otherwise modify such Person’s obligations respecting the Company, the Parent, or any of their respective Subsidiaries under any confidentiality, standstill, non-disclosure, non-solicitation, use, business purpose or similar agreement, restriction or covenant to which the Company, the Parent, or any of their respective Subsidiaries is a party (it being acknowledged by the Parties that the automatic termination or release of any standstill restrictions of any such agreement as the result of entering into of this Agreement will not constitute a breach of this Section 6.1(c)).

(d)        Notwithstanding the foregoing, if Parent receives a written Acquisition Proposal from a third party and the receipt of such Acquisition Proposal was not initiated, sought, solicited, knowingly encouraged or knowingly induced by Parent or its subsidiaries, then the Parent may (i) contact the person who has made such Acquisition Proposal in order to clarify the terms of such Acquisition Proposal so that the Parent Board (or any committee thereof) may inform itself about such Acquisition Proposal, (ii) furnish information concerning its business, properties or assets to any person pursuant to a confidentiality agreement with terms that, taken as a whole, are not materially less favorable to the Company than those contained in the Confidentiality Agreement and (iii) negotiate and participate in discussions and negotiations with such person concerning a Acquisition Proposal, in the case of clauses (ii) and (iii), if the Parent Board determines in good faith that such Acquisition Proposal constitutes or is reasonably likely to constitute or lead to a Superior Proposal.  Parent (A) shall promptly (and in any case within twenty-four (24) hours) provide the Company notice (1) of the receipt of any Acquisition Proposal, which notice shall include a complete, unredacted copy of such Acquisition Proposal, and (2) of any inquiries, proposals or offers received by, any requests for non-public information from, or any discussions or negotiations sought to be initiated or continued with, the Parent or any Representatives of the Parent concerning an Acquisition Proposal that constitutes or is reasonably likely to constitute or lead to an Acquisition Proposal, and disclose the identity of the other party (or parties) and the material terms of such inquiry, offer, proposal or request and, in the case of written materials, provide copies of such materials, (B) shall promptly (and in any case within twenty-four (24) hours) make available to the Company copies of all written materials provided by the Parent to such party but not previously made available to the Company and (C) shall keep the Company informed on a reasonably prompt basis (and, in any case, within twenty-four (24) hours of any significant development) of the status and material details (including amendments and proposed amendments) of any such Acquisition Proposal or other inquiry, offer, proposal or request.

(e) If the Parent Board receives an Acquisition Proposal that the Parent Board determines in good faith constitutes a Superior Proposal, the Parent Board may effect a Parent Change in Recommendation and authorize the Parent to terminate this Agreement pursuant to Section 9.2(a)(iv)(A) in order to enter into a definitive agreement providing for a Superior Proposal if (i) the Parent Board determines in good faith that the failure to take such action could reasonably be expected to be inconsistent with the Parent’s directors’ fiduciary duties under applicable Law; (ii) the Parent has notified the Company in writing that it intends to effect a Parent Change in Recommendation or terminate this Agreement; (iii) if applicable, the Parent has provided the Company a copy of the proposed definitive agreements between the Parent and the Person making such Superior Proposal; (iv) for a period of five (5) Business Days following the notice delivered pursuant to clause (ii) of this Section 6.1(e), the Parent shall have discussed and negotiated in good faith and made Representatives of the Parent available to discuss and negotiate in good faith (in each case to the extent the Company desires to negotiate) with Representatives of the Company any proposed modifications to the terms and conditions of this Agreement so that the failure to take such action would no longer reasonably be expected to be inconsistent with the Parent’s directors’ fiduciary duties under applicable Law (it being understood and agreed that any amendment to any material term or condition of any Superior Proposal shall require a new notice and a new four (4) Business Day negotiation period); and (v) no earlier than the end of such negotiation period, the Parent Board shall have determined in good faith, after considering the terms of any proposed amendment or modification to this Agreement, that (x) the Acquisition Proposal that is the subject of the notice described in clause (ii) above still constitutes a Superior Proposal and (y) the failure to take such action would still reasonably be expected to be inconsistent with the Parent’s directors’ fiduciary duties under applicable Law.

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6.2          Breach by Representatives

Without limiting the generality of the foregoing, the Company or the Parent, as the case may be, shall advise their respective Representatives of the prohibitions set out in this Article 6 and any violation of the restrictions set forth in this Article 6 by the Company, the Parent, or their respective Representatives is deemed to be a breach of this Article 6 by the Company or by the Parent, as the case may be.

ARTICLE 7

OTHER COVENANTS

7.1          Public Communications

The Parties shall cooperate in the preparation of presentations, if any, to the Company Securityholders and the Parent Stockholders regarding the Amalgamation. A Party must not issue any press release or make any other public statement or disclosure with respect to this Agreement or the Amalgamation without the consent of the other Parties (which consent shall not be unreasonably withheld or delayed), and neither Party may make any filing with any Governmental Authority with respect to this Agreement or the Amalgamation without the consent of the other Party (which consent shall not be unreasonably withheld or delayed); provided that any Party that, in the opinion of its outside legal counsel, is required to make disclosure by Applicable Law may make such disclosure provided it shall use its commercially reasonable efforts to give the other Parties prior oral or written notice and a reasonable opportunity to review or comment on the disclosure or filing (other than with respect to confidential information contained in such disclosure or filing). The Party making such disclosure shall give reasonable consideration to any comments made by the other Parties or their counsel, and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure or filing.

7.2          Covenants of the Company Regarding the Conduct of Business

(a) The Company covenants and agrees that, subject to Applicable Law, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the express prior written consent of the Parent and the Purchaser or as required or permitted by this Agreement, the Company shall conduct its business in the Ordinary Course and in accordance with Applicable Law.

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(b) Without limiting the generality of Section 7.2(a), subject to Applicable Law, the Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the express prior written consent of the Parent and the Purchaser or as required or permitted by this Agreement, the Company shall use its reasonable commercially reasonable efforts to maintain and preserve intact the current business organization, assets, properties and business of the Company, maintain in effect all material Authorizations of the Company, keep available the services of the present employees and agents of the Company and maintain good relations with, and the goodwill of, employees, suppliers, customers, creditors and all other Persons having business relationships with the Company and, except with the prior written consent of the Parent and the Purchaser and as required in connection with the Bridge Loan Financing, the Company shall not, directly or indirectly:

(i) make any change in its Organizational Documents;

(ii) split, combine, consolidate or reclassify any shares of its capital stock, undertake any capital reorganization or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof);

(iii) redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire any shares of its capital stock or reduce the stated capital in respect of the Company Common Shares or any other shares of the Company;

(iv) issue, grant, deliver, sell, pledge or otherwise encumber, or authorize the issuance, grant, delivery, sale, pledge or other encumbrance of any shares of capital stock, securities, options, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock, of the Company, except for the issuance of Company Common Shares (A) issuable upon the exercise of the currently outstanding Company Options or (B) pursuant to outstanding Company Warrants;

(v) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses of any other Person (other than pursuant to the transactions contemplated by this Agreement);

(vi) reorganize, amalgamate, combine or merge the Company with any other Person (other than pursuant to the transactions contemplated by this Agreement);

(vii) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company;

(viii) sell, pledge, lease, dispose of, surrender, lose the right to use, mortgage, license, encumber (other than Permitted Liens) or otherwise dispose of or transfer any assets of the Company or any interest in any assets of the Company, other than in the Ordinary Course;

(ix) make any capital expenditure or similar commitments, other than in the Ordinary Course;

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(x) make any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person, other than in the Ordinary Course;

(xi) prepay any long-term indebtedness before its scheduled maturity or increase, create, incur, assume or otherwise become liable, in one transaction or in a series of related transactions, with respect to any indebtedness for borrowed money or guarantees thereof, other than in the Ordinary Course; provided that any indebtedness created, incurred, refinanced, assumed or for which the Company becomes liable in accordance with the any of the foregoing shall be prepayable at the Effective Time without premium, penalty or other incremental costs (including breakage costs);

(xii) enter into any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or similar financial instruments;

(xiii) make any bonus or profit sharing distribution or similar payment of any kind;

(xiv) grant any general increase in the rate of wages, salaries, bonuses or other remuneration of any Company Employees, other than in the Ordinary Course;

(xv) except as required by United States GAAP, make any change in the Company’s methods of accounting;

(xvi) make any material Tax election, information schedule, return or designation, except as required by Applicable Law and in a manner consistent with past practice, settle or compromise any material Tax claim, assessment, reassessment or liability, file any amended Tax Return, enter into any material agreement with a Governmental Authority with respect to Taxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material Tax matter or materially amend or change any of its methods or reporting income, deductions or accounting for income Tax purposes except as may be required by Applicable Law;

(xvii) create, enter into or increase any severance, change of control or termination pay to (or amend any similar existing arrangement with) any Company Employee, director or executive officer of the Company or change the benefits payable under any existing severance or termination pay policies with any Company Employee, director or executive officer of the Company;

(xviii) except as required by Applicable Law: (A) adopt, enter into or amend any Employee Plan (other than entering into an employment agreement in the Ordinary Course with a new Company Employee who was not employed by the Company on the date of this Agreement); (B) pay any benefit to any director or officer of the Company or to any Company Employee that is not required under the terms of any Employee Plan in effect on the date of this Agreement; (C) grant, accelerate, increase or otherwise amend any payment, award or other benefit payable to, or for the benefit of, any director or officer of the Company or to any Company Employee; (D) make any material determination under any Employee Plan that is not in the Ordinary Course; (E) take or propose any action to effect any of the foregoing; or (F) hire or terminate or promote any employee whose base salary is greater than $75,000;

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(xix) cancel, waive, release, assign, settle or compromise any material claims or rights;

(xx) commence, waive, release, assign, settle or compromise any litigation, proceedings or governmental investigations;

(xxi) amend, modify, terminate or waive any right under any Material Contract or enter into any Contract or agreement that would be a Material Contract if in effect on the date hereof;

(xxii) except as contemplated in Section 4.1(jj), amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of the Company in effect on the date of this Agreement, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums are in full force and effect;

(xxiii) in respect of any assets of the Company, waive, release, surrender, let lapse, grant or transfer any material right or value or amend, modify or change, or agree to amend, modify or change, in any material respect any existing material Authorization, right to use, lease, contract, production sharing agreement, Intellectual Property (other than the granting of non-exclusive licenses or other dispositions in the Ordinary Course), or other material document;

(xxiv) abandon or fail to diligently pursue any application for any material Authorizations, licenses, leases, or registrations or take any action, or fail to take any action, that could lead to the termination of any material Authorizations, licenses, leases or registrations;

(xxv) enter into or amend any Contract with any broker, finder or investment banker; or

(xxvi) authorize, agree, resolve or otherwise commit, whether or not in writing, to do any of the foregoing.

7.3          Covenants of the Company in Connection with the Transaction

The Company shall perform all obligations required or desirable to be performed by the Company under this Agreement, cooperate with the Parent and the Purchaser in connection therewith, and do all such other commercially reasonable acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by this Agreement and, without limiting the generality of the foregoing, the Company shall:

(a) carry out this Agreement in accordance with and subject to the terms hereof, and comply promptly with all requirements imposed by Applicable Law on it with respect to this Agreement or the Amalgamation;

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(b) use all commercially reasonable efforts to obtain and maintain all third party or other consents, waivers, permits, exemptions, orders, approvals, agreements, amendments or confirmations that are (i) necessary or advisable to be obtained under the Material Contracts in connection with the Amalgamation or (ii) required in order to maintain the Material Contracts in full force and effect following completion of the Amalgamation, in each case, on terms that are reasonably satisfactory to the Parent and the Purchaser, and without paying, and without committing itself or the Parent or the Purchaser to pay, any consideration or incur any liability or obligation without the prior written consent of the Parent and the Purchaser;

(c) use all commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Authorities from the Company relating to the Amalgamation;

(d) use all commercially reasonable efforts to, on prior written approval of the Parent and the Purchaser, oppose, lift or rescind any injunction, restraining or other order, decree, judgment or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Amalgamation and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Amalgamation or this Agreement;

(e) not take any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, delay or otherwise impede the consummation of the Amalgamation or the transactions contemplated by this Agreement;

(f) use all commercially reasonable efforts to, as promptly as practicable, prepare and file all necessary documents, registrations, statements, petitions, filings and applications for any Regulatory Approvals and use commercially reasonable efforts to obtain and maintain all Regulatory Approvals;

(g) use all commercially reasonable efforts to cooperate with the Parent and the Purchaser in connection with obtaining any Regulatory Approvals including providing the Parent and the Purchaser with copies of all notices and information or other correspondence supplied to, filed with or received from any Governmental Authority;

(h) concurrently with the Closing, cause all current Company Shareholders except the Noteholder to execute a lock-up agreement substantially in the form attached hereto as Exhibit A (the “Lock-Up Agreement”);

(i) promptly notify the Parent and the Purchaser in writing of:

(i) any Material Adverse Effect with respect to the Company or any change, effect, event, development, occurrence, circumstance or state of facts which could reasonably be expected to have a Material Adverse Effect with respect to the Company;

(ii) any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another Person) is or may be required in connection with this Agreement or the Amalgamation;

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(iii) any notice or other communication from any material supplier, customer or other third party to the effect that such supplier, customer or third party is terminating, may terminate or is otherwise materially adversely modifying or may materially adversely modify its relationship with the Company as a result of this Agreement or the Amalgamation;

(iv) any notice or other communication from any Governmental Authority in connection with this Agreement (and the Company shall contemporaneously provide a copy of any such written notice or communication to the Purchaser); or

(v) any filing, actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting the Company or its assets or properties; and

(j) conduct itself, in all material respects, subject to Applicable Law, so as to keep the Parent and the Purchaser fully informed as to the material decisions required to be made or actions required to be taken with respect to the operation of its business.

7.4          Covenants of the Parent and the Purchaser Regarding the Conduct of Business

(a) The Parent and the Purchaser covenant and agree that, subject to Applicable Law, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the express prior written consent of the Company or as required or permitted by this Agreement, the Parent and the Purchaser shall, and shall cause their respective Subsidiaries to, conduct their business in the Ordinary Course and in accordance with Applicable Law.

(b) Without limiting the generality of Section 7.4(a), subject to Applicable Law, the Parent and the Purchaser covenant and agree that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the express prior written consent of the Company or as required or permitted by this Agreement or as contemplated by the Parent Legacy Business Disposition or Parent Financing, the Parent and the Purchaser shall, and shall cause their respective Subsidiaries to, use their commercially reasonable efforts to maintain and preserve intact the current business organization, assets, properties and business of the Parent, the Purchaser and their respective Subsidiaries, maintain in effect all material Authorizations of the Parent, the Purchaser and their respective Subsidiaries, keep available the services of the present employees and agents of the Parent, the Purchaser and their respective Subsidiaries and maintain good relations with, and the goodwill of, employees, suppliers, customers, creditors and all other Persons having business relationships with the Parent, the Purchaser and their respective Subsidiaries and, except with the prior written consent of the Company and other than as required in connection with the Parent Legacy Business Disposition and the Stock Split, the Parent and the Purchaser shall not, directly or indirectly, and shall cause their respective Subsidiaries not to:

(i) make any change in its Organizational Documents, other than the Parent Charter Amendment;

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(ii) split, combine, consolidate or reclassify any shares of its capital stock, undertake any capital reorganization or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof), other than the Stock Split;

(iii) redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire any shares of its capital stock or reduce the stated capital in respect of the Parent Common Stock or any other shares of the Parent, the Purchaser and their respective Subsidiaries (other than in connection with the redemption or conversion into common stock of the Parent’s outstanding shares of preferred stock prior to the Effective Time);

(iv) issue, grant, deliver, sell, pledge or otherwise encumber, or authorize the issuance, grant, delivery, sale, pledge or other encumbrance of any shares of capital stock, securities, options, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock, of the Parent, the Purchaser or their respective Subsidiaries, except for the issuance of Parent Capital Stock (A) issuable upon the exercise of the currently outstanding Parent Options, (B) pursuant to outstanding Parent Warrants or (C) issuable in connection with the Parent Financing;

(v) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses of any other Person (other than pursuant to the transactions contemplated by this Agreement);

(vi) reorganize, amalgamate, combine or merge the Parent, the Purchaser or their respective Subsidiaries with any other Person (other than pursuant to the transactions contemplated by this Agreement);

(vii) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Parent, the Purchaser or their respective Subsidiaries;

(viii) sell, pledge, lease, dispose of, surrender, lose the right to use, mortgage, license, encumber (other than Permitted Liens) or otherwise dispose of or transfer any assets of the Parent, the Purchaser or their respective Subsidiaries or any interest in any assets of the Parent, the Purchaser or their respective Subsidiaries, other than in the Ordinary Course;

(ix) make any capital expenditure or similar commitments, other than in the Ordinary Course;

(x) make any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person;

(xi) prepay any long-term indebtedness before its scheduled maturity or increase, create, incur, assume or otherwise become liable, in one transaction or in a series of related transactions, with respect to any indebtedness for borrowed money or guarantees thereof, other than in the Ordinary Course; provided that any indebtedness created, incurred, refinanced, assumed or for which the Parent, the Purchaser or their respective Subsidiaries becomes liable in accordance with the foregoing shall be prepayable at the Effective Time without premium, penalty or other incremental costs (including breakage costs);

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(xii) enter into any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or similar financial instruments;

(xiii) make any bonus or profit sharing distribution or similar payment of any kind except as may be required by the terms of a Contract listed in the Parent Disclosure Letter or the SEC Documents;

(xiv) grant any general increase in the rate of wages, salaries, bonuses or other remuneration of any Parent Employees except as may be required by a Contract listed in the Parent Disclosure Letter or the SEC Documents, other than in the Ordinary Course;

(xv) except as required by United States GAAP, make any change in the methods of accounting of the Parent, the Purchaser or their respective Subsidiaries;

(xvi) make any material Tax election, information schedule, return or designation, except as required by Applicable Law and in a manner consistent with past practice, settle or compromise any material Tax claim, assessment, reassessment or liability, file any amended Tax Return, enter into any material agreement with a Governmental Authority with respect to Taxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material Tax matter or materially amend or change any of its methods or reporting income, deductions or accounting for income Tax purposes except as may be required by Applicable Law;

(xvii) create, enter into or increase any severance, change of control or termination pay to (or amend any existing arrangement with) any Parent Employee, director or executive officer of the Parent, the Purchaser or their respective Subsidiaries or change the benefits payable under any existing severance or termination pay policies with any Parent Employee, director or executive officer of the Parent, the Purchaser or their respective Subsidiaries, except as required by the terms thereof as in effect on the date of this Agreement;

(xviii) except as required by Applicable Law: (A) adopt, enter into or amend any Parent Employee Plan (other than entering into an employment agreement in the Ordinary Course with a new Parent Employee who was not employed by the Parent, the Purchaser or their respective Subsidiaries on the date of this Agreement); (B) pay any benefit to any director or officer of the Parent, the Purchaser or their respective Subsidiaries or to any Parent Employee that is not required under the terms of any Parent Employee Plan in effect on the date of this Agreement; (C) grant, accelerate, increase or otherwise amend any payment, award or other benefit payable to, or for the benefit of, any director or officer of the Parent, the Purchaser or their respective Subsidiaries or to any Parent Employee; (D) make any material determination under any Parent Employee Plan that is not in the Ordinary Course; or (E) take or propose any action to effect any of the foregoing;

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(xix) cancel, waive, release, assign, settle or compromise any material claims or rights;

(xx) commence, waive, release, assign, settle or compromise any litigation, proceedings or governmental investigations;

(xxi) amend or modify or terminate or waive any right under any Material Contract or enter into any Contract or agreement that would be a Material Contract if in effect on the date hereof;

(xxii) except as contemplated in Section 5.1(gg), amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of the Parent, the Purchaser or their respective Subsidiaries in effect on the date of this Agreement, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums are in full force and effect;

(xxiii) in respect of any assets of the Parent, the Purchaser or their respective Subsidiaries, waive, release, surrender, let lapse, grant or transfer any material right or value or amend, modify or change, or agree to amend, modify or change, in any material respect any existing material Authorization, right to use, lease, contract, production sharing agreement, Intellectual Property, or other material document;

(xxiv) abandon or fail to diligently pursue any application for any material Authorizations, licenses, leases, or registrations or take any action, or fail to take any action, that could lead to the termination of any material Authorizations, licenses, leases or registrations;

(xxv) enter into or amend any Contract with any broker, finder or investment banker; or

(xxvi) authorize, agree, resolve or otherwise commit, whether or not in writing, to do any of the foregoing.

7.5          Covenants of the Parent and the Purchaser in Connection with the Transaction

Each of the Parent and the Purchaser shall perform, and shall cause their respective Subsidiaries to perform, all obligations required or desirable to be performed by each of the Parent and the Purchaser or any of their respective Subsidiaries under this Agreement, cooperate with the Company in connection therewith, and do all such other commercially reasonable acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by this Agreement and, without limiting the generality of the foregoing, each of the Parent and the Purchaser shall and, where appropriate, shall cause each of their respective Subsidiaries to:

(a) carry out in accordance with and subject to the terms of this Agreement and comply promptly with all requirements imposed by Applicable Law on it with respect to this Agreement or the Amalgamation;

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(b) use all commercially reasonable efforts to obtain and maintain all third party or other consents, waivers, permits, exemptions, orders, approvals, agreements, amendments or confirmations that are (i) necessary or advisable to be obtained under the Material Contracts in connection with the Amalgamation or (ii) required in order to maintain the Material Contracts in full force and effect following completion of the Amalgamation, in each case, on terms that are reasonably satisfactory to the Company, and without paying, and without committing itself or the Company to pay, any consideration or incur any liability or obligation without the prior written consent of the Company;

(c) use all commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Authorities from each of the Parent and the Purchaser relating to the Amalgamation;

(d) prepare and submit the NASDAQ Listing Application and use commercially reasonable efforts to cause such NASDAQ Listing Application to be conditionally approved prior to the Effective Time;

(e) use all commercially reasonable efforts to oppose, lift or rescind any injunction, restraining or other order, decree, judgment or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Amalgamation and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Amalgamation or this Agreement;

(f) use all commercially reasonable efforts to, as promptly as practicable, prepare and file all necessary documents, registrations, statements, petitions, filings and applications for any Regulatory Approvals and use commercially reasonable efforts to obtain and maintain all Regulatory Approvals;

(g) use all commercially reasonable efforts to cooperate with the Company in connection with obtaining any Regulatory Approvals including providing the Company with copies of all notices and information or other correspondence supplied to, filed with or received from any Governmental Authority (provided that, notwithstanding anything to the contrary set forth in this Agreement, each of the Parent and the Purchaser are under no obligation to take any steps or actions that would, in their sole discretion, affect the Parent or the Purchaser’s right to own, use or exploit its business, operations or assets or those of the Company);

(h) not take any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, delay or otherwise impede the consummation of the Amalgamation or the transactions contemplated by this Agreement;

(i) except as set forth in Section 7.7 hereof, assist in obtaining the resignations (in a form satisfactory to the Company, acting reasonably) of each member of the Parent Board and each member of the board of directors of the Parent’s Subsidiaries, and causing them and the officers of the Parent to be replaced in accordance with Section 7.7;

(j) prior to the Closing, consummate the Parent Legacy Business Disposition;

(k) prior to the Closing, consummate the Parent Financing;

(l) prior to the Closing, obtain the Parent Stockholder Approval;

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(m) immediately prior to the Effective Time, file the Parent Charter Amendment to become effective at the Effective Time;

(n) concurrently with the Closing, if necessary, effectuate the Stock Split;

(o) prior to the Closing, cause all Parent Preferred Stock to be converted into Parent Common Stock;

(p) adopt a stock incentive plan (the “Resulting Issuer Incentive Stock Plan”) pursuant to which shares of Resulting Issuer Common Stock comprising 15% of the issued and outstanding shares of Resulting Issuer Common Stock post-Closing, on a fully diluted basis, shall be reserved for issuance to employees, directors, consultants, and other service providers;

(q) promptly notify the Company of:

(i) any Material Adverse Effect with respect to the Parent or the Purchaser or any change, effect, event, development, occurrence, circumstance or state of facts which could reasonably be expected to have a Material Adverse Effect with respect to the Parent or the Purchaser;

(ii) any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another Person) is or may be required in connection with this Agreement or the Amalgamation;

(iii) any notice or other communication from any material supplier, customer or other third party to the effect that such supplier, customer or third party is terminating, may terminate or is otherwise materially adversely modifying or may materially adversely modify its relationship with the Parent or the Purchaser as a result of this Agreement or the Amalgamation;

(iv) any notice or other communication from any Governmental Authority in connection with this Agreement (and the Parent or the Purchaser shall contemporaneously provide a copy of any such written notice or communication to the Company); or

(v) any filing, actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting the Company or its assets or properties; and

(r) conduct itself, in all material respects, subject to Applicable Law, so as to keep the Company fully informed as to the material decisions required to be made or actions required to be taken with respect to the operation of its business.

7.6          Investment Canada Act

The Parent will file a “Notification to Acquire Control of an Existing Canadian Business” pursuant to the Investment Canada Act within 30 days after the Effective Date.

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7.7          Directors and Officers of the Resulting Issuer

The Parties will take all actions necessary to cause the number of directors of the Resulting Issuer to be a be a minimum of five (5), of which one (1) director shall be a designee of the Parent and the remaining four (4) of which shall be designated by the Company, and to be appointed as of the date of Closing. The composition of the board of directors of the Resulting Issuer shall satisfy all NASDAQ and SEC requirements.

7.8          ExchangeCo

The Parent and ExchangeCo shall take all actions necessary to (a) maintain in effect for all periods relevant hereto an election under § 301.7701-3 of the Treasury Regulations for ExchangeCo to be disregarded as an entity separate from the Parent for United States federal income tax purposes, and (b) cause ExchangeCo for each taxable period of its existence to be disregarded as an entity separate from Parent for United States federal income tax purposes. Prior to the Effective Time, the Parent shall deliver to the Company a copy of the applicable Form 8832 (Entity Classification Election) for ExchangeCo and proof of filing of such Form 8832 by ExchangeCo with the IRS.

7.9          Actions to Satisfy Conditions

(a) The Company shall take all commercially reasonable actions to ensure compliance with all of the applicable conditions precedent in favor of the Parent as set forth in this Agreement.

(b) The Parent shall take all commercially reasonable actions to ensure compliance with all of the applicable conditions precedent in favor of the Company as set forth in this Agreement.

7.10          Notice and Cure Provisions

(a) Each Party shall promptly notify the other Parties of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure would, or would be reasonably likely to:

(i) cause any of the representations or warranties of such Party contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date of this Agreement to the Effective Time; or

(ii) result in the failure, in any material respect, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party under this Agreement.

(b) Notification provided under this Section 7.10 will not affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement.

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(c) The Parent and the Purchaser may not elect to exercise their right to terminate this Agreement pursuant to Section 9.2 and the Company may not elect to exercise its right to terminate this Agreement pursuant to Section 9.2, unless the Party seeking to terminate the Agreement (the “Terminating Party”) has delivered a written notice (“Termination Notice”) to the other Party (the “Breaching Party”) specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Terminating Party asserts as the basis for termination. After delivering a Termination Notice, provided the Breaching Party is proceeding diligently to cure such matter and such matter is capable of being cured prior to the End Date, the Terminating Party may not exercise such termination right until the earlier of (a) the End Date, and (b) the date that is twenty (20) Business Days following receipt of such Termination Notice by the Breaching Party, if such matter has not been cured by such date. If the Terminating Party delivers a Termination Notice prior to the date of the Company Meeting or the Parent Meeting, if necessary, unless the Parties agree otherwise, the Company shall postpone or adjourn the Company Meeting, and the Parent shall postpone or adjourn the Parent Meeting, if necessary, to the earlier of (a) five (5) Business Days prior to the End Date and (b) the date that is twenty (20) Business Days following receipt of such Termination Notice by the Breaching Party.

7.11        Parent Legacy Business Disposition

Concurrently with the execution of this Agreement, the Parent shall have entered into the share purchase agreement attached hereto as Exhibit B (the “Parent Share Purchase Agreement”) for the sale of substantially all of the Parent’s assets related to the business of the Parent conducted as of and prior to the date of this Agreement. Immediately prior to the Closing, the Parent will consummate the transactions contemplated by the Parent Share Purchase Agreement (the “Parent Legacy Business Disposition”).  For clarity, the obligation of the Parent to consummate the Parent Legacy Business Disposition is subject to the substantially simultaneous consummation of the Amalgamation and the other transactions contemplated by this Agreement. The Parent shall not amend, modify or waive any provisions of the Parent Share Purchase Agreement without the prior written consent of the Company if such amendment modification or waiver would (a) result in any continuing obligation on the Parent following the consummation of the Parent Legacy Business Disposition or (b) otherwise have an adverse effect on the Parent, the Company or the Resulting Issuer following the consummation of the Parent Legacy Business Disposition and the transactions contemplated hereby. Prior to the Closing, the Parent shall (i) seek and obtain written agreements in form and substance reasonably acceptable to the Company from all parties to Contracts that are transferred and assigned in connection with the Parent Legacy Business Disposition releasing the Parent from any and all liabilities and obligations under such Contracts, (ii) obtain an independent third party valuation from a credible firm of the business and assets transferred pursuant to the Parent Share Purchase Agreement (the “Parent Legacy Business Valuation”), (iii) provide evidence reasonably satisfactory to the Company that no material Tax will arise to the Parent as a result of the Parent Legacy Business Disposition, and (iv) deliver to the Company a schedule, which schedule shall be reasonably acceptable to the Company, setting forth the list of Contracts and other assets and all related liabilities and obligations to be transferred as part of the Parent Legacy Business Disposition.  All costs and expenses related to the Parent Legacy Business Disposition and the Parent Legacy Business Valuation shall be the responsibility of the Parent.

7.12        Access to Information; Confidentiality

(a) From the Execution Date until the earlier of the Effective Time and the termination of this Agreement, subject to compliance with Applicable Laws, each Party will, and will direct their Affiliates and its and their respective Representatives, as applicable, to:

(i) give the other Parties and their Representatives reasonable access to the offices, properties, books and records of such Party; and

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(ii) furnish to the other Parties and their Representatives such financial and operating data and other information as such Persons may reasonably request.

(b) Any investigation pursuant to this Section 7.12 will be conducted during normal business hours and in such manner as not to interfere unreasonably with the conduct of the business of the other Party or any Affiliate thereof, as the case may be.

(c) From the Execution Date until the Effective Time, each Party will, and will direct their Affiliates and its and their respective Representatives, as applicable, to hold, in strict confidence, all data and information obtained from any other Party or from any Affiliate or Representative thereof, whether pertaining to the financial condition, assets, results of operations or method of operation thereof or otherwise, except any of the same which:

(i) currently in the public domain;

(ii) is required to be disclosed by any such Person in connection with any Proceeding before, or the regulatory requirements of, any Governmental Authority, or in connection with securing any consent required hereunder (provided that the disclosing Party, to the extent legally permissible, provides the other Party with reasonable prior notice of such disclosure); or

(iii) becomes information generally available to the public other than through an act of a person bound by or subject to a confidentiality arrangement with the disclosing party;

provided that if the Transaction is not consummated, such Party shall return or cause to be returned to the other Parties all data, information or other written material respecting each such Party obtained by any of the foregoing Persons from each such other Party or from any Affiliate or Representative thereof in connection with the negotiation or consummation of this Agreement or other matters contemplated by this Agreement.

(d) Except with respect to the material terms and conditions of the Transaction, each Party covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Noteholder or its agents or counsel with any information that constitutes, or such Party reasonably believes constitutes, material non-public information, unless prior thereto the Noteholder shall have consented to the receipt of such information and agreed with such Party to keep such information confidential.  To the extent that a Party delivers any material, non-public information to the Noteholder without the Noteholder’s consent, such Party hereby covenants and agrees that the Noteholder shall not have any duty of confidentiality to the Parties, any of their Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Noteholder shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information, the Party giving such notice shall simultaneously file, or cause to be filed, such notice pursuant to a Current Report on Form 8-K.  Each Party acknowledges and agrees that (i) the Noteholder shall be relying on the foregoing covenant in effecting transactions in securities of the Resulting Issuer and (ii) the Noteholder is not a party to any confidentiality agreement nor is it subject to any confidentiality obligations.  Parent shall on the trading day following the entry into this Amalgamation Agreement, file a Current Report on Form 8-K including the Transaction Documents as exhibits thereto with the SEC (“Signing Form 8-K”).  A form of the Signing Form 8-K is attached hereto as Exhibit C.  Such Exhibit C will be identical to the Signing Form 8-K which will be filed with the SEC except for the omission of signatures thereto.  From and after the filing of the Signing Form 8-K, Parent represents to Noteholder that Parent shall have publicly disclosed all material, non-public information delivered to Noteholder, or any of its officers, directors, employees or agents.  The requirements set forth in this Section 7.12(d) are made for the benefit of Noteholder and as an inducement to Noteholder to enter into a funding transaction with the Company.

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7.13        Insurance

Prior to the Closing Date, the Parent shall purchase, at the Parent’s sole expense, customary “tail” policies of directors’ and officers’ liability insurance providing protection no less favorable in the aggregate than the protection provided by the policies maintained by the Parent which are in effect immediately prior to the Closing Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Closing Date.  In addition, the provisions of the certificate of incorporation and bylaws of Parent with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of Parent that are presently set forth in the certificate of incorporation and bylaws of Parent shall not be amended, modified or repealed for a period of six years from the Effective Date in a manner that would adversely affect the rights thereunder of individuals who, at or prior to the Effective Time, were officers or directors of Parent.

7.14        ExchangeCo

Each of ExchangeCo and the Parent will use their commercially reasonable efforts to ensure that ExchangeCo is, at the Effective Time and for so long as there are any ExchangeCo Exchangeable Shares issued and outstanding (other than ExchangeCo Exchangeable Shares held by the Parent or any of its Affiliates), a “taxable Canadian corporation” and not a “mutual fund corporation”, as such terms are defined in the Tax Act.

7.15        Proxy Statement/Prospectus

(a) As promptly as reasonably practicable following the date of this Agreement, the Parent shall prepare and file with the SEC a proxy statement to be sent to the stockholders of each of the Parent and the Company relating to the meeting of the stockholders, as applicable, and a Registration Statement on Form S-4 (including a prospectus) (including all amendments thereto, “S-4 Registration Statement”) in connection with the issuance of shares of Resulting Issuer Capital Stock and Resulting Issuer Preferred Stock (or a newly filed S-8 Registration Statement, as applicable), of which such proxy statement will form a part (such proxy statement and prospectus constituting a part thereof, the “Proxy Statement/Prospectus”), and each of the Company and the Parent shall, or shall cause their respective Affiliates to, prepare and file with the SEC all other documents to be filed by the Parent with the SEC in connection with the Amalgamation and the other transactions contemplated hereby (the “Other Filings”) as required by the 1933 Act or the United States Exchange Act.  For the avoidance of doubt, all shares of Resulting Issuer Preferred Stock held by the Noteholder will be registered on the S-4 Registration Statement.  The Parent and the Company shall cooperate with each other in connection with the preparation of the S-4 Registration Statement, the Proxy Statement/Prospectus and any Other Filings.  Each Party shall as promptly as reasonably practicable notify the other Party of the receipt of any oral or written comments from the staff of the SEC on the S-4 Registration Statement or any Other Filing.  The Parent and the Company shall also use their reasonable commercially reasonable efforts to satisfy prior to the effective date of the S-4 Registration Statement all applicable Securities Laws or “blue sky” notice requirements in connection with the Amalgamation and to consummate the other transactions contemplated hereby.

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(b) The Parent covenants and agrees that the S-4 Registration Statement and Proxy Statement/Prospectus, including any pro forma financial statements included therein (and the letter to stockholders, notice of meeting and form of proxy included therewith), will not, at the time that the S-4 Registration Statement and Proxy Statement/Prospectus or any amendment or supplement thereto is filed with the SEC or the Proxy Statement/Prospectus is first mailed to the Parent Stockholders, at the time of the Parent Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company represents, covenants and agrees that the information provided by the Company to the Parent for inclusion in the S-4 Registration Statement and Proxy Statement/Prospectus (including the Company Financial Statements) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make such information not misleading. Notwithstanding the foregoing, the Parent makes no covenant, representation or warranty with respect to statements made in the S-4 Registration Statement or Proxy Statement/Prospectus (and the letter to stockholders, notice of meeting and form of proxy included therewith), if any, based on information furnished in writing by the Company specifically for inclusion therein.  Each of the Parties shall use commercially reasonable efforts to cause the S-4 Registration Statement and Proxy Statement/Prospectus to comply with the applicable rules and regulations promulgated by the SEC and to respond promptly to any comments of the SEC or its staff.  Each of the Parties shall use commercially reasonable efforts to cause the S-4 Registration Statement to be declared effective as soon as possible and the Proxy Statement/Prospectus to be mailed to Parent Stockholders as promptly as practicable after the SEC declares the S-4 Registration Statement to be effective. Each Party shall promptly furnish to the other Party all information concerning such Party, such Party’s Subsidiaries and such Party’s stockholders that may be required or reasonably requested in connection with any action contemplated by this Section 7.15. If any event relating to the Parent or the Company occurs, or if the Parent or the Company becomes aware of any information, that should be disclosed in an amendment or supplement to the S-4 Registration Statement and/or Proxy Statement/Prospectus, then the Parent or the Company, as applicable, shall promptly inform the other Party thereof and shall cooperate with one another in filing such amendment or supplement with the SEC and, if appropriate, in mailing such amendment or supplement to the Parent Stockholders. No filing of, or amendment or supplement to, the S-4 Registration Statement and/or Proxy Statement/Prospectus will be made by the Parent without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

(c) The Company shall reasonably cooperate with the Parent and provide, and require its Representatives, advisors, accountants and attorneys to provide, the Parent and its Representatives, advisors, accountants and attorneys, with all true, correct and complete information regarding the Company that is required by Applicable Law to be included in the S-4 Registration Statement and/or the Proxy Statement/Prospectus or reasonably requested from the Parent to be included in the S-4 Registration Statement and/or the Proxy Statement/Prospectus. The information provided by the Company to be included in the S-4 Registration Statement and/or the Proxy Statement/Prospectus shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

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ARTICLE 8

CONDITIONS

8.1          Mutual Conditions Precedent

The Parties are not required to complete the Amalgamation unless each of the following conditions is satisfied at or prior to the Closing, which conditions may only be waived, in whole or in part, by the mutual consent of each of the Parties:

(a) Amalgamation Resolution.  The Amalgamation Resolution has been approved and adopted by the necessary Company Securityholders at the Company Meeting.

(b) Parent Stockholder Approval.  The Parent Stockholder Approval shall have been obtained.

(c) No Injunctions or Restraints; Illegality.  No temporary restraining order, preliminary or permanent injunction or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Amalgamation will be in effect, nor will any proceeding brought by any administrative agency or commission or other Governmental Authority or instrumentality, domestic or foreign, seeking any of the foregoing be pending. There will not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Amalgamation, which makes the consummation of the Amalgamation illegal.

(d) Regulatory Approvals.  Each required Regulatory Approval has been made, given or obtained and each such Regulatory Approval is in force and has not been modified. Any waiting period applicable to the consummation of the Amalgamation under any Regulatory Approval will have expired or been terminated.

(e) Voting and Exchange Trust Agreement. Parent, ExchangeCo and the Trustee (as defined in the provisions governing the ExchangeCo Exchangeable Shares) shall have entered into the Voting and Exchange Trust Agreement.

(f) Exchangeable Share Support Agreement. Parent and ExchangeCo shall have entered into the Exchangeable Share Support Agreement.

(g) NASDAQ Listing Application.  The NASDAQ Listing Application shall have been approved, if such approval is required to maintain such listing following the consummation of the Amalgamation.

(h) Registration Statement.  The S-1 Registration Statement, S-3 Registration Statement or S-4 Registration Statement, as applicable, shall have become effective under the 1933 Act and shall not be the subject of any stop order.

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(h) Parent Legacy Business Disposition. The Parent shall have completed the Parent Legacy Business Disposition.

(i) Parent Financing. The Parent shall have completed the Parent Financing.

(j) Naming of Company Representative. Prior to the Effective Time, the identity and contact information of the Company Representative designated hereby shall be provided to the Parties, including the Parent Representative.

8.2          Additional Conditions Precedent to the Obligations of the Parent and the Purchaser

The Purchaser is not required to complete the Amalgamation unless each of the following conditions is satisfied at or prior to the Closing, which conditions are for the exclusive benefit of the Purchaser and may only be waived, in whole or in part, by the Purchaser in its sole discretion:

(a) Representations and Warranties.

(i) The representations and warranties of the Company (other than the Fundamental Representations) set forth in Article 4 shall be true and correct as of the Execution Date and the Closing Date as though made on and as of the Execution Date and the Closing Date (as applicable), except to the extent such representations and warranties speak as of an earlier date (which need only be true and correct as of such earlier date), in each case, except for inaccuracies that would not, individually or in the aggregate, have a Material Adverse Effect.

(ii) The Fundamental Representations of the Company set forth in Article 4 shall be true and correct as of the Execution Date and the Closing Date as though made on and as of the Execution Date and the Closing Date, except for those Fundamental Representations which expressly relate to an earlier date (in which case such Fundamental Representations shall have been true and correct in all respects as of such earlier date).

(iii) The Company has delivered a certificate confirming clauses (i) and (ii) above to the Parent and the Purchaser, executed by an officer of the Company (without personal liability) addressed to the Parent and the Purchaser and dated as of the Closing Date.

(b) Performance of Covenants.  The Company has fulfilled or complied in all material respects with each of the covenants of the Company contained in this Agreement to be fulfilled or complied with by it on or prior to the Closing Date, and has delivered a certificate confirming same to the Parent and the Purchaser, executed by an officer of the Company (without personal liability) addressed to the Parent and the Purchaser and dated as of the Closing Date.

(c) No Legal Action.  There is no action or proceeding (whether, for greater certainty, by a Governmental Authority or any other Person) pending or threatened in any jurisdiction to:

(i) cease trade, enjoin, prohibit, or impose any limitations, damages or conditions on, the Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any Company Common Shares, including the right to vote the Company Common Shares;

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(ii) prohibit, restrict or impose terms or conditions on, the Amalgamation, or the ownership or operation by the Parent and the Purchaser of the business or assets of the Parent, the Purchaser, the Company or their respective Subsidiaries, or compel the Parent or the Purchaser to dispose of or hold separate any of the business or assets of the Parent, the Purchaser, the Company or their respective Subsidiaries as a result of the Amalgamation; or

(iii) prevent or materially delay the consummation of the Amalgamation, or if the Amalgamation were to be consummated, have a Material Adverse Effect with respect to the Company.

(d) Material Adverse Effect.  There shall not have been or occurred a Material Adverse Effect with respect to the Company that has not been disclosed by the Company prior to the date hereof.

(e) Officer’s Certificate.  The Parent shall have received a certificate executed by an officer of the Company (without personal liability) certifying as to (i) an attached copy of each of the Amalgamation Resolution and the Company Board Approval and stating neither the Amalgamation Resolution nor the Company Board Approval has been amended, modified, revoked or rescinded, (ii) the incumbency, authority and specimen signature of each officer of the Company executing this Agreement and (iii) true and complete attached copies of the Organizational Documents of the Company.

(f) Allocation Certificate.  An officer of the Company will have executed and delivered to Parent at least two (2) Business Days prior to the Closing Date a certificate in a form reasonably acceptable to the Parent which sets forth (i) a true and complete list of the Company Securityholders immediately prior to the Effective Time and the number and type of Company Common Shares, Company Options or Company Warrants owned by each such Company Securityholder and (ii) the allocation of the Consideration among the Company Securityholders pursuant to the Amalgamation.

(g) Lock-Up Agreements.  The Company shall have provided the Lock-Up Agreements executed by each of the parties described in Section 7.3(h) hereof.

(h) Certificate of Good Standing.  The Company shall have provided the Parent a certificate of good standing (or equivalent) from the appropriate Governmental Authority of the jurisdiction of incorporation of the Company.

(i) Consulting Agreement. Barry Kostiner and the Company shall have entered into a consulting agreement, to be effective as of the Closing, pursuant to which Barry Kostiner will serve as a consultant to the Company for a period of twelve (12) months following the Closing Date.

8.3          Additional Conditions Precedent to the Obligations of the Company

The Company is not required to complete the Amalgamation unless each of the following conditions is satisfied on or before the Effective Time, which conditions are for the exclusive benefit of the Company and may only be waived, in whole or in part, by the Company in its sole discretion:

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(a) Representations and Warranties.

(i) The representations and warranties of the Parent, the Purchaser and ExchangeCo (other than the Fundamental Representations) set forth in Article 5 shall be true and correct as of the Execution Date and the Closing Date as though made on and as of the Execution Date and the Closing Date (as applicable), except to the extent such representations and warranties speak as of an earlier date (which need only be true and correct as of such earlier date), in each case, except for inaccuracies that would not, individually or in the aggregate, have a Material Adverse Effect.

(ii) The Fundamental Representations of the Parent, the Purchaser and ExchangeCo set forth in Article 5 shall be true and correct as of the Closing Date as though made on and as of the Closing Date, except for those Fundamental Representations which expressly relate to an earlier date (in which case such Fundamental Representations shall have been true and correct in all respects as of such earlier date).

(iii) The Parent (on behalf of itself and the Purchaser) has delivered a certificate confirming clauses (i) and (ii) above to the Company, executed by an officer of the Parent (without personal liability) addressed to the Company and dated as of the Closing Date.

(b) Performance of Covenants.  Each of the Parent and the Purchaser has fulfilled or complied in all material respects with each of the covenants of the Parent and the Purchaser contained in this Agreement to be fulfilled or complied with by it on or prior to the Closing Date, and has delivered a certificate confirming same to the Company, executed by an officer of the Parent (without personal liability) addressed to the Company and dated as of the Closing Date.

(c) Parent Liabilities. Parent shall have no outstanding material debts or liabilities of any kind (including, without limitation, unpaid Transaction expenses, leases, accounts payable or promissory notes) at the Effective Time.

(d) Material Adverse Effect.  There shall not have been or occurred a Material Adverse Effect with respect to the Parent that has not been disclosed by the Parent prior to the date hereof.

(e) Parent Board of Directors and Officer Resignation Letters.  Company will have received a duly executed copy of a resignation letter from each of the resigning members of the board of directors of Parent and each officer of Parent as contemplated by Section 7.5(i) and each of the Parent Subsidiaries, as applicable, pursuant to which each such Person will resign as a member of the board of directors of Parent immediately following the Effective Time.

(f) Officer’s Certificate.  The Company shall have received a certificate executed by an officer of the Parent (without personal liability) certifying as to (i) an attached copy of each of the Parent Stockholder Approval Resolution and the Parent Board Approval and stating neither the Parent Stockholder Approval Resolution nor the Parent Board Approval has been amended, modified, revoked or rescinded, (ii) the incumbency, authority and specimen signature of each officer of the Parent executing this Agreement and (iii) true and complete attached copies of the Organizational Documents of the Parent and the Purchaser.

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(g) Stock Split.  The Parent shall have completed the Stock Split, if it is deemed necessary.

(h) Certificate of Good Standing.  The Parent and the Purchaser shall have provided the Company a certificate of good standing (or equivalent) from the appropriate Governmental Authority of the jurisdiction of incorporation or formation of the Parent and the Purchaser.

(i) Parent Preferred Stock Conversion. The Parent shall have caused all Parent Preferred Stock to be converted into Parent Common Stock.

(j) Incentive Stock Plan. The Purchaser shall have adopted the Resulting Issuer Incentive Stock Plan, to be effective as of the Closing.

8.4          Satisfaction of Conditions

The conditions precedent set out in this Article 8 are inserted for the benefit of the respective Parties. Any Party may refuse to proceed with the Closing if the conditions precedent inserted for its benefit are not fulfilled to its reasonable satisfaction at or prior to the Closing, and it will incur no liability to any other Party by reason of such refusal.

8.5          Right of Waiver

The conditions precedent set out in this Article 8 may be waived in whole or in part by the Party for whose benefit they are inserted, in such Party’s absolute discretion. No such waiver will be of any effect unless it is in writing signed by the Party granting the waiver or if such Party determines to proceed with the Closing.

ARTICLE 9

TERM AND TERMINATION

9.1          Term

This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.

9.2          Termination

(a) This Agreement may be terminated prior to the Effective Time (provided, however, that (x) in each case the Noteholder’s prior written consent shall be a condition precedent to such termination and (y) if any of the conditions in this Section 9.2(a) are not met, the Company shall be required to pay, and the Noteholder shall be entitled to receive upon demand, the entire outstanding principal balance of the Note plus all accrued and unpaid interest thereon and any other sums payable to the Noteholder directly in connection with the Bridge Loan Financing) by:

(i) the mutual written agreement of the Parties; or

(ii) either the Company or the Purchaser if:

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(A) the Parent Stockholder Approval Resolution is not approved by the requisite vote at the Parent Meeting provided that a Party may not terminate this Agreement pursuant to this Section 9.2(a)(ii)(A) if the failure to obtain the Parent Stockholder Approval has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

(B) the Amalgamation Resolution is not approved by the necessary Company Securityholders at the Company Meeting provided that a Party may not terminate this Agreement pursuant to this Section 9.2(a)(ii)(B) if the failure to obtain the approval of the necessary Company Securityholders has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

(C) after the date of this Agreement, any Applicable Law is enacted, made, enforced or amended, as applicable, that makes the consummation of the Amalgamation illegal or otherwise permanently prohibits or enjoins the Company, the Parent or the Purchaser from consummating the Amalgamation, and such Applicable Law has, if applicable, become final and non-appealable;

(D) the Effective Time does not occur on or prior to the End Date, provided that a Party may not terminate this Agreement pursuant to this Section 9.2(a)(ii)(D) if the failure of the Effective Time to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement, provided, however, in the event that the SEC has not concluded its review of the S-4 Registration Statement by the date which is sixty (60) days prior to the End Date, then either of Parent or the Company shall be entitled to extend the End Date for an additional sixty (60) days by providing written notice to the other party; or

(iii) the Company if:

(A) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Parent or the Purchaser under this Agreement occurs that would cause any condition in Section 8.3(a) or Section 8.3(b) not to be satisfied, and such breach or failure is incapable of being cured on or prior to the End Date or is not cured in accordance with the terms of Section 7.10; provided that any willful breach shall be deemed to be incurable, and; provided, further that the Company is not then in breach of this Agreement so as to cause any condition in Section 8.2(a) or Section 8.2(b) not to be satisfied;

(B)

(1) the Parent Board or any committee of the Parent Board fails to unanimously recommend or withdraws, amends, modifies or qualifies the Parent Board Approval, or publicly proposes or states its intention to do so (a “Parent Change in Recommendation”); or

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(2) the Parent breaches Article 6 in any material respect;

(C) there has occurred a Material Adverse Effect with respect to the Parent that has not been disclosed by the Parent prior to the date hereof;

(iv) the Parent

(A) in order to enter into a definitive agreement providing for a Superior Proposal in accordance with Section 6.1(e).

(B) if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company under this Agreement occurs that would cause any condition in Section 8.2(a) or Section 8.2(b) not to be satisfied, and such breach or failure is incapable of being cured on or prior to the End Date or is not cured in accordance with the terms of Section 7.10; provided that any willful breach shall be deemed to be incurable, and; provided, further that the Parent is not then in breach of this Agreement so as to cause any condition in Section 8.3(a) or Section 8.3(b) not to be satisfied;

(C)

(1) if the Company Board or any committee of the Company Board fails to unanimously recommend or withdraws, amends, modifies or qualifies the Company Board Approval, or publicly proposes or states its intention to do so (a “Company Change in Recommendation”); or

(2) if the Company breaches Article 6 in any material respect; or

(D) if there has occurred a Material Adverse Effect with respect to the Company that has not been publicly disclosed by the Company prior to the date hereof.

(b) The Party desiring to terminate this Agreement pursuant to this Section 9.2 shall give notice of such termination to the other Party, specifying in reasonable detail the basis for such Party’s exercise of its termination right.

9.3          Effect of Termination

If this Agreement is terminated pursuant to Section 9.2, this Agreement shall become void and of no further force or effect without liability of any Party (or any shareholder, director, officer, employee, agent, consultant or representative of such Party) to any other Party to this Agreement, except (a) as set forth in Section 11.16 and (b) provided further that no Party shall be relieved of any liability for any willful breach by it of this Agreement. No termination of this Agreement will affect the obligations of the Parties contained in the Confidentiality Agreement, all of which obligations will, in addition to this Section 9.3, Article 10, Article 11 and the defined terms used in such Section and Article set forth or referenced in Section 1.1 hereof, survive termination of this Agreement in accordance with their respective terms.

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ARTICLE 10

INDEMNIFICATION

10.1        Survival

Unless otherwise explicitly set forth in this Agreement, all representations and warranties in this Agreement and any other certificate or document delivered pursuant to this Agreement shall be accurate as of the date of such certificate or document and as of the Closing Date. All representations, warranties, covenants and obligations of the Parent, Purchaser or ExchangeCo in this Agreement and any other document delivered pursuant to this Agreement shall survive the Closing. Notwithstanding the foregoing, the Company may bring a claim under this Article 10 at any time during the period beginning on the Closing Date and ending on the twelve (12) month anniversary of the Closing Date (the “Survival Period”) for any breach of any representation, warranty, covenant or obligation made in this Agreement. The right to indemnification, reimbursement or other remedy based upon such representations, warranties, covenants and obligations shall not be affected by any investigation conducted or any knowledge acquired (or capable of being acquired) at any time, whether before or after the Closing Date, with respect to the accuracy or inaccuracy of or compliance with any such representation, warranty, covenant or obligation. The waiver of any condition based upon the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, reimbursement or other remedy based upon such representations, warranties, covenants and obligations.

10.2        Indemnification and Reimbursement by Parent

(a) The Parent, from and after the Closing Date and through the applicable Survival Period, will indemnify and hold harmless the Company Shareholders, the Noteholder and its officers, directors, agents or employees (collectively, the “Company Indemnified Parties”), and will reimburse the Company Indemnified Parties for any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and reasonable attorneys’ fees) or diminution of value (collectively, “Damages”), whether or not involving a third party claim, arising from or in connection with:

(i) any breach of any representation or warranty made by the Parent, Purchaser or ExchangeCo in (A) this Agreement or (B) any other certificate, document, writing or instrument executed and delivered;

(ii) any breach of any covenant or obligation of the Parent, Purchaser or ExchangeCo in this Agreement or in any other certificate, document, writing or instrument executed and delivered by the Parent, Purchaser or ExchangeCo on or prior to the Closing Date pursuant to this Agreement;

(iii) the operations and corporate governance of the Parent prior to the Closing, including, without limitation, its compliance (or lack of compliance) with Applicable Laws or the rules and regulations of any Governmental Authority;

(iv) any debts, liabilities or other obligations of the Parent related to the business or activities of the Parent conducted prior to the Effective Time;

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(v) Taxes attributable to any transaction or event occurring on or prior to the Closing Date;

(vi) any litigation, action, claim, proceeding or investigation by any third party relating to or arising out of the business or operations of the Parent, or the actions of the Parent or any holder of Parent Capital Stock prior to the Effective Time; and/or

(vii) any Proceedings pending or threatened in writing on or prior to the Closing Date against the Parent, Purchaser or ExchangeCo.

10.3        Notice of Claims

(a) If, at any time on or prior to the expiration of the Survival Period, any of the Company Indemnified Parties shall assert a claim for indemnification pursuant to Section 10.2, the Company Representative (as defined below) on behalf of such Company Indemnified Party shall submit to the Parent, the Parent Representative, the Noteholder and Grushko & Mittman, P.C. (Attn: Edward Grushko) a written claim in good faith signed by the Company Representative stating (i) that a Company Indemnified Party incurred or reasonably believes it may incur Damages and the reasonable estimate of the amount of any such Damages; (ii) in reasonable detail, the facts alleged as the basis for such claim and the section or sections of this Agreement alleged as the basis or bases for the claim; and (iii) if the Damages have actually been incurred, the number of additional shares of Resulting Issuer Common Stock to which the Company Shareholders are entitled to with respect to such Damages, which shall be determined as provided in Section 10.4 below (each such written claim, an “Indemnification Statement”). If the claim is for Damages which the Company Representative, on behalf of the Company Indemnified Parties, reasonably believes may be incurred or are otherwise un-liquidated, the Indemnification Statement shall state the reasonable estimate of such Damages, in which event a claim shall be deemed to have been asserted under this Article 10 in the amount of such estimated Damages, but no distribution of additional shares of Resulting Issuer Common Stock to the Company Shareholders pursuant to Section 10.4 below shall be made until such Damages have actually been incurred.

(b) If the Parent or the Parent Representative has any objections to an Indemnification Statement, then the Parent Representative shall deliver to the Company Representative a statement (an “Objection Statement”) setting forth its disputes or objections (the “Objection Disputes”) to the Indemnification Statement and, to the extent practical, the Parent Representative’s proposed resolution of each such Objection Dispute.  If an Objection Statement is not delivered to the Company Representative within thirty (30) days after receipt of the Indemnification Statement by the Parent Representative, then the Indemnification Statement as originally received by the Parent Representative shall be final, binding and non-appealable by the Parties.  If an Objection Statement is timely delivered, then the Parent Representative and the Company Representative shall negotiate in good faith to resolve any Objection Disputes, but if they do not reach a final resolution within thirty (30) days after the delivery of the Objection Statement, the Parent Representative and the Company Representative shall submit each unresolved Objection Dispute to a court of competent jurisdiction to resolve such Objection Disputes. The Party that is not the prevailing party shall pay all of the fees, costs and expenses associated with the resolution of any Objection Disputes that are submitted to a court of competent jurisdiction for resolution.

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(c) In the event that any action, suit or proceeding is brought against any Company Indemnified Party with respect to which the Parent may have liability under this Article 10, the Parent shall have the right, at its cost and expense, to defend such action, suit or proceeding in the name and on behalf of the Company Indemnified Party; provided, however, that a Company Indemnified Party shall have the right to retain its own counsel, with fees and expenses paid by the Parent, if representation of the Company Indemnified Party by counsel retained by the Parent would be inappropriate because of actual or potential differing interests between the Parent and the Company Indemnified Party. In connection with any action, suit or proceeding subject to this Article 10, the Parent and each Company Indemnified Party agree to render to each other such assistance as may reasonably be required in order to ensure proper and adequate defense of such action, suit or proceeding. The Parent shall not, without the prior written consent of the applicable Company Indemnified Party, which consent shall not be unreasonably withheld or delayed, settle or compromise any claim or demand if such settlement or compromise does not include an irrevocable and unconditional release of such Company Indemnified Party for any liability arising out of such claim or demand.

10.4        Indemnification and Reimbursement by Parent.

In the event that the Company Indemnified Parties shall be entitled to indemnification pursuant to this Article 10 for actual Damages incurred by them, the Parent shall, within thirty (30) days after the final determination of the amount of such Damages, issue to the Company Shareholders (on a pro rata basis) that number of additional shares of Resulting Issuer Common Stock in an aggregate amount equal to the quotient obtained by dividing (x) the amount of such Damages by (y) the Fair Market Value per share of the Resulting Issuer Common Stock as of the date (the “Determination Date”) of the submission of the notice of claim to the Parent pursuant to Section 10.3. Such shares of Resulting Issuer Common Stock shall be issued to the Company Shareholders pro rata, in proportion to the number of shares of Resulting Issuer Common Stock issued (or issuable) to the Company Shareholders at the Effective Time. For purposes of this Section 10.4, “Fair Market Value” shall mean, with respect to a share of Resulting Issuer Common Stock on any Determination Date, the average of the daily closing prices for the ten (10) consecutive Business Days prior to such date. The closing price for each day shall be the last sales price or in case no sale takes place on such day, the average of the closing high bid and low asked prices, in either case as officially quoted on the NASDAQ or such other market on which the Resulting Issuer Common Stock is then listed for trading or quoted.

ARTICLE 11

GENERAL PROVISIONS

11.1        Amendments

This Agreement and the Amalgamation may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties, without further notice to or authorization on the part of the Company Securityholders (provided, however, that the Parties shall provide the Noteholder with prior written notice of any and all proposed amendments, and the Noteholder shall have the right to veto any such proposed amendment), and any such amendment may, without limitation:

(a) change the time for performance of any of the obligations or acts of the Parties;

(b) modify any representation or warranty contained herein or in any document delivered pursuant hereto;

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(c) modify any of the covenants contained in this Agreement and waive or modify performance of any of the obligations of the Parties; and/or

(d) modify any mutual conditions contained in this Agreement.

11.2        Notices

Any notice, direction or other communication regarding the matters contemplated by this Agreement must be in writing, sent by personal delivery, courier, facsimile or electronic mail and addressed:

(a) to Parent and the Purchaser at:

Ameri Holdings, Inc.

5000 Research Court

Suite 750

Suwanee, GA 30024

Attention: Barry Kostiner

Email: Barry.Kostiner@ameri100.com

with copies to:

Sheppard Mullin Richter & Hampton LLP

30 Rockefeller Plaza

New York, NY 10112

Attention: Richard Friedman

Email: rafriedman@sheppardmullin.com

(b) to the Company at:

Jay Pharma Inc.

181 Bay Street, Suite 4400E

Toronto ON, M5J 2T3, Canada

Attention: David Stefansky

Email: dstefansky@bezalelpartners.com

with copies to:

Haynes and Boone, LLP

30 Rockefeller Plaza

26th Floor

New York, NY 10112

Attention: Rick Werner

Email: Rick.Werner@haynesboone.com

(c) to ExchangeCo at:

1236567 B.C. UNLIMITED LIABILITY COMPANY

5000 Research Court

Suite 750

Suwanee, GA 30024

Attention: Barry Kostiner

Email: Barry.Kostiner@ameri100.com

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with copies to:

Sheppard Mullin Richter & Hampton LLP

30 Rockefeller Plaza

New York, NY 10112

Attention: Richard Friedman

Email: rafriedman@sheppardmullin.com

(d) to the Parent Representative at:

Barry Kostiner

5000 Research Court

Suite 750

Suwanee, GA 30024

Attention: Barry Kostiner

Email: Barry.Kostiner@ameri100.com

with copies to:

Sheppard Mullin Richter & Hampton LLP

30 Rockefeller Plaza

New York, NY 10112

Attention: Richard Friedman

Email: rafriedman@sheppardmullin.com

(e) to the Noteholder at:

Alpha Capital Anstalt

Lettstrasse 32

9490 Vaduz, Liechtenstein

Attention:  Konrad Ackermann, Director

with copies to:

Grushko & Mittman, P.C.

515 Rockaway Avenue

Valley Stream, NY 11581

Attention: Edward Grushko

Email: ed@grushkomittman.com

Any notice or other communication is deemed to be given and received (i) if sent by personal delivery or same day courier, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day, (ii) if sent on a Business Day by email before 11:59 p.m. (recipient’s time), when transmitted, (iii) if sent by email on a day other than a Business Day, or if sent by email after 11:59 p.m. (recipient’s time), on the Business Day following the date when transmitted, (iv) if sent by overnight courier, on the next Business Day, or (v) if sent by facsimile, on the Business Day following the date of confirmation of transmission by the originating facsimile. A Party may change its address for service from time to time by providing a notice in accordance with the foregoing. Any subsequent notice or other communication must be sent to the Party at its changed address. Any element of a Party’s address that is not specifically changed in a notice will be assumed not to be changed. Sending a copy of a notice or other communication to a Party’s legal counsel as contemplated above is for information purposes only and does not constitute delivery of the notice or other communication to that Party. The failure to send a copy of a notice or other communication to legal counsel does not invalidate delivery of that notice or other communication to a Party.

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11.3        Further Assurances

Each Party will execute and deliver all such further documents and instruments and do all acts and things as the other Parties may, either before or after the Effective Time, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement.

11.4        Time of the Essence

Time is of the essence to this Agreement.

11.5        Expenses

Each of the Parties shall be responsible for its own costs and charges incurred with respect to the transactions contemplated herein, including all costs and charges incurred prior to the date of this Agreement and all legal and accounting fees and disbursements relating to preparing the Transaction Documents or otherwise relating to the transactions contemplated herein.

11.6        Injunctive Relief

The Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at law 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 the Parties shall be entitled to injunctive and other equitable relief to prevent breaches or threatened breaches of this Agreement, and to enforce compliance with the terms of this Agreement without any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief, this being in addition to any other remedy to which the Parties may be entitled at law or in equity.

11.7        Waiver

No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

11.8        No Third Party Beneficiaries

The Parties intend that this Agreement will not benefit or create any right or cause of action in favor of, any Person, other than the Parties. No Person, other than the Parties to this Agreement, is entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

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11.9        Entire Agreement

This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the Parties with respect to the transactions contemplated by this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties; provided that to the extent any provisions of the Confidentiality Agreement conflict with the terms of this Agreement, the terms of this Agreement shall prevail. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement.

11.10      Benefit of the Agreement

This Agreement will inure to the benefit of and be binding upon the respective heirs, executors, administrators, other legal representatives, successors and permitted assigns of the Parties.

11.11      Successors and Assigns

(a) This Agreement becomes effective only when executed by the Company, the Parent, the Purchaser and ExchangeCo. After that time, it will be binding upon and inure to the benefit of the Company, the Parent, the Purchaser and ExchangeCo and their respective successors and permitted assigns.

(b) Neither this Agreement nor any of the rights or obligations under this Agreement are assignable or transferable by any Party without the prior written consent of the other Party.

11.12      Severability

If any provision of this Agreement is determined to be illegal, invalid or unenforceable by any court of competent jurisdiction, that provision will be severed from this Agreement and the remaining provisions shall remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

11.13      Governing Law

This Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each Party irrevocably attorns and submits to the exclusive jurisdiction of the courts of competent jurisdiction of the Province of Ontario in any proceeding hereunder, and waives objection to the venue of any Proceeding in such court or that such court provides an inconvenient forum.  Notwithstanding the foregoing, the expressions “commercially reasonable efforts” and “commercially reasonable actions” shall have the meaning given such expressions under the laws of the State of New York.

11.14      Counterparts

This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

11.15      Electronic Execution

Delivery of an executed signature page to this Agreement by any Party by electronic transmission will be as effective as delivery of a manually executed copy of the Agreement by such Party.

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11.16      Expense Reimbursement

(a) For purposes of this Agreement,

(i) “Company Expense Reimbursement” means an amount equal to the documented out-of-pocket fees and expenses incurred or paid by or on behalf of the Company in connection with this Agreement or the consummation of any of the transactions in an amount that will not exceed $500,000, and “Parent Expense Reimbursement” means an amount equal to the documented out-of-pocket fees and expenses incurred or paid by or on behalf of the Parent in connection with this Agreement or the consummation of any of the transactions in an amount that will not exceed $500,000.

(ii) “Company Expense Reimbursement Event” means the termination of this Agreement:

(A) by the Parent or the Purchaser pursuant to Section 9.2(a)(ii)(B) or Section 9.2(a)(iv)(C) if:

(1) prior to such termination, an Acquisition Proposal for the Company is made or publicly announced or otherwise publicly disclosed by any Person (other than the Parent and the Purchaser or any of its Affiliates) or any Person (other than the Parent and the Purchaser or any of its Affiliates) shall have publicly announced an intention to make an Acquisition Proposal for the Company; and

(2) within 365 days following the date of such termination, (x) an Acquisition Proposal for the Company (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) is consummated or effected, (y) the Company, directly or indirectly, in one or more transactions, enters into a contract or a letter of intent in respect of such Acquisition Proposal for the Company (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) and such Acquisition Proposal is later consummated or effected (whether or not such Acquisition Proposal is later consummated or effected within 365 days after such termination), or (z) an Acquisition Proposal for the Company is made or publicly announced or otherwise publicly disclosed by any Person (other than the Parent and the Purchaser or any of its Affiliates) or any Person (other than the Parent and the Purchaser or any of its Affiliates) shall have publicly announced an intention to make an Acquisition Proposal for the Company.

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For purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning specified in Section 1.1, except that references to “20% or more” in the definition of “Acquisition Proposal” in Section 1.1 shall be deemed to be references to “50% or more.”

(iii) “Parent Expense Reimbursement Event” means the termination of this Agreement:

(A) by the Company pursuant to Section 9.2(a)(ii)(A) or Section 9.2(a)(iii)(B) if:

(1) prior to such termination, an Acquisition Proposal for the Parent is made or publicly announced or otherwise publicly disclosed by any Person (other than the Parties) or any Person (other than the Parties or their Affiliates) shall have publicly announced an intention to make an Acquisition Proposal for the Parent; and

(2) within 365 days following the date of such termination, (x) an Acquisition Proposal for the Parent (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) is consummated or effected, or (y) the Parent or one or more of its Subsidiaries, directly or indirectly, in one or more transactions, enters into a contract in respect of such Acquisition Proposal for the Parent (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) and such Acquisition Proposal is later consummated or effected (whether or not such Acquisition Proposal is later consummated or effected within 365 days after such termination); or

(B) by the Parent pursuant to Section 9.2(a)(iv)(A).

For purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning specified in Section 1.1, except that references to “20% or more” in the definition of “Acquisition Proposal” in Section 1.1 shall be deemed to be references to “50% or more”.

(b) The Company Expense Reimbursement shall be paid by the Company to the Parent (or as the Purchaser may direct by notice in writing), by wire transfer of immediately available funds, if a Company Expense Reimbursement Event occurs.

(c) The Parent Expense Reimbursement shall be paid by the Parent to the Company by wire transfer of immediately available funds, if a Parent Expense Reimbursement Event occurs.

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(d) The Company acknowledges that the agreements contained in this Section 11.16 are an integral part of the transactions contemplated by this Agreement, and that without these agreements, neither the Parent, the Purchaser nor the Company would enter into this Agreement, and that the amounts set out in this Section 11.16 represent liquidated damages which are a genuine pre-estimate of the damages, including opportunity costs, reputational damages, and out-of-pocket expenditures, which the Parent and the Purchaser, will suffer or incur as a result of the event giving rise to such damages and resultant termination of this Agreement, and are not penalties.  The Company irrevocably waives any right they may have to raise as a defence that any such liquidated damages are excessive or punitive. In the event the amounts set out in Section 11.16 are paid to the Parent and the Purchaser (or as they direct), no other amounts will be due and payable as damages or otherwise by the Company, and the Parent and the Purchaser hereby accept that such payments are the maximum aggregate amount that the Company shall be required to pay in lieu of any damages or any other payments or remedy which the Parent and the Purchaser may be entitled to in connection with this Agreement or the transactions contemplated by this Agreement; provided, however, that this limitation shall not apply in the event of a wilful breach by the Company of its representations, warranties, covenants or agreements set forth in this Agreement (which breach and liability, therefore, shall not be affected by termination of this Agreement or any payment of the amounts set out in Section 11.16, as applicable).

(e) The Parent acknowledges that the agreements contained in this Section 11.16 are an integral part of the transactions contemplated by this Agreement, and that without these agreements, neither the Parent, the Purchaser nor the Company would enter into this Agreement, and that the amounts set out in this Section 11.16 represent liquidated damages which are a genuine pre-estimate of the damages, including opportunity costs, reputational damages, and out-of-pocket expenditures, which the Company will suffer or incur as a result of the event giving rise to such damages and resultant termination of this Agreement, and are not penalties. The Parent irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. In the event the amounts set out in Section 11.16 are paid to the Company (or as it directs), no other amounts will be due and payable as damages or otherwise by the Parent, and the Company hereby accepts that such payments are the maximum aggregate amount that the Parent shall be required to pay in lieu of any damages or any other payments or remedy which the Company may be entitled to in connection with this Agreement or the transactions contemplated by this Agreement; provided, however, that this limitation shall not apply in the event of a wilful breach by the Parent of its representations, warranties, covenants or agreements set forth in this Agreement (which breach and liability, therefore, shall not be affected by termination of this Agreement or any payment of the amounts set out in Section 11.16, as applicable).

11.17      Rules of Construction

The Parties to this Agreement waive the application of any Applicable Law or rule of construction providing that ambiguities in any agreement or other document shall be construed against the party drafting such agreement or other document.

11.18      No Liability

No director or officer of the Parent or the Purchaser shall have any personal liability whatsoever to the Company under this Agreement or any other document delivered in connection with the transactions contemplated hereby on behalf of the Parent or the Purchaser. No director or officer of the Company shall have any personal liability whatsoever to the Parent or the Purchaser under this Agreement or any other document delivered in connection with the transactions contemplated hereby on behalf of the Company.

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11.19       Transaction Engagements.

(a) Notwithstanding anything to the contrary in this Agreement, from and after the Closing, (i) all communications between the Parent or its Subsidiaries or any of their respective Representatives, on one hand, and Sheppard, Mullin, Richter & Hampton LLP (“SMRH”), on the other hand, in connection with the Transaction (collectively, the “SMRH Transaction Engagements”) shall be deemed to be attorney-client confidences that belong solely to the members of the Parent Board as of immediately prior to the Effective Time (the “Parent Transaction Board Members”) and not the Parent or its Subsidiaries, (ii) neither the Company or any of their respective Representatives shall have access to any such communications, or to any of the files or other documents delivered or prepared in connection therewith, (iii) the Transaction Board Members shall be the sole holder of the attorney-client privilege with respect to each SMRH Transaction Engagement, and neither the Parent or its Subsidiaries or any of their respective Representatives nor the Company or any of their respective Representatives shall be a holder thereof, (iv) to the extent that files of SMRH in respect of any SMRH Transaction Engagement constitute property of the client thereof, only Transaction Board Members shall hold such property rights thereto, and (v) unless directed to do so by the Parent Transaction Board Members or by a court of competent jurisdiction or other Governmental Authority (and then in each case only to the extent of such direction), SMRH shall not have any duty whatsoever to reveal or disclose any such attorney-client communications or files related to the Parent or its Subsidiaries or any of their respective Representatives or the Company or any of their respective Representatives by reason of any attorney-client relationship between SMRH and the Parent or any of its Subsidiaries or otherwise.

(b) Notwithstanding anything to the contrary in this Agreement, from and after the Closing, (i) all communications between the Company or its Subsidiaries or any of their respective Representatives, on one hand, and Haynes and Boone, LLP (“HB”), on the other hand, in connection with the Transaction (collectively, the “HB Transaction Engagements”) shall be deemed to be attorney-client confidences that belong solely to the members of the Company Board as of immediately prior to the Effective Time (the “Company Transaction Board Members”) and not the Company or its Subsidiaries, (ii) neither the Parent or any of their respective Representatives shall have access to any such communications, or to any of the files or other documents delivered or prepared in connection therewith, (iii) the Company Transaction Board Members shall be the sole holder of the attorney-client privilege with respect to each HB Transaction Engagement, and neither the Company or its Subsidiaries or any of their respective Representatives nor the Parent or any of their respective Representatives shall be a holder thereof, (iv) to the extent that files of HB in respect of any HB Transaction Engagement constitute property of the client thereof, only Company Transaction Board Members shall hold such property rights thereto, and (v) unless directed to do so by the Company Transaction Board Members or by a court of competent jurisdiction or other Governmental Authority (and then in each case only to the extent of such direction), HB shall not have any duty whatsoever to reveal or disclose any such attorney-client communications or files related to the Company or its Subsidiaries or any of their respective Representatives or the Parent or any of their respective Representatives by reason of any attorney-client relationship between HB and the Company or any of its Subsidiaries or otherwise.

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11.20      Designation of Parent Representative.

(a) Designation of Parent Representative. Barry Kostiner (the “Parent Representative”) is hereby designated to serve as the representative of the Parent Stockholders with respect to the matters expressly set forth in this Agreement to be performed by the Parent Representative.

(b) Authority of Parent Representative. The Parent Representative is hereby irrevocably appointed as the agent, proxy and attorney-in-fact for each of the Parent Stockholders for all purposes of this Agreement and any other agreement entered into in connection herewith, including the full power and authority on such Parent Stockholder’s behalf (i) to consummate the transactions contemplated herein, (ii) to pay expenses incurred by such Parent Stockholder or the Parent Representative in connection with the marketing of the Parent, the evaluation of the transactions contemplated by this Agreement and the negotiation and performance of this Agreement and any other agreement entered into in connection herewith (whether incurred on or after the date hereof), (iii) to any amounts payable to each Parent Stockholder pursuant to this Agreement and disburse any funds received hereunder to each Parent Stockholder, (iv) to endorse and deliver any certificates or instruments representing any Parent Stockholder’s Parent Common Stock and execute such further agreements or instruments as the Company shall reasonably request or which the Parent Representative shall consider necessary or proper to effectuate the transactions contemplated by this Agreement, all of which shall have the effect of binding the Parent Stockholders as if such Parent Stockholder had personally executed such agreement or instrument, (v) to resolve any adjustments or issues relating to any component of Article 10 of this Agreement, (vi) to receive notices and other deliverables hereunder on behalf of such Parent Stockholder, (vii) to execute and deliver on behalf of such Parent Stockholder any amendment or waiver hereto or to any other agreement contemplated hereunder, (viii) to take all other actions to be taken by or on behalf of such Parent Stockholder in connection herewith, (ix) to dispute, compromise, settle and pay any claims made in connection with this Agreement or the transactions contemplated hereunder, (x) to retain legal and other professional advisors on behalf of, and at the expense of the Parent Stockholders in connection with its actions hereunder, (xi) to dispense funds on behalf of the Parent Stockholders pursuant to the terms of this Agreement and to retain from such funds an amount sufficient to satisfy the reasonable out-of-pocket expenses or other amounts incurred or payable by the Parent Representative in fulfilling its obligations hereunder, (xii) to make any calculations required under this Agreement, and (xiii) to do each and every act and exercise any and all rights which such Parent Stockholder is permitted or required to do or exercise under this Agreement.  Such agency, proxy and attorney-in-fact and all authority granted hereunder are coupled with an interest, are therefore irrevocable without the consent of the Parent Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Parent Stockholder.  If, after the execution of this Agreement, any Parent Stockholder dies, dissolves or liquidates or becomes incapacitated or incompetent, then the Parent Representative is nevertheless authorized, empowered and directed to act in accordance with this Agreement as if that death, dissolution, liquidation, incapacity or incompetency had not occurred and regardless of notice thereof.  All decisions and actions by the Parent Representative shall be binding upon all of the Parent Stockholders, and no Parent Stockholder shall have the right to object, dissent, protest or otherwise contest the same.

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(c) Authority; Indemnification. The Company and the Noteholder shall be entitled to rely on any action taken by the Parent Representative, on behalf of the Parent Stockholders, pursuant to Section 11.20(b) (each, a “Parent Authorized Action”), and each Parent Authorized Action shall be binding on each Parent Stockholder as fully as if such Parent Stockholder had taken such Parent Authorized Action.  The Company and the Noteholder each agree that the Parent Representative, solely in its capacity as the Parent Representative, shall have no liability to the Company or the Noteholder for any Parent Authorized Action, except as set forth in the Agreement or to the extent that such Parent Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or bad faith.  Each Parent Stockholder severally, for itself only and not jointly, will indemnify and hold harmless the Parent Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Parent Representative in connection with any action, suit or Proceeding to which the Parent Representative is made a party by reason of the fact it is or was acting as the Parent Representative pursuant to the terms of this Agreement.

(d) Duties of the Parent Representative. The Parent Representative hereby accepts its obligations under this Agreement.  The Parent Representative shall have only the duties expressly stated in this Agreement, and shall have no other duty, express or implied.  The Parent Representative is not, by virtue of serving as the Parent Representative, a fiduciary of the Parent Stockholders or any other person.  The Parent Representative, in its capacity as such, has no personal responsibility or liability for any representation, warranty or covenant of the Parent, the Purchaser or the ExchangeCo.

(e) Exculpation. The Parent Representative shall not be liable to any Parent Stockholder for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that the Parent Representative shall not be relieved of any liability imposed by Applicable Laws for fraud or bad faith.  The Parent Representative shall not be liable to the Parent Stockholders for any apportionment or distribution of payments made by the Parent Representative in good faith, and, if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Parent Stockholder to whom payment was due, but not made, shall be to recover from other Parent Stockholders any payment in excess of the amount to which they are determined to have been entitled.  The Parent Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement.  Neither the Parent Representative nor any agent employed by it shall incur any liability to any Parent Stockholder by virtue of the failure or refusal of the Parent Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith.

(f) No Fees to or Compensation of the Parent Representative. The Parent Representative shall not be entitled to and shall not charge or collect from the Parent Stockholders or any other person any fees or other compensation for its services as the Parent Representative under this Agreement.  The Parent Representative, however, shall be entitled to reimbursement from the Parent Stockholders (based on their pro-rata share of such expenses) for its reasonable out-of-pocket expenses incurred in connection with its services as the Parent Representative under this Agreement.

(g) Replacement of the Parent Representative. If the Parent Representative resigns or is otherwise unable or unwilling to serve in such capacity, then the Parent Stockholders that held a majority of the Parent Common Stock outstanding immediately prior to the Effective Time, voting as a single class, will appoint a new person to serve as the Parent Representative and will provide prompt written notice thereof to the Company. Until such notice is received, the Company will be entitled to rely on the actions and statements of the previous Parent Representative.

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11.21      Designation of Company Representative.

(a) Designation of Company Representative. A Person to be named prior to the Effective Time (the “Company Representative”) is hereby designated to serve as the representative of the Company Securityholders with respect to the matters expressly set forth in this Agreement to be performed by the Company Representative.

(b) Authority of Company Representative. The Company Representative is hereby irrevocably appointed as the agent, proxy and attorney-in-fact for each of the Company Securityholders for all purposes of this Agreement and any other agreement entered into in connection herewith, including the full power and authority on such Company Securityholder’s behalf (i) to consummate the transactions contemplated herein, (ii) to pay expenses incurred by such Company Securityholder or the Company Representative in connection with the marketing of the Company, the evaluation of the transactions contemplated by this Agreement and the negotiation and performance of this Agreement and any other agreement entered into in connection herewith (whether incurred on or after the date hereof), (iii) to any amounts payable to each Company Securityholder pursuant to this Agreement and disburse any funds received hereunder to each Company Securityholder, (iv) to endorse and deliver any certificates or instruments representing any Company Securityholder’s Company Common Stock, Company Option or Company Warrant and execute such further agreements or instruments as the Parent shall reasonably request or which the Company Representative shall consider necessary or proper to effectuate the transactions contemplated by this Agreement, all of which shall have the effect of binding the Company Securityholders as if such Company Securityholder had personally executed such agreement or instrument, (v) to resolve any adjustments or issues relating to any component of Article 10 of this Agreement, (vi) to receive notices and other deliverables hereunder on behalf of such Company Securityholder, (vii) to execute and deliver on behalf of such Company Securityholder any amendment or waiver hereto or to any other agreement contemplated hereunder, (viii) to take all other actions to be taken by or on behalf of such Company Securityholder in connection herewith, (ix) to dispute, compromise, settle and pay any claims made in connection with this Agreement or the transactions contemplated hereunder, (x) to retain legal and other professional advisors on behalf of, and at the expense of the Company Securityholders in connection with its actions hereunder, (xi) to dispense funds on behalf of the Company Securityholders pursuant to the terms of this Agreement and to retain from such funds an amount sufficient to satisfy the reasonable out-of-pocket expenses or other amounts incurred or payable by the Company Representative in fulfilling its obligations hereunder, (xii) to make any calculations required under this Agreement, and (xiii) to do each and every act and exercise any and all rights which such Company Securityholder is permitted or required to do or exercise under this Agreement.  Such agency, proxy and attorney-in-fact and all authority granted hereunder are coupled with an interest, are therefore irrevocable without the consent of the Company Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Company Securityholder.  If, after the execution of this Agreement, any Company Securityholder dies, dissolves or liquidates or becomes incapacitated or incompetent, then the Company Representative is nevertheless authorized, empowered and directed to act in accordance with this Agreement as if that death, dissolution, liquidation, incapacity or incompetency had not occurred and regardless of notice thereof.  All decisions and actions by the Company Representative shall be binding upon all of the Company Securityholders, and no Company Securityholder shall have the right to object, dissent, protest or otherwise contest the same.

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(c) Authority; Indemnification. The Parent, the Purchaser, the Noteholder and the ExchangeCo shall be entitled to rely on any action taken by the Company Representative, on behalf of the Company Securityholders, pursuant to Section 11.20(b) (each, a “Company Authorized Action”), and each Company Authorized Action shall be binding on each Company Securityholder as fully as if such Company Securityholder had taken such Company Authorized Action.  The Parent, the Purchaser, the Noteholder and the ExchangeCo agree that the Company Representative, solely in its capacity as the Company Representative, shall have no liability to the Parent, the Purchaser, the Noteholder or the ExchangeCo for any Company Authorized Action, except as set forth in the Agreement or to the extent that such Company Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or bad faith.  Each Company Securityholder severally, for itself only and not jointly, will indemnify and hold harmless the Company Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Company Representative in connection with any action, suit or Proceeding to which the Company Representative is made a party by reason of the fact it is or was acting as the Company Representative pursuant to the terms of this Agreement.

(d) Duties of the Company Representative. The Company Representative hereby accepts its obligations under this Agreement.  The Company Representative shall have only the duties expressly stated in this Agreement, and shall have no other duty, express or implied.  The Company Representative is not, by virtue of serving as the Company Representative, a fiduciary of the Company Securityholders or any other person.  The Company Representative, in its capacity as such, has no personal responsibility or liability for any representation, warranty or covenant of the Company.

(e) Exculpation. The Company Representative shall not be liable to any Company Securityholder for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that the Company Representative shall not be relieved of any liability imposed by Applicable Laws for fraud or bad faith.  The Company Representative shall not be liable to the Company Securityholders for any apportionment or distribution of payments made by the Company Representative in good faith, and, if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Company Securityholder to whom payment was due, but not made, shall be to recover from other Company Securityholders any payment in excess of the amount to which they are determined to have been entitled.  The Company Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement.  Neither the Company Representative nor any agent employed by it shall incur any liability to any Company Securityholder by virtue of the failure or refusal of the Company Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith.

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(f) No Fees to or Compensation of the Company Representative. The Company Representative shall not be entitled to and shall not charge or collect from the Company Securityholder or any other person any fees or other compensation for its services as the Company Representative under this Agreement.  The Company Representative, however, shall be entitled to reimbursement from the Company Securityholders (based on their pro-rata share of such expenses) for its reasonable out-of-pocket expenses incurred in connection with its services as the Company Representative under this Agreement.

(g) Replacement of the Company Representative. If the Company Representative resigns or is otherwise unable or unwilling to serve in such capacity, then the Company Shareholders that held a majority of the Company Common Stock outstanding immediately prior to the Effective Time, voting as a single class, will appoint a new person to serve as the Company Representative and will provide prompt written notice thereof to the Parent. Until such notice is received, the Parent, the Purchaser and the ExchangeCo will be entitled to rely on the actions and statements of the previous Company Representative.

11.22      No Group Status.  Nothing contained in this Agreement, and no action taken by any shareholder of the Company pursuant hereto or otherwise in connection herewith, shall be deemed to constitute the shareholders of the Company as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the shareholders of the Company are in any way acting in concert or as a “group” (within the meaning of Section 13 the United States Exchange Act) with respect to such obligations or the transactions contemplated by this Agreement.  Except as otherwise provided in or contemplated by this Agreement, there are no agreements (written or oral) between and among the shareholders of the Company with respect to the transactions contemplated hereby.

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IN WITNESS WHEREOF the Parties have executed this Amalgamation Agreement as of the date first written above.

PARENT:
AMERI HOLDINGS, INC.
By:	/s/ Barry Kostiner
	Authorized Signing Officer
	Print Name: Barry Kostiner
PURCHASER:
JAY PHARMA MERGER SUB, INC.
By:	/s/ Barry Kostiner
	Authorized Signing Officer
	Print Name: Barry Kostiner
COMPANY:
JAY PHARMA INC.
By:	/s/ David Stefansky
	Authorized Signing Officer
	Print Name: David Stefansky
EXCHANGECO:
1236567 B.C. UNLIMITED LIABILITY COMPANY
By:	/s/ Barry Kostiner
	Authorized Signing Officer
	Print Name: Barry Kostiner
PARENT REPRESENTATIVE:
/s/ Barry Kostiner
BARRY KOSTINER

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APPENDIX I

EXCHANGEABLE SHARE PROVISIONS WITH RESPECT TO THE SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO EXCHANGEABLE SHARES

EXCHANGEABLE SHARE PROVISIONS

SPECIAL RIGHTS AND RESTRICTIONS EXCHANGEABLE SHARES

The Exchangeable Shares Without Par Value have attached to them the special rights and restrictions set out in this Part:

1. Interpretation.

(a) Definitions. For the purposes of these Exchangeable Share Provisions, unless there is something in the context or subject matter inconsistent therewith, the following terms will have the following meanings:

“affiliate” has the meaning ascribed thereto in the BCBCA.

“Amalgamation Agreement” means the amalgamation agreement among the Parent, the Company, Jay Pharma Merger Sub, Inc., Jay Pharma Inc., and Barry Kostiner, as may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“BCBCA” means the Business Corporations Act (British Columbia), and all regulations made thereunder as promulgated or amended from time to time.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than a Saturday, Sunday, a public holiday or a day on which commercial banking institutions in Toronto, Ontario are closed for business.

“Canadian Dollar Equivalent” means, at any date, in respect of any amount expressed in a currency other than Canadian dollars (the “Foreign Currency Amount”) as of such date, the product obtained by multiplying (i) the Foreign Currency Amount by (ii) the daily exchange rate (“Daily Exchange Rate”) on such date for such foreign currency expressed in Canadian dollars as reported by the Bank of Canada or, in the event Daily Exchange Rate is not available, such spot exchange rate on such date for such foreign currency expressed in Canadian dollars as may be deemed by the Board of Directors to be appropriate for such purpose.

“Canadian Resident” means a beneficial owner of Common Shares immediately prior to the Effective Times who is: (i) a resident of Canada for purposes of the Tax Act (other than a Tax Exempt Person), or (ii) a partnership any member of which is (A) a resident of Canada for purposes of the Tax Act and (B) not a Tax Exempt Person.

“Change of Law” means any amendment to the Tax Act and other applicable provincial income tax laws that permits Canadian Resident holders of Exchangeable Shares, who hold the Exchangeable Shares as capital property and deal at arm’s length with the Parent and the Company (all for the purposes of the Tax Act and other applicable provincial income tax laws), to exchange their Exchangeable Shares for Parent Shares on a basis that will not require such holders to recognize any gain or loss or any actual or deemed dividend in respect of such exchange for the purposes of the Tax Act or applicable provincial income tax laws.

“Change of Law Call Date” has the meaning ascribed thereto in Section 8(b).

[Ameri – Exchangeable Share Provisions]

“Change of Law Call Purchase Price” has the meaning ascribed thereto in Section 8(a).

“Change of Law Call Right” has the meaning ascribed thereto in Section 8(a);

“Common Shares” means the common shares in the capital of the Company.

“Company” means 1236567 B.C. UNLIMITED LIABILITY COMPANY, an unlimited liability corporation existing under the laws of British Columbia.

“Current Market Price” means, in respect of a Parent Share on any date, the Canadian Dollar Equivalent of the average closing sale price on the NasdaqGS during the period of 20 consecutive trading days ending on the third trading day immediately before such date or, if the Parent Shares are not then quoted on the NasdaqGS, on such other stock exchange or automated quotation system on which the Parent Shares are listed or quoted, as the case may be, as may be selected by the Board of Directors for such purpose; provided, however, that if in the opinion of the Board of Directors the public distribution or trading activity of Parent Shares during such period does not reflect the fair market value of a Parent Share, then the Current Market Price of a Parent Share shall be determined by the Board of Directors, based upon the advice of such qualified independent financial advisors as the Board of Directors may deem to be appropriate; and provided further that any such selection, opinion or determination by the Board of Directors shall be conclusive and binding, absent manifest error.

“Effective Date” means the date on which the Effective Time occurs.

“Effective Time” has the meaning ascribed thereto in the Amalgamation Agreement.

“Exchangeable Share Consideration” means, with respect to each Exchangeable Share, for any acquisition of, redemption of or distribution of assets of the Company in respect of such Exchangeable Share, or purchase of such Exchangeable Share pursuant to these Exchangeable Share Provisions, the Support Agreement or the Voting and Exchange Trust Agreement:

(i) the Current Market Price of one Parent Share deliverable in connection with such action; plus

(ii) a cheque or cheques payable at par at any branch of the bankers of the payor in the amount of all declared, payable and unpaid, and all undeclared but payable, cash dividends deliverable in connection with such action; plus

(iii) such stock or other property constituting any declared, payable and unpaid non-cash dividends deliverable in connection with such action,

provided that: (A) the part of the consideration which represents (i) above shall be fully paid and satisfied by the delivery of one Parent Share, such share to be duly issued, fully paid and non-assessable; (B) the part of the consideration which represents (iii) above shall be fully paid and satisfied by delivery of such non-cash items; (C) in each case, any such consideration shall be delivered free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest; and (D) in each case, any such consideration shall be paid without interest and less any tax required to be deducted and withheld therefrom.

“Exchangeable Share Price” means, at any time, for each Exchangeable Share, an amount equal to the aggregate of:

(i) the Current Market Price of one Parent Share at such time;

[Ameri – Exchangeable Share Provisions]

(ii) the full amount of all cash dividends declared, payable and unpaid, at such time, on such Exchangeable Share;

(iii) the full amount of all non-cash dividends declared, payable and unpaid, at such time, on such Exchangeable Share; and

(iv) the full amount of all dividends declared and payable or paid in respect of each Parent Share which have not, at such time, been declared or paid on Exchangeable Shares in accordance herewith.

“Exchangeable Share Provisions” means the rights, privileges, restrictions and conditions set out herein.

“Exchangeable Share Voting Event” means any matter in respect of which holders of Exchangeable Shares are entitled to vote as shareholders of the Company, other than an Exempt Exchangeable Share Voting Event, and, for greater certainty, excluding any matter in respect of which holders of Exchangeable Shares are entitled to vote (or instruct the Trustee to vote) in their capacity as Beneficiaries under (and as that term is defined in) the Voting and Exchange Trust Agreement.

“Exchangeable Shares” means the exchangeable shares in the capital of the Company, having the rights, privileges, restrictions and conditions set forth herein.

“Exempt Exchangeable Share Voting Event” means any matter in respect of which holders of Exchangeable Shares are entitled to vote as shareholders of the Company to approve or disapprove, as applicable, any change to, or in the rights of the holders of, the Exchangeable Shares, where the approval or disapproval, as applicable, of such change is required to maintain the economic equivalence of the Exchangeable Shares and the Parent Shares.

“Governmental Authority” means any international, multinational, federal, provincial, territorial, state, regional, municipal, local or other government or governmental body and any ministry, department, division, bureau, agent, official, agency, commission, board or authority of any government, governmental body, quasi-governmental or private body (including any stock exchange), domestic or foreign, exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing and any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel, arbitrator or arbitral body acting under the authority of any of the foregoing.

“Liquidation Amount” has the meaning ascribed thereto in Section 4(a).

“Liquidation Call Purchase Price” has the meaning ascribed thereto in Section 6(a).

“Liquidation Call Right” has the meaning ascribed thereto in Section 6(a).

“Liquidation Date” has the meaning ascribed thereto in Section 4(a).

“NasdaqGS” means the Nasdaq Global Select Market.

“Parent” means Ameri Holdings, Inc., a corporation existing under the laws of the State of Delaware.

“Parent Control Transaction” shall be deemed to have occurred if:

(i) any person acquires, directly or indirectly, any voting security of the Parent and, immediately after such acquisition, directly or indirectly owns, or exercises control and direction over, voting securities representing more than 50% of the total voting power of all of the then outstanding voting securities of the Parent;

[Ameri – Exchangeable Share Provisions]

(ii) the shareholders of the Parent approve a merger, consolidation, recapitalization or reorganization of the Parent, other than any such transaction which would result in the holders of outstanding voting securities of the Parent immediately prior to such transaction directly or indirectly owning, or exercising control and direction over, voting securities representing more than 50% of the total voting power of all of the voting securities of the surviving entity outstanding immediately after such transaction;

(iii) the shareholders of the Parent approve a liquidation of the Parent; or

(iv) the Parent sells or disposes of all or substantially all of its assets.

“Parent Dividend Declaration Date” means the date on which the board of directors of the Parent declares any dividend or other distribution on the Parent Shares.

“Parent Shares” means shares of common stock of the Parent.

“person” includes any individual, sole proprietorship, corporation, body corporate, incorporated or unincorporated association, syndicate or organization, partnership, limited partnership, limited liability company, unlimited liability company, joint venture, joint stock company, trust, natural person in his or her capacity as trustee, executor, administrator or other legal representative, a government or governmental authority or other entity, whether or not having legal status.

“Redemption Call Purchase Price” has the meaning ascribed thereto in Section 7(a).

“Redemption Call Right” has the meaning ascribed thereto in Section 7(a).

“Redemption Date” means the date, if any, established by the Board of Directors for the redemption by the Company of all but not less than all of the outstanding Exchangeable Shares, which date shall be no earlier than the tenth (10^th) anniversary of the Effective Date, unless:

(i) the aggregate number of Exchangeable Shares issued and outstanding (other than Exchangeable Shares held by the Parent and its subsidiaries) is less than 5% of the number of Exchangeable Shares issued on the Effective Date (as such number of shares may be adjusted as deemed appropriate by the Board of Directors to give effect to any subdivision, combination or consolidation of or stock dividend on the Exchangeable Shares, any issue or distribution of rights to acquire Exchangeable Shares or securities exchangeable for or convertible into Exchangeable Shares, any issue or distribution of other securities or rights or evidences of indebtedness or assets, or any other capital reorganization or other transaction affecting the Exchangeable Shares), in which case the Board of Directors may accelerate such redemption date to such date as it may determine, upon at least thirty (30) days’ prior written notice to the registered holders of the Exchangeable Shares;

(ii) a Parent Control Transaction is proposed, in which case, provided that the Board of Directors determines, in good faith and in its sole discretion, that it is not reasonably practicable to substantially replicate the terms and conditions of the Exchangeable Shares in connection with such Parent Control Transaction and that the redemption of all but not less than all of the outstanding Exchangeable Shares is necessary to enable the completion of such Parent Control Transaction in accordance with its terms, the Board of Directors may accelerate such redemption date to such date as it may determine, upon such number of days, prior written notice to the registered holders of the Exchangeable Shares and the Trustee as the Board of Directors may determine to be reasonably practicable in such circumstances;

[Ameri – Exchangeable Share Provisions]

(iii) an Exchangeable Share Voting Event is proposed and (A) the Board of Directors has determined, in good faith and in its sole discretion, that it is not reasonably practicable to accomplish the business purpose (which business purpose must be bona fide and not for the primary purpose of causing the occurrence of the Redemption Date) intended by the Exchangeable Share Voting Event in a commercially reasonable manner that does not result in an Exchangeable Share Voting Event and (B) the holders of the Exchangeable Shares fail to take the necessary action at a meeting or other vote of holders of Exchangeable Shares to approve or disapprove, as applicable, the Exchangeable Share Voting Event, in which case the Redemption Date shall be the Business Day following the later of the day on which the Board of Directors makes such a determination or the holders of the Exchangeable Shares fail to take such action; or

(iv) an Exempt Exchangeable Share Voting Event is proposed and the holders of the Exchangeable Shares fail to take the necessary action at a meeting or other vote of holders of Exchangeable Shares to approve or disapprove, as applicable, the Exempt Exchangeable Share Voting Event, in which case the Redemption Date shall be the Business Day following the day on which the holders of the Exchangeable Shares fail to take such action, provided, however, that the accidental failure or omission to give any notice of redemption under clauses (i), (ii), (iii) or (iv) above to any of the holders of Exchangeable Shares shall not affect the validity of any such redemption.

“Redemption Price” has the meaning ascribed thereto in Section 9(a).

“Retracted Shares” has the meaning ascribed thereto in Section 5(a)(i)(B).

“Retraction Call Notice” has the meaning ascribed thereto in Section 5(b)(ii).

“Retraction Call Right” has the meaning ascribed thereto in Section 5(b)(i).

“Retraction Call Right Purchase Price” has the meaning ascribed thereto in Section 5(b)(i).

“Retraction Date” has the meaning ascribed thereto in Section 5(a)(i).

“Retraction Price” has the meaning ascribed thereto in Section 5(a)(i).

“Retraction Request” has the meaning ascribed thereto in Section 5(a)(i)(B).

“Support Agreement” means the Support Agreement to be entered into at or prior to the issuance by the Company of any Exchangeable Shares among the Parent and the Company, as may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Tax” or “Taxes” means all taxes, dues, duties, rates, imposts, fees, levies, other assessments, tariffs, charges or obligations of the same or similar nature, however denominated, imposed, assessed or collected by any Governmental Authority, including: (i) all income taxes, including any tax on or based on net income, gross income, income as specifically defined, earnings, gross receipts, capital, capital gains, profits, business royalty or selected items of income, earnings or profits, and specifically including any federal, provincial, state, territorial, county, municipal, local or foreign taxes, state profit share taxes, windfall or excess profit taxes, capital taxes, royalty taxes, production taxes, payroll taxes, health taxes, employment taxes, withholding taxes (including all withholdings on amounts paid to or by the relevant person), sales taxes, use taxes, goods and services taxes, custom duties, value added taxes, ad valorem taxes, excise taxes, alternative or add-on minimum taxes, franchise taxes, gross receipts taxes, licence taxes, occupation taxes, real and personal property taxes, land transfer taxes, severance taxes, capital stock taxes, stamp taxes, anti-dumping taxes, countervailing taxes, occupation taxes, environment taxes, transfer taxes, and employment or unemployment insurance premiums, social insurance premiums and worker’s compensation premiums and pension (including Canada Pension Plan) payments, and other taxes, fees, imposts, assessments or charges of any kind whatsoever together with any interest, penalties, additional taxes, fines and other charges and additions that may become payable in respect thereof; (ii) any tax imposed, assessed, collected or payable pursuant to any tax-sharing agreement or any other contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency or fee; and (iii) any liability for any of the foregoing of a transferee, successor, guarantor or by contract or by operation of law.

[Ameri – Exchangeable Share Provisions]

“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time.

“Tax Exempt Person” means a person who is exempt from Tax under Part I of the Tax Act.

“Transfer Agent” means such person as may from time to time be appointed by the Company as the registrar and transfer agent for the Exchangeable Shares.

“Trustee” means the trustee chosen by the Parent to act as trustee under the Voting and Exchange Trust Agreement and any successor trustee appointed under the Voting and Exchange Trust Agreement.

“U.S. Tax Code” means the United States Internal Revenue Code of 1986, as amended.

“Voting and Exchange Trust Agreement” means the Voting and Exchange Trust Agreement to be made among the Parent, the Company and the Trustee, as may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

(b) Interpretation Not Affected by Headings. The division of these Exchangeable Share Provisions into Sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references to a “Section” followed by a number and/or a letter refer to the specified Section of these Exchangeable Share Provisions.

(c) Number and Gender. In these Exchangeable Share Provisions, unless the context otherwise clearly requires, words used herein importing the singular include the plural and vice versa and words imparting any gender shall include all genders.

(d) Date of Any Action. If any date on which any action is required to be taken hereunder by any person is not a Business Day, then such action shall be required to be taken on the next succeeding day which is a Business Day.

(e) Currency. In these Exchangeable Share Provisions, unless stated otherwise, all cash payments provided for herein shall be made in Canadian dollars.

[Ameri – Exchangeable Share Provisions]

2. Ranking of Exchangeable Shares.

(a) Ranking of Exchangeable and Common Shares. The Exchangeable Shares shall be entitled to a preference over the Common Shares and any other shares ranking junior to the Exchangeable Shares:

(i) with respect to the payment of dividends or distributions as and to the extent provided in Section 3; and

(ii) with respect to the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs as and to the extent provided in Section 4.

3. Dividends and Distributions.

(a) Dividends and Distributions. A holder of an Exchangeable Share shall be entitled to receive and the Board of Directors shall, subject to applicable law, on each Parent Dividend Declaration Date, declare a dividend or distribution on each Exchangeable Share:

(i) in the case of a cash dividend or distribution declared on the Parent Shares, in an amount in cash for each Exchangeable Share equal to the Canadian Dollar Equivalent of the cash dividend or distribution declared on each Parent Share on the Parent Dividend Declaration Date;

(ii) in the case of a stock dividend or distribution declared on the Parent Shares to be paid in Parent Shares, by the issue or transfer by the Company of such number of Exchangeable Shares for each Exchangeable Share as is equal to the number of Parent Shares to be paid on each Parent Share; provided, however, that the Company may, in lieu of such stock dividend, elect to effect a contemporaneous and economically equivalent (as determined by the Board of Directors in accordance with Section 3(e)) subdivision of the outstanding Exchangeable Shares; or

(iii) in the case of a dividend or distribution declared on the Parent Shares in property other than cash or Parent Shares, in such type and amount of property for each Exchangeable Share as is the same as or economically equivalent (as determined by the Board of Directors in accordance with Section 3(e)) to the type and amount of property declared as a dividend or distribution on each Parent Share.

Such dividends or distributions shall be paid out of money, assets or property of the Company properly applicable to the payment of dividends or other distributions, or out of authorized but unissued shares of the Company, as applicable. The holders of Exchangeable Shares shall not be entitled to any dividends or other distributions other than or in excess of the dividends and distributions referred to in this Section 3.

(b) Payments of Dividends and Distributions. Cheques of the Company payable at par at any branch of the bankers of the Company shall be issued in respect of any cash dividends or distributions contemplated by Section 3(a)(ii) and the sending of such cheque to each holder of an Exchangeable Share shall satisfy the cash dividend or distribution represented thereby unless the cheque is not paid on presentation. Written evidence of the book entry issuance or transfer to the registered holder of Exchangeable Shares shall be delivered in respect of any stock dividends or distributions contemplated by Section 3(a)(ii) and the sending of such written evidence to each holder of an Exchangeable Share shall satisfy the stock dividend or distribution represented thereby. Such other type and amount of property in respect of any dividends or distributions contemplated by Section 3(a)(iii) shall be issued, distributed or transferred by the Company in such manner as it shall determine and the issuance, distribution or transfer thereof by the Company to each holder of an Exchangeable Share shall satisfy the dividend or distribution represented thereby. Subject to the requirements of applicable law with respect to unclaimed property, no holder of an Exchangeable Share shall be entitled to recover by action or other legal process against the Company any dividend or distribution that is represented by a cheque that has not been duly presented to the Company’s bankers for payment or that otherwise remains unclaimed for a period of six (6) years from the date on which such dividend was payable.

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(c) Record and Payment Dates. The record date for the determination of the holders of Exchangeable Shares entitled to receive payment of, and the payment date for, any dividend or distribution declared on the Exchangeable Shares under this Section 3 shall be the same dates as the record date and payment date, respectively, for the corresponding dividend or distribution declared on the Parent Shares. The record date for the determination of the holders of Exchangeable Shares entitled to receive Exchangeable Shares in connection with any subdivision of the Exchangeable Shares under Section 3(a)(ii) and the effective date of such subdivision shall be the same dates as the record and payment date, respectively, for the corresponding stock dividend or distribution declared on the Parent Shares.

(d) Partial Payment. If on any payment date for any dividends or distributions declared on the Exchangeable Shares under Section 3(a) the dividends or distributions are not paid in full on all of the Exchangeable Shares then outstanding, any such dividends or distributions that remain unpaid shall be paid on a subsequent date or dates determined by the Board of Directors on which the Company shall have sufficient moneys, assets or property properly applicable to the payment of such dividends or distributions.

(e) Economic Equivalence. The Board of Directors shall determine, in good faith and in its sole discretion (with the assistance of such financial or other advisors as the Board of Directors may determine), “economic equivalence” for the purposes of the Exchangeable Share Provisions and each such determination shall be conclusive and binding on the Company and its shareholders. In making each such determination, the following factors shall, without excluding other factors determined by the Board of Directors to be relevant, be considered by the Board of Directors:

(i) in the case of any stock dividend or other distribution payable in Parent Shares, the number of such shares issued in proportion to the number of Parent Shares previously outstanding;

(ii) in the case of the issuance or distribution of any rights, options or warrants to subscribe for or purchase Parent Shares (or securities exchangeable for or convertible into or carrying rights to acquire Parent Shares), the relationship between the exercise price of each such right, option or warrant, the Current Market Price of a Parent Share, the volatility of the Parent Shares and the terms of any such instrument;

(iii) in the case of the issuance or distribution of any other form of property (including any shares or securities of the Parent of any class other than Parent Shares, any rights, options or warrants other than those referred to in Section 3(a)(ii), any evidences of indebtedness of the Parent or any assets of the Parent), the relationship between the fair market value (as determined by the Board of Directors in the manner above contemplated) of such property to be issued or distributed with respect to each outstanding Parent Share and the Current Market Price of a Parent Share;

(iv) in the case of any subdivision, redivision or change of the then outstanding Parent Shares into a greater number of Parent Shares or the reduction, combination, consolidation or change of the then outstanding Parent Shares into a lesser number of Parent Shares or any amalgamation, merger, arrangement, reorganization or other transaction affecting the Parent Shares, the effect thereof upon the then outstanding Exchangeable Shares; and

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(v) in all such cases, the general taxation consequences of the relevant event to holders of Exchangeable Shares to the extent that such consequences may differ from the taxation consequences to holders of Parent Shares as a result of differences between taxation laws of Canada and the United States (except for any differing consequences arising as a result of differing withholding taxes and marginal taxation rates and without regard to the individual circumstances of holders of Exchangeable Shares).

4. Liquidation.

(a) Liquidation Amount. Subject to applicable laws and the due exercise by the Parent of the Liquidation Call Right, in the event of the liquidation, dissolution or winding-up of the Company or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, subject to the exercise of the Liquidation Call Right, a holder of Exchangeable Shares shall be entitled, subject to applicable law, to receive from the assets of the Company in respect of each Exchangeable Share held by such holder on the effective date of such liquidation, dissolution, winding-up or other distribution (the “Liquidation Date”), before any distribution of any part of the assets of the Company among the holders of the Common Shares or any other shares ranking junior to the Exchangeable Shares with respect to dividends or distributions an amount per share (the “Liquidation Amount”) equal to the Exchangeable Share Price applicable on the last Business Day prior to the Liquidation Date, which price shall be satisfied in full by the Company delivering or causing to be delivered to such holder the Exchangeable Share Consideration representing the Liquidation Amount.

(b) Payment of Liquidation Amount. In the case of a distribution pursuant to Section 4(a), and provided that the Liquidation Call Right has not been exercised by the Parent, on or promptly after the Liquidation Date, the Company shall deliver or cause to be delivered to the holders of the Exchangeable Shares the Liquidation Amount for each such Exchangeable Share upon presentation and surrender of the certificates representing such Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require, at the registered office of the Company or at any office of the Transfer Agent as may be specified by the Company by notice to the holders of the Exchangeable Shares. Payment of the Liquidation Amount for such Exchangeable Shares shall be made by delivery to each holder, at the address of such holder recorded in the securities register of the Company for the Exchangeable Shares or by holding for pick-up by such holder at the registered office of the Company or at any office of the Transfer Agent as may be specified by the Company by notice to the holders of the Exchangeable Shares, the Exchangeable Share Consideration such holder is entitled to receive pursuant to Section 4(a). On and after the Liquidation Date, the holders of the Exchangeable Shares shall cease to be holders of such Exchangeable Shares and shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement) other than the right to receive their proportionate part of the total Liquidation Amount, unless payment of the total Liquidation Amount for such Exchangeable Shares shall not be made upon presentation and surrender of share certificates in accordance with the foregoing provisions, in which case the rights of the holders shall remain unaffected until the Liquidation Amount has been paid in the manner hereinbefore provided. The Company shall have the right at any time after the Liquidation Date to transfer or cause to be issued or transferred to, and deposited in a custodial account with, any chartered bank or trust company the Liquidation Amount in respect of the Exchangeable Shares represented by certificates that have not at the Liquidation Date been surrendered by the holders thereof, such Liquidation Amount to be held by such bank or trust company as trustee for and on behalf of, and for the use and benefit of, such holders. Upon such deposit being made, the rights of a holder of Exchangeable Shares after such deposit shall be limited to receiving its proportionate part of the total Liquidation Amount for such Exchangeable Shares so deposited, without interest, and all dividends and other distributions with respect to the Parent Shares to which such holder is entitled with a record date after the date of such deposit and before the date of transfer of such Parent Shares to such holder (in each case less any amounts withheld on account of tax required to be deducted and withheld therefrom) against presentation and surrender of the certificates for the Exchangeable Shares held by them in accordance with the foregoing provisions.

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(c) No Right to Participate in Further Distributions. After the Company has satisfied its obligations to pay the holders of the Exchangeable Shares the total Liquidation Amount per Exchangeable Share pursuant to this Section 4, such holders shall not be entitled to share in any further distribution of the assets of the Company.

5. Retraction of Exchangeable Shares.

(a) Retraction at Option of Holder.

(i) Subject to applicable laws and the due exercise by the Parent of the Retraction Call Right, a holder of Exchangeable Shares shall be entitled at any time to require the Company to redeem, on the fifth (5^th) Business Day after the date on which the Retraction Request is received by the Company (the “Retraction Date”), any or all of the Exchangeable Shares registered in the name of such holder for an amount per share equal to the Exchangeable Share Price applicable on the last Business Day prior to the Retraction Date (the “Retraction Price”), which price shall be satisfied in full by the Company delivering or causing to be delivered to such holder the Exchangeable Share Consideration representing the Retraction Price. A holder of Exchangeable Shares must give notice of a request to redeem by presenting and surrendering to the Company, at the registered office of the Company or at any office of the Transfer Agent as may be specified by the Company by notice to the holders of the Exchangeable Shares, the certificate or certificates representing the Exchangeable Shares that such holder desires to have the Company redeem, together with:

(A) such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require; and

(B) a duly executed request (the ‘‘Retraction Request’’) in the form of Appendix I hereto or in such other form as may be acceptable to the Company specifying that such holder desires to have all or any number specified therein of the Exchangeable Shares represented by such certificate or certificates (the “Retracted Shares”) redeemed by the Company.

(ii) In the case of a redemption of Exchangeable Shares pursuant to this Section 5(a), upon receipt by the Company or the Transfer Agent in the manner specified in Section 5(a)(i) of a certificate representing the number of Exchangeable Shares which the holder desires to have the Company redeem, together with a duly executed Retraction Request and such additional documents and instruments specified in Section 5(a)(i), and provided that:

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(A) the Retraction Request has not been revoked by the holder of such Exchangeable Shares in the manner specified in Section 5(a)(iv); and

(B) the Parent has not exercised the Retraction Call Right,

the Company shall redeem the Retracted Shares effective at the close of business on the Retraction Date. On the Retraction Date, the Company shall deliver or cause to be delivered to such holder, at the address of the holder recorded in the securities register of the Company for the Exchangeable Shares or at the address specified in the Retraction Request or by holding for pick-up by the holder at the registered office of the Company or at any office of the Transfer Agent as may be specified by the Company by notice to the holders of the Exchangeable Shares, the Exchangeable Share Consideration representing the Retraction Price and such delivery of such Exchangeable Share Consideration by or on behalf of the Company by the Transfer Agent shall be deemed to be payment of and shall satisfy and discharge all liability for the Retraction Price to the extent that the same is represented by such Exchangeable Share Consideration, unless any cheque comprising part of such Exchangeable Share Consideration is not paid on due presentation. If only a part of the Exchangeable Shares represented by any certificate is redeemed, a new certificate for the balance of such Exchangeable Shares shall be issued to the holder at the expense of the Company. On and after the close of business on the Retraction Date, the holder of the Retracted Shares shall cease to be a holder of such Retracted Shares and shall not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive the total Retraction Price in respect thereof, unless upon presentation and surrender of certificates in accordance with the foregoing provisions, payment of the aggregate Retraction Price payable to such holder shall not be made, in which case the rights of such holder shall remain unaffected until such aggregate Retraction Price has been paid in the manner hereinbefore provided. On and after the close of business on the Retraction Date, provided that presentation and surrender of certificates and payment of such aggregate Retraction Price has been made in accordance with the foregoing provisions, the holder of the Retracted Shares so redeemed by the Company shall thereafter be considered and deemed for all purposes to be a holder of the Parent Shares delivered to such holder.

(iii) Notwithstanding any other provision of this Section 5, the Company shall not be obligated to redeem Retracted Shares specified by a holder in a Retraction Request if and to the extent that such redemption of Retracted Shares would be contrary to solvency requirements or other provisions of applicable laws. If the Company believes that on any Retraction Date it would not be permitted by any of such provisions to redeem the Retracted Shares tendered for redemption on such date, and the Parent has not exercised the Retraction Call Right with respect to such Retracted Shares, the Company shall only be obligated to redeem Retracted Shares specified by a holder in a Retraction Request to the extent of the maximum number that may be so redeemed (rounded down to a whole number of shares) as would not be contrary to such provisions and shall notify the holder and the Trustee at least two (2) Business Days prior to the Retraction Date as to the number of Retracted Shares which will not be redeemed by the Company. In any case in which the redemption by the Company of Retracted Shares would be contrary to solvency requirements or other provisions of applicable laws, the Company shall redeem Retracted Shares in accordance with Section 5(a)(ii) on a pro rata basis and shall issue to each holder of Retracted Shares a new certificate, at the expense of the Company, representing the Retracted Shares not redeemed by the Company pursuant to Section 5(a)(ii). If the Company would otherwise be obligated to redeem Retracted Shares pursuant to Section 5(a)(ii) but is not obligated to do so as a result of solvency requirements or other provisions of applicable laws, the holder of any such Retracted Shares not redeemed by the Company pursuant to Section 5(a)(ii) as a result of solvency requirements or other provisions of applicable laws shall be deemed, by delivery of the Retraction Request to have instructed the Transfer Agent to require the Parent to purchase such Retracted Shares from such holder on the Retraction Date or as soon as practicable thereafter on payment by the Parent to such holder of the total Retraction Price in respect of such Retracted Shares, all as more specifically provided for in the Voting and Exchange Trust Agreement.

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(iv) A holder of Retracted Shares may, by notice in writing given by the holder to the Company before the close of business on the Business Day immediately preceding the Retraction Date, withdraw its Retraction Request, in which event such Retraction Request shall be null and void and, for greater certainty, the revocable offer constituted by the Retraction Request to sell the Retracted Shares to the Parent shall be deemed to have been revoked.

(v) Notwithstanding any other provision of this Section 5(a), if:

(A) exercise of the rights of the holders of the Exchangeable Shares, or any of them, to require the Company to redeem any Exchangeable Shares pursuant to this Section 5(a) on any Retraction Date would require listing particulars or any similar document to be issued in order to obtain the approval of NasdaqGS to the listing and trading (subject to official notice of issuance) of the Parent Shares that would be required to be delivered to such holders of Exchangeable Shares in connection with the exercise of such rights; and

(B) as a result of (A) above, it would not be practicable (notwithstanding the reasonable endeavours of the Parent) to obtain such approvals in time to enable all or any of such Parent Shares to be admitted to listing and trading by NasdaqGS (subject to official notice of issuance) when so delivered,

then the Retraction Date shall, notwithstanding any other date specified or otherwise deemed to be specified in any relevant Retraction Request, be deemed for all purposes to be the earlier of:

(C) the second Business Day immediately following the date the approvals referred to in Section 5(a)(v)(A) are obtained; and

(D) the date which is thirty (30) Business Days after the date on which the relevant Retraction Request is received by the Company, and references in these Exchangeable Share Provisions to such Retraction Date shall be construed accordingly.

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(b) Retraction Call Right.

(i) In the event that a holder of Exchangeable Shares delivers a Retraction Request pursuant to Section 5(a), and subject to the limitations set forth in Section 5(a)(ii), the Parent shall have the overriding right (the “Retraction Call Right”), notwithstanding the proposed redemption of the Exchangeable Shares by the Company pursuant to Section 5(a), to purchase from such holder on the Retraction Date all but not less than all of the Retracted Shares held by such holder on payment by the Parent of an amount per share equal to the Exchangeable Share Price applicable on the last Business Day prior to the Retraction Date (the “Retraction Call Right Purchase Price”), which price shall be satisfied in full by the Parent delivering or causing to be delivered to such holder the Exchangeable Share Consideration representing the Retraction Call Right Purchase Price. Upon the exercise of the Retraction Call Right in respect of Retracted Shares, the holder of such shares shall be obligated to sell all of such Retracted Shares to the Parent on the Retraction Date on payment by the Parent of the total Retraction Call Right Purchase Price in respect of such Retracted Shares as set forth in this Section 5(b)(i).

(ii) Upon receipt by the Company of a Retraction Request, the Company shall immediately notify the Parent thereof and shall provide the Parent with a copy of the Retraction Request. In order to exercise its Retraction Call Right, the Parent must notify the Company in writing of its determination to do so (a “Retraction Call Notice”) within five (5) Business Days after the Company notifies the Parent of the Retraction Request. If the Parent does not notify the Company within such five (5) Business Day period, the Company shall notify the holder as soon as possible thereafter that the Parent will not exercise the Retraction Call Right. If the Parent delivers a Retraction Call Notice within such five (5) Business Day period and duly exercises its Retraction Call Right in accordance with this Section 5(b)(ii), the obligation of the Company to redeem the Retracted Shares shall terminate and, provided that the Retraction Request is not revoked by the holder of such Retracted Shares in the manner specified in Section 5(a)(iv), the Parent shall purchase from such holder and such holder shall sell to the Parent on the Retraction Date the Retracted Shares for an amount per share equal to the Retraction Call Right Purchase Price. Provided that the aggregate Retraction Call Right Purchase Price has been so deposited with the Transfer Agent as provided in Section 5(b)(iii), the closing of the purchase and sale of the Retracted Shares pursuant to the Retraction Call Right shall be deemed to have occurred as at the close of business on the Retraction Date and, for greater certainty, no redemption by the Company of such Retracted Shares shall take place on the Retraction Date.

(iii) For the purpose of completing a purchase of Retracted Shares pursuant to the exercise of the Retraction Call Right, the Parent shall deliver or cause to be delivered to the holder of such Retracted Shares, at the address of the holder recorded in the securities register of the Company for the Exchangeable Shares or at the address specified in the holder’s Retraction Request or by holding for pick-up by the holder at the registered office of the Company or at any office of the Transfer Agent as may be specified by the Company by notice to the holders of Exchangeable Shares, the Exchangeable Share Consideration representing the Retraction Call Right Purchase Price to which such holder is entitled and such delivery of Exchangeable Share Consideration on behalf of the Parent shall be deemed to be payment of and shall satisfy and discharge all liability for the Retraction Call Right Purchase Price to the extent that the same is represented by such Exchangeable Share Consideration, unless such cheque comprising part of such Exchangeable Share Consideration is not paid on due presentation.

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(iv) On and after the close of business on the Retraction Date, the holder of the Retracted Shares shall cease to be a holder of such Retracted Shares and shall not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive the total Retraction Call Right Purchase Price in respect thereof, unless payment of the aggregate Retraction Call Right Purchase Price payable to such holder shall not be made upon presentation and surrender of certificates in accordance with the foregoing provisions in which case the rights of such holder shall remain unaffected until such aggregate Retraction Call Right Purchase Price has been paid in the manner hereinbefore provided. On and after the close of business on the Retraction Date, provided that presentation and surrender of certificates and payment of such aggregate Retraction Call Right Purchase Price has been made in accordance with the foregoing provisions, the holder of the Retracted Shares so purchased by the Parent shall thereafter be considered and deemed for all purposes to be a holder of the Parent Shares delivered to such holder.

6. Liquidation Call Right.

(a) Liquidation Call Right. The Parent shall have the overriding right (the “Liquidation Call Right”), in the event of and notwithstanding the proposed liquidation, dissolution or winding-up of the Company or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, pursuant to Section 5, to purchase from all but not less than all of the holders of Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) on the Liquidation Date all but not less than all of the Exchangeable Shares held by each such holder on payment by the Parent to each such holder of the Exchangeable Share Price (payable in the form of the Exchangeable Share Consideration) applicable on the last Business Day prior to the Liquidation Date (the “Liquidation Call Purchase Price”) in accordance with Section 6(c). In the event of the exercise of the Liquidation Call Right by the Parent each such holder of Exchangeable Shares shall be obligated to sell all of the Exchangeable Shares held by the holder to the Parent on the Liquidation Date on payment by the Parent to such holder of the Liquidation Call Purchase Price (payable in the form of Exchangeable Share Consideration) for each such share, and the Company shall have no obligation to pay any Liquidation Amount to the holders of such shares so purchased.

(b) Exercise of Liquidation Call Right. To exercise the Liquidation Call Right, the Parent must notify the Transfer Agent, as agent for the holders of Exchangeable Shares, and the Company of its intention to exercise such right:

(i) in the case of a voluntary liquidation, dissolution or winding-up of the Company or any other voluntary distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, at least thirty (30) days before the Liquidation Date; or

(ii) in the case of an involuntary liquidation, dissolution or winding-up of the Company or any other involuntary distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, at least five (5) Business Days before the Liquidation Date.

The Transfer Agent will notify the holders of Exchangeable Shares as to whether or not the Parent has exercised the Liquidation Call Right forthwith after the expiry of the period during which the Parent may exercise the Liquidation Call Right. If the Parent exercises the Liquidation Call Right, the Parent will purchase and the holders of the Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) will sell, on the Liquidation Date, all of the Exchangeable Shares held by such holders on such date for a price per share equal to the Liquidation Call Purchase Price (payable in the form of Exchangeable Share Consideration).

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(c) Effect of Exercise of Liquidation Call Right. For the purposes of completing the purchase and sale of the Exchangeable Shares pursuant to the exercise of the Liquidation Call Right, the Parent shall deposit or cause to be deposited with the Transfer Agent, on or before the Liquidation Date, the Exchangeable Share Consideration representing the total Liquidation Call Purchase Price less any amounts withheld pursuant to Section 6(d). Provided that such Exchangeable Share Consideration has been so deposited with the Transfer Agent, the holders of the Exchangeable Shares shall cease to be holders of the Exchangeable Shares on and after the Liquidation Date and, from and after such date, shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement) other than the right to receive their proportionate part of the total Liquidation Call Purchase Price, without interest, upon presentation and surrender by the holder of certificates representing the Exchangeable Shares held by such holder and the holder shall on and after the Liquidation Date be considered and deemed for all purposes to be the holder of the Parent Shares which such holder is entitled to receive. Upon surrender to the Transfer Agent of a certificate or certificates representing Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company, and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require, the holder of such surrendered certificate or certificates shall be entitled to receive, in exchange therefor, and the Transfer Agent on behalf of the Parent shall deliver to such holder, the Exchangeable Share Consideration such holder is entitled to receive. If the Parent does not exercise the Liquidation Call Right in the manner described above, each holder of the Exchangeable Shares will be entitled to receive, on the Liquidation Date, the Liquidation Amount otherwise payable by the Company in respect of the Exchangeable Shares held by such holder in connection with the liquidation, dissolution or winding-up of the Company or any distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs pursuant to Section 6.

(d) Withholding of Taxes. The Parent and the Company will be entitled to deduct and withhold from any consideration otherwise payable to any holder of Exchangeable Shares such amounts as the Parent or the Company is required to deduct and withhold with respect to such payment under the Tax Act, the U.S. Tax Code and the rules and regulations promulgated thereunder, or any provision of any provincial, state, local or foreign Tax Law as counsel may advise is required to be so deducted and withheld by the Parent or the Company, as the case may be. For the purposes hereof, all such withheld amounts shall be treated as having been paid to the person in respect of which such deduction and withholding was made on account of the obligation to make payment to such person hereunder, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority by or on behalf the Parent or the Company, as the case may be.

7. Redemption Call Right.

(a) Redemption Call Right. Notwithstanding the proposed purchase for cancellation of the Exchangeable Shares by the Company pursuant to Section 10, the Parent shall have the overriding right (the “Redemption Call Right”) to purchase from all but not less than all of the holders of Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) on the Redemption Date all but not less than all of the Exchangeable Shares held by each such holder on payment by the Parent to each such holder of the Exchangeable Share Price (payable in the form of the Exchangeable Share Consideration) applicable on the last Business Day prior to the Redemption Date (the “Redemption Call Purchase Price”) in accordance with Section 7(c). In the event of the exercise of the Redemption Call Right by the Parent, each such holder shall be obligated to sell all of the Exchangeable Shares held by the holder to the Parent on the Redemption Date on payment by the Parent to such holder of the Redemption Call Purchase Price (payable in the form of Exchangeable Share Consideration) for each such share, and the Company shall have no obligation to redeem, or to pay the Redemption Price (as defined in the Exchangeable Share Provisions) in respect of, such shares so purchased.

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(b) Exercise of Redemption Call Right. To exercise the Redemption Call Right, the Parent must notify the Transfer Agent, as agent for the holders of Exchangeable Shares, and the Company of its intention to exercise such right:

(i) in the case of a redemption occurring as a result of a Parent Control Transaction, an Exchangeable Share Voting Event or an Exempt Exchangeable Share Voting Event, on or before the Redemption Date; and

(ii) in any other case, at least thirty (30) days before the Redemption Date. The Transfer Agent will notify the holders of the Exchangeable Shares as to whether or not the Parent has exercised the Redemption Call Right forthwith after the expiry of the period during which the Parent may exercise the Redemption Call Right.

If the Parent exercises the Redemption Call Right, the Parent will purchase and the holders of the Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) will sell, on the Redemption Date, all of the Exchangeable Shares held by such holders on such date for a price per share equal to the Redemption Call Purchase Price (payable in the form of Exchangeable Share Consideration).

(c) Effect of Exercise of Redemption Call Right. For the purposes of completing the purchase and sale of the Exchangeable Shares pursuant to the exercise of the Redemption Call Right, the Parent shall deposit or cause to be deposited with the Transfer Agent, on or before the Redemption Date, the Exchangeable Share Consideration representing the total Redemption Call Purchase Price less any amounts withheld pursuant to Section 7(d). Provided that such Exchangeable Share Consideration has been so deposited with the Transfer Agent, the holders of the Exchangeable Shares shall cease to be holders of the Exchangeable Shares on and after the Redemption Date and, from and after such date, shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement) other than the right to receive their proportionate part of the total Redemption Call Purchase Price, without interest, upon presentation and surrender by the holder of certificates representing the Exchangeable Shares held by such holder and the holder shall on and after the Redemption Date be considered and deemed for all purposes to be the holder of the Parent Shares which such holder is entitled to receive. Upon surrender to the Transfer Agent of a certificate or certificates representing Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company, and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require, the holder of such surrendered certificate or certificates shall be entitled to receive, in exchange therefor, and the Transfer Agent on behalf of the Parent shall deliver to such holder, the Exchangeable Share Consideration such holder is entitled to receive. If the Parent does not exercise the Redemption Call Right in the manner described above, each holder of the Exchangeable Shares will be entitled to receive, on the Redemption Date, the Redemption Price otherwise payable by the Company in respect of the Exchangeable Shares held by such holder in connection with the redemption of the Exchangeable Shares pursuant to Section 9 of the Exchangeable Share Provisions.

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(d) Withholding of Taxes. The Parent and the Company will be entitled to deduct and withhold from any consideration otherwise payable to any holder of Exchangeable Shares such amounts as the Parent or the Company is required to deduct and withhold with respect to such payment under the Tax Act, the U.S. Tax Code and the rules and regulations promulgated thereunder, or any provision of any provincial, state, local or foreign Tax Law as counsel may advise is required to be so deducted and withheld by the Parent or the Company, as the case may be. For the purposes hereof, all such withheld amounts shall be treated as having been paid to the person in respect of which such deduction and withholding was made on account of the obligation to make payment to such person hereunder, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority by or on behalf the Parent or the Company, as the case may be.

8. Change of Law Call Right.

(a) Change of Law Call Right. The Parent shall have the overriding right (the “Change of Law Call Right”), in the event of a Change of Law, to purchase from all but not less than all of the holders of Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) on the Change of Law Call Date all but not less than all of the Exchangeable Shares held by each such holder on payment by the Parent to each such holder of the Exchangeable Share Price (payable in the form of the Exchangeable Share Consideration) applicable on the last Business Day prior to the Change of Law Call Date (the “Change of Law Call Purchase Price”) in accordance with Section 8(c). In the event of the exercise of the Change of Law Call Right by the Parent, each such holder of Exchangeable Shares shall be obligated to sell all of the Exchangeable Shares held by the holder to the Parent on the Change of Law Call Date on payment by the Parent to such holder of the Change of Law Call Purchase Price (payable in the form of Exchangeable Share Consideration) for each such share.

(b) Exercise of Change of Law Call Right. To exercise the Change of Law Call Right, the Parent must notify the Transfer Agent, as agent for the holders of Exchangeable Shares, and the Company of its intention to exercise such right at least thirty (30) days before the date (the “Change of Law Call Date”) on which the Parent shall acquire the Exchangeable Shares pursuant to the exercise of the Change of Law Call Right. The Transfer Agent will notify the holders of Exchangeable Shares as to whether the Parent has exercised the Change of Law Call Right forthwith after receiving notice of such exercise from the Parent. If the Parent exercises the Change of Law Call Right, the Company will purchase and the holders of Exchangeable Shares (other than any holder of Exchangeable Shares which is the Parent or an affiliate of the Parent) will sell, on the Change of Law Call Date, all of the Exchangeable Shares held by such holders on such date for a price per share equal to the Change of Law Call Purchase Price (payable in the form of Exchangeable Share Consideration).

(c) Effect of Exercise of Change of Law Call Right. For the purposes of completing the purchase and sale of the Exchangeable Shares pursuant to the exercise of the Change of Law Call Right, the Parent shall deposit or cause to be deposited with the Transfer Agent, on or before the Change of Law Call Date, the Exchangeable Share Consideration representing the total Change of Law Call Purchase Price. Provided that such Exchangeable Share Consideration has been so deposited with the Transfer Agent, the holders of the Exchangeable Shares shall cease to be holders of the Exchangeable Shares on and after the Change of Law Call Date and, from and after such date, shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement) other than the right to receive their proportionate part of the total Change of Law Purchase Price, without interest, upon presentation and surrender by the holder of certificates representing the Exchangeable Shares held by such holder and the holder shall on and after the Change of Law Call Date be considered and deemed for all purposes to be the holder of the Parent Shares which such holder is entitled to receive. Upon surrender to the Transfer Agent of a certificate or certificates representing Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company, and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require, the holder of such surrendered certificate or certificates shall be entitled to receive, in exchange therefor, and the Transfer Agent on behalf of the Parent shall deliver to such holder, the Exchangeable Share Consideration such holder is entitled to receive.

[Ameri – Exchangeable Share Provisions]

9. Redemption of Exchangeable Shares by the Company.

(a) Redemption Amount. Subject to applicable laws and the due exercise by the Parent of the Redemption Call Right, the Company shall on the Redemption Date redeem all but not less than all of the then outstanding Exchangeable Shares for an amount per share (the “Redemption Price”) equal to the Exchangeable Share Price on the last Business Day prior to the Redemption Date, which price shall be satisfied in full by the Company delivering or causing to be delivered to each holder of Exchangeable Shares the Exchangeable Share Consideration for each Exchangeable Share held by such holder.

(b) Notice of Redemption. In the case of a redemption of Exchangeable Shares pursuant to this Section 9, the Company shall, at least thirty (30) days before the Redemption Date (other than a Redemption Date established in connection with a Parent Control Transaction, an Exchangeable Share Voting Event or an Exempt Exchangeable Share Voting Event), send or cause to be sent to each holder of Exchangeable Shares a notice in writing of the redemption by the Company or the purchase by the Parent under the Redemption Call Right, of the Exchangeable Shares held by such holder. In the case of a Redemption Date established in connection with a Parent Control Transaction, an Exchangeable Share Voting Event or an Exempt Exchangeable Share Voting Event, the written notice of the redemption by the Company or the purchase by the Parent of the Exchangeable Shares under the Redemption Call Right will be sent on or before the Redemption Date, on as many days’ prior written notice as may be determined by the Board of Directors to be reasonably practicable in the circumstances. In any such case, such notice shall set out the formula for determining the Redemption Price or the Redemption Call Purchase Price, as the case may be, the Redemption Date and, if applicable, particulars of the Redemption Call Right. In the case of any notice given in connection with a possible Redemption Date, such notice will be given contingently and will be withdrawn if the contingency does not occur.

[Ameri – Exchangeable Share Provisions]

(c) Payment of Redemption Price. On or after the Redemption Date, and provided that the Redemption Call Right has not been exercised by the Parent, the Company shall deliver or cause to be delivered to the holders of the Exchangeable Shares to be redeemed the Redemption Price for each such Exchangeable Share, upon presentation and surrender of the certificates representing such Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the BCBCA and the constating documents of the Company and such additional documents, instruments and payments as the Transfer Agent and the Company may reasonably require, at the registered office of the Company or at any office of the Transfer Agent as may be specified by notice to the holders of the Exchangeable Shares. Payment of the Redemption Price for such Exchangeable Shares shall be made by delivery to each holder, at the address of the holder recorded in the securities register of the Company for the Exchangeable Shares or by holding for pick-up by the holder at the registered office of the Transfer Agent as may be specified by the Company by notice to the holders of Exchangeable Shares, the Exchangeable Share Consideration representing the Redemption Price. On and after the Redemption Date, the holders of the Exchangeable Shares called for redemption shall cease to be holders of such Exchangeable Shares and shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement) other than the right to receive their proportionate part of the total Redemption Price, unless payment of the total Redemption Price for such Exchangeable Shares shall not be made upon presentation and surrender of certificates in accordance with the foregoing provisions, in which case the rights of the holders shall remain unaffected until the Redemption Price has been paid in the manner hereinbefore provided. The Company shall have the right at any time after the sending of notice of its intention to redeem the Exchangeable Shares as aforesaid to deposit or cause to be deposited the total Redemption Price (in the form of Exchangeable Share Consideration) of the Exchangeable Shares so called for redemption, or of such of the said Exchangeable Shares represented by certificates that have not at the date of such deposit been surrendered by the holders thereof in connection with such redemption, in a custodial account with any chartered bank or trust company in Canada named in such notice and any interest earned on such deposit shall belong to the Company. Provided that such total Redemption Price has been so deposited prior to the Redemption Date, on and after the Redemption Date, the Exchangeable Shares shall be redeemed and the rights of the holders thereof after the Redemption Date shall be limited to receiving their proportionate part of the total Redemption Price for such Exchangeable Shares so deposited, against presentation and surrender of the certificates for the Exchangeable Shares held by them, respectively, in accordance with the foregoing provisions.

10. Purchase for Cancellation.

(a) Private Agreement. Subject to applicable laws and the constating documents of the Company, and notwithstanding Section 10(b), the Company may at any time and from time to time purchase for cancellation all or any part of the Exchangeable Shares by private agreement with the holder thereof.

(b) Tender Offer. Subject to applicable laws and the constating documents of the Company, the Company may at any time and from time to time purchase for cancellation all or any part of the outstanding Exchangeable Shares at any price per share by tender to all the holders of record of Exchangeable Shares then outstanding together with an amount equal to all declared and unpaid dividends thereon for which the record date has occurred prior to the date of purchase. If in response to an invitation for tenders under the provisions of this Section 10(b) more Exchangeable Shares are tendered at a price or prices acceptable to the Company than the Company is prepared to purchase, the Exchangeable Shares to be purchased by the Company shall be purchased as nearly as may be pro rata according to the number of shares tendered by each holder who submits a tender to the Company, provided that when shares are tendered at different prices the pro rating shall be effected (disregarding fractions) only with respect to the shares tendered at the price at which more shares were tendered than the Company is prepared to purchase after the Company has purchased all the shares tendered at lower prices. If only part of the Exchangeable Shares represented by any certificate are purchased pursuant to this Section 10(b), a new certificate for the balance of such shares shall be issued at the expense of the Company.

[Ameri – Exchangeable Share Provisions]

11. Voting Rights.

(a) Exchangeable Share Voting Rights. Except as required by applicable laws and by Section 12, the holders of the Exchangeable Shares shall not be entitled as such to receive notice of or to attend any meeting of the shareholders of the Company or to vote at any such meeting. Without limiting the generality of the foregoing, the holders of the Exchangeable Shares shall not have class votes except as required by applicable law.

12. Amendment and Approval.

(a) Amendment. The rights, privileges, restrictions and conditions attaching to the Exchangeable Shares may be added to, changed or removed only with the approval of the holders of the Exchangeable Shares given as hereinafter specified.

(b) Approval. Any approval given by the holders of the Exchangeable Shares to add to, change or remove any right, privilege, restriction or condition attaching to the Exchangeable Shares or any other matter requiring the approval or consent of the holders of the Exchangeable Shares in accordance with applicable laws shall be deemed to have been sufficiently given if it shall have been given in accordance with applicable laws, subject to a minimum requirement that such approval be evidenced by resolution passed by not less than two-thirds of the votes cast on such resolution at a meeting of holders of Exchangeable Shares duly called and held at which the holders of at least 10% of the outstanding Exchangeable Shares at that time are present or represented by proxy; provided, however, that if at any such meeting the holders of at least 10% of the outstanding Exchangeable Shares at that time are not present or represented by proxy within one-half hour after the time appointed for such meeting, then the meeting shall be adjourned to such date not less than five (5) days thereafter and to such time and place as may be designated by the Chairman of such meeting. At such adjourned meeting, the holders of Exchangeable Shares present or represented by proxy thereat may transact the business for which the meeting was originally called and a resolution passed thereat by the affirmative vote of not less than two-thirds of the votes cast on such resolution at such meeting shall constitute the approval or consent of the holders of the Exchangeable Shares.

13. Restrictions in Respect of Parent Shares.

(a) Restrictions on Issuance or Distribution of Parent Shares. Each holder of an Exchangeable Share acknowledges that the Support Agreement provides, in part, that the Parent will not, except as provided in the Support Agreement, without the prior approval of the Company and the prior approval of the holders of the Exchangeable Shares given in accordance with Section 12(b):

(i) issue or distribute Parent Shares (or securities exchangeable for or convertible into or carrying rights to acquire Parent Shares) to the holders of all or substantially all of the then outstanding Parent Shares by way of stock dividend or other distribution, other than an issue of Parent Shares (or securities exchangeable for or convertible into or carrying rights to acquire Parent Shares) to holders of Parent Shares:

(A) who exercise an option to receive dividends in Parent Shares (or securities exchangeable for or convertible into or carrying rights to acquire Parent Shares) in lieu of receiving cash dividends; or

(B) pursuant to any dividend reinvestment plan or similar arrangement;

[Ameri – Exchangeable Share Provisions]

(ii) issue or distribute rights, options or warrants to the holders of all or substantially all of the then outstanding Parent Shares entitling them to subscribe for or to purchase Parent Shares (or securities exchangeable for or convertible into or carrying rights to acquire Parent Shares); or

(iii) issue or distribute to the holders of all or substantially all of the then outstanding Parent Shares:

(A) shares or securities of the Parent of any class other than Parent Shares (or securities convertible into or exchangeable for or carrying rights to acquire Parent Shares);

(A) rights, options or warrants other than those referred to in Section 13(a)(ii), above;

(B) evidence of indebtedness of the Parent; or

(C) assets of the Parent,

unless, in each case:

(I) the Company is permitted under applicable law to issue or distribute the economic equivalent on a per share basis of such rights, options, warrants, securities, shares, evidences of indebtedness or other assets to the holders of the Exchangeable Shares; and

(II) the Company shall issue or distribute the economic equivalent of such rights, options, warrants, securities, shares, evidences of indebtedness or other assets simultaneously to holders of the Exchangeable Shares; provided, however, that, for greater certainty, the above restrictions shall not apply to any securities issued or distributed by the Parent in order to give effect to and to consummate the transactions contemplated by, and in accordance with, the Amalgamation Agreement.

(b) Restrictions on Division, Combination and Reclassification of Parent Shares. Each holder of an Exchangeable Share acknowledges that the Support Agreement further provides, in part, that for so long as any Exchangeable Shares not owned by the Parent or its affiliates are outstanding, the Parent will not without the prior approval of the Company and the prior approval of the holders of the Exchangeable Shares given in accordance with Section 12(b):

(i) subdivide, redivide or change the then outstanding Parent Shares into a greater number of Parent Shares;

(ii) reduce, combine, consolidate or change the then outstanding Parent Shares into a lesser number of Parent Shares; or

(iii) reclassify or otherwise change the Parent Shares or effect an amalgamation, merger, reorganization or other transaction affecting the Parent Shares,

unless, in each case:

(A) the Company is permitted under applicable law to make the same or an economically equivalent change to, or in the rights of holders of, the Exchangeable Shares; and

[Ameri – Exchangeable Share Provisions]

(B) the same or an economically equivalent change is made simultaneously to, or in the rights of the holders of, the Exchangeable Shares; provided, however, that, for greater certainty, the above restrictions shall not apply to any securities issued or distributed by the Parent in order to give effect to and to consummate the transactions contemplated by, and in accordance with the Amalgamation Agreement. The Support Agreement further provides, in part, that the aforesaid provisions of the Support Agreement shall not be changed without the approval of the holders of the Exchangeable Shares given in accordance with Section 12(b).

(c) Effect of a Parent Control Transaction. Notwithstanding the foregoing provisions of this Section 13, in the event of a Parent Control Transaction:

(i) in which the Parent merges or amalgamates with, or in which all or substantially all of the then outstanding Parent Shares are acquired by one or more other corporations to which the Parent is, immediately before such merger, amalgamation or acquisition, related within the meaning of the Tax Act (otherwise than virtue of a right referred to in Paragraph 251(5)(b) thereof);

(ii) which does not result in an acceleration of the Redemption Date in accordance with Paragraph (ii) of the definition of such term in Section 1(a); and

(iii) in which all or substantially all of the then outstanding Parent Shares are converted into or exchanged for shares or rights to receive such shares (the “Other Shares”) of another corporation (the “Other Corporation”) that, immediately after such Parent Control Transaction, owns or controls, directly or indirectly, the Parent;

then all references herein to “Parent” shall thereafter be and be deemed to be references to “Other Corporation” and all references herein to “Parent Shares” shall thereafter be and be deemed to be references to “Other Shares” (with appropriate adjustments, if any, as are required to result in a holder of Exchangeable Shares on the exchange, redemption or retraction of shares pursuant to these Exchangeable Share Provisions or the exchange of shares pursuant to the Voting and Exchange Trust Agreement immediately subsequent to the Parent Control Transaction being entitled to receive that number of Other Shares equal to the number of Other Shares such holder of Exchangeable Shares would have received if the exchange, option or retraction of such shares pursuant to these Exchangeable Share Provisions or the exchange of such shares pursuant to the Voting and Exchange Trust Agreement had occurred immediately prior to the Parent Control Transaction and the Parent Control Transaction was completed) but subject to subsequent adjustments to reflect any subsequent changes in the share capital of the issuer of the Other Shares, including without limitation, any subdivision, consolidation or reduction of share capital, without any need to amend the terms and conditions of the Exchangeable Shares and without any further action required.

14. Actions by the Company under Support Agreement.

(a) Actions by the Company. The Company will take all such actions and do all such things as shall be necessary or advisable to perform and comply with and to ensure performance and compliance by the Parent and the Company with all provisions of the Support Agreement applicable to the Parent and the Company, respectively, in accordance with the terms thereof including taking all such actions and doing all such things as shall be necessary or advisable to enforce to the fullest extent possible for the direct benefit of the Company all rights and benefits in favour of the Company under or pursuant to such Agreement.

[Ameri – Exchangeable Share Provisions]

(b) Changes to the Support Agreement. The Company shall not propose, agree to or otherwise give effect to any amendment to, or waiver or forgiveness of its rights or obligations under, the Support Agreement without the approval of the holders of the Exchangeable Shares given in accordance with Section 12(b), other than such amendments, waivers and/or forgiveness as may be necessary or advisable for the purposes of:

(i) adding to the covenants of any or all of the other parties to the Support Agreement if the board of directors of each of the Parent and the Company shall be of the good faith opinion that such additions will not be prejudicial in any material respect to the rights or interests of the holders of the Exchangeable Shares as a whole;

(ii) evidencing the succession of successors to the Parent either by operation of law or Agreement to the liabilities and covenants of the Parent under the Support Agreement (“Parent Successors”) and the covenants of and obligations assumed by each such the Parent Successor in accordance with the provisions of Article 3 of the Support Agreement;

(iii) making such amendments or modifications not inconsistent with the Support Agreement as may be necessary or desirable with respect to matters or questions arising thereunder which, in the good faith opinion of the board of directors of each of the Parent and the Company, having in mind the interests of the holders of the Exchangeable Shares as a whole, it may be expedient to make, provided that each such board of directors shall be of the good faith opinion, after consultation with counsel, that such amendments and modifications will not be prejudicial in any material respect to the rights or interests of the holders of the Exchangeable Shares as a whole; or

(iv) making such changes in or corrections to the Support Agreement which, on the advice of counsel to the Parent and the Company, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error contained therein, provided that the board of directors of each of the Parent and the Company shall be of the good faith opinion that such changes or corrections will not be prejudicial in any material respect to the rights or interests of the holders of the Exchangeable Shares as a whole.

15. Legend; Call Rights; Withholding Rights.

(a) Legend. The certificates evidencing the Exchangeable Shares shall contain or have affixed thereto a legend in form and on terms approved by the Board of Directors with respect to the Support Agreement, the provisions relating to the Liquidation Call Right, the Redemption Call Right and the Change of Law Call Right, the Voting and Exchange Trust Agreement (including the provisions with respect to the voting rights and automatic exchange thereunder) and the Retraction Call Right.

(b) Call Rights. Each holder of an Exchangeable Share, whether of record or beneficial, by virtue of becoming and being such a holder shall be deemed to acknowledge each of the Liquidation Call Right, the Redemption Call Right, the Change of Law Call Right, and the Retraction Call Right, in each case, in favour of the Parent, and the overriding nature thereof in connection with the liquidation, dissolution or winding-up of the Company or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, or the retraction or redemption of Exchangeable Shares, as the case may be, and to be bound thereby in favour of the Parent as provided herein.

[Ameri – Exchangeable Share Provisions]

(c) Withholding Rights. the Parent, the Company and the Transfer Agent shall be entitled to deduct and withhold from any dividend, distribution or other consideration otherwise payable to any holder of Exchangeable Shares such amounts as the Parent, the Company or the Transfer Agent, as the case may be, is required to deduct and withhold with respect to such payment under the Tax Act or United States tax laws or any provision of provincial, territorial, state, local or foreign tax law, in each case, as amended. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the holder of the Exchangeable Shares in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing agency. To the extent that the amount so required to be deducted or withheld from any payment to a holder exceeds the cash portion of the consideration otherwise payable to the holder, the Parent, the Company and the Transfer Agent are hereby authorized to sell or otherwise dispose of such portion of the consideration as is necessary to provide sufficient funds to the Parent, the Company or the Transfer Agent, as the case may be, to enable it to comply with such deduction or withholding requirement and the Parent, the Company or the Transfer Agent, as the case may be, shall notify the holder thereof and remit any unapplied balance of the net proceeds of such sale.

16. Notices.

(a) Notices. Subject to applicable laws, any notice, request or other communication to be given to the Company by a holder of Exchangeable Shares shall be in writing and shall be valid and effective if given by first class mail (postage prepaid) or by telecopy or by delivery to the registered office of the Company and addressed to the attention of the Secretary of the Company. Any such notice, request or other communication, if given by mail, telecopy or delivery, shall only be deemed to have been given and received upon actual receipt thereof by the Company.

(b) Certificates. Any presentation and surrender by a holder of Exchangeable Shares to the Company or the Transfer Agent of certificates representing Exchangeable Shares in connection with the liquidation, dissolution or winding-up of the Company or the retraction or redemption of Exchangeable Shares shall be made by first class mail (postage prepaid) or by delivery to the registered office of the Company or to such office of the Transfer Agent as may be specified by the Company, in each case, addressed to the attention of the Secretary of the Company. Any such presentation and surrender of certificates shall only be deemed to have been made and to be effective upon actual receipt thereof by the Company or the Transfer Agent, as the case may be. Any such presentation and surrender of certificates made by first class mail (postage prepaid) shall be at the sole risk of the holder mailing the same.

(c) Notice to Shareholders.

(i) Subject to applicable laws, any notice, request or other communication to be given to a holder of Exchangeable Shares by or on behalf of the Company shall be in writing and shall be valid and effective if given by first class mail (postage prepaid) or by delivery to the address of the holder recorded in the register of shareholders of the Company or, in the event of the address of any such holder not being so recorded, then at the last known address of such holder. Any such notice, request or other communication, if given by mail, shall be deemed to have been given and received on the third Business Day following the date of mailing and, if given by delivery, shall be deemed to have been given and received on the date of delivery. Accidental failure or omission to give any notice, request or other communication to one or more holders of Exchangeable Shares shall not invalidate or otherwise alter or affect any action or proceeding to be taken by the Company pursuant thereto.

[Ameri – Exchangeable Share Provisions]

(ii) In the event of any interruption of mail service immediately prior to a scheduled mailing or in the period following a mailing during which delivery normally would be expected to occur, the Company shall make reasonable efforts to disseminate any notice by other means, such as publication. Except as otherwise required or permitted by law, if post offices in Canada are not open for the deposit of mail, any notice which the Company or the Transfer Agent may give or cause to be given hereunder will be deemed to have been properly given and to have been received by holders of Exchangeable Shares if it is published once in any daily newspaper of general circulation published in the City of Toronto, Canada.

(iii) Notwithstanding any other provisions of these Exchangeable Share Provisions, notices, other communications and deliveries need not be mailed if the Company determines that delivery thereof by mail may be delayed. Persons entitled to any deliveries (including certificates and cheques) which are not mailed for the foregoing reason may take delivery thereof at the office of the Transfer Agent to which the deliveries were made, upon application to the Transfer Agent, until such time as the Company has determined that delivery by mail will no longer be delayed. The Company will provide notice of any such determination not to mail made hereunder as soon as reasonably practicable after the making of such determination and in accordance with this Section 16(c). Such deliveries in such circumstances will constitute delivery to the persons entitled thereto.

17. Disclosure of Interests in Exchangeable Shares.

(a) Disclosure of Interests in Exchangeable Shares. The Company shall be entitled to require any holder of an Exchangeable Share or any person whom the Company knows or has reasonable cause to believe holds any interest whatsoever in an Exchangeable Share to:

(i) confirm that fact; or

(ii) give such details as to whom has an interest in such Exchangeable Share,

in each case as would be required (if the Exchangeable Shares were a class of “equity shares” of the Company) under the constating documents of the Parent or any laws or regulations applicable to the Company and/or the Parent, or pursuant to the rules or regulations of any regulatory agency applicable to the Company and/or the Parent, if and only to the extent that the Exchangeable Shares were Parent Shares.

18. No Fractional Shares.

(a) Treatment of Fractional Shares. A holder of Exchangeable Shares shall not be entitled to any fraction of a Parent Share upon the exchange or purchase of such holder’s Exchangeable Shares and no certificates representing any such fractional interest shall be issued and such holder otherwise entitled to a fractional interest will receive for such fractional interest from the Company, or Parent, as the case may be, on the designated payment date a cash payment equal to such fractional interest multiplied by the Exchangeable Share Price.

[Ameri – Exchangeable Share Provisions]

APPENDIX I

RETRACTION REQUEST

[TO BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]

To:          Ameri Holdings, Inc. (“Parent”) and 1236567 B.C. UNLIMITED LIABILITY COMPANY (the “Company”)

This notice is given pursuant to Section 5 of the share provisions (the “Exchangeable Share Provisions”) attaching to the Exchangeable Shares of the Company represented by this certificate and all capitalized words and expressions used in this notice that are defined in the Exchangeable Share Provisions have the meanings ascribed to such words and expressions in such Exchangeable Share Provisions.

The undersigned hereby notifies the Company that, subject to the Retraction Call Right referred to below, the undersigned desires to have the Company redeem in accordance with Section 5 of the Exchangeable Share Provisions:

o all share(s) represented by this certificate; or

o _____ share(s) only represented by this certificate.

The undersigned acknowledges the overriding Retraction Call Right of the Parent to purchase all but not less than all the Retracted Shares from the undersigned and that this notice is and shall be deemed to be a revocable offer by the undersigned to sell the Retracted Shares to the Parent or in accordance with the Retraction Call Right on the Retraction Date for the Retraction Call Right Purchase Price and on the other terms and conditions set out in Section 5(b) of the Exchangeable Share Provisions. If the Parent does not exercise the Retraction Call Right, the Company will notify the undersigned of such fact as soon as possible. This Retraction Request, and this offer to sell the Retracted Shares to the Parent, may be revoked and withdrawn by the undersigned only by notice in writing given to the Company at any time before the close of business on the Business Day immediately preceding the Retraction Date.

The undersigned acknowledges that if, as a result of solvency provisions of applicable law, the Company is unable to redeem all Retracted Shares, and provided that the Parent has not exercised the Retraction Call Right with respect to the Retracted Shares, the Retracted Shares will be automatically exchanged pursuant to the Voting and Exchange Trust Agreement so as to require the Parent to purchase the unredeemed Retracted Shares.

The undersigned hereby represents and warrants to the Parent and the Company that the undersigned (select one):

is

is not

a resident of Canada for purposes of the Income Tax Act (Canada). The undersigned acknowledges that in the absence of an indication that the undersigned is not a non-resident of Canada, withholding on account of Canadian tax may be made from amounts payable to the undersigned on the redemption or purchase of the Retracted Shares.

[Ameri – Exchangeable Share Provisions]

The undersigned hereby represents and warrants to the Parent and the Company that the undersigned has good title to, and owns, the share(s) represented by this certificate to be acquired by the Parent or the Company, as the case may be, free and clear of all liens, claims and encumbrances.

(Date) (Signature of Shareholder) (Guarantee of Signature)

Please check box if the securities and any cheque(s) resulting from the retraction or purchase of the Retracted Shares are to be held for pick-up by the shareholder from the Transfer Agent at the principal office of the Transfer Agent, failing which such certificates and cheque(s) will be mailed to the last address of the shareholder as it appears on the register.

NOTE: This panel must be completed and this certificate, together with such additional documents and payments (including, without limitation, any applicable stamp taxes) as the Transfer Agent and the Company may require, must be deposited with the Transfer Agent at its principal transfer office. The securities and any cheque(s) resulting from the retraction or purchase of the Retracted Shares will be issued and registered in, and made payable to, respectively, the name of the shareholder as it appears on the register of the Company and the certificates for the securities and any cheque(s) resulting from such retraction or purchase will be delivered to such shareholder as indicated above, unless the form appearing immediately below is duly completed.

Date: _________________

Name of Person in Whose Name Securities or Cheque(s) Are to be Registered, Issued or Delivered (please print):

(Registration / Name)

(Street Address or P.O. Box)

(City, Province/State, Country)

(Postal Code)

Signature of Shareholder Signature Guaranteed by

NOTE: If this Retraction Request is for less than all of the shares represented by this certificate, a certificate representing the remaining share(s) of the Company represented by this certificate will be issued and registered in the name of the shareholder as it appears on the register of the Company, unless the share transfer power on the share certificate is duly completed in respect of such share(s).

[Ameri – Exchangeable Share Provisions]

EX-5.1

Exhibit 5.1

Sheppard, Mullin, Richter & Hampton LLP 30 Rockefeller Plaza New York, New York 10112-0015 212.653.8700 main 212.653.8701 fax www.sheppardmullin.com

January 13, 2020

VIA ELECTRONIC MAIL

Ameri Holdings, Inc.

5000 Research Court, Suite 750

Suwanee, Georgia, 30024

Re: Registration Statement on Form S-3

Ladies and Gentlemen:

You have requested our opinion with respect to certain matters in connection with the offering for sale of a $500,000 5% convertible debenture (the “Debenture”) convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.01 per share, of Ameri Holdings, Inc. (the “Company”), pursuant to the Registration Statement (as defined below) and the Prospectus (as defined below). Unless defined herein, capitalized terms have the meanings given to them in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated January 10, 2020, by and among the Company and the purchasers identified on the signature pages thereto (the Purchasers”), relating to the issuance and sale by the Company of the Debenture.

This opinion is being furnished in accordance with the requirements of Item 601(b)(5)(i) of Regulation S-K.

In connection with this opinion, we have reviewed and relied upon the following:

• the Registration Statement on Form S-3 (File No. 333-233260) initially filed with the Securities and Exchange Commission (the “Commission”) on September 16, 2019, under the Securities Act of 1933, as amended (the “Securities Act”) (including any documents incorporated by reference therein, the “Registration Statement,” and the related prospectus included in such Registration Statement (including any documents incorporated by reference therein, the “Base Prospectus”));

• the final prospectus supplement, which includes the Base Prospectus, filed on January 13, 2020 pursuant to Rule 424(b) under the Securities Act, which is referred to as the “Prospectus”;

• the Securities Purchase Agreement;

• the Amended and Restated Certificate of Incorporation of the Company, as amended, in effect on the date hereof;

• the Amended and Restated Bylaws of the Company in effect on the date hereof;

• the resolutions of the Board of Directors of the Company, authorizing/ratifying the execution and delivery of the Securities Purchase Agreement, the issuance and sale of the Debenture and the Conversion Shares, the preparation and filing of the Prospectus, and other actions with regard thereto; and

• such other documents, records, certificates, memoranda and other instruments as we deem necessary as a basis for this opinion.

In our examination, we have assumed the genuineness of all signatures, including endorsements, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photocopy, and the authenticity of the originals of such copies. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials.

Sheppard, Mullin, Richter & Hampton LLP 30 Rockefeller Plaza New York, New York 10112-0015 212.653.8700 main 212.653.8701 fax www.sheppardmullin.com

Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the following opinions:

1. provided that the Debenture has been duly executed and delivered by the Company to the purchaser thereof against payment therefor, the Debenture, when issued and sold as contemplated in the Registration Statement and the Prospectus will be a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, and

2. the Conversion Shares, when issued in accordance with the terms of Debenture, will be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion letter as an exhibit to the Company’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement. We also hereby consent to the reference to our firm under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the Commission promulgated thereunder or Item 509 of Regulation S-K.

We express no opinion as to matters governed by any laws other than the General Corporation Law of the State of Delaware.

We disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company or the Conversion Shares.

Respectfully submitted,

/s/ Sheppard, Mullin, Richter & Hampton LLP

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP

EX-10.1

Exhibit 10.1

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”) is made, entered into and effective as of January 10, 2020, by and among AMERI Holdings, Inc., a Delaware corporation (the “Company”), [___________] (the “Investor”), and Ameri100, Inc. (“Ameri PrivateCo”).

RECITALS

WHEREAS, the Company and Investor are parties to a [________________] (the “Purchase Agreement”).

WHEREAS, pursuant to the Purchase Agreement, the Company owes Investor (the “Existing Debt”) an outstanding principal amount of $[_______] (the “Principal Amount”), which Existing Debt accrues interest at a rate of [____] percent ([__]%) per annum, payable monthly, which interest payment has not been made September 30, 2019.

WHEREAS, the Company has entered into a Share Purchase Agreement, dated on or about the date hereof (as amended, the “SPA”), pursuant to which Ameri PrivateCo has agreed to purchase and the Company has agreed to sell to Ameri PrivateCo all of the issued and outstanding equity interests of its wholly-owned Delaware corporation subsidiary (“Holdco”) which owns all of the business and assets of the Company and its subsidiaries (the “Divestiture”);

WHEREAS, the Company has also entered into an Amalgamation Agreement, dated on or about the date hereof (as amended, the “Amalgamation Agreement”), pursuant to which, immediately following the Divestiture, Jay Pharma, Inc. will become a wholly-owned subsidiary of the Company (the “Merger”);

WHEREAS, the Company desires, and the Investor agrees, that subject to the terms and conditions of this Agreement the Investor exchange (the “Exchange”) the remaining balance of the Existing Debt (after making certain repayments required hereunder and excluding $500,000 of the Principal Amount, which remain outstanding subject to the terms of this Agreement) for a number of shares of common stock of the Company; and

WHEREAS, the Exchange Shares (as defined below) are intended to qualify as exempted securities under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investor agree as follows:

ARTICLE I

THE EXCHANGE

1.1 Exchange.  Subject to the terms and conditions set forth in this Agreement, at the Closing (which in accordance with Section 2.1 below, will occur simultaneously with the signing of this Agreement), the Company and the Investor shall exchange the remaining balance of the Existing Debt after payment of the Closing Payment (as defined below) and deducting the Remaining Principal Amount (the “Balance Due”) in consideration for the issuance by the Company to the Investor of a number of shares of common stock of the Company equal to the Balance Due divided by the NASDAQ Minimum Price (the “Exchange Shares”).  The “NASDAQ Minimum Price” shall equal the lesser of(i) the last closing price of the Company’s common stock as of the end of the Trading Day immediately preceding the Closing Date or (ii) the average closing price of the common stock on the NASDAQ Capital Market for the five Trading Days immediately preceding the Closing Date.  At or prior to the Closing, the Company shall pay to the Investor, by wire transfer of immediately available funds to an account designed in writing by the Investor, an amount equal to all outstanding accrued and unpaid interest on the Existing Debt as of the Closing (the “Closing Payment”).

1.2 Principal Payment.  Without limiting the last sentence of Section 1.1 above, at the Closing, $500,000 of the Principal Amount (but not the remainder of the Principal Amount) (the “Remaining Principal Amount”) shall not be converted into Exchange Shares and shall remain outstanding as an obligation under the Purchase Agreement, except that, as of the Closing, the interest rate for the Remaining Principal Amount will increase to fifteen percent (15%) per annum (or if less, the maximum amount permitted by applicable law) (the “Remaining Principal Interest Rate”), which interest on the Remaining Principal Amount shall be paid by the Company monthly in arrears on the first business day of the month until the Remaining Principal Amount and all accrued interest, fees and costs related thereto are paid in full.  Upon or at any time prior to the closing of the Merger (the “Merger Closing”), the Company shall make an additional payment equal to the sum of (x) the Remaining Principal Amount, plus (y) all outstanding accrued and unpaid interest on the Remaining Principal Amount as of the date of such payment (such aggregate amount under clauses (x) and (y), the “Merger Closing Payment”).  The Company hereby agrees that, without the prior written consent of the Investor, it will not consummate the Merger Closing without making the Merger Closing Payment.  In the event that the Company fails to make the full Merger Closing Payment upon the Merger Closing, then starting from the Merger Closing, the Remaining Principal Interest Rate will increase by two percent (2%), and the Remaining Principal Interest Rate will further increase by an additional two percent (2%) on each monthly anniversary of the Merger Closing thereafter until the obligations under this Section 1.2 are satisfied in full (subject to a maximum interest rate of the highest interest rate permitted by applicable law).  Notwithstanding anything to the contrary contained herein, on the earlier to occur of: (i) 181 days after the execution of the Amalgamation Agreement or (ii) the termination of the Amalgamation Agreement in accordance with its terms prior to the consummation of the transactions contemplated thereby, the Remaining Principal Amount, plus all accrued interest and fees, shall be due and payable in full by the Company within fifteen (15) days after such occurrence, and Ameri PrivateCo shall be required to make the payment required by the Make Whole Letter.

1.3 No Further Effect to Existing Debt.  Except as set forth in the Make Whole Agreement, effective as of the Closing, the Existing Debt shall be deemed automatically canceled and of no further force or effect.

ARTICLE II

THE CLOSING

2.1. Closing.  The closing of the Exchange, the issuance of the Exchange Shares and the consummation of the other transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of the Company, on the date hereof (the “Closing Date”), simultaneously with the execution and delivery of this Agreement by the parties hereto.  By mutual agreement of the parties, the Closing may take place by conference call and facsimile (or other electronic transmission of signature pages) with exchange of original signatures by mail.

2.2.  Closing Deliveries to the Investor.  At or prior to the Closing:

(a) the Company shall have made the Closing Payment;

(b) the Company shall have delivered to the Investor a duly executed copy of (i) a Leak-Out Agreement, in the form attached hereto as Exhibit A (the “Leak-Out Agreement”) and (ii) the Lock-Up Agreement (as defined below) in accordance with Section 4.1 below; and

(c) the Company shall have delivered to the Investor a copy of the Make Whole Agreement, in the form attached as Exhibit B hereto (the “Make Whole Agreement”), duly executed by Ameri PrivateCo.

2.3.  Closing Deliveries to the Company.  At or prior to the Closing:

(a) the Investor shall have delivered to the Company a duly executed copy of (i) the Leak-Out Agreement and (ii) the Lock-Up Agreement in accordance with Section 4.1 below;

(b) the Investor shall have delivered to the Company a pay-off and release letter with respect to the Existing Debt in form and substance reasonably acceptable to the Company; and

(c) the Investor shall have delivered to Ameri PrivateCo a copy of the Make Whole Agreement, duly executed by the Investor.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Investor Representations and Warranties. The Investor hereby represents and warrants to the Company as follows on the Closing Date:

(a) Organization; Authority. The Investor, if not a natural person, is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Investor has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. This Agreement has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Investor, enforceable against it in accordance with its terms.

(b) Ownership of the Existing Debt.  The Investor is the sole owner of the Existing Debt, free and clear of any and all liens, claims and encumbrances of any kind.  The Investor has not assigned any rights in the Existing Debt to any party.

(c) Investment Intent. The Investor is acquiring the Exchange Shares for its own account for investment purposes only and not with a view to or for distributing or reselling such Exchange Shares or any part thereof, except pursuant to sales that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act. The Investor does not have any agreement or understanding, directly or indirectly, with any person or entity to distribute the Exchange Shares.  Notwithstanding anything in this Section 3.1(c) to the contrary (but subject to the provisions of the Lock-Up Agreement, the Leak-Out Agreement and the Make Whole Letter), by making the representations herein, the Investor does not agree to hold the Exchange Shares for any minimum or other specific term and reserves the right to dispose of the Exchange Shares at any time in accordance with or pursuant to a registration statement or an exemption from the registration requirements under the Securities Act.

(d) Investor Status. At the time the Investor was offered the Exchange Shares, it was, and, as of the Closing Date it is, an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act. The Investor is not a broker-dealer.

(e) General Solicitation. The Investor is not acquiring the Exchange Shares as a result of or subsequent to any advertisement, article, notice or other communication regarding the Exchange Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(f) Reliance. The Investor understands and acknowledges that (i) the Exchange Shares are being offered and sold to it without registration under the Securities Act in a transaction that is exempt from the registration provisions of the Securities Act, and (ii) the availability of such exemption depends in part on, and the Company will rely upon the accuracy and truthfulness of, the foregoing representations, and the Investor hereby consents to such reliance; provided, that, in accordance with and subject to Section 4.4 below, the Exchange Shares will be registered for resale at or prior to the Merger Closing.

(g) Brokers and Finders. The Investor has no knowledge of any person or entity who will be entitled to or make a claim for payment of any finder fee or other compensation as a result of the consummation of the transactions contemplated by this Agreement.

(h) Experience. Investor has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Exchange Shares, and has so evaluated the merits and risks of such investment. Investor is able to bear the economic risk of an investment in the Exchange Shares and, at the present time, is able to afford a complete loss of such investment.

(i) Access to Information . Such Investor acknowledges that it has had the opportunity to review this Agreement (including all exhibits hereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the Exchange Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

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3.2 Company Representations and Warranties. The Company hereby makes the following representations and warranties to the Investor on the Closing Date:

(a) Organization and Qualification. The Company is a corporation incorporated, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction where the nature of the business it conducts 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: (i) a material adverse effect on the legality, validity or enforceability of the Exchange Shares or this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a ” Material Adverse Effect”).

(b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and to issue the Exchange Shares and otherwise to carry out its obligations hereunder. The execution, delivery and performance of this Agreement and any other agreements that the Company is required to enter into pursuant to the terms of this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by the Company’s Board of Directors, and no further consent or authorization of the Company, its Board of Directors (including any committee thereof) or any class of the Company’s stockholders is required (subject to the approval of the Company’s stockholders of the Amalgamation Agreement and the SPA).  This Agreement has been duly executed by the Company and constitutes the valid and binding obligations of the Company enforceable against the Company, in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(c) Capitalization. The authorized and issued and outstanding capital stock of the Company as of the Closing (prior to giving effect to any other exchange agreements entered into with other creditors of the Company in connection with the Amalgamation Agreement) is set forth in the Capitalization Table attached hereto as Exhibit C.

(d) Issuance of the Exchange Shares. Upon their issuance at the Closing in accordance with the terms of this Agreement, the Exchange Shares will be duly authorized and duly and validly issued, fully paid and nonassessable.

(e) No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not, (i) result in a violation of the articles of incorporation of the Company, as amended (the ” Certificate of Incorporation “) or the bylaws of the Company (the “Bylaws”) or (ii) result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and rules or regulations of any self-regulatory organizations to which either the Company or its securities are subject) applicable to the Company or by which any property or asset of the Company is bound or affected, except in each case as has not had and would not reasonably be expected to have a Material Adverse Effect. The Company is not in violation of its Certificate of Incorporation, Bylaws or other organizational documents in any material respect.

(f) Absence of Certain Changes. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy or receivership law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings with respect to the Company.

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(g) Certain Fees. No fees or commissions will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person or entity with respect to the transactions contemplated by this Agreement.

(h) Restrictive Agreements.  Other than those restrictions set forth in the Lock-Up Agreement, the Leak-Out Agreement and the Make Whole Letter, and those imposed by applicable securities laws and the Certificate of Incorporation and Bylaws, the Investor will not be bound by any agreements or restrictions with respect to the Exchange Shares, including, without limitation, voting agreements, stockholder agreements, right of first refusal agreements, and similar agreements required to be executed by the Company’s holders of common stock.

ARTICLE IV

OTHER COVENANTS

4.1 Lock-Up. Except as may be required by applicable law, without the prior written consent of the Company or as expressly permitted pursuant to the Lock Up Agreement, the Investor will not sell or otherwise dispose of, directly or indirectly, any Exchange Shares acquired under this Agreement for a period beginning on the Closing Date and ending six (6) months following the Merger Closing (such time period, the “Lock-Up Period”).  Should the last closing price of the common stock of the Company on the principal securities exchange or securities market on which the Company’s common stock is then traded exceed $7.50 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations and similar events after the Closing Date) for any 20 consecutive Trading Days during the Lock-Up Period (a “Release Event”), the lock-up restrictions of this Section 4.1 and leak-out restriction pursuant to Section 4.2 below shall immediately cease to be in effect, and the Lock-Up Period and the Post Lock-Up Period shall be deemed to have expired.  The Company and the Investor will enter into a lock-up agreement (the “Lock-Up Agreement”) in a form reasonably satisfactory to the Company which evidences the terms described in this section 4.1.  For purposes of this Agreement, the term “Trading Day” means any day on which shares of the Company’s common stock are actually traded on the principal securities exchange or securities market on which the Company’s common stock is then traded.

4.2 Leak-Out. During the three (3) months following the expiration of the Lock-Up Period (the “Post Lock-Up Period”), unless there is a Release Event pursuant to Section 4.1 above, the Investor agrees to be bound by the Leak-Out Agreement.

4.3 Make-Whole. Concurrently with the execution of this Agreement, AmeriPrivate Co. and the Investor are entering into the Make-Whole Agreement in the form attached hereto as Exhibit B.

4.4 Securities Laws; Registration Rights.  The Investor acknowledges that, as of the Closing, the Exchange Shares have not been registered under the Securities Act and may only be disposed of pursuant to an available exemption from or in a transaction not subject to the registration requirements of the Securities Act.  Notwithstanding the foregoing, the Company agrees to file with the U.S. Securities and Exchange Commission (at the Company’s sole expense) a registration statement registering the resale of the Exchange Shares (the “Resale Registration Statement”) promptly after the Closing and shall use its reasonable efforts to have the Resale Registration Statement declared effective as soon as practicable after the filing thereof, and in any event prior to the Merger Closing; provided, that the Investor will reasonably cooperate with the Company in its efforts to register the resale of the Exchange Shares, including providing the Company with such information concerning the Investor and its shareholders, officers, directors, employees, financial condition and plan of distribution for the Exchange Shares that may be required or appropriate for inclusion in the Resale Registration Statement, or in any amendments or supplements thereto, which information provided by the Investor shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.  The Investor shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling shareholder in similar situations.  The Company may delay filing or suspend the use of any such 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, or if such filing or use could materially affect a bona fide business or financing transaction of the Company or its subsidiaries or would require premature disclosure of information that could materially adversely affect the Company or its subsidiaries (each such circumstance, a “Suspension Event”); provided, that the Company shall use commercially reasonable efforts to make such registration statement available for the sale by the Investor of such securities as soon as practicable thereafter.  Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Resale Registration Statement is effective or if as a result of a Suspension Event the Resale 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, the Investor  agrees that it will (i) immediately discontinue offers and sales of the Exchange Shares under the Resale Registration Statement until the Investor receives (A) (x) copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and (y) notice that any post-effective amendment has become effective or (B) notice from the Company that it may resume such offers and sales, and (ii) maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by applicable law.  If so directed by the Company, the Investor will deliver to the Company or destroy all copies of the prospectus covering the Exchange Shares in the Investor’s possession.

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4.5 Restrictive Legend. The Investor agrees to the imprinting of the following legend on the Exchange Shares prior to their registration under the Securities Act:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS 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 STATE SECURITIES LAWS.

The Investor acknowledges that the Exchange Shares will also have certain legends acknowledging the transfer and other restrictions with respect to the Exchange Shares set forth in this Agreement, the Lock-Up Agreement, the Leak-Out Agreement and the Make Whole Letter.

4.6 Reservation of Shares. The Company shall at all times prior to the Closing have authorized and reserved for the purpose of issuance a sufficient number of Exchange Shares to satisfy its obligations under this Agreement.

ARTICLE V

MISCELLANEOUS

5.1 Fees and Expenses. Except as set forth in this Section 5.1, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

5.2 Entire Agreement; Amendments. This Agreement together with the exhibits hereto and the other documents referenced herein contains the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and other documents.

5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email at the email address specified in this Section prior to 6:00 p.m. (Eastern time) on a business day, against electronic confirmation thereof, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email at the email address specified in this Agreement later than 6:00 p.m. (Eastern time) on any date, against electronic confirmation thereof, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

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If to the Company:	Ameri Holdings, Inc.
	5000 Research Court, Suite 750 Suwanee, Georgia 30024 Attn: Chief Executive Officer

With copies to (which shall	Sheppard, Mullin, Richter & Hampton LLP
not constitute notice):	30 Rockefeller Plaza, 39th Floor
	New York, NY 10112
	Email: rafriedman@sheppardmullin.com
	Attn: Richard A. Friedman
If to the Investor:	At the address of the Investor set forth on the signature page to this Agreement.
If to Ameri PrivateCo.:	Ameri 100 Inc. 5000 Research Court, Suite 750 Atlanta, GA 30024 Attn:  President
With copies to (which shall not constitute notice):	Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York  10105 Attention:  Ari Edelman, Esq. and Matthew A. Gray, Esq. Email:  aedelman@egsllp.com and mgray@egsllp.com

or such other address as may be designated in writing hereafter, in the same manner, by such person or entity.

5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company, the Investor and Ameri PrivateCo.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

5.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Investor may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company and Ameri PrivateCo.

5.7  No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity.

5.8 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. The parties irrevocably consent to the jurisdiction of the United States federal courts and state courts located in the State of Delaware in any suit or proceeding based on or arising under this Agreement and irrevocably agree that all claims in respect of such suit or proceeding may be determined in such courts.

5.9 Survival. The representations and warranties contained herein shall survive until the expiration of the first anniversary following the Closing. The agreements and covenants contained herein shall survive the Closing and the delivery of the Exchange Shares until the expiration of the applicable statute of limitations (if any) therefor.

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5.10 Execution. This Agreement may be executed in one or more counterparts, all of which when taken together 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, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a scanned copy via electronic mail, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or scanned signature page were an original thereof.

5.11 Severability. In case any one or more of the provisions of this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

5.12 Further Assurances. The parties hereto agree that each shall execute and deliver any and all further agreements, instruments, certificates and other documents, and shall take any and all action, as any of the parties hereto may reasonably deem necessary or desirable in order to carry out the intent of the parties to this Agreement.

5.13 Attorneys’ Fees. If any party shall commence an action or proceeding to enforce any provisions relating to the obligations to close the transactions contemplated by this Agreement prior to the Closing, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

5.14 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise this Agreement 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 this Agreement or any amendments hereto.  In this Agreement, unless the context otherwise requires: (i) any pronoun 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) the term “including” (and with correlative meaning “include”) shall be deemed in each case to be followed by the words “without limitation”; and (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement.  For purposes of this Agreement, a “business day” means any day that is not a Saturday, Sunday or any other day on which banks are required or authorized by law to be closed in New York City, New York.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

AMERI HOLDINGS, INC.

By:

Name:

Title:

AMERI100, INC.

By:

Name:

Title:

[additional signature page follows]

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INVESTOR:

[____________________]

By:

Name:

Title:

Email Address of Authorized Signatory:  __________________________

Facsimile Number of Authorized Signatory: ________________________

Number of Exchange Shares:_____________________________________

Address for Notice to Investor:

_________________________________________

_________________________________________

_________________________________________

_________________________________________

_________________________________________

[Investor Signature Page to Exchange Agreement]

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EX-23.1

Exhibit 23.1

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

We consent to the inclusion in this Current Report of Ameri Holdings, Inc. on Form 8-K of our report dated April 15, 2019, which includes an explanatory paragraph as to the ability of Jay Pharma, Inc. to continue as a going concern, with respect to our audits of the financial statements of Jay Pharma, Inc. as of December 31, 2018 and 2017, for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017.

/s/ Marcum llp

Marcum llp

New York, NY

January 13, 2020

EX-99.1

Exhibit 99.1

Ameri Holdings to Merge with Jay Pharma Inc.,

Evidence-Based Cannabinoid Medicine & Wellness Company Focused on Cancer

• Jay Pharma holds exclusive license with Tikun Olam for cannabinoid intellectual property, including data and genetics for cancer patient care

• Jay Pharma’s world class management & oncology teams are developing safe, clinically validated cannabinoid products

ATLANTA, GA. and TORONTO, CANADA – January 13, 2020 -- AMERI Holdings, Inc. (NASDAQ: AMRH) (“Ameri”) today announced it entered into an amalgamation agreement (the “Amalgamation Agreement”) with Jay Pharma Inc. (“Jay Pharma”), a Canadian company dedicated to developing innovative, evidence-based cannabinoid products and combination therapies to address unmet needs in cancer care, pursuant to which the shareholders of Jay Pharma will become the majority holders of Ameri’s outstanding stock by way of an amalgamation (the “Amalgamation”). In connection with the Amalgamation, Ameri will spin-off its existing IT services business to a private entity founded by Ameri management in partnership with Ameri’s current Series A Preferred Equity Holders (the “Spin-Off,” and collectively, with the Amalgamation, the “Transactions”). The Transactions are expected to close in the first half of 2020, subject to Ameri shareholder approval, approval of the Nasdaq Stock Market, and other customary closing conditions.

“We are excited about the Jay Pharma business and believe that it is a great opportunity that will maximize shareholder value,” said Dev Nidhi, Executive Chairman of Ameri.

On a pro forma basis and based upon the number of shares of Ameri common stock to be issued in the Amalgamation, current Ameri shareholders will own approximately 16% of the combined company and current Jay Pharma shareholders will own approximately 84% of the combined company. The Boards of Directors of both Ameri and Jay Pharma have unanimously approved the transaction.

Jay Pharma is primarily focused on developing over-the-counter cannabinoid-based palliative and wellness products to address the side effects of cancer and cancer treatment, including skin reactions, pain, nausea, and anxiety. Jay Pharma holds the exclusive rights to Israel-based Tikun Olam Ltd.’s (“Tikun Olam”) proprietary cannabinoid genetics and data for oncology, including for the development of over-the-counter and pharmaceutical products. Tikun Olam has amassed one of the world’s largest patient treatment databases in the field of medical cannabis, with over 20,000 patient records noting strains used and symptoms treated. Use of Tikun Olam strains were analyzed in 2,970 cancer patients seeking assistance with sleep problems, pain, nausea, and lack of appetite (Bar-lev Schleider, Eur J Intern Med, 2018); treatment was found to be a well-tolerated, effective, and safe option to help patients cope with the malignancy related symptoms. Jay Pharma plans to bring leading oncology clinicians and researchers, together with academic and industry partners to enhance clinically proven products to patients. In addition, Jay Pharma has an experienced management team led by Dave Johnson who will assume the Chairman & CEO role upon the closing of the Transactions.

Mr. Johnson stated, “According to a 2018 survey of 237 medical oncologists (Braun IM, J Clin Oncol, 2018), 80% of oncologists discuss medical cannabis with patients and nearly one-half recommend it clinically. Critically, only 30% of oncologists feel sufficiently informed to make recommendations regarding medical cannabis, suggesting a large unmet opportunity to educate oncologists and provide research that supports the safety of medical cannabis. In a market that is highly underdeveloped with little clinical data, Jay Pharma has the potential to stand apart as a developer of cannabinoid-based therapies exclusively focused on the needs of cancer patients.”

Mr. Johnson has been leading life science companies for over 35 years. He was the CEO of Convatec Inc., a global medical products and technology company. At Convatec, Mr. Johnson led a team of 8,000 employees in over 43 countries and stewarded the $4.1B spin out of Convatec from Bristol Myers Squibb to Private Equity Owners. In addition, Mr. Johnson was the CEO of Alliqua Biomedical, a developer, marketer, and manufacturer of advanced wound care technologies. He was also a board member of Omni Life Sciences, prior to the sale of the company earlier this year to The Corin Group, supported by Permira Funds. Mr. Johnson is currently the Executive Chairman of Hypermed Imaging, a leading company in developing medical devices for superficial tissue oximetry applications. Mr. Johnson received his undergraduate business degree in Marketing from The Northern Alberta Institute of Technology in Edmonton, Alberta, Canada and is a Fellow of The Wharton School at The University of Pennsylvania.

Palladium Capital Advisors, LLC acted as financial advisor to the parties in connection with the Transactions. Sheppard, Mullin, Richter & Hampton LLP is serving as legal advisor to Ameri.

About Ameri

Ameri is a specialized SAP® cloud, digital and enterprise solutions company which provides SAP® services to customers worldwide. Headquartered in Suwanee, Georgia, Ameri has offices in the U.S. and Canada. The Company also has global delivery centers in India. With its bespoke engagement model, Ameri delivers transformational value to its clients across industry verticals. For further information, visit www.ameri100.com

About Jay Pharma

Jay Pharma is dedicated to developing innovative, evidence-based products and combination therapies to address unmet needs in cancer care. Jay Pharma seeks to improve the lives of persons suffering from cancer, initially by developing safe cannabinoid products for persons suffering from the side effects of cancer and cancer treatment, and longer term by advancing a pipeline of novel combination therapies as an adjunct to standard of care cancer treatments. Jay Pharma has filed several patents covering the use of cannabinoids with current cancer treatments and for specific cancer types. For more information, visit www.jaypharma.co

Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “ expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the Transactions. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the Transactions will be consummated or that the parties other plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific that contribute to the possibility that the predictions, estimates, forecasts, projections and other forward-looking statements will not occur.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Ameri disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Ameri undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

-2-

Additional Information about the Proposed Transactions and Where to Find It

In connection with the proposed Transactions, Ameri will file a proxy statement with the Securities and Exchange Commission (SEC). The materials to be filed by Ameri with the SEC may be obtained free of charge at the SEC’s web site at www.sec.gov.  INVESTORS AND SECURITY HOLDERS OF AMERI ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTIONS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Ameri Contacts

Corporate

Barry Kostiner, Chief Financial Officer

IR@ameri100.com

Investor Relations

Sanjay M. Hurry

LHA Investor Relations

(212) 838-3777

IR@ameri100.com

###

-3-

EX-99.2

Exhibit 99.2

JAY PHARMA, INC.

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2018 AND FOR THE PERIOD FROM APRIL 19, 2017

(INCEPTION) THROUGH DECEMBER 31, 2017

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm	1
Balance Sheets	2
Statements of Operations and Comprehensive Loss	3
Statements of Changes in Shareholders’ Deficit	4
Statements of Cash Flows	5
Notes to the Financial Statements	6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Jay Pharma, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Jay Pharma, Inc. (the “Company”) as of December 31, 2018 and 2017, and the related statements of operations and comprehensive loss, changes in shareholders’ deficit and cash flows for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the financial statements, the Company has no present revenues and needs to raise additional funds to meet  its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any  adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the "PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum llp

Marcum llp

We have served as the Company’s auditor since 2019.

New York, NY

April 15, 2019

1

JAY PHARMA, INC.

BALANCE SHEETS

	December 31,
	2018			2017
Assets
Current assets:
Cash	$	113,671		$	5,915
Prepaid expenses		5,556			10,761
Other receivables		14,536			4,136
Total current assets		133,763			20,812
Total assets	$	133,763		$	20,812
Liabilities and Shareholders' Equity
Liabilities
Current liabilities:
Accounts payable and accrued liabilities	$	199,217		$	51,858
Total liabilities		199,217			51,858
Commitments
Shareholders' Deficit
Common stock, no par value, unlimited authorized shares, 24,972,504 and 19,110,000 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively		-			-
Additional paid-in capital		2,423,709			534,663
Accumulated deficit		(2,484,208	)		(564,631	)
Accumulated other comprehensive income		(4,955	)		(1,078	)
Total shareholders' deficit		(65,454	)		(31,046	)
Total liabilities and shareholders' deficit	$	133,763		$	20,812

The accompanying notes are in integral part of these financial statements.

2

JAY PHARMA, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For theYear Ended December 31, 2018			For the Period from April 19, 2017 (Inception) through December 31, 2017
Expenses
Operating expenses	$	1,919,577		$	564,631
Net loss		(1,919,577	)		(564,631	)
Other comprehensive income
Foreign exchange loss		(3,877	)		(1,078	)
Comprehensive loss	$	(1,923,454	)	$	(565,709	)
Loss per share ‑ basic and diluted	$	(0.08	)	$	(0.08	)
Weighted average shares outstanding, basic and diluted		22,607,147			7,071,089

The accompanying notes are in integral part of these financial statements.

3

JAY PHARMA, INC.

STATEMENTS OF  CHANGES IN SHAREHOLDERS' DEFICIT

	Common Stock				Addition paid-in capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
	Shares		Amount
Balance as of April 19, 2017 (Inception)		-	$	-	$	-	$	-		$	-		$	-
Common stock issued for cash		10,920,000		-		177,402		-			-			177,402
Common stock issued for services		546,000		-		108,570		-			-			108,570
Common stock issued in exchange for sublicense		7,644,000		-		196,295		-			-			196,295
Stock based compensation - stock options		-		-		52,396		-			-			52,396
Foreign exchange loss		-		-		-		-			(1,078	)		(1,078	)
Net loss for the year ended December 31, 2017		-		-		-		(564,631	)		-			(564,631	)
Balance as of December 31, 2017		19,110,000	$	-	$	534,663	$	(564,631	)	$	(1,078	)	$	(31,046	)
Common stock issued for cash		2,892,244		-		822,665		-			-			822,665
Common stock issued for services		813,098		-		360,828		-			-			360,828
Common stock issued in exchange for sublicense		2,157,162		-		652,624		-			-			652,624
Stock based compensation - stock options		-		-		52,929		-			-			52,929
Foreign exchange gain		-		-		-		-			(3,877	)		(3,877	)
Net loss for the year ended December 31, 2018		-		-		-		(1,919,577	)		-			(1,919,577	)
Balance as of December 31, 2018		24,972,504	$	-	$	2,423,709	$	(2,484,208	)	$	(4,955	)	$	(65,454	)

The accompanying notes are in integral part of these financial statements.

4

JAY PHARMA, INC.

STATEMENTS OF CASH FLOWS

	For the Year Ended December 31, 2018			For the Period from April 19, 2017 (Inception) through December 31,2017
Cash Flows From Operating Activities:
Net loss	$	(1,919,577	)	$	(564,631	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock based compensation		53,294			51,280
Stock issued for services		365,382			106,258
Stock issued for sublicense		644,006			192,115
Change in operating assets and liabilities:
Prepaid expenses and other current assets		(5,938	)		(14,580	)
Accounts payable and accrued liabilities		151,668			50,753
Net cash used in operating activities		(711,165	)		(178,805	)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock		822,665			177,402
Net cash provided by financing activities		822,665			177,402
Effect of foreign exchange rate on cash		(3,744	)		7,318
Net increase in cash		107,756			5,915
Cash - beginning of period		5,915			-
Cash - end of period	$	113,671		$	5,915

The accompanying notes are in integral part of these financial statements.

5

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - BUSINESS

Nature of operations

Jay Pharma Inc. ("Jay Pharma" or the “Company”) was incorporated under the Business Corporations Act (Canada) on April 19, 2017 as Jay Resources Inc. The Company is a pharmaceutical company developing innovative, evidence-based cannabinoid medicines. The head office of the Company is located at 140 E. Ridgewood Avenue, Suite 415, Paramus, New Jersey 07652.

NOTE 2 – LIQUIDITY AND GOING CONCERN

The Company has incurred continuing losses from its operations and as of December 31, 2018, the Company had an accumulated deficit of $2,484,208 and working capital deficiency of $65,454.

Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its shares of common stock.

The Company has no present revenue and the Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings and to continue to develop its technologies under its sublicense agreement. Without further funding, the sublicense agreement will have no commercial value.

There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance date of these financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”).

Use of Estimates

The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management's estimates and assumptions include determining the fair value of transactions involving common stock and valuation of stock-based compensation. Actual results could differ from those estimates.

6

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Foreign Currency Translation

The reporting currency of the Company is the United States dollar. The financial statements of companies located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the Company is the Canadian dollar. Monetary assets and liabilities are translated using public exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Shareholders’ equity accounts and non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive loss in the accompanying balance sheets.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2018 and 2017.

Income Taxes

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liabilities. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of December 31, 2018 and 2017, no liability for unrecognized tax benefits was required to be reported.

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of operating expenses. There were no amounts accrued for penalties and interest for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017. The Company does not expect its uncertain tax positions to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

The Company has identified its Canadian federal tax return and its provincial tax returns in Ontario as its “major” tax jurisdictions. The Company is in the process of filing its corporate tax returns for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017. Net operating losses for these periods will not be available to reduce future taxable income until the returns are filed.

7

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Stock-Based Compensation

The Company follows Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and management, this is typically considered to be the vesting period of the award. For consultants, the fair value of the award is recorded over the term of the service period and unvested amounts are revalued at each reporting period over the service period. The Company estimates the expected forfeitures and updates the valuation accordingly.

Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted.

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

	For the year ended December 31, 2018		For the period from April 19, 2017 (Inception) through December 31, 2017
Warrants to purchase shares of common stock		992,244		-
Options to purchase shares of common stock		3,118,234		2,561,317
Total potentially dilutive securities		4,110,478		2,561,317

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair Value

The carrying value of the Company’s financial instruments, including cash and accounts payable, approximate fair value because of the short-term nature of such financial instruments.

8

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements, other than those disclosed below.

On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of this ASU will have on the Company’s financial position and results of operations.

In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic, 842, Leases”, which clarifies how to apply certain aspects of the new leases standard, ASC 842. The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other things.

In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which provides entities with relief from the costs of implementing certain aspects of the new leasing standard, ASC 842. Specifically, under the amendments in ASU 2018-11, (1) entities may elect not to recast the comparative periods presented when transitioning to ASC 842 and (2) lessors may elect not to separate lease and nonlease components when certain conditions are met.

NOTE 4 – SUBLICENSE AGREEMENT

On January 12, 2018, the Company entered into a sublicense agreement (which formalized the sublicense terms as agreed to in 2017) (the “Agreement”) with TO Pharmaceuticals USA LLC (“TOP”), a Delaware limited liability company. The Agreement requires TOP to sublicense to the Company certain patent and other intellectual property rights for the exclusive use by the Company in cancer-related applications. These rights include intellectual property consisting of patents regarding cannabis pharmaceutical products. The sublicense does not provide for any ability for the Company to sublicense these rights to third parties without the express written consent of TOP.  In exchange for the sublicensed patents, the Company issued to TOP 7,280,000 shares of its common stock along with an obligation to issue to TOP 40% of shares of common stock issued to investors during future financings up to $1.25 million. In connection with the additional rounds of financing, the Company issued to TOP an additional 2,157,162 and 364,000 shares of its common stock during the year ended December 31, 2018 and during the period from April 19, 2017 (inception) through December 31, 2017, respectively.  As of December 31, 2018, TOP owned approximately 40% of the total outstanding shares of common stock of the Company.  The Chief Executive Officer of TOP became the Company’s Interim President effective February 1, 2019 (see Note 8). At present, the sublicense lacks commercial value, economic substance, has no alternative future use, and given that the Company is an early stage business with minimal assets, requiring significant funding to develop and commercialize these technologies, including obtain necessary FDA regulatory approvals, the value of the shares issued to acquire the sublicense was charged to operations for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017 in the amount of $652,624 and $196,295, respectively.

Entities often sell goods and services in exchange for equity instruments issued by the purchaser of the goods and services.  The entity granting the equity instruments follows the accounting guidance for those transactions in ACS 718-10.  Such transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measureable.  The entity receiving equity instruments in exchange for providing goods or services follows the guidance for such transactions in accordance with ASC 845.  The Company accounted for the transaction described above in accordance with the provisions of ASC 718-10, and as such, the fair value of the shares issued was determined to be more reliably measureable in determining the value of the sublicense acquired.

9

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share rateably in all assets of the Company that are legally available for distribution. As of December 31, 2018, an unlimited number of common shares were authorized for issuance.

Issuance of Common Stock

During 2017, in connection with the formation of the Company, an aggregate 10,920,000 shares of common stock were issued to the Company’s founders for CAD $0.02 (USD $0.01) per common share for gross proceeds of CAD $234,000 (USD $177,402).  During 2017, the Company issued 7,644,000 shares to TOP in exchange for the rights to develop certain technology under a sublicense agreement, as described in Note 4, for which the Company valued the shares at USD $196,295.

During 2018, the Company issued an additional 2,157,162 shares of common stock to TOP under the sublicense agreement. The Company valued these shares at $652,624.

In January 2018, the Company closed a private placement for 1,900,000 shares of common stock for CAD $0.25 (USD $0.20) per common share for gross proceeds of CAD $475,000 (USD $376,203).

In October 2018, the Company closed a private placement for 992,244 shares of common stock and warrants to purchase 992,244 shares of common stock for CAD $0.87 (USD $0.68) per common share for gross proceeds of CAD $579,044 (USD $446,462).  The warrants are exercisable immediately and expire on October 31, 2020.

Shares Issued in Exchange for Services

During the years ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017, the Company issued 813,098 and 546,000 shares, respectively, to consultants in exchange for services. The Company valued these shares at $360,828 and $108,570, respectively.

Stock Options

On July 26, 2017, the Company granted options to purchase 1,558,367 shares of the Company to a director.  The options have a ten year term, an exercise price of CAD $0.58 (USD $0.43 as of December 31, 2018), and vest as follows:

- Options to purchase 222,767 shares vest immediately upon grant;

- Options to purchase 222,767 shares vest on the first anniversary of the grant date;

- Options to purchase 222,767 shares vest on the second anniversary of the grant date;

- Options to purchase 222,267 shares vest upon the filing of any patent application in the United State of America or Europe within five months from the date of grant;

- Options to purchase 222,267 shares vest upon the Company’s acquisition of any strategic assets or intellectual property following an introduction by the director within 24 months from the date of grant;

- Options to purchase 445,533 shares vest upon the Company’s completion of a proof of concept study based on intellectual property introduced by the director within 24 months from the date of grant.

On July 26, 2017, the Company granted options to purchase 1,225,217 shares of the Company to a director.  The options have a ten year term, an exercise price of CAD $0.58 (USD $0.43 as of December 31, 2018), and vest as follows:

- Options to purchase 222,767 shares vest immediately upon grant;

- Options to purchase 222,767 shares vest on the first anniversary of the grant date;

- Options to purchase 222,767 shares vest on the second anniversary of the grant date;

- Options to purchase 556,917 shares vest upon the consummation of a business development or similar joint venture transaction with a strategic partner that contains a minimum upfront payment to the Company of at least $5 million.

In July 2018, the Company granted options to purchase 556,917 shares of the Company to a director.  The options have a ten year term, an exercise price of CAD $0.58 (USD $0.43 as of December 31, 2018), and vest as follows: (a) one-half of the option shares vest on the date of grant; and (b) one-half of the option shares vest on the date of the Company’s initial public offering.

10

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

Stock options, continued

The Company utilized the Black-Scholes option pricing model to determine the fair value of these stock options, using the assumptions as outlined below.

	July 2017			July 2018
Stock Price	$	0.25 (CAD	)	$	0.25 (CAD	)
Exercise Price	$	0.58 (CAD	)	$	0.58 (CAD	)
Dividend Yield		0	%		0	%
Expected Volatility		92	%		81	%
Weighted Average Risk-Free Interest Rate		2.58	%		2.58	%
Expected life (in years)		3.0			2.8

Stock price – Based on price of common stock of recent shares sold.

Discount rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities, which correspond to the expected term of the Company’s stock options.

Dividend yield —The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.

Expected volatility —Based on the historical volatility of comparable companies in a similar industry.

Expected term —The Company has had no stock options exercised since inception. The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment, which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options.

Forfeitures —ASC Topic 718 Compensation - Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

	Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Grant Date Fair Value (USD)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (USD)
Outstanding - April 19, 2017		-			-		-
Granted		2,783,584		$	0.43	$	0.08
Expired, forfeited, or cancelled		(222,267	)	$	0.43	$	0.08
Outstanding - December 31, 2017		2,561,317		$	0.43	$	0.08		9.57	$	-
Exercisable at December 31, 2017		445,534		$	0.43	$	0.08		9.57	$	-
Outstanding – January 1, 2018		2,561,317		$	0.43	$	0.08
Granted		556,917		$	0.43	$	0.06
Outstanding - December 31, 2018		3,118,234		$	0.43	$	0.08		8.75	$	-
Exercisable at December 31, 2018		1,169,526		$	0.43	$	0.08		8.81	$	-

The Company’s stock based compensation expense related to stock options for the year ended December 31, 2018 and for the period from April 19, 2017 (inception) through December 31, 2017 was $52,929 and $52,396, respectively. As of December 31, 2018, the Company had $137,594 in unamortized stock option expense, which will be amortized over a period of 0.5 years.

11

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS, CONTINUED

Warrants

The following table summarizes information about shares issuable under warrants outstanding at December 31, 2018:

	Warrant shares outstanding		Weighted average exercise price (CAD)		Weighted average remaining life		Intrinsic value
Outstanding at January 1, 2018		-
Issued		992,244	$	0.87
Exercised		-
Expired or cancelled		-
Outstanding at December 31, 2018		992,244	$	0.87		1.83	$	-
Exercisable at December 31, 2018		992,244	$	0.87		1.83	$	-

There were no warrants issued, exercised, or forfeited during the period April 19, 2017 (inception) through December 31, 2017. The warrants in 2018 were issued as a part of a common stock unit offering whereby shares were sold for cash during the current year. The warrants were accounted for as a component of equity, as the instrument contains no features which would preclude such classification.

NOTE 6 – INCOME TAXES

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	As of December 31,
Deferred tax assets:	2018				2017
Net operating loss carryovers	$	505,871		$	106,971
Deferred tax assets, gross		505,871			106,971
Less: valuation allowance		(505,871	)		(106,971	)
Deferred tax assets, net		-			-
Deferred tax assets (liabilities), net	$	-		$	-

The change in the Company’s valuation allowance is as follows:

	For the year ended December 31, 2018		For the period from April 19, 2017 (Inception) to December 31, 2017
Beginning of year	$	106,971	$	-
Increase in valuation allowance		398,900		106,971
End of year	$	505,871	$	106,971

12

JAY PHARMA, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES, CONTINUED

A reconciliation of the provision for income taxes with the amounts computed by applying the statutory federal income tax rate to loss from operations before the provision for income taxes is as follows:

	For the year ended December 31, 2018			For the period from April 19, 2017 (Inception) to December 31, 2017
Canada federal statutory rate		(15.0	)%		(15.0	)%
Provincial taxes		(11.5	)%		(11.5	)%
Permanent differences
Non-deductible expenses		5.7	%		7.5	%
Valuation allowance		20.8	%		19.0	%
Effective income tax rate		0.0	%		0.0	%

As of December 31, 2018, the Company had net operating loss carryovers of $1,908,948 for Canadian federal income tax purposes, which begin to expire in 2027. The ultimate realization of the net operating loss is dependent upon future taxable income, if any, of the Company. Based on losses from inception, the Company determined that as of December 31, 2018 and 2017 it is more likely than not that the Company will not realize benefits from the deferred tax assets. The Company will not record income tax benefits in the financial statements until it is determined that it is more likely than not that the Company will generate sufficient taxable income to realize the deferred income tax assets. As a result of the analysis, the Company determined that a valuation allowance against the deferred tax assets was required of $505,871 and $106,971 as of December 31, 2018 and 2017, respectively.

NOTE 7 – COMMITMENTS

On December 19, 2018, the Company entered into a consulting and advisory agreement with a financial consulting firm. Under the terms of the agreement, the consulting firm provides the Company with a consultant who serves as the Company’s Interim Chief Financial Officer. The agreement expires on December 19, 2019 and requires a monthly fee of $8,500.

NOTE 8 - SUBSEQUENT EVENTS

On February 7, 2019, the Company issued a note payable to an investor for $66,000 and received $60,000 in proceeds with an OID of $6,000. The note bears no interest and is due and payable on May 6, 2019.

On February 1, 2019, the Company entered into a consulting agreement with its executive director. Subject to the approval of the Company’s Board of Directors or Compensation Committee, the executive director will be granted options to purchase up to one percent of the common stock of the Company, on a fully diluted basis, as calculated on the effective date (as defined). In connection with the consulting agreement, on March 5, 2019, the Company issued a note payable to its executive director for $150,000. The note bears no interest and is due and payable on March 4, 2020. The agreement expires on February 1, 2020.

On February 1, 2019, the Company entered into a consulting agreement with the Chief Executive Officer of TOP (see Note 4) to serve as the Company’s Interim Chief Executive Officer (the “Interim CEO”). Pursuant to the terms of the agreement, the Interim CEO receives a monthly fee of $6,000 until the Company completes a Bridge Financing (as defined) of at lease $1.5 million. Following the consummation of the Bridge Financing, the Interim CEO is entitled to a monthly fee of $8,000. Subject to the approval of the Company’s Board of Directors or Compensation Committee, the Interim CEO will be granted options to purchase up to three and one half percent of the common stock of the Company, as calculated on a fully diluted basis, upon an exercise price assuming a $10 million valuation of the Company. The agreement expires on Febraury 1, 2020.

On January 5, 2019, the Company entered into a business advisor services agreement. Pursuant to the terms of the agreement, the consultant will provide business advisory, marketing, and investor relations services in exchange for $15,000 per month, of which $7,500 is payable in cash and $7,500 is payable in the Company’s common shares.  The term expires on January 4, 2020.

During April 2019, the Company received $300,000 in exchange for convertible notes payable and warrants.  The notes payable bear interest at a rate of 6% per annum and are due and payable one year from the date of issuance.  The notes are convertible at any time by the holder into common stock at a price of $0.60 per share.  The notes payable will automatically convert into common stock in the event that the Company consummates a reverse merger with a publicly traded company.

13

EX-99.3

Exhibit 99.3

JAY PHARMA, INC.

CONDENSED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(unaudited)

TABLE OF CONTENTS

Unaudited Condensed Balance Sheets	1
Unaudited Condensed Statements of Operations and Comprehensive Loss	2
Unaudited Condensed Statements of Changes in Shareholders’ Deficit	3
Unaudited Condensed Statements of Cash Flows	4
Notes to the Unaudited Condensed Financial Statements	5

JAY PHARMA, INC.

CONDENSED BALANCE SHEETS

	September 30,			December 31,
	2019			2018
	(unaudited)
Assets
Current assets:
Cash	$	8,883		$	113,671
Prepaid expense, related party		61,774			-
Prepaid expenses and other current assets		21,019			5,556
Other receivables		17,610			14,536
Total current assets		109,286			133,763
Total assets	$	109,286		$	133,763
Liabilities and Shareholders' Equity
Liabilities
Current liabilities:
Accounts payable and accrued liabilities	$	780,173		$	199,217
Advance from related party		21,937			-
Notes payable		403,564			-
Convertible notes payable		290,405			-
Total current liabilities		1,496,079			199,217
Total liabilities		1,496,079			199,217
Commitments (Note 5)
Shareholders' Deficit
Common stock, no par value, unlimited authorized shares, 25,144,801 and 24,972,504 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		-			-
Additional paid-in capital		3,072,636			2,423,709
Accumulated deficit		(4,459,678	)		(2,484,208	)
Accumulated other comprehensive income (loss)		249			(4,955	)
Total shareholders' deficit		(1,386,793	)		(65,454	)
Total liabilities and shareholders' deficit	$	109,286		$	133,763

The accompanying notes are an integral part of these unaudited condensed financial statements.

1

JAY PHARMA, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

	Nine Months Ended September 30,
	2019			2018
Expenses
Operating expenses	$	1,895,355		$	934,958
Operating loss		(1,895,355	)		(934,958	)
Other expense
Extinguishment of notes payable		32,257			-
Accretion and interest		47,858			-
Total other expense		80,115			-
Net Loss	$	(1,975,470	)	$	(934,958	)
Other comprehensive gain (loss)
Foreign exchange gain (loss)		5,204			(19,450	)
Comprehensive loss	$	(1,970,266	)	$	(954,408	)
Loss per share ‑ basic and diluted	$	(0.08	)	$	(0.04	)
Weighted average shares outstanding, basic and diluted		25,060,193			21,978,730

The accompanying notes are an integral part of these unaudited condensed financial statements.

2

JAY PHARMA, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT

(unaudited)

	Common Stock				Addition paid-in capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount
Balance as of January 1, 2018		19,110,000	$	-	$	534,663	$	(564,631	)	$	(1,078	)	$	(31,046	)
Common stock issued for cash		2,476,184		-		636,202		-			-			636,202
Common stock issued in exchange for sublicense		1,266,667		-		257,450		-			-			257,450
Stock based compensation - stock options		-		-		43,855		-			-			43,855
Foreign exchange gain		-		-		-		-			(19,450	)		(19,450	)
Net loss		-		-		-		(934,958	)		-			(934,958	)
Balance as of September 30, 2018		22,852,851	$	-	$	1,472,170	$	(1,499,589	)	$	(20,528	)	$	(47,947	)
Balance as of January 1, 2019		24,972,504	$	-	$	2,423,709	$	(2,484,208	)	$	(4,955	)	$	(65,454	)
Common stock issued for services		172,297		-		88,465		-			-			88,465
Warrants issued in conjunction with issuance of notes payable		-		-		24,875		-			-			24,875
Stock based compensation - stock options		-		-		535,587		-			-			535,587
Foreign exchange gain		-		-		-		-			5,204			5,204
Net loss		-		-		-		(1,975,470	)		-			(1,975,470	)
Balance as of September 30, 2019		25,144,801	$	-	$	3,072,636	$	(4,459,678	)	$	249		$	(1,386,793	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

3

JAY PHARMA, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash Flows From Operating Activities:
Net loss	$	(1,975,470	)	$	(934,958	)
Adjustments to reconcile net loss to net cash used in operating activities:
Extinguishment of note payable		32,257			-
Amortization of note discount		38,985			-
Stock based compensation		624,052			44,139
Stock issued for sublicense		-			245,955
Change in operating assets and liabilities:
Prepaid expenses and other current assets		67,591			2,623
Accounts payable and accrued liabilities		579,995			222,459
Net cash used in operating activities		(632,590	)		(419,782	)
Cash Flows From Financing Activities:
Proceeds from notes payable		198,000			-
Proceeeds from convertible notes payable		300,000			-
Advances from related party		22,000			-
Common stock issue for cash		-			636,202
Net cash provided by financing activities		520,000			636,202
Effect of foreign exchange rate on cash		7,802			(9,966	)
Net change in cash		(104,788	)		206,454
Cash - beginning of period		113,671			5,915
Cash - end of period	$	8,883		$	212,369
Non-cash investing and financing activities
Warrants issued with notes payable	$	24,875		$	-
Note payable issued to consultant for prepaid services	$	150,000		$	-

The accompanying notes are an integral part of these unaudited condensed financial statements.

4

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 1 - BUSINESS

Nature of operations

Jay Pharma Inc. ("Jay Pharma" or the “Company”) was incorporated under the Business Corporations Act (Canada) on April 19, 2017 as Jay Resources Inc. The Company is a pharmaceutical company developing innovative, evidence-based cannabinoid medicines. The head office of the Company is located at 140 E. Ridgewood Avenue, Suite 415, Paramus, New Jersey 07652.

On January 12, 2018, the Company entered into a sublicense agreement (which formalized the sublicense terms as agreed to in 2017) (the “Agreement”) with TO Pharmaceuticals USA LLC (“TOP”), a Delaware limited liability company. The Agreement requires TOP to sublicense to the Company certain patent and other intellectual property rights for the exclusive use by the Company in cancer-related applications. These rights include intellectual property consisting of patents regarding cannabis pharmaceutical products. The sublicense does not provide for any ability for the Company to sublicense these rights to third parties without the express written consent of TOP.

NOTE 2 – LIQUIDITY AND GOING CONCERN

The Company has incurred continuing losses from its operations and as of September 30, 2019, the Company had an accumulated deficit of $4,459,678 and working capital deficiency of $1,386,793.

Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its shares of common stock.

The Company has no present revenue and the Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings and to continue to develop the Company’s technologies under its sublicense agreement. Without further funding, the sublicense agreement will have no commercial value.

There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance date of these financial statements. The accompanying condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these condensed financial statements. These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto for the fiscal year ended December 31, 2018. Operating results for the nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

Use of Estimates

The preparation of these unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management's estimates and assumptions include determining the fair value of transactions involving common stock and valuation of stock-based compensation. Actual results could differ from those estimates.

5

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Foreign Currency Translation

The reporting currency of the Company is the United States dollar – all amounts within these unaudited condensed financial statements are stated in United States dollars unless otherwise indicated. The financial statements of companies located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the Company is the Canadian dollar. Monetary assets and liabilities are translated using published exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Shareholders’ deficiency accounts and non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive income (loss) in the accompanying unaudited condensed balance sheets.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2019 and December 31, 2018.

Income Taxes

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liabilities. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Stock-Based Compensation

The Company follows Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the property or service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees, consultants, and management, this is typically considered to be the vesting period of the award. The Company estimates the expected forfeitures and updates the valuation accordingly.

6

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the nine months ended September 30, 2019 and 2018 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted.

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018
Warrants to purchase shares of common stock		381,429		-
Convertible notes		500,000		-
Options to purchase shares of common stock		3,102,362		2,561,317
Total potentially dilutive securities		3,983,791		2,561,317

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair Value

The carrying value of the Company’s financial instruments, including cash and accounts payable, approximate fair value because of the short-term nature of such financial instruments.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements, other than those disclosed below.

On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The impact of this ASU did not have a material effect on the Company’s financial position and results of operations.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. The ASU was issued to address the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after December 15, 2018, and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU 2017-11 on January 1, 2019 and determined that the adoption of ASU 2017-11 did not have an impact on the Company's financial statements.

7

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718)”,Improvements to Nonemployee Share-based Payments (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring good and services from nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted and the Company adopted this new standard effective January 1, 2019 with no material impact to stock compensation issued to non-employees during the nine months ended September 30, 2019.

In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic, 842, Leases”, which clarifies how to apply certain aspects of the new leases standard, ASC 842. The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other things.

In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which provides entities with relief from the costs of implementing certain aspects of the new leasing standard, ASC 842. Specifically, under the amendments in ASU 2018-11, (1) entities may elect not to recast the comparative periods presented when transitioning to ASC 842 and (2) lessors may elect not to separate lease and nonlease components when certain conditions are met.

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable Summary

As of September 30, 2019, the Company’s notes payable and convertible notes payable consisted of the following:

	Gross		Discount			Net
February 2019 Note	$	66,000	$	-		$	66,000
March 2019 Note		150,000		-			150,000
April 2019 Convertible Notes		300,000		(9,595	)		290,405
July 2019 Note		191,640		(4,076	)		187,564
Total	$	707,640		(13,671	)	$	693,969
Notes payable	$	407,640	$	(4,076	)	$	403,564
Convertible notes payable	$	300,000	$	(9,595	)	$	290,405

Notes Payable

On February 7, 2019, the Company received $60,000 in exchange for a promissory note with a director for $66,000, including an original issue discount of $6,000 (the “February 2019 Note”).  The note bears no stated interest rate and was due on May 8, 2019. Given that the Company was unable to pay its obligation under the note, the February 2019 Note is currently in default. The Company amortized the full $6,000 originial issue discount in the statement of operations and comprehensive loss through September 30, 2019.

On February 1, 2019, the Company entered into a consulting agreement with its executive director. In connection with the consulting agreement, on March 5, 2019, the Company issued a note payable to its executive director for $150,000 (the “March 2019 Note”). The note bears no interest and is due and payable on March 4, 2020. The agreement expires on February 1, 2020.

8

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE, CONTINUED

On July 8, 2019, the Company entered into a note agreement (the “July 2019 Note”) with a limited liability company (the “Lender”). One of the principals of the Lender is the brother of a member of the Company’s board of directors. The Note’s face value was $157,714 and the original issue discount was $19,714 for total gross proceeds of $138,000. The Company may, without premium or penalty, at any time and from time to time, prepay all or any portion of the Note. The maturity date of the Note was September 8, 2019. As there remained an outstanding balance on the Note at its maturity date, the Company was in default. Per the Note, the Lender may at its option (a) declare the entire principal amount of the Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable; and/or (b) exercise any or all of its rights, powers or remedies under applicable law. In connection with the Note, the Company issued warrants to purchase 131,429 shares of the Company’s common stock at an exercise price of $0.71 per share. The warrants are exercisable for a period of five years. The fair value of the award was estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes valuation model requires the development of assumptions that are inputs into the model. These assumptions include the stock volatility, the expected life of the option, and the dividend yield on the underlying stock, as shown in the table below. The Company amortized this discount over the term of the July 2019 Note.  During the nine months ended September 30, 2019 and 2018, the Company recorded amortization of debt discount of $1,674 and $0, repectively.

	Warrants
Stock Price	CAD $ 0.58
Exercise Price	CAD $ 0.93
Dividend Yield		0.00	%
Expected Volatility		96.0	%
Weighted Average Risk-Free Interest Rate		2.31
Number of Shares		131,429
Value (USD)	$	1,674
Expected life (in years)		0.2

Stock price – Based on price of common stock of recent shares sold.

Expected volatility – Based on the historical volatility of comparable companies in a similar industry.

On September 20, 2019, the Company entered into an amendment to the July 2019 Note (the “Amendment”). The Amendment extends the maturity date for the Note until the earlier of (a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) November 7, 2019. In consideration for the Amendment, the Company agreed to pay an extension fee of $18,926, which was added to the outstanding balance of the Note. In addition to the extension fee, the Company agreed to grant warrants to purchase 50,000 shares of the Company’s common stock, subject to approval by the Company’s board of directors. If the Company’s board of directors did not approve the grant of the warrants prior to October 18, 2019, the Company agreed to pay an additional extension fee of $15,000 in lieu of issuing the warrants. On October 19, 2019, given that the Company did not grant the warrants, $15,000 was added to the face value of the note. Given that the cash flows of the amended July 2019 Note are greater than 10% difference from the original July 2019 Note, the Company must treat the modification as an extinguishment of debt and determine the gain or loss on the exchange of instruments. Based on the analysis performed, the Company determined that there was a loss on extinguishment of debt of $32,257. The Company determined the fair value of the amended note, which was less than its face value.  The Company will amortize this discount over the term of the amended note.

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JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE, CONTINUED

Convertible Notes Payable

During April 2019, the Company received $300,000 in exchange for convertible notes payable (the “April 2019 Convertible Notes”) and warrants to purchase 250,000 shares of the Company’s common stock. The notes payable bear interest at a rate of 6% per annum and are due and payable one year from the date of issuance. The notes are convertible at any time by the holder into shares of the Company’s common stock at a price of $0.60 per share. If the Company sells or issues common stock at a price lower than the conversion price of the notes, the conversion price shall be reduced to that price .The notes payable will automatically convert into shares of the Company’s common stock in the event that the Company consummates a reverse merger with a publicly traded company.

The fair value of the warrants issued was estimated on the date of grant using the Black–Scholes option valuation model and recorded as a debt discount. The Black–Scholes valuation model requires the development of assumptions that are inputs into the model. These assumptions include the stock volatility, the expected life of the option, and the dividend yield on the underlying stock, as shown in the table below. The Company will amortize this discount over the term of the April 2019 Convertible Notes. During the nine months ended September 30, 2019 and 2018, the Company recorded amortization of debt discount of $15,574 and $0, repectively.

	April 2019 Convertible Notes
Stock Price	CAD $ 0.58
Exercise Price	CAD $ 0.95
Dividend Yield		0.00	%
Expected Volatility		96.0	%
Weighted Average Risk-Free Interest Rate		2.31	%
Number of Shares		250,000
Value (USD)	$	25,169
Expected life (in years)		1.0

Stock price – Based on price of common stock of recent shares sold.

Expected volatility – Based on the historical volatility of comparable companies in a similar industry.

NOTE 5 – COMMITMENTS

On February 1, 2019, the Company entered into a consulting agreement with its executive director. Subject to the approval of the Company’s Board of Directors or Compensation Committee, the executive director will be granted options to purchase up to one percent of the common stock of the Company, on a fully diluted basis, as calculated on the date of the Company’s initial public offering. These warrants have not yet been issued, and will not be issued until after the consummation of an initial public offering.  In connection with the consulting agreement, on March 5, 2019, the Company issued a note payable to its executive director for $150,000. The note bears no interest and is due and payable on March 4, 2020. The agreement expires on February 1, 2020.

On February 1, 2019, the Company entered into a consulting agreement with the Chief Executive Officer of TOP (see Note 1) to serve as the Company’s Interim Chief Executive Officer (the “Interim CEO”). Pursuant to the terms of the agreement, the Interim CEO receives a monthly fee of $6,000 until the Company completes a Bridge Financing (as defined) of at least $1.5 million. Following the consummation of the Bridge Financing, the Interim CEO is entitled to a monthly fee of $8,000. Subject to the approval of the Company’s Board of Directors or Compensation Committee, the Interim CEO was granted options to purchase 779,683 shares of the Company’s common stock (see Note 6). The agreement expires on Febraury 1, 2020.

On January 5, 2019, the Company entered into a business advisor services agreement. Pursuant to the terms of the agreement, the consultant will provide business advisory, marketing, and investor relations services in exchange for $15,000 per month, of which $7,500 is payable in cash and $7,500 is payable in the Company’s common shares. The term expires on January 4, 2020.

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JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 6 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share rateably in all assets of the Company that are legally available for distribution. As of September 30, 2019 and December 31, 2018, an unlimited number of common shares were authorized for issuance.

Shares Issued in Exchange for Services

During the nine months ended September 30, 2019 and 2018, the Company issued 172,297 and 0 shares, respectively, to consultants in exchange for services. The Company valued these shares at $88,465 and $0, respectively, which represents the value of the services performed by the consultants.

Stock Options

On February 1, 2019, the Company granted options to purchase 779,683 shares of the Company to its Chief Executive Officer. The options have a ten year term, an exercise price of CAD $0.58 (USD $0.44 as of September 30, 2019), and vest as follows:

- Options to purchase 111,382 shares vest immediately;

- Options to purchase 222,767 shares vest upon the Company completing a bridge financing of at least $1.5 million;

- Options to purchase 222,767 shares vest upon the Company hiring a chief executive officer;

- Options to purchase 222,767 shares vest upon the Company dosing a patient in its Glioblastoma Study;

On April 1, 2019, the Company granted options to purchase 1,248,624 shares of the Company to its Chairman. The options have a ten year term, an exercise price of CAD $0.58 (USD $0.44 as of June 30, 2019), and vest immediately:

The Company utilized the Black-Scholes option pricing model to determine the fair value of these stock options, using the assumptions as outlined below.

	February 2019			April 2019
Stock Price	$	0.58 (CAD	)	$	0.58 (CAD	)
Exercise Price	$	0.58 (CAD	)	$	0.58 (CAD	)
Dividend Yield		0	%		0	%
Expected Volatility		96	%		101	%
Weighted Average Risk-Free Interest Rate		2.51	%		2.31	%
Expected life (in years)		5.2			5.0

Stock price – Based on price of common stock of recent shares sold.

Discount rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities, which correspond to the expected term of the Company’s stock options.

Dividend yield —The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.

Expected volatility —Based on the historical volatility of comparable companies in a similar industry.

Expected term —The Company has had no stock options exercised since inception. The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment, which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options.

Forfeitures —ASC Topic 718 Compensation - Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 6 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS, CONTINUED

Stock Options, continued

	Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Grant Date Fair Value (USD)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (USD)
Outstanding – January 1, 2019		3,118,234		$	0.87	$	0.08
Granted		2,028,307		$	0.44	$	0.33
Expired, forfeited, or cancelled		(890,567	)
Outstanding – September 30, 2019		4,255,974		$	0.44	$	0.18		8.65	$	-
Exercisable at September 30, 2019		3,102,362		$	0.44	$	0.22		8.71	$	-

The Company’s stock based compensation expense related to stock options for the nine months ended September 30, 2019 and 2018 was $538,598 and $44,141, respectively. As of September 30, 2019, the Company had $166,734 in unamortized stock option expense, which will be amortized over a period of 0.11 years.

Warrants

The following table summarizes information about shares issuable under warrants outstanding at September 30, 2019:

	Warrant shares outstanding		Weighted average exercise price (CAD)		Weighted average remaining life		Intrinsic value
Outstanding at January 1, 2019		992,244	$	0.87
Issued		381,429	$	0.94
Exercised		-
Expired or cancelled		-
Outstanding at September 30, 2019		1,373,673	$	0.89		2.06	$	-
Exercisable at September 30, 2019		1,373,673	$	0.89		2.06	$	-

The warrants issued in connection with the April 2019 Convertible Notes have an expiration date on March 31, 2024 with an exercise price of $0.71 and a remaining life of 4.50 years. The warrant issued in connection with the Lender of the July 2019 Note has an expiration date of July 4, 2024 with an exercise price of $0.71 and a remaining life of 4.76 years.

12

JAY PHARMA, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Stated in US Dollars)

(unaudited)

NOTE 7 - SUBSEQUENT EVENTS

Note Amendments

On November 21, 2019, the Company entered into an amendment to the July 2019 Note (the “November 21 Amendment”). The November 21 Amendment extends the maturity date for the Note until the earlier of (a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) December 9, 2019. In consideration for the November 21 Amendment, the Company agreed to grant 25,440 shares of the Company’s common stock, subject to approval by the Company’s board of directors.

On December 9, 2019, the Company entered into an amendment to the July 2019 Note (the “December 9 Amendment”). The December 9 Amendment extends the maturity date for the Note until the earlier of (a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) January 7, 2020. In consideration for the December 9 Amendment, the Company agreed to grant 25,440 shares of the Company’s common stock, subject to approval by the Company’s board of directors.

On January 8, 2020 the Company entered into an amendment to the July 2019 Note (the “January 8 Amendment”).  The January 8 Amendment extends the maturity date for the July 2019 Note until the (a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) April 1, 2020. In consideration for the January 8 Amendment, the Company agreed to grant 50,000 shares of the Company’s common stock, subject to approval by the Company’s board of directors.

Amalgamation Agreement

On January 10, 2020, the Company entered into an amalgamation agreement (the “Amalgamation Agreement”) with Jay Pharma Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of AmeriHoldings, Inc.. (“Ameri”), and Jay Pharma Exchange Co, Inc. (“ExchangeCo”), a wholly owned subsidiary of Ameri.  The Amalgamation Agreement provides that the Company will merge into Merger Sub and be amalgamated and operate as one company.  The shareholders of the Company will own approximately 84% of the post-closing company’s issued and outstanding shares of common stock.

The Amalgamation Agreement will automatically be terminated if the amalgamation is not completed within 180 days.

Simultaneously with the execution of the Amalgamation Agreement, Jay Pharma entered into a Secured Promissory Note, dated January 10, 2020 (the “Note”), by and among Jay Pharma and certain lenders, pursuant to which, on January 10, 2020, Jay Pharma received aggregate gross proceeds of $1,500,000. Pursuant to the Note, the aggregate obligations of Jay Pharma under the Note are to automatically, immediately prior to the consummation of the Amalgamation, convert into shares of Jay Pharma common stock, subject to the terms and provisions of the Note. Pursuant to Note, upon conversion of the term loans made by the lenders subject to the terms of the Note, Jay Pharma is required to cause Ameri to issue each lender warrants to purchase Ameri Common Stock. Upon consummation of the Amalgamation, Jay Pharma has agreed to cause Ameri to register the resale of the warrant shares.

Prior to the execution and delivery of the Amalgamation Agreement, certain investors have entered into agreements with Jay Pharma pursuant to which such investors have agreed, subject to the terms and conditions of such agreements, to purchase, immediately prior to the consummation of the Amalgamation, shares of Jay Pharma’s common stock (or common stock equivalents) and warrants to purchase Jay Pharma’s common stock for an aggregate purchase price of $3.5 million. The consummation of the transactions contemplated by such agreements is conditioned upon the satisfaction or waiver of the conditions set forth in the Amalgamation Agreement. After consummation of the Amalgamation, Jay Pharma has agreed to cause Ameri to register the resale of the Ameri Common Stock issued and issuable pursuant to the warrants issued to the investors in the Jay Pre-Closing Financing.

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