Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On
Consideration Merger Consideration
The total consideration to be paid at Closing (the "Merger Consideration") by
Viveon to Clearday security holders (and holders who have the right to acquire
Clearday capital stock) will be an amount equal to
Earnout Payments
In addition, the holders of Company Preferred Stock will have the contingent right to earn up to 5,000,000 shares of Viveon Common Stock, in the aggregate (the "Earnout Shares"), if at any time during the period beginning on the date of the Closing (the "Closing Date") and ending on the fifth anniversary of the Closing Date (the "Earnout Eligibility Period"), the Adjusted Net Income for any Earnout Period is a positive number for the first time during the Earnout Eligibility Period (the "Earnout Milestone").
If, following the Closing Date and prior to end of the Earnout Eligibility Period, there is a Change of Control, then, immediately prior to such Change of Control, all the Earnout Shares not yet earned shall be earned by the Company Earnout Holders and shall be released from escrow and delivered to the Company Earnout Holders, and the Company Earnout Holders shall be eligible to participate in such Change of Control transaction with respect to such Earnout Shares.
The Earnout Shares will be placed in escrow and will not be released from escrow until they are earned as a result of the occurrence of the Earnout Milestone or a Change of Control, if applicable. The Earnout Shares that are not earned on or before the expiration of the Earnout Eligibility Period shall be automatically forfeited and cancelled.
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Treatment of
Cancellation of Securities. Each share of Clearday capital stock, if any, that is owned by Viveon, Merger Sub, Clearday, or any of their subsidiaries (as treasury stock or otherwise) immediately prior to the effective time of the Merger (the "Effective Time"), will automatically be cancelled and retired without any conversion or consideration.
Preferred Stock. At the Effective Time, each issued and outstanding share of
Clearday's Series F Cumulative Convertible Preferred Stock, par value
Each issued and outstanding share of Clearday's Series A Convertible Preferred
Stock, par value
Common Stock. At the Effective Time, each issued and outstanding share of
Clearday's common stock, par value
Stock Options. At the Effective Time, each outstanding option to purchase shares of Clearday Common Stock will be converted into an option to purchase, subject to substantially the same terms and conditions as were applicable under such options prior to the Effective Time, shares of Viveon Common Stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Conversion Ratio, at an exercise price per share of Viveon Common Stock equal to the exercise price per share of Clearday Common Stock subject to such option divided by the Conversion Ratio.
Warrants. Contingent on and effective as of immediately prior to the Effective Time, each outstanding warrant to purchase shares of Clearday Preferred Stock or Clearday Common Stock will be treated in accordance with the terms thereof.
Convertible Notes. Contingent on and effective as of immediately prior to the Effective Time, Clearday's convertible notes outstanding as of immediately prior to the Effective Time, will be treated in accordance with the terms of the relevant agreements governing such convertible notes.
Subsidiary Capital Stock. At and as of the Effective Time, the Subsidiary Capital Stock will remain in full force and effect with the right to acquire the Company Common Stock with such adjustments noted in the terms of such Subsidiary Capital Stock.
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Representations and Warranties
The Merger Agreement contains customary representations and warranties of the
parties thereto with respect to, among other things, (a) corporate existence and
power, (b) authorization to enter into the Merger Agreement and related
transactions; subsidiaries, (c) governmental authorization, (d)
non-contravention, (e) capitalization, (f) corporate records, (g) consents, (h)
financial statements, (i) internal accounting controls, (j) absence of certain
changes, (k) properties; title to assets, (l) litigation, (m) material
contracts, (n) licenses and permits, (o) compliance with laws, (p) intellectual
property, (q) privacy and data security, (r) employee matters and benefits, (s)
tax matters, (t) real property, (u) environmental laws, (v) finders' fees, (w)
directors and officers, (x) anti-money laundering laws, (y) insurance, (z)
related party transactions, and (aa) certain representations related to
securities law and activity. Viveon has additional representations and
warranties, including (a) issuance of shares, (b) trust fund, (c) listing, (d)
board approval, (e)
Covenants
The Merger Agreement includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Merger and efforts to satisfy conditions to consummation of the Merger. The Merger Agreement also contains additional covenants of the parties, including, among others, access to information, cooperation in the preparation of the Registration Statement and Proxy Statement (as each such terms are defined in the Merger Agreement) required to be filed in connection with the Merger and to obtain all requisite approvals of each party's respective stockholders. Viveon and Clearday have each also agreed to include in the Proxy Statement the recommendation of its respective board that its stockholders approve all of the proposals to be presented at its respective special meeting. In addition, each of Viveon and Clearday have agreed to use commercially reasonable efforts to solicit and finalize definitive documentation for a committed equity in an aggregate amount that, together with the funds in the Trust Account after giving effect to potential redemptions from Viveon's public stockholders, together with financing programs available to Clearday after the Closing, will provide to Clearday working capital to meet its short term commercial development goals.
Viveon has also agreed to prepare a proxy statement to seek the approval of its
stockholders (the "Extension Proposal") to amend its organizational documents to
extend the period of time Viveon is afforded under its organizational documents
and IPO prospectus to consummate an initial business combination for an
additional three months, from
Each party's representations, warranties and pre-Closing covenants will not survive Closing and no party has any post-Closing indemnification obligations.
Viveon Equity Incentive Plan
Viveon has agreed to approve and adopt an equity incentive plan (the "Incentive Plan") to be effective as of the Closing and in a form mutually acceptable to Viveon and Clearday, subject to approval of the Incentive Plan by the Viveon stockholders. The Incentive Plan will provide for an initial aggregate share reserve equal to 8% of the number of shares of Viveon Common Stock issued and outstanding at the Closing and an "evergreen" provision that is mutually agreeable to Viveon and Clearday will provide for an automatic increase on the first day of each fiscal year in the number of shares available for issuance under the Incentive Plan as mutually determined by Viveon and Clearday.
Non-Solicitation Restrictions
Each of Viveon and Clearday has agreed that from the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement in accordance with its terms, it will not initiate any negotiations with any party relating to an Alternative Transaction (as such term is defined in the Merger Agreement) or enter into any agreement relating to such a proposal, other than as expressly excluded from the definition of an Alternative Transaction. Each of Viveon and Clearday has also agreed to be responsible for any acts or omissions of any of its respective representatives that, if they were the acts or omissions of Viveon and Clearday, as applicable, would be deemed a breach of the party's obligations with respect to these non-solicitation restrictions.
4 Conditions to Closing
The consummation of the Merger is conditioned upon, among other things, (i) the
absence of any applicable law or order restraining, prohibiting or imposing any
condition on the consummation of the Merger and related transactions, (ii) the
expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (iii) receipt of any consent,
approval or authorization required by any Authority (as defined in the Merger
Agreement), (iv) Viveon having net tangible assets of at least
Solely with respect to Viveon and Merger Sub, the consummation of the Merger is conditioned upon, among other things, (i) Clearday having duly performed or complied with all of its obligations under the Merger Agreement in all material respects, (ii) the representations and warranties of Clearday, other than certain fundamental representations as defined in the Merger Agreement, being true and correct in all respects unless failure would not have or reasonably be . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit Description 2.1* Merger Agreement dated as ofApril 5, 2023 , by and amongViveon Health Acquisition Corp. , Clearday, Inc.,VHAC2 Merger Sub, Inc. ,Viveon Health LLC and Clearday SR LLC 10.1 Form of Parent Stockholder Support Agreement dated as ofApril 5, 2023 , by and amongViveon Health Acquisition Corp. , Clearday, Inc. and certain stockholders ofViveon Health Acquisition Corp. 10.2 Form of Company Support Agreement dated as ofApril 5, 2023 , by and amongViveon Health Acquisition Corp. , Clearday, Inc. and certain stockholders of Clearday, Inc. 10.3 Form of Lock-Up Agreement, between the Holder (defined therein) andViveon Health Acquisition Corp. 10.4 Form of Amended and Restated Registration Rights Agreement, by and among Clearday, Inc. (formerly known asViveon Health Acquisition Corp. ), certain stockholders ofViveon Health Acquisition Corp. and certain stockholders of Clearday, Inc. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). Viveon 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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