MINM Minim Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

(Rule 13d-101)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

(Amendment No. 2)¹

 

Minim, Inc.

(Name of Issuer)

 

Common Stock, $0.01 par value

(Title of Class of Securities)

 

60365W102

(CUSIP Number)

 

DAVID E. LAZAR

30B, Tower 200 The Towers

Winston Churchill

San Francisco, Paitilla

Panama City 07196 Panama

(646) 768-8417

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

July 22, 2024

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this Schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☐.

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

1

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

 

 

1	NAME OF REPORTING PERSONS   DAVID E. LAZAR
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS   PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Portugal, Israel
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER   5,625,0001
	8	SHARED VOTING POWER   1,447,8672
	9	SOLE DISPOSITIVE POWER   5,625,0001
	10	SHARED DISPOSITIVE POWER   -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   7,072,8673
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   84.1%3
14	TYPE OF REPORTING PERSON   IN

 

(1)

Consists of (a) 25,000 shares of the Issuer’s Common Stock, $0.01 par value per share (the “Common Stock”), (b) 2,800,000 shares of Common Stock issuable upon conversion of the Issuer’s Series A Convertible Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”), which are convertible within 60 days, and (c) 2,800,000 shares of Common Stock issuable upon exercise of warrants that are exercisable within 60 days (the “Warrants”).

(2)

The Reporting Person has shared voting power over 1,447,867 shares of Common Stock pursuant to the Voting Agreement described in Item 6.

(3)

Consists of (a) 25,000 shares of Common Stock directly beneficially owned by the Reporting Person, (b) 5,600,000 shares of Common Stock owned by the Reporting Person upon conversion of the shares of Series A Preferred Stock or exercise of the Warrants and (c) 1,447,867 shares of Common Stock which the Reporting Person shares voting power over pursuant to the Voting Agreement described in Item 6.

 

 

The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”). This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.

 

Item 5.

Interest in Securities of the Issuer.

 

Item 5 (a)-(c) is hereby amended and restated as follows:

 

The aggregate percentage of Shares reported owned by each person named herein is based upon 8,409,689 shares of Common Stock outstanding, which is the total of (a) 2,809,689 shares of Common Stock outstanding as of May 20, 2024, as reported in the Issuer’s Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission (the “SEC”) on May 20, 2024 and (b) an aggregate of 5,600,000 shares of Common Stock directly beneficially owned by the Reporting Person upon the conversion of the Series A Preferred Stock or exercise of the Warrants.

 

A.

Reporting Person

 

(a)

As of the close of business on July 22, 2024, the Reporting Person beneficially owned 7,072,867 Shares.

 

Percentage: Approximately 84.1%

 

(b)

1. Sole power to vote or direct vote: 5,625,000 2. Shared power to vote or direct vote: 1,447,867 3. Sole power to dispose or direct the disposition: 5,625,000 4. Shared power to dispose or direct the disposition: 0

 

(c)

The Reporting Person has not entered into any transactions in the Shares since the filing of Amendment No. 1 to the Schedule 13D filed by the Reporting Person on February 29, 2024.

 

 

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

 

Item 6 is hereby amended to add the following:

 

On July 22, 2024, the Reporting Person entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchaser named therein (the “Purchaser”), pursuant to which the Reporting Person agreed to (1) sell to the Purchaser all of his right and interest in (i) 627,187 shares of Common Stock of the Issuer (the “Sold Common Stock”), (ii) 2,000,000 shares of Series A Preferred Stock of the Issuer (the “Preferred Securities”) and (iii) warrants to purchase up to an additional 2,800,000 shares of Common Stock of the Issuer (the “Warrants”, and together with the Sold Common Stock and the Preferred Securities, as well as any shares of Common Stock of the Issuer into which the Preferred Securities may be converted, the “Securities”) and (2) transfer to the Purchaser all of his right, title and interest in the SPA, pursuant to which the Reporting Person acquired the Securities. The aggregate purchase price paid by the Purchaser under the Purchase Agreement is $5,600,000 (the “Purchase Price”). The Purchase Agreement is subject to the satisfaction of certain closing conditions, including the appointment of certain designees of the Purchaser to the board of directors of the Issuer, and contains customary representations, warranties and agreements of the Reporting Person and the Purchaser, indemnification rights and other obligations of the parties.

 

On July 22, 2024, the Reporting Person also entered into an Escrow Agreement pursuant to which, among other things, the Purchaser placed into escrow the Purchase Price.

 

Prior to the closing of the Purchase Agreement, the Reporting Person anticipates receiving 602,187 shares of Common Stock from the Company as compensation for his service as Chief Executive Officer and Chief Financial Officer of the Issuer in lieu of accrued and unpaid salary and fees owed to him.

 

The foregoing descriptions of the Purchase Agreement and Escrow Agreement do not purport to be complete and are qualified in their entirety by the reference to the Purchase Agreement and Escrow Agreement, which are filed as exhibits to this Amendment No. 2, and are incorporated by reference herein.

 

Item 7.

Material to be Filed as Exhibits

 

Item 7 is hereby amended to add the following:

 

	99.4	Securities Purchase Agreement, dated as of July 22, 2024, by and between David Lazar and Yihucha Technology Co., Ltd.
	99.5	Escrow Agreement, dated as of July 22, 2024, by and between David Lazar, Yihucha Technology Co., Ltd., and McMurdo Law Group, LLC.

 

 

SIGNATURES

 

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: July 24, 2024

 

	/s/ DAVID E. LAZAR
	DAVID E. LAZAR

 

 

Exhibit 99.4

 

Execution copy

 

SECURITIES PURCHASE AGREEMENT

 

This Agreement (the “Agreement”) is entered into as of this 22nd day of July, 2024 (the “Effective Date”) by and among David Elliot Lazar, whose address is 30B, Tower 200 The Towers, Winston Churchill, San Francisco, Paitilla, Panama City, Panama 07196 (“Seller”), and Yihucha Technology Co., Ltd., whose address is at Aegis Chambers, 1st Floor, Ellen Skelton Building, 3076 Sir Francis Drake’s Highway, Road Town, Tortola VG1110, British Virgin Islands (“Purchaser”). Seller and Purchaser may be referred to herein as the “Parties” and each of them separately as a “Party”.

 

WHEREAS, Seller, a director of Minim, Inc., a Delaware corporation (the “Issuer” and, together with its subsidiaries, the “Group”), is (or will be at the Closing, as defined herein) the holder of (i) 627,187 shares of Common Stock, par value $0.01 per share (the “Sold Common Stock”), (ii) 2,000,000 shares of Series A Convertible Preferred Stock, $0.001 par value per share (the “Preferred Securities”) of the Issuer and (iii) warrants to purchase up to an additional 2,800,000 shares of Common Stock, with an exercise price equal to $1.00 per share, subject to adjustment therein (the “Warrants”, and together with the Sold Common Stock and the Preferred Securities, as well as any shares of Common Stock of the Issuer into which the Preferred Securities may be converted, the “Securities”) of the Issuer; and

 

WHEREAS, the Purchaser proposes to purchase and the Seller proposes to sell all of his interest and rights in the Securities, so that Purchaser at Closing, on an as-converted basis, shall own approximately sixty-four percent (64%) of the issued and outstanding common stock of the Issuer on a fully diluted basis, as well as all of the Seller’s right, title and interest in that certain Securities Purchase Agreement dated as of January 23, 2024 between Seller and Issuer, pursuant to which, inter alia, the Seller has acquired the Securities (the “Series A SPA”; and together with the Securities, the “Sold Assets”), all pursuant to this Agreement,

 

NOW, THEREFORE, in consideration of these premises and the mutual agreements contained in this Agreement, the Parties agree as follows:

 

1. Agreement to Purchase and Sell. Subject to the terms and conditions of this Agreement, Seller shall place the Securities, with medallion guarantee indemnity (or substantial equivalent thereto), with McMurdo Law Group, LLC (the “Escrow Agent”), upon execution hereof, in order to sell, assign, transfer, convey, and deliver to Purchaser, the Securities and any and all rights in the Sold Assets to which Seller is entitled, and by doing so Seller shall be deemed to have assigned all of his right, title and interest in and to the Sold Assets to Purchaser, assuming the Purchase Price is paid in accordance with this Agreement. Such sale of the Securities shall be evidenced by book entry statements thereof or stock certificates, duly endorsed in blank or accompanied by stock powers duly executed in blank or other instruments of transfer in form and substance reasonably satisfactory to the Issuer and Purchaser (the “Stock Transfer Documents”), and a duly executed deed of assignment of the Series A SPA (the “Series A SPA Assignment”; and, together with the Stock Transfer Documents, the “Closing Transfer Documents”).

 

2. Consideration. In consideration for the sale of the Sold Assets, Purchaser shall deliver to Escrow Agent Five Million Six Hundred Thousand US Dollars (USD 5,600,000) (the “Purchase Price”).

 

 

3. Closing; Deliverables.

 

3.1 The Closing shall be held on or before August 1, 2024 (the “Closing”), subject to receipt by the Escrow Agent of the Closing Transfer Documents, or other instruments of transfer in form and substance reasonably satisfactory to Purchaser, including Exhibit A for the appointment of the designees of Purchaser to serve as directors of the Issuer.

 

3.2 At the Closing, Seller shall cause the Escrow Agent to deliver to Purchaser (1) evidence of Purchaser’s ownership of the Sold Assets, including (A) the documentation pursuant to which Seller received the Securities, (B) any documentary evidence of the due recordation in the Issuer’s share register of Purchaser’s full and unrestricted title to such Securities, (C) this Agreement duly executed by the Seller, (D) evidence of the appointment of Purchaser’s designee(s) as directors of the Issuer, (E) the Series A SPA Assignment duly executed by Seller, and (F) such other documents as may be required under applicable law or reasonably requested by Purchaser.

 

3.3 At the Closing, Purchaser shall cause the Escrow Agent to deliver the Purchase Price, minus $1,000,000 (the “Holdback”), to Seller, or its assignees, by wire transfer of immediately available funds to accounts designated by Seller, at which point the Sold Assets will be transferred to Purchaser. The Holdback will be held and released by the Escrow Agent in accordance with the escrow agreement entered into on or about the date hereof among Seller, Purchaser and the Escrow Agent, the form of which is attached hereto as Exhibit C.

 

4. Representations and Warranties of Seller. As an inducement to Purchaser to enter into this Agreement and to consummate the transactions contemplated herein, Seller represents and warrants to Purchaser, as of the date hereof and as of the Closing, as follows:

 

4.1 Authority. Seller has the right, power, authority and capacity to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform his obligations under this Agreement. Subject to execution and delivery by Purchaser, this Agreement constitutes the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with the terms hereof, except as such enforcement may be affected by statutes of limitation; bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally; general principles of equity; and considerations of public policy.

 

4.2 Ownership.

 

(a) Seller is or will be at the Closing the sole record and beneficial owner of the Sold Assets, has or will have good and marketable title to the Sold Assets, free and clear of all Encumbrances (hereafter defined), other than applicable restrictions under applicable securities laws, and has or will have full legal right and power to sell, transfer and deliver the Sold Assets to Purchaser in accordance with this Agreement.

 

(b) “Encumbrances” means any liens, pledges, hypothecations, charges, adverse claims, options, preferential arrangements or restrictions of any kind, including, without limitation, any restriction of the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. Upon the execution and delivery of this Agreement, Purchaser will receive good and marketable title to the Sold Assets, free and clear of all Encumbrances, other than restrictions imposed pursuant to any applicable securities laws and regulations. There are no stockholders’ agreements, voting trusts, proxies, options, rights of first refusal or any other agreements or understandings with respect to the Securities.

 

 

4.3 Valid Issuance. The Sold Assets are, or will at the Closing be, duly authorized, validly issued, fully paid and non-assessable, and were not and will not be issued in violation of any preemptive or similar rights.

 

4.4 No Conflict. None of the execution, delivery, or performance of this Agreement, and the consummation of the transactions contemplated hereby, conflicts or will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach or violation of (i) any instrument, contract or agreement to which the Seller is a party or by which any of his assets is bound, or to which the Sold Assets are subject; or (ii) any federal, state, local or foreign law, ordinance, judgment, decree, order, statute, or regulation, or that of any other governmental body or authority, applicable to the Seller or the Sold Assets.

 

4.5 No Consent. Except as required by applicable securities laws, no consent, approval, authorization or order of, or any filing or declaration with any governmental authority or any other person is required for the consummation by the Seller of any of the transactions on its part contemplated under this Agreement.

 

4.6 No Other Interest. Neither the Seller nor any of his affiliates has any interest, direct or indirect, in any shares of capital stock or other equity in the Issuer, other than the Securities and 10,000 shares of common stock.

 

4.7 Capitalization. The authorized capital of the Issuer (the “Authorized Stock”), as of execution of this Agreement, consists of (i) 70,000,000 shares of common stock, par value $0.01, of which a total of 2,809,689 shares are issued and outstanding, and (ii) 10,000,000 shares of preferred stock, par value $0.001, of which a total of 2,000,000 shares are issued and outstanding. These shares have been duly authorized, issued, fully paid and nonassessable, free and clear of all liens, charges, pledges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions. No person, firm or corporation has any right, agreement, warrant or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to require the Issuer to issue any shares in its capital or to convert any securities of the Issuer or of any other company into shares in the capital of the Issuer. The capitalization table attached as Schedule 4.7 sets forth the complete and accurate capitalization of the Issuer immediately following the Closing, including without limitation: (x) all record and beneficial owners of all share capital or other equity interests of the Issuer (other than in respect of the shares in the public float, i.e., the unrestricted shares held by non-affiliates), and (y) details of any share or other incentive options granted. The purchase of the Securities pursuant to this Agreement will result in the Purchaser, as of the Closing, owning a 64% equity interest in the Issuer on a fully diluted basis.

 

4.8 Filings. The Issuer has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act of 1934, as amended (the “Reports”).

 

4.9 Reports. The Reports accurately reflect the corporate information of the Issuer. The Reports do not contain any misleading information or fail to include material information.

 

4.10 Nasdaq. The Issuer’s common stock is listed on The Nasdaq Stock Market LLC (“Nasdaq”). Other than the notice from Nasdaq indicating that the Issuer was not in compliance with the minimum stockholders’ equity requirement of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(1), the Issuer has received no other indications that it would not be listed on Nasdaq. Purchaser will have the opportunity to restore compliance with this requirement.

 

 

4.11 Delisting. Seller expects that the Issuer will have the opportunity to retain its Nasdaq listing by providing the applicable plans and/or actions to the Nasdaq Hearing Board. In the event, despite Purchaser’s best efforts, the Issuer is delisted, and Nasdaq explicitly takes the position that nothing the Issuer could have done, including retaining any or all of the current directors of the Issuer or injecting sufficient additional equity, following the Closing would have prevented such delisting, Seller shall be deemed to have breached this representation.

 

4.12 Anti-Dilution Rights. Other than as part of the Securities, the Issuer is not a party to or bound by any agreement or understanding granting anti-dilution rights to any person with respect to any of its equity or debt securities; no person has a right to purchase or acquire or receive any equity or debt security of the Issuer.

 

4.13 Further Assistance. The Seller agrees to execute and deliver such other documents and to perform such other acts as shall be necessary to effectuate the purposes of this Agreement.

 

4.14 Litigation. There are no actions, suits, proceedings, judgments, claims or investigations pending or threatened in writing by or against the Issuer or affecting the Issuer or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. To the knowledge of the Seller after due and careful inquiry, there is no default on the part of the Issuer with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which would result in the discovery of such default.

 

4.15 Liabilities. Other than as disclosed in the Reports, there are no trade payables, accrued expenses, liabilities, taxes, obligations or commitments which the Issuer would be required to accrue or reflect in its financial statements pursuant to GAAP.

 

4.16 Tax Returns. The Issuer has filed all state, federal or local income and/or franchise tax returns required to be filed by it from inception to the date hereof. Each such income tax return reflects the taxes due for the period covered thereby, except for amounts which, in the aggregate, are immaterial. In addition, to the knowledge of the Seller after due and careful inquiry, all such tax returns are correct and complete in all material respects. All taxes of the Issuer which are (i) shown as due on such tax returns, (ii) otherwise due and payable or (iii) claimed or asserted by any taxing authority to be due, have been paid. There are no liens for any taxes upon the assets of the Issuer, other than statutory liens for taxes not yet due and payable. To the knowledge of the Seller after due and careful inquiry, there are no proposed or threatened tax claims or assessments.

 

4.17 Books and Records. The books and records, financial and otherwise, of the Issuer are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices.

 

4.18 Financial Statements. To the knowledge of the Seller after due and careful inquiry, each of the Issuer’s financial statements included in the Reports has been prepared according to United States generally accepted accounting principles, as amended from time to time (“US GAAP”). Such financial statements fairly present, in all material respects, the financial condition and results of operations of the Issuer and its consolidated subsidiaries, if any, as of the times and for the periods referred to therein, and there are no off-balance sheet arrangements to which the Issuer or any of its subsidiaries is a party.

 

 

4.19 Undisclosed Liabilities. There are no liabilities or obligations of any kind, whether accrued, contingent, absolute, inchoate or otherwise (collectively, “Liabilities”) of the Group, individually or in the aggregate, that are required to be recorded or reflected on a balance sheet prepared in accordance with US GAAP, other than Liabilities reflected or reserved against in the financial statements (or the notes thereto) included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

 

4.20 Absence of Material Adverse Effect. Since the date of the Issuer’s latest audited financial statements filed with the Securities and Exchange Commission pursuant to the Exchange Act on Form 10-K, there has been no development which, individually or in the aggregate with any one or more other developments, would reasonably be expected to result in a material adverse effect on the business, assets, liabilities, results of operations or financial condition of the Group.

 

4.21 Full Disclosure. To the knowledge of the Seller after due and careful inquiry, no representation or warranty of the Seller to Purchaser in this Agreement omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they were made, not misleading. There is no fact known to the Seller that has specific application to the Securities or the Issuer that materially adversely affects or, as far as can be reasonably foreseen, materially threatens the Securities or the Issuer that has not been set forth in this Agreement.

 

4.22 Affiliate Status. The Seller is an “affiliate,” as defined in Rule 144(a), promulgated under Section 4(a)(1) of the Securities Act of 1933.

 

4.23 Employees, Directors and Officers. The Issuer and the Seller have not entered into any employment or independent contractor agreements with any individuals or entities, or any option agreements or warrants, grants or promises for the issuance of the Authorized Stock, except as otherwise set forth in Schedule 4.23. The provisions of any such agreements, warrants, grants or promises have been waived in writing by the counterparties to the extent necessary to ensure that the percentage equity interest referenced in the last sentence of Section 4.7 will not be diminished by such agreements, warrants, grants or promises.

 

4.24 Board of Directors. On the date of the Closing, Purchaser will receive the resignations of any or all of the current members of the board of directors of the Issuer, as Purchaser may request at that time, and the board shall comprise or include (as specified by Purchaser) those individuals designated by Purchaser in accordance with Section 6.2.

 

5. Representations and Warranties of Purchaser. As an inducement to Seller to enter into this Agreement and to consummate the transactions contemplated herein, Purchaser represents and warrants to Seller as follows:

 

5.1 Authority. Purchaser has the right, power, corporate authority and capacity to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform its obligations under this Agreement. Subject to execution and delivery by Seller, this Agreement constitutes the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with the terms hereof, except as such enforcement may be affected by statutes of limitation; bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally; general principles of equity; and considerations of public policy.

 

 

5.2 No Consent. No consent, approval, authorization or order of, or any filing or declaration with any governmental authority or any other person is required for the consummation by Purchaser of any of the transactions on its part contemplated under this Agreement.

 

5.3 No Conflict. None of the execution, delivery, or performance of this Agreement, and the consummation of the transactions contemplated hereby, conflicts or will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach or violation of, (i) any instrument, contract or agreement to which Purchaser is a party or by which it is bound; or (ii) any federal, state, local or foreign law, ordinance, judgment, decree, order, statute, or regulation, or that of any other governmental body or authority, applicable to Purchaser.

 

5.4 Potential Loss of Investment. Purchaser understands that an investment in the Sold Assets is a speculative investment which involves a high degree of risk and the potential loss of its entire investment.

 

5.5 Receipt of Information. Purchaser has received all documents, records, books and other information pertaining to its investment that has been requested by Purchaser. Purchaser has reviewed all the publicly available information regarding the Issuer, prior to such date, which can be located on sec.gov, or otherwise distributed to the public in compliance with Regulation FD, and the State of Delaware Secretary of the State web site.

 

5.6 No Advertising. At no time was Purchaser presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

 

5.7 Investment Experience. Purchaser (either by itself or with its advisors) is (i) experienced in making investments of the kind described in this Agreement, (ii) able, by reason of the business and financial experience of its directors and officers, to protect its own interests in connection with the transactions described in this Agreement, (iii) able to afford the entire loss of its investment in the Securities, and (iv) a qualified “accredited investor.”

 

5.8 Investment Purposes. Purchaser is acquiring the restricted Securities for its own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part, and no other person has a direct or indirect beneficial interest in the amount of restricted Securities Purchaser is acquiring herein. Further, Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the restricted Securities Purchaser is acquiring.

 

5.9 Restrictive Legends. The Purchaser acknowledges that the Securities (including any common stock of the Issuer into which the Series A may be converted) were and will be issued pursuant to exemptions from registration under the Securities Act, and are also deemed to be “control securities”, and shall each bear legends stating that transfer of those Securities is restricted, substantially as follows:

 

 

THIS SECURITY AND ANY SECURITIES ISSUABLE UPON CONVERSION/EXERCISE OF THIS SECURITY ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THIS SECURITY AND ANY SECURITIES ISSUABLE UPON CONVERSION/EXERCISE OF THIS SECURITY IS PROHIBITED, EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

5.10 Stockholders’ (Deficit) Equity Deficiency. Purchaser is aware of the Issuer’s stockholders (deficit) equity deficiency disclosed in this Agreement.

 

5.11 Flow of Funds. Purchaser has reviewed the Issuer’s anticipated flow of funds set out in Schedule 5.11 hereto.

 

6. Covenants.

 

6.1 Stockholders’ (Deficit) Equity Deficiency. If applicable, Seller undertakes to cause the Issuer to submit a plan to Nasdaq related to curing the Issuer’s stockholders (deficit) equity deficiency and request a hearing in front of the panel of Nasdaq related to the plan to cure such deficiency.

 

6.2 Directors. At and after the Closing, the Parties shall take all necessary actions to ensure that, until successors are duly elected or appointed and qualified in accordance with applicable law, or until their earlier death, resignation or removal in accordance with the organizational documents of the Issuer, subject to applicable Nasdaq or SEC rules and requirements, including those relating to the number of independent directors, the board of directors of the Issuer from the Closing shall comprise or include (as specified by Purchaser) any or all of the individuals designated by Purchaser in writing, delivered to Seller, at least three business days in advance of the Closing for the Nominating Committee’s review.

 

6.3 Reports. The Seller shall use his best efforts to assist, and to arrange for current employees and consultants to assist, the Issuer to file its next required Report, as well as any Reports that may be required in relation to the purchase contemplated by this Agreement. (For the avoidance of doubt, nothing in this Section 6.3 shall be construed as requiring the Seller to pay any current employees or consultants to provide such assistance.)

 

7. Indemnification.

 

7.1 Indemnification relating to Agreement. Seller and Purchaser shall indemnify and hold harmless the other Party and such Party’s agents, beneficiaries, affiliates, representatives, successors and assigns (collectively, the “Indemnified Persons”) from and against any and all damages, losses, liabilities, taxes and costs and expenses (including, without limitation, attorneys’ fees and costs) (collectively, “Losses”) resulting directly or indirectly from (a) any inaccuracy, misrepresentation, or breach of any of the representations and warranties of such Party in this Agreement, or any actions, omissions or statements of fact inconsistent with, in any material respect, any such representation or warranty, as limited by the knowledge qualifier(s) applicable thereto, and (b) any failure by such Party to perform or comply with any agreement, covenant or obligation in this Agreement.

 

 

7.2 Indemnification relating to Business.

 

(i) Seller shall indemnify and hold harmless Purchaser and its agents, beneficiaries, affiliates, representatives, and successors and assigns (the “Indemnified Purchaser Parties”) against any Losses arising from third-party claims against Purchaser or the Group relating to the period prior to the Closing. Notwithstanding anything to the contrary contained in this Agreement, where there has been a breach of Section 4.18 or where any Liabilities of the Group relating to the period prior to the Closing are borne by the Group or an Indemnified Purchaser Party after the Closing, then Seller shall be liable for the related Loss with a cap on the liability up to the Purchase Price.

 

(ii) Purchaser shall first make commercially reasonable efforts to recover such Losses (directly or on behalf of the Issuer) from any third parties (not to include the Issuer) who might reasonably be liable to Purchaser or the Issuer for such Losses, before seeking to recover from the Holdback in the Escrow Account and shall then first seek recovery from the Holdback before seeking further recovery from Seller.

 

8. Miscellaneous.

 

8.1 Survival. All representations, warranties, covenants and agreements of the Parties contained herein or in any other certificate or document delivered pursuant hereto shall survive the date hereof until the expiration of the applicable statute of limitations.

 

8.2 Further Assurances. From time to time, whether at or following the Closing, each Party shall make reasonable commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable, including as required by applicable laws, to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement.

 

8.3 Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given (a) if by personal delivery, when so delivered, (b) if sent through an express delivery service, the day shown by such delivery service that the notice was delivered or, in the absence of such notice, four days after being so sent to the respective addresses of the Parties as indicated on the signature page hereto, and (c) if by email, on the day the email is sent (provided the sender receives no automatically generated notice of non-delivery). Either Party may change the address or email address to which notices and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

 

8.4 Choice of Law; Jurisdiction. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law. Each of the Parties agrees to submit to the jurisdiction of the federal courts located in the Borough of Manhattan in New York City in any actions or proceedings arising out of or relating to this Agreement. Each of the Parties, by execution and delivery of this Agreement, expressly and irrevocably (i) consents and submits to the personal jurisdiction of any of such courts in any such action or proceeding; (ii) consents to the service of any complaint, summons, notice or other process relating to any such action or proceeding by delivery thereof to such Party as set forth in Section 8.2 above and (iii) waives any claim or defense in any such action or proceeding based on any alleged lack of personal jurisdiction, improper venue or forum non conveniens or any similar basis. EACH OF THE UNDERSIGNED HEREBY WAIVES FOR ITSELF AND ITS PERMITTED SUCCESSORS AND ASSIGNS THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INSTITUTED IN CONNECTION WITH THIS AGREEMENT.

 

 

8.5 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the Parties in respect of the transactions contemplated hereby and supersedes all prior and contemporaneous agreements, arrangements and understandings of the Parties relating to the subject matter hereof. No representation, promise, inducement, waiver of rights, agreement or statement of intention has been made by any of the Parties which is not expressly embodied in this Agreement.

 

8.6 Assignment. Each Party’s rights and obligations under this Agreement shall not be assigned or delegated, by operation of law or otherwise, without the other Parties’ prior written consent, and any such assignment or attempted assignment shall be void, of no force or effect, and shall constitute a material default by such party.

 

8.7 Amendments. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the Parties.

 

8.8 Waivers. The failure of either Party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either Party of any condition, or the breach of any term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other term, covenant, representation or warranty of this Agreement.

 

8.9 Counterparts. This Agreement may be executed simultaneously in two or more counterparts and by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

8.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

8.11 Interpretation. The Parties agree that this Agreement shall be deemed to have been jointly and equally drafted by them, and that the provisions of this Agreement therefore shall not be construed against a Party on the ground that such Party drafted or was more responsible for the drafting of any such provisions. The Parties further agree that they have each carefully read the terms and conditions of this Agreement, that they know and understand the contents and effect of this Agreement and that the legal effect of this Agreement has been fully explained to its satisfaction by counsel of its own choosing.

 

8.12 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the interpretation of the Agreement or the rights of the Parties.

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

 

	David Elliot Lazar
	/s/ David Elliot Lazar
	Address for notices:   30B, Tower 200 The Towers Winston Churchill San Francisco, Paitilla Panama City 07196 Panama   david@activistinvestingllc.com
	Yihucha Technology Co., Ltd.
	By:	/s/ Lijun Chen
	Name:	Lijun Chen
	Title:	Director
	Address for notices:   Aegis Chambers 1st Floor, Ellen Skelton Building 3076 Sir Francis Drake’s Highway Road Town Tortola VG1110 British Virgin Islands   yihuchaltd@outlook.com

 

 

EXHIBIT A

 

DIRECTOR APPOINTMENTS

 

 

EXHIBIT B

 

ESCROW AGREEMENT

 

 

SCHEDULE 4.7

 

CAPITALIZATION SPREADSHEET

 

 

SCHEDULE 4.23

 

EMPLOYMENT AND CONSULTANT AGREEMENTS

 

Please see data room for all agreements.

 

 

SCHEDULE 5.11

 

FLOW OF EXISTING ISSUER FUNDS

 

 

Exhibit 99.5

 

Execution copy

 

ESCROW AGREEMENT

 

This ESCROW AGREEMENT (this “Agreement”) is made as of the 22nd day of July, 2024 (the “Effective Date”), by and among Yihucha Technology Co., Ltd. (the “Buyer”), with an address at Aegis Chambers, 1st Floor, Ellen Skelton Building, 3076 Sir Francis Drake’s Highway, Road Town, Tortola VG1110, British Virgin Islands; David Elliot Lazar (“Seller”), with an address at 30B, Tower 200 The Towers, Winston Churchill, San Francisco, Paitilla, Panama City, Panama. 07196, and McMurdo Law Group, LLC (the “Escrow Agent”). Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the SPA (as hereinafter defined).

 

WITNESSETH:

 

WHEREAS, the Seller is (or will be at the closing) the holder of (i) 627,187 shares of Common Stock, par value $0.01 per share (the “Sold Common Stock”), (ii) 2,000,000 shares of Series A Convertible Preferred Stock, $0.001 par value per share (the “Preferred Securities”) of the Issuer and (iii) warrants to purchase up to an additional 2,800,000 shares of Common Stock, par value $0.01 per share, with an exercise price equal to $1.00 per share, subject to adjustment therein (the “Warrants”, and together with the Sold Common Stock and the Preferred Securities, as well as any shares of Common Stock of the Issuer into which such the Preferred Securities may be converted, the “Securities”) of Minim, Inc., a Delaware corporation (the “Company”);

 

WHEREAS, the Buyer proposes to purchase and the Seller proposes to sell the Securities pursuant to a securities purchase agreement, to be entered into by and between the Seller and the Buyer concurrently herewith (the “SPA”);

 

WHEREAS, the parties hereto desire to establish an escrow account (the “Escrow Account”), to which the agreed upon purchase price of Five Million Six Hundred Thousand US Dollars (USD 5,600,000) in immediately available funds (the “Escrow Amount”) will be transferred as set forth herein, and the Escrow Agent is willing to establish the Escrow Account and disburse the deposited monies on the terms and subject to the conditions hereinafter set forth; and

 

WHEREAS, the Escrow Agent has a bank account at Capital One Bank (the “Bank”) into which the monies, which are received by the Escrow Agent from the Buyer and credited to the Escrow Account, are to be deposited.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:

 

1. Bank Account. The Escrow Agent has established a non-interest-bearing attorney escrow bank account at the branch of Bank selected by the Escrow Agent, and bearing the following account information:

 

 

SWIFT Code: HIBKUS44

Capital One Bank

1166 6^th Ave.

New York, NY 10036

 

McMurdo Law Group, LLC

Routing number: #065000090

Account number: #4670291566

 

1185 Avenue of the Americas, 3^rd Floor

New York, NY 10036

 

(heretofore defined as the “Bank Account”). The purpose of the Bank Account is for (a) the deposit by the Buyer of the Escrow Amount by wire transfer (b) the holding of the Escrow Amount by the Escrow Agent, and (c) the disbursement of the Escrow Amount by the Escrow Agent, all as described herein.

 

2. Deposit to the Bank Account and with the Escrow Agent. The Buyer has sent $500,000 (the “Non-Refundable Deposit”) by wire transfer to the Bank Account. The Buyer shall send $1,500,000 by wire transfer to the Bank Account no later than July 25, 2024, unless extended by a written instrument signed by Buyer, Seller and the Escrow Agent. The Buyer shall send the balance of the Escrow Amount by wire transfer to the Bank Account no later than August 1, 2024.

 

3. Disbursement of Escrow Amount from the Bank Account by Escrow Agent.

 

3.1 The Escrow Agent hereby irrevocably confirms that upon written confirmation from the transfer agent of the Company of the transfer of the Securities to the name of Buyer or Buyer’s designee, as contemplated in the SPA, the Escrow Agent shall release the Escrow Amount less USD 1,000,000 (USD 1,000,000 being the “Holdback”) to Seller by paying such amount via wire transfer to the bank account(s) designated in writing by Seller. Upon execution of the wire transfer of the Escrow Amount to Seller by the Escrow Agent, the Escrow Agent shall send to Seller by email a bank statement confirming the transfer of the Escrow Amount to the bank account(s) designated in writing by Seller.

 

3.2 The Escrow Agent hereby irrevocably confirms that upon written instruction from both Buyer and Seller that the transaction(s) contemplated in the SPA will not be undertaken, in form and substance as set out in Attachment A (or such other form and substance as the parties may hereafter agree from time to time) (the “Return Notice”), the Escrow Agent shall (i) release the Escrow Amount, minus the Non-Refundable Deposit, to Buyer by paying the Escrow Amount via wire transfer to the bank account designated in writing by Buyer and (ii) release the Non-Refundable Deposit to Seller by paying such amount via wire transfer to the bank account(s) designated in writing by Seller. Upon execution of the wire transfers described above, the Escrow Agent shall send to Seller and Buyer by email bank statements confirming the transfers.

 

 

3.3 The Escrow Agent hereby irrevocably confirms that upon written instruction from both Buyer and Seller, in form and substance as set out in Attachment B (or such other form and substance as the parties may hereafter agree from time to time) (the “Claim Notice”), that an Indemnified Purchaser Party or the Group (as both terms are defined in the SPA) has incurred a Loss (as defined in the SPA) which Seller has indemnified against in the SPA and Buyer has been unable to cover such Loss through insurance or recovery from other parties despite making commercially reasonable efforts to do so, the Escrow Agent shall release to Buyer that portion of the Holdback specified in the Claim Notice as the amount of such Loss and shall do so by paying such amount via wire transfer to the bank account designated in writing by Buyer. Upon execution of the wire transfer of this amount to Buyer by the Escrow Agent, the Escrow Agent shall send to Seller by email a bank statement confirming the transfer of such amount to the bank account designated in writing by Buyer.

 

3.4 The Escrow Agent hereby irrevocably confirms that upon written instruction from Buyer, in form and substance as set out in Attachment C (or such other form and substance as the parties may hereafter agree from time to time) (the “ Suspension Notice”), that an Indemnified Purchaser Party or the Group has received notice of an alleged Liability that, were it to result in a Loss, would likely be covered by the indemnity provided by Seller in the SPA and Buyer intends to make commercially reasonable efforts to recover such Loss through insurance or from other parties, the Escrow Agent shall hold the Holdback or, if less, the remainder of the monies in the Escrow Account until such time as the Escrow Agent either receives a Claim Notice or a Final Notice (or both, where the amount of a covered Loss is less than the amount in the Escrow Account) following Buyer’s and Seller’s determination of whether there is a Loss, what the amount of the Loss is, and whether such Loss is covered by Seller’s indemnity provided in the SPA.

 

3.5 The Escrow Agent hereby irrevocably confirms that unless it has received a Suspension Notice, the Escrow Agent shall, on the 61^st day after the Closing, release to Seller the Holdback or, if less, the remainder of the monies in the Escrow Account (if any) by paying the amount via wire transfer to the bank account designated in writing by Seller. Upon execution of the wire transfer of the amount to Seller by the Escrow Agent, the Escrow Agent shall send to Buyer by email a bank statement confirming the transfer of such amount to the bank account designated in writing by Seller.

 

3.6 The Escrow Agent hereby irrevocably confirms that upon written instruction from both Buyer and Seller, in form and substance as set out in Attachment D (or such other form and substance as the parties may hereafter agree from time to time) (the “Final Notice”), the Escrow Agent shall release to Seller the Holdback or, if less, the remainder of the monies in the Escrow Account by paying the amount via wire transfer to the bank account designated in writing by Seller. Upon execution of the wire transfer of the amount to Seller by the Escrow Agent, the Escrow Agent shall send to Buyer by email a bank statement confirming the transfer of such amount to the bank account designated in writing by Seller.

 

3.7 Upon written notice from Buyer to the Escrow Agent confirming the receipt of the Escrow Amount in accordance with Section 3.2, or from Seller confirming receipt, in aggregate, of the Holdback in accordance with Section 3.3, or from Seller confirming receipt of the remainder of the funds in the Escrow Account (even if less than the Holdback) in accordance with Section 3.5 or 3.6, the Escrow Agent shall be relieved of further obligations and released from all liability under this Agreement as related to such Escrow Amount. It is expressly agreed and understood that in no event shall the aggregate amount of payment made by the Escrow Agent exceed the amount of the Escrow Amount.

 

 

4. Rights, Duties and Responsibilities of Escrow Agent. It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature, and that:

 

4.1 The Escrow Agent shall notify the other parties hereto of the amount which has cleared the banking system and has been collected by the Escrow Agent.

 

4.2 The Escrow Agent shall not be responsible for the performance by Buyer or Seller of their respective obligations under this Agreement.

 

4.3 If the Escrow Agent is uncertain in good faith as to its duties or rights hereunder or with any provision of this Agreement, it shall deposit the Escrow Amount with a court of competent jurisdiction over this Agreement (“Competent Court”) for the resolution of such dispute by final judgment of such court, or any other Competent Court.

 

4.4 The Escrow Agent shall not be liable for any action taken or omitted hereunder, or for the misconduct of any employee, agent or attorney appointed by it, except in the case of willful misconduct or gross negligence. The Escrow Agent shall be entitled to consult with counsel of its own choosing and shall not be liable for any action taken, suffered or omitted by it in accordance with the good faith advice of independent counsel.

 

4.5 The Escrow Agent shall have no responsibility at any time to ascertain whether or not any security interest exists in the Escrow Amount or any part thereof or to file any financing statement under the Uniform Commercial Code with respect to the Escrow Amount or any part thereof.

 

4.6 The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith and in the absence of (i) gross negligence, (ii) fraud or (iii) willful misconduct, and any act done or omitted by the Escrow Agent pursuant to the good faith advice of the Escrow Agent’s independent attorneys-at-law shall be conclusive evidence of such good faith, in the absence of (i) gross negligence, (ii) fraud or (iii) willful misconduct.

 

4.7 The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of a Competent Court and is hereby expressly authorized to comply with and obey any final orders, judgments or decrees of any Competent Court.

 

 

4.8 The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary properly to advise the Escrow Agent in connection with the Escrow Agent’s duties hereunder, may rely upon the good faith advice of such counsel, and may pay such counsel reasonable compensation; provided that the costs of such compensation shall be borne by the Escrow Agent. The Company is not a party to this Agreement.

 

4.9 If the Escrow Agent reasonably requires other or further instruments in connection with this Agreement or obligations in respect hereto, the necessary party(ies) hereto shall furnish such instruments.

 

4.10 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the Escrow Amount held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion to retain in the Escrow Agent’s possession without liability to anyone all or any part of the Escrow Amount until such disputes shall have been settled by mutual written agreement signed by the Buyer and the Seller; provided, however, that if such dispute is not settled within 30 days after it first arose, the Escrow Agent shall be entitled to deliver the Escrow Amount and any other property and documents held by the Escrow Agent hereunder to a Competent Court located in the City of New York in accordance with the applicable procedure therefore.

 

5. Amendment; Resignation or Removal of Escrow Agent. This Agreement may be altered or amended only with the written consent of the Buyer, the Seller and the Escrow Agent. The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving written notice of such resignation to the Buyer and the Seller specifying a date when such resignation shall take effect and upon delivery of the Escrow Amount to the successor escrow agent designated by the Buyer and Seller in writing. Such successor Escrow Agent shall become the Escrow Agent hereunder upon the resignation date specified in such written notice from the Escrow Agent, which shall in no event be earlier than sixty (60) days after receipt of such written resignation notice from the Escrow Agent by both Buyer and Seller. If the Buyer and the Seller fail to designate a successor Escrow Agent within sixty (60) days after such notice, then the resigning Escrow Agent shall promptly refund the Escrow Amount to the Buyer, without interest thereon or deduction, except for wire transfer fees, if any. The Escrow Agent shall continue to serve until its successor accepts the escrow and receives the Escrow Amount. Upon its resignation and delivery of the Escrow Amount as set forth in this Section 5, the Escrow Agent shall be discharged of and from any and all further obligations arising in connection with the escrow contemplated by this Agreement.

 

6. Fees and Expenses. The Escrow Agent compensation for its services hereunder shall be $2,000 (“Escrow Fee”), which shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by the Seller; provided, however, that in the event that the Escrow Agent is made a party to any litigation pertaining to this Agreement or the subject matter hereof, then Buyer and the Seller shall each be liable to reimburse the Escrow Agent for fifty percent (50%) of all costs, including reasonable attorneys’ fees, paid by Escrow Agent directly in connection with such litigation. The Escrow Agent shall have, and is hereby granted, with respect to any unpaid portion of the Escrow Fee, a prior lien upon such part of the Escrow Amount as is equivalent to the Escrow Fee.

 

 

7. Representations and Warranties of Buyer and Seller. The Buyer and the Seller hereby severally represent and warrant to the Escrow Agent that:

 

7.1 No party other than the parties hereto have, or shall have, any lien, claim or security interest in the Escrow Amount or any part thereof.

 

7.2 All of the information contained in this Agreement is, as of the date hereof, and will be, at the time of any disbursement of the Escrow Amount, true and correct.

 

8. Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Escrow Agent and to the Seller that:

 

8.1 No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Amount or any part thereof.

 

9. Indemnification and Contribution.

 

9.1 The Buyer and the Seller (together, the “Indemnitors”) agree to indemnify the Escrow Agent and its officers, directors, employees, agents and shareholders (collectively referred to as the “Indemnitees”) against, and hold them harmless of and from, any direct cost (including reasonable counsel fees) actually incurred by the Indemnitees by reason of any action, claim or proceeding brought against the Indemnitees arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates, unless such action, claim or proceeding is the result of the willful misconduct, fraud or gross negligence of any or all of the Indemnitees.

 

9.2 The provisions of this Article 9 shall survive any termination of this Agreement, whether by disbursement of the Escrow Amount, resignation of the Escrow Agent or otherwise.

 

10. Termination of Agreement. This Agreement shall terminate upon written notice from Seller to the Escrow Agent confirming the receipt of the Escrow Amount, provided that the rights of the Escrow Agent and the obligations of the other parties hereto shall survive the termination hereof and the resignation or removal of the Escrow Agent.

 

11. Governing Law and Assignment. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflicts of laws principles thereof, and shall be binding upon the parties hereto and their respective successors and assigns.

 

12. Notices. All notices required to be given in connection with this Agreement shall be sent by (i) facsimile transmission or email in portable document format (.pdf), (ii) registered or certified mail, return receipt requested, (iii) hand delivery with receipt acknowledged, or (iv) by express courier and addressed, if to the Buyer or the Seller, at their respective address set forth above, and if to the Escrow Agent, to 1047 Seward Ave., Westfield, NJ 07090.

 

 

13. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable under any applicable law: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the Parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

14. Counterparts. This Agreement may be executed in any number of counterparts, each of which when delivered, either in original or facsimile or other electronic form, shall be deemed to be an original and all of which together shall constitute one and the same document.

 

15. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings (written or oral) of the parties in connection therewith. If any conflict arises between this Agreement and the SPA, the SPA shall control.

 

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

	ESCROW AGENT   MCMURDO LAW GROUP, LLC
	By:	/s/ Matthew McMurdo, Esq.
	Name:	Matthew McMurdo, Esq.
	Title:	Managing Member
	BUYER   YIHUCHA TECHNOLOGY CO., LTD.
	By:	/s/ Lijun Chen
	Name:	Lijun Chen
	Title:	Director
	SELLER
	/s/ David Elliot Lazar
	David Elliot Lazar

 

 

 

Signature page

Escrow Agreement

 

 

Attachment A

 

Return Notice

 

	From:	David Elliot Lazar (“Seller”)
		Yihucha Technology Co., Ltd. (“Buyer”)

 

To:

McMurdo Law Group, LLC (the “Escrow Agent”)

 

Dated:

[insert date]

 

Re:

Escrow Agreement dated July 22, 2024 among Seller, Buyer and the Escrow Agent (the “Escrow Agreement”)

 

1.

We refer to the Escrow Agreement. This is a Return Notice referred to in Section 3.2 of the Escrow Agreement. Terms defined in the Escrow Agreement shall have the same meanings in this request.

 

2.

We hereby instruct the Escrow Agent to release the following amount from the Escrow Account to the following recipient(s), with the account details set out below, on or before [insert date]:

 

Recipient(s)		Withdrawal amount:		Account details of the recipient(s):
				Account Bank: [●]
[Yihucha Technology Co., Ltd.]		USD 5,600,000		Account Name: [●]
				Account Number: [●]

 

This notice is irrevocable and shall not be recalled, cancelled or amended.

 

Yours faithfully,

 

David Elliot Lazar (Seller)		Yihucha Technology Co., Ltd. (Buyer)
		By:
		Name:
		Title:

 

 

Attachment B

 

Claim Notice

 

	From:	David Elliot Lazar (“Seller”)
		Yihucha Technology Co., Ltd. (“Buyer”)

 

To:

McMurdo Law Group, LLC (the “Escrow Agent”)

 

Dated:

[insert date]

 

Re:

Escrow Agreement dated July 22, 2024 among Seller, Buyer and the Escrow Agent (the “Escrow Agreement”)

 

1.

We refer to the Escrow Agreement. This is a Claim Notice referred to under Section 3.3 of the Escrow Agreement. Terms defined in the Escrow Agreement shall have the same meanings in this request.

 

2.

We confirm that an Indemnified Purchaser Party or the Group has incurred a Loss which Seller has indemnified against in the SPA and Buyer has been unable to cover such Loss through insurance or recovery from other parties despite making commercially reasonable efforts to do so.

 

3.

We hereby instruct the Escrow Agent to release the following amount from the Escrow Account to the following recipient(s), with the account details set out below, on or before [insert date]:

 

Recipient(s)		Withdrawal amount:		Account details of the recipient(s):
				Account Bank: [●]
[Yihucha Technology Co., Ltd.]		USD [insert amount of Loss]		Account Name: [●]
				Account Number: [●]

 

This notice is irrevocable and shall not be recalled, cancelled or amended.

 

Yours faithfully,

 

David Elliot Lazar (Seller)		Yihucha Technology Co., Ltd. (Buyer)
		By:
		Name:
		Title:

 

 

Attachment C

 

Suspension Notice

 

From:

Yihucha Technology Co., Ltd. (“Buyer”)

 

To:

McMurdo Law Group, LLC (the “Escrow Agent”)

 

Cc:

David Elliot Lazar (“Seller”)

 

Dated:

[insert date]

 

Re:

Escrow Agreement dated July 22, 2024 among Seller, Buyer and the Escrow Agent (the “Escrow Agreement”)

 

1.

We refer to the Escrow Agreement. This is a Suspension Notice referred to in Section 3.4 of the Escrow Agreement. Terms defined in the Escrow Agreement shall have the same meanings in this request.

 

2.

An Indemnified Purchaser Party or the Group has received notice of an alleged liability that, if it results in a Loss, will likely be covered by the indemnity provided by Seller in the SPA, and Buyer intends to make commercially reasonable efforts to recover such Loss through insurance or from other parties.

 

3.

We hereby instruct the Escrow Agent to continue holding the Holdback in the Escrow Account until it has been determined whether there is a Loss, what the amount of the Loss is, and whether such Loss is covered by Seller’s indemnity provided in the SPA, whereupon the Buyer and Seller will provide the Escrow Agent with either a Claim Notice or a Final Notice (or both, where the amount of a covered Loss is less than the amount in the Escrow Account).

 

This notice is irrevocable and shall not be recalled, cancelled or amended.

 

Yours faithfully,

 

Yihucha Technology Co., Ltd. (Buyer)

 

By:
Name:
Title:

 

 

Attachment D

 

Final Notice

 

	From:	David Elliot Lazar (“Seller”)
		Yihucha Technology Co., Ltd. (“Buyer”)

 

To:

McMurdo Law Group, LLC (the “Escrow Agent”)

 

Dated:

[insert date]

 

Re:

Escrow Agreement dated July 22, 2024 among Seller, Buyer and the Escrow Agent (the “Escrow Agreement”)

 

1.

We refer to the Escrow Agreement. This is a Final Notice referred to in Section 3.6 of the Escrow Agreement. Terms defined in the Escrow Agreement shall have the same meanings in this request.

 

2.

We confirm that 60 days have passed since the Closing and Buyer and all pending or threatened claims for which Seller would likely be liable under the indemnification provisions of the SPA have been addressed.

 

3.

We hereby instruct the Escrow Agent to release the following amount from the Escrow Account to the following recipient(s), with the account details set out below:

 

Recipient(s)		Withdrawal amount:		Account details of the recipient(s):
				Account Bank: [●]
[David Elliot Lazar]		All monies remaining in the Escrow Account		Account Name: [●]
				Account Number: [●]

 

This notice is irrevocable and shall not be recalled, cancelled or amended.

 

Yours faithfully,

 

David Elliot Lazar (Seller)		Yihucha Technology Co., Ltd. (Buyer)
		By:
		Name:
		Title:

 

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