Exhibit 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

MTY FRANCHISING USA, INC.,

MTY COLUMBIA MERGER SUB, INC.

and

PAPA MURPHY’S HOLDINGS, INC.

April 10, 2019

TABLE OF CONTENTS


		Page
ARTICLE I THE MERGER TRANSACTIONS			2
Section 1.1	The Offer		2
Section 1.2	Company Actions		5
Section 1.3	The Merger		7
Section 1.4	Closing		7
Section 1.5	Effective Time		7
Section 1.6	Merger Without Meeting of Stockholders		7
Section 1.7	Effects of the Merger		7
Section 1.8	Certificate of Incorporation		7
Section 1.9	Bylaws		8
Section 1.10	Directors		8
Section 1.11	Officers		8

ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK			8
Section 2.1	Conversion of Capital Stock		8
Section 2.2	Surrender of Certificates and Book-Entry Shares		9
Section 2.3	Company Equity Awards		11
Section 2.4	Dissenting Shares		13

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			14
Section 3.1	Organization and Power		14
Section 3.2	Foreign Qualifications		14
Section 3.3	Corporate Authorization		14
Section 3.4	Enforceability		15
Section 3.5	Subsidiaries		15
Section 3.6	Governmental Authorizations		15
Section 3.7	Non-Contravention		16
Section 3.8	Capitalization		16
Section 3.9	SEC Reports		18
Section 3.10	Financial Statements; Internal Controls		18
Section 3.11	Liabilities		20
Section 3.12	Absence of Certain Changes		20
Section 3.13	Litigation		20
Section 3.14	Material Contracts		21
Section 3.15	Benefit Plans		23
Section 3.16	Labor Relations; Employee Matters		25
Section 3.17	Taxes		27
Section 3.18	Environmental Matters		29
Section 3.19	Intellectual Property		29
Section 3.20	Privacy and Data Protection Matters		30
Section 3.21	Real Property		31
Section 3.22	Insurance		32
Section 3.23	Franchise Matters		33

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TABLE OF CONTENTS

(continued)


		Page
Section 3.24	Quality and Safety of Food and Beverage Products		34
Section 3.25	Permits; Compliance with Law		34
Section 3.26	Anti-Corruption		35
Section 3.27	Company Swaps		35
Section 3.28	Affiliated Transactions		36
Section 3.29	Opinion of Financial Advisor		36
Section 3.30	Brokers		36
Section 3.31	State Takeover Laws		36
Section 3.32	No Rights Agreement		36
Section 3.33	No Other Representations or Warranties		36

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			37
Section 4.1	Organization and Power		37
Section 4.2	Foreign Qualifications		37
Section 4.3	Corporate Authorization		37
Section 4.4	Governmental Authorizations		37
Section 4.5	Non-Contravention		38
Section 4.6	Capitalization; Interim Operations of Merger Sub; Ownership of Common Stock		38
Section 4.7	Sufficient Funds		39
Section 4.8	Guarantee		39
Section 4.9	Absence of Arrangements with Management and Principal Stockholders		39
Section 4.10	Litigation		39
Section 4.11	Brokers		40
Section 4.12	Independent Investigation		40

ARTICLE V COVENANTS			40
Section 5.1	Conduct of Business of the Company		40
Section 5.2	Conduct of Parent and Merger Sub		43
Section 5.3	Access to Information; Confidentiality		44
Section 5.4	No Solicitation		44
Section 5.5	Employees; Benefit Plans		45
Section 5.6	Directors’ and Officers’ Indemnification and Related Insurance		49
Section 5.7	Reasonable Best Efforts		51
Section 5.8	Consents; Filings; Further Action		51
Section 5.9	Public Announcements		53
Section 5.10	Fees and Expenses		53
Section 5.11	Financing		54
Section 5.12	Rule 16b-3		54
Section 5.13	Notification of Certain Matters		55
Section 5.14	Delisting		55

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TABLE OF CONTENTS

(continued)


		Page
Section 5.15	Rule 14d-10		55
Section 5.16	Takeover Laws		55
Section 5.17	FIRPTA Certificate		56

ARTICLE VI CONDITIONS			56
Section 6.1	Conditions to Each Party’s Obligation to Effect the Merger		56
Section 6.2	Frustration of Closing Conditions		56

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER			56
Section 7.1	Termination by Mutual Consent		56
Section 7.2	Termination by Either Parent or the Company		56
Section 7.3	Termination by Parent		57
Section 7.4	Termination by the Company		57
Section 7.5	Effect of Termination		58
Section 7.6	Fees Following Termination		58

ARTICLE VIII MISCELLANEOUS			60
Section 8.1	Certain Definitions		60
Section 8.2	Interpretation		66
Section 8.3	No Survival		67
Section 8.4	Governing Law		67
Section 8.5	Submission to Jurisdiction		67
Section 8.6	WAIVER OF JURY TRIAL		68
Section 8.7	Notices		68
Section 8.8	Amendment		69
Section 8.9	Extension; Waiver		70
Section 8.10	Entire Agreement		70
Section 8.11	No Third-Party Beneficiaries		70
Section 8.12	Severability		70
Section 8.13	Rules of Construction		70
Section 8.14	Assignment		71
Section 8.15	Specific Performance		71
Section 8.16	Counterparts; Effectiveness		72
Section 8.17	Non-Recourse		72

Annex I Conditions to the Offer

-iii-

INDEX OF DEFINED TERMS


Term		Section
Acceptable Confidentiality Agreement		Section 8.1(a)
Acquisition Agreement		Section 5.4(d)
Adverse Recommendation Change		Section 5.4(d)
Affiliate		Section 8.1(b)
Agreement		Preamble
Anti-Corruption Laws		Section 3.26
Associated Party		Section 8.1(c)
Balance Sheet Date		Section 3.11(a)(i)
Book-Entry Shares		Section 2.1(c)(ii)
Business Day		Section 8.1(d)
Certificate of Merger		Section 1.5
Certificates		Section 2.1(c)(ii)
Chosen Courts		Section 8.5
Claim		Section 5.6(b)
Closing		Section 1.4
Closing Date		Section 1.4
Code		Section 2.2(f)
Common Stock		Recitals
Company		Preamble
Company Assets		Section 3.7
Company Benefit Plan		Section 3.15(a)
Company Board		Recitals
Company Board Recommendation		Recitals
Company Disclosure Schedule		Article III
Company Equity Awards		Section 2.3(d)
Company Equity Plans		Section 8.1(e)
Company Financial Advisor		Section 3.29
Company Material Adverse Effect		Section 8.1(f)
Company Option		Section 2.3(a)
Company Organizational Documents		Section 8.1(g)
Company Performance Awards		Section 2.3(c)
Company Permits		Section 3.25(a)
Company Stock Awards		Section 2.3(b)
Company SEC Reports		Section 8.1(h)
Compensation Committee		Section 5.15
Confidentiality Agreement		Section 5.3(b)
Continuation Period		Section 5.5(a)
Contract		Section 8.1(i)
DGCL		Recitals
Dissenting Shares		Section 2.4(a)
Divestiture Action		Section 5.8(d)
Effective Time		Section 1.5
Employee		Section 5.5(a)
Enforceability Exceptions		Section 8.1(j)


Term		Section
Environmental and Safety Laws		Section 8.1(k)
ERISA		Section 3.15(a)
Exchange Act		Section 3.6(b)
Excluded Shares		Section 2.1(b)
Expenses		Section 5.10
Expiration Time		Section 1.1(c)
FDDs		Section 3.23(f)
Franchise Agreement		Section 8.1(l)
Franchisee		Section 8.1(m)
GAAP		Section 3.10(a)(ii)
Governmental Authority		Section 8.1(n)
Governmental Authorizations		Section 3.6
Guarantee		Section 4.8
Guarantor		Recitals
Hazardous Materials		Section 8.1(o)
HSR Act		Section 3.6(d)
Incidental Inbound License		Section 8.1(p)
Incidental Outbound License		Section 8.1(q)
Indemnitee or Indemnitees		Section 5.6(a)
Initial Expiration Time		Section 1.1(c)
Intellectual Property		Section 8.1(r)
Intervening Event		Section 8.1(s)
IRS		Section 3.15(b)
Knowledge		Section 8.1(t)
Law		Section 8.1(u)
Legal Actions		Section 3.13
Liabilities, Liability		Section 3.11
Licensed Intellectual Property		Section 3.19(b)
Liens		Section 8.1(v)
Material Contracts		Section 3.14
Material FDDs		Section 3.23(f)
Maximum Premium		Section 5.6(c)
Merger		Recitals
Merger Consideration		Section 2.1(c)(i)
Merger Sub		Preamble
Merger Transactions		Recitals
Minimum Condition		Annex I
Nasdaq		Section 1.1(d)
New Plan		Section 5.5(b)
Non-Party Affiliates		Section 8.17
Notice Period		Section 5.4(e)(iii)
Offer		Recitals
Offer Acceptance Time		Section 1.1(e)
Offer Conditions		Section 1.1(a)
Offer Documents		Section 1.1(i)


Term		Section
Offer Price		Recitals
Option Consideration		Section 2.3(a)
Orders		Section 8.1(w)
Outside Date		Section 7.2(a)
Owned Intellectual Property		Section 8.1(x)
Parent		Preamble
Parent Assets		Section 4.5
Parent Material Adverse Effect		Section 8.1(y)
Paying Agent		Section 2.2(a)
Payment Fund		Section 2.2(b)
Payoff Amount		Section 5.11
Payoff Letter		Section 5.11
Permits		Section 3.25(a)
Permitted Lien		Section 8.1(z)
Person		Section 8.1(aa)
Personal Data		Section 8.1(bb)
Preferred Stock		Section 3.8(a)
Principal Supplier		Section 3.14(l)
Property Restrictions		Section 3.21(c)
PTO		Section 5.5(c)
Real Property Leases		Section 3.21(c)
Representatives		Section 8.1(cc)
Rights or rights		Section 8.1(dd)
Schedule 14D-9		Section 1.2(b)
Schedule TO		Section 1.1(i)
SEC		Section 3.6(b)
Securities Act		Section 3.9
Stockholder List Date		Section 1.2(c)
Subject Indebtedness		Section 5.11
Subsidiary		Section 8.1(ee)
Superior Proposal		Section 8.1(ff)
Support Agreement		Recitals
Surviving Bylaws		Section 1.9
Surviving Charter		Section 1.8
Surviving Corporation		Section 1.3
Takeover Law		Section 3.31
Takeover Proposal		Section 8.1(gg)
Tax Returns		Section 8.1(hh)
Taxes		Section 8.1(ii)
Termination Fee		Section 7.6(c)
Trade Secrets		Section 8.1(jj)
Trademarks		Section 8.1(kk)
Willful and Material Breach		Section 8.1(ll)

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of April 10, 2019 (this “Agreement”), is by and among MTY Franchising USA, Inc., a Delaware corporation (“Parent”), MTY Columbia Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Papa Murphy’s Holdings, Inc., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, Parent desires to acquire the Company on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, in furtherance of the acquisition of the Company by Parent, upon the terms and subject to the conditions set forth in this Agreement, Parent has agreed to cause Merger Sub to commence a cash tender offer (as it may be extended and amended from time to time as permitted under, or required by, this Agreement, the “Offer”) to purchase all of the outstanding shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at a price per share of $6.45 (such amount, or any other amount per share paid in the Offer in accordance with this Agreement, the “Offer Price”), net to the seller in cash, without interest and subject to any required withholding of Taxes;

WHEREAS, it is proposed that, on the terms and subject to the conditions set forth in this Agreement, following the consummation of the Offer, Merger Sub shall, in accordance with Section 251(h) of the Delaware General Corporation Law (the “DGCL”), merge with and into the Company (the “Merger”), with the Company surviving the Merger and pursuant to which each share of Common Stock that is not validly tendered and irrevocably accepted for payment pursuant to the Offer (except as otherwise provided herein) will be converted into the right to receive the Offer Price;

WHEREAS, Parent, Merger Sub and the Company acknowledge and agree that the Merger shall be governed by and effected under Section 251(h) of the DGCL and, subject to the terms of this Agreement, effected as soon as practicable following the consummation (as defined in Section 251(h) of the DGCL) of the Offer;

WHEREAS, the board of directors of the Company (the “Company Board”) has (i) determined that the Offer, the Merger and the other transactions contemplated hereby (the “Merger Transactions”), are fair to and in the best interests of the Company and its stockholders, (ii) approved this Agreement and the Merger Transactions and declared it advisable that the Company enter into this Agreement and consummate the Merger Transactions, (iii) resolved that this Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL and (iv) resolved to recommend that the Company’s stockholders tender their shares of Common Stock in the Offer (such recommendation, the “Company Board Recommendation”);

WHEREAS, the board of directors of Merger Sub has approved and declared it advisable for Merger Sub to enter into this Agreement and consummate the Offer and the other Merger Transactions;

WHEREAS, the board of directors of Parent has approved this Agreement and the Merger Transactions, and Parent, in its capacity as the sole stockholder of Merger Sub, has agreed to adopt this Agreement;

WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, MTY Food Group Inc. (the “Guarantor”) is entering into the Guarantee with respect to the obligations of Parent and Merger Sub under this Agreement;

WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent and Merger Sub have entered into agreements with certain stockholders of the Company, pursuant to which, among other things, such stockholders have, subject to the conditions in such agreement, irrevocably agreed to tender the shares of Common Stock beneficially owned by them in the Offer (as the same may be amended from time to time pursuant to its terms, the “Support Agreement”); and

WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE I

THE MERGER TRANSACTIONS

Section 1.1 The Offer.

(a) Upon the terms and subject to the conditions of this Agreement (including Article VII), as promptly as reasonably practicable following the date hereof, but in any event no later than the tenth Business Day after the initial public announcement of the execution of this Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, commence, within the meaning of Rule 14d-2 under the Exchange Act, the Offer. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment, and pay for, any shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer are subject only to the satisfaction or waiver (to the extent permitted under this Agreement) of the conditions set forth in Annex I (as they may be amended in accordance with this Agreement, the “Offer Conditions”).

(b) To the extent permitted by Law, Parent and Merger Sub expressly reserve the right, at any time, to waive, in whole or in part, any Offer Condition (other than the Minimum Condition), to increase the Offer Price or to modify the terms of the Offer in a manner consistent with the terms of this Agreement; provided, however, that, without the prior written consent of the Company, neither Parent nor Merger Sub shall (i) reduce the maximum number of shares of Common Stock sought to be purchased in the Offer, (ii) reduce the Offer Price or change the form of consideration payable in the Offer, (iii) change, modify or waive the Minimum Condition, (iv) impose conditions to the Offer that are in

addition to the Offer Conditions, (v) modify or amend any existing Offer Conditions in a manner adverse to the holders of the Common Stock, (vi) except as otherwise required or expressly permitted by Section 1.1(d), extend or otherwise change the Expiration Time, (vii) provide for any “subsequent offering period” within the meaning of Rule 14d-11 under the Exchange Act or, (viii) otherwise amend, modify or supplement the Offer in any manner adverse to the holders of Common Stock or in any manner that materially delays or unreasonably interferes with, hinders or impairs the consummation of the Offer. The Offer may not be terminated prior to its scheduled Expiration Time, unless this Agreement is terminated in accordance with Article VII.

(c) The Offer shall initially expire at midnight (New York City time) (i.e., one minute after 11:59 p.m. New York City time) on the date that is twenty (20) Business Days (calculated in accordance with Rule 14d-1(g)(3) under the Exchange Act) following the commencement of the Offer (such initial expiration date and time of the Offer, the “Initial Expiration Time”) or, if the Offer has been extended pursuant to and in accordance with Section 1.1(d), the date and time to which the Offer has been so extended (the Initial Expiration Time, or such later expiration date and time to which the Offer has been so extended, the “Expiration Time”).

(d) Subject to Article VII, Merger Sub shall, and Parent shall cause Merger Sub to, extend the Offer on one or more occasions, (i) for the minimum period required by any rule, regulation, interpretation or position of the SEC, the staff thereof or the Nasdaq Global Select Market (the “Nasdaq”) applicable to the Offer and (ii) if, at the then-scheduled Expiration Time, any of the Offer Conditions has not been satisfied or waived by Parent and Merger Sub (to the extent such waiver is permitted under this Agreement and applicable Law), in consecutive increments of at least five Business Days each (with each such period to end at midnight (New York City time) (i.e., one minute after 11:59 p.m. New York City time), on the last Business Day of such period), or such other duration as may be agreed to by Parent and the Company, in order to permit the satisfaction of such Offer Condition(s); provided, however, that (A) in either case, Merger Sub shall not be required to extend the Offer to a date later than the Outside Date, (B) any such extension shall not be deemed to impair, limit, or otherwise restrict in any manner the rights of the parties hereto to terminate this Agreement pursuant to the terms of Article VII, and (C) with respect to clause (ii) above, if, at any such scheduled Expiration Time, the only Offer Condition that has not been so satisfied or waived is the Minimum Condition, then Merger Sub shall not be required to extend the Offer for more than one such additional five Business Day increment (and shall not be required to extend the Offer at any subsequent Expiration Time at which the Minimum Condition is not satisfied), but shall be entitled, at its sole discretion, to extend the Offer for more than one such additional five Business Day increment.

(e) On the terms and subject to the conditions of this Agreement, (i) at or as promptly as practicable following the Expiration Time, Merger Sub shall, and Parent shall cause Merger Sub to, irrevocably accept for payment (the time of acceptance for payment, the “Offer Acceptance Time”) all shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer and (ii) at or as promptly as practicable following the Offer Acceptance Time (but in any event within three Business Days (calculated as set forth in Rule 14d-1(g)(3) under the Exchange Act) thereafter) Merger Sub shall, and Parent shall

cause Merger Sub to, pay for all shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer. Parent shall provide or cause to be provided to Merger Sub, on a timely basis, the funds necessary to purchase any shares of Common Stock that Merger Sub becomes obligated to purchase pursuant to the Offer and shall cause Merger Sub to fulfill all of Merger Sub’s obligations under this Agreement.

(f) The Offer Price payable in respect of each share of Common Stock shall be paid on the terms and subject to the conditions of this Agreement. The Company agrees that no shares of Common Stock held by the Company or any of its Subsidiaries will be tendered pursuant to the Offer.

(g) Unless this Agreement is terminated pursuant to Article VII, neither Parent nor Merger Sub shall terminate or withdraw the Offer prior to any scheduled Expiration Time without the prior written consent of the Company in its sole discretion. In the event this Agreement is terminated pursuant to Article VII, Merger Sub shall promptly (and in any event within two (2) Business Days) following such termination irrevocably and unconditionally terminate the Offer and shall not acquire any shares of Common Stock pursuant thereto. If the Offer or this Agreement is terminated in accordance with this Agreement, Merger Sub shall promptly return, or cause any depositary acting on behalf of Merger Sub to promptly return, all tendered shares of Common Stock to the tendering stockholders in accordance with applicable Law.

(h) The Offer Price shall be adjusted appropriately and proportionately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other similar change with respect to the Common Stock occurring on or after the date of this Agreement and at or prior to the Offer Acceptance Time, and such adjustment to the Offer Price shall provide to the holders of shares of Common Stock the same economic effect as contemplated by this Agreement prior to such action.

(i) On the date of commencement of the Offer (within the meaning of Rule 14d-2 under the Exchange Act), Parent and Merger Sub shall file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the “Schedule TO”), which shall contain or incorporate by reference an offer to purchase and a related letter of transmittal and other appropriate ancillary offer documents (such Schedule TO and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the “Offer Documents”), and cause the Offer Documents to be disseminated to the holders of the Common Stock as and to the extent required by United States federal securities Laws. The Company shall promptly furnish or otherwise make available to Parent or Parent’s legal counsel upon request all information concerning the Company that is required by the Exchange Act or other applicable Law to be set forth in the Offer Documents, and all other information concerning the Company that may be reasonably requested by Parent for inclusion in the Offer Documents. Each of Parent, Merger Sub and the Company shall promptly correct any information supplied by it or on its behalf for inclusion or incorporation by reference in the Offer Documents if and to the extent that such

information shall have become false or misleading in any material respect, and each of Parent and Merger Sub shall take all steps necessary and use all reasonable efforts to promptly amend or supplement the Offer Documents and to cause the Offer Documents as so amended or supplemented to be filed with the SEC and disseminated to the holders of the Common Stock, in each case as and to the extent required by applicable Law. Parent and Merger Sub shall promptly notify the Company upon the receipt of any comments from the SEC, or any request from the SEC for amendments or supplements, to the Offer Documents, and shall promptly provide the Company with copies of all written correspondence and summaries of all material oral communications between them and their respective Representatives, on the one hand, and the SEC, on the other hand. Unless there has been an Adverse Recommendation Change, prior to the filing of the Offer Documents and any amendment or supplement thereto with the SEC or dissemination thereof to the holders of the Common Stock, or responding to any comments of the SEC with respect to the Offer Documents, Parent and Merger Sub shall provide the Company and its counsel a reasonable opportunity to review and comment on such Offer Documents or amendment or supplement or response, and Parent and Merger Sub shall give reasonable consideration to any such comments. Unless the Offer has been terminated in accordance with the terms of this Agreement, in the event that Parent or Merger Sub receives any comments from the SEC or its staff with respect to the Offer Documents, each shall use its reasonable best efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein.

Section 1.2 Company Actions.

(a) The Company hereby approves of and consents to the Offer, the Merger and the other Merger Transactions.

(b) On the date the Offer Documents are filed with the SEC, the Company shall, concurrently with or immediately following, and in any event on the same Business Day as, the filing of the Schedule TO, file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the “Schedule 14D-9”) containing, subject to Section 5.4, the Company Board Recommendation and shall disseminate the Schedule 14D-9 to the holders of the Common Stock as and to the extent required by United States federal securities Laws, including Rule 14d-9 under the Exchange Act. The Schedule 14D-9 shall also contain and constitute the notice to holders of Common Stock of the availability of appraisal rights in connection with the Merger required to be delivered to such holders by Section 262(d) of the DGCL. The Company shall set the record date for the holders of Common Stock to receive such notice of appraisal rights as the same date as the Stockholder List Date and shall disseminate the Schedule 14D-9 including such notice of appraisal rights to such holders to the extent required by Section 262(d) of the DGCL. Each of Parent and Merger Sub shall promptly furnish or otherwise make available to the Company or the Company’s legal counsel upon request all information concerning Parent, Merger Sub and the Guarantor that is required by the Exchange Act or other applicable Law to be set forth in the Schedule 14D-9, and all other information concerning the Parent, Merger Sub and the Guarantor that may be reasonably requested by the Company for inclusion in the Schedule 14D-9. Each of the Company, Parent, and Merger Sub shall promptly correct any information supplied by it or on its behalf for inclusion or incorporation

by reference in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary and use all reasonable efforts to promptly amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the holders of the Common Stock, in each case as soon as and to the extent required by applicable Law. The Company shall promptly notify Parent upon the receipt of any comments from the SEC, or any request from the SEC for amendments or supplements, to the Schedule 14D-9, and shall promptly provide Parent with copies of all written correspondence and summaries of all material oral communications between the Company and its Representatives, on the one hand, and the SEC, on the other hand. Prior to the filing of the Schedule 14D-9 and any amendment or supplement thereto (that does not contain or relate to a Takeover Proposal or an Adverse Recommendation Change) with the SEC or dissemination thereof to the holders of the Common Stock, or responding to any comments of the SEC with respect to such Schedule 14D-9, the Company shall provide Parent, Merger Sub and their counsel a reasonable opportunity to review and comment on such Schedule 14D-9 or amendment or supplement or response, and the Company shall give reasonable consideration to any such comments. The Company hereby consents to the inclusion in the Offer Documents of the Company Board Recommendation contained in the Schedule 14D-9, to the extent that the Company Board Recommendation has not been withdrawn, amended or modified in accordance with Section 5.4. Unless the Offer has been terminated in accordance with the terms of this Agreement, in the event that the Company receives any comments from the SEC or its staff with respect to the Schedule 14D-9, it shall use its reasonable best efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein.

(c) In connection with the Offer, the Company shall instruct its transfer agent to furnish Parent and Merger Sub or their respective designated agents promptly (and in any event no later than five Business Days after the date of this Agreement) and from time to time thereafter as reasonably requested by Parent or Merger Sub with mailing labels containing the names and addresses of the record holders of Common Stock as of the latest practicable date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company’s possession or control regarding the beneficial owners of Common Stock, in each case as of the latest date practicable, and shall furnish to Parent and Merger Sub such information and assistance (including periodically updated lists of stockholders, security position listings and computer files) as Parent or Merger Sub may reasonably request in communicating the Offer to holders of Common Stock. The date of the list of stockholders used to determine the Persons to whom the Offer Documents and the Schedule 14D-9 are first disseminated is referred to as the “Stockholder List Date”. Subject to the requirements of applicable Law and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger Transactions, Parent, Merger Sub and their respective Affiliates and Representatives shall use the information contained in any such labels, listings and files only in connection with the Merger Transactions, shall treat such information and materials in accordance with the terms and conditions of the Confidentiality Agreement, and, if this Agreement shall be terminated, will deliver to the Company or destroy (at the Company’s election) all copies of such information then in their possession or under their control promptly upon the written request of the Company.

Section 1.3 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL (including Section 251(h) thereof), at the Effective Time, (a) Merger Sub shall be merged with and into the Company, (b) the separate corporate existence of Merger Sub shall cease and the Company shall continue its corporate existence under the DGCL as the surviving corporation in the Merger (the “Surviving Corporation”) and (c) the Surviving Corporation shall become a wholly owned Subsidiary of Parent.

Section 1.4 Closing. Subject to the satisfaction or waiver of all of the conditions to closing contained in Article VI (other than those conditions that by their terms are to be satisfied at the Closing, but subject to such conditions being able to be satisfied), the closing of the Merger (the “Closing”) shall take place (a) at the offices of Perkins Coie LLP, 1120 NW Couch Street, 10th Floor, Portland, Oregon at 10:00 a.m. (New York City time) as soon as practicable following the consummation (as defined in Section 251(h) of the DGCL) of the Offer, but in any event no later than the first Business Day following such satisfaction or waiver of such conditions, or (b) at such other place and time as Parent and the Company may agree in writing. The date on which the Closing occurs is referred to as the “Closing Date”.

Section 1.5 Effective Time. On the Closing Date, Parent and the Company shall cause a certificate of merger (the “Certificate of Merger”) to be executed, signed, acknowledged and filed with the Secretary of State of the State of Delaware in such form as is required by the relevant provisions of the DGCL, and shall make all other deliveries, filings or recordings required by the DGCL in connection with the Merger. The Merger shall become effective when the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such other subsequent date or time as Parent and the Company may agree and specify in the Certificate of Merger in accordance with the DGCL (the “Effective Time”).

Section 1.6 Merger Without Meeting of Stockholders. The Merger shall be governed by and effected under Section 251(h) of the DGCL, without a vote of the stockholders of the Company. The parties agree to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable following the consummation (within the meaning of Section 251(h) of the DGCL) of the Offer, without a vote of the stockholders of the Company in accordance with Section 251(h) of the DGCL.

Section 1.7 Effects of the Merger. The Merger shall have the effects set forth in the DGCL, this Agreement and the Certificate of Merger.

Section 1.8 Certificate of Incorporation. The certificate of incorporation of the Company shall, at the Effective Time, be amended and restated to read identically to the certificate of incorporation of Merger Sub as in effect as of the date hereof (except that the name of the Surviving Corporation shall be “Papa Murphy’s Holdings, Inc.”), and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation (the “Surviving Charter”), until amended as provided therein and by applicable Law.

Section 1.9 Bylaws. The bylaws of Merger Sub in effect immediately before the Effective Time shall be, from and after the Effective Time, the bylaws of the Surviving Corporation (the “Surviving Bylaws”), except as to the name of the Surviving Corporation, until amended as provided in the Surviving Charter and the Surviving Bylaws and by applicable Law.

Section 1.10 Directors. The parties shall take all requisite action so that the directors of Merger Sub immediately before the Effective Time shall be, from and after the Effective Time, the directors of the Surviving Corporation until their respective successors are duly elected and qualified or until their earlier death, resignation or removal in accordance with the Surviving Charter, the Surviving Bylaws and applicable Law.

Section 1.11 Officers. The parties shall take all requisite action so that the officers of the Company as of the date hereof shall be, from and after the Effective Time (unless any such officer dies, resigns or is removed prior to the Effective Time), the officers of the Surviving Corporation until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Charter, the Surviving Bylaws and applicable Law.

ARTICLE II

EFFECT OF THE MERGER ON CAPITAL STOCK

Section 2.1 Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holder of any shares of capital stock of Merger Sub or the Company:

(a) Conversion of Merger Sub Capital Stock. Each share of capital stock of Merger Sub issued and outstanding immediately before the Effective Time shall be converted into and become one fully paid and non-assessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

(b) Cancellation of Certain Shares. Each share of Common Stock owned by the Company as treasury stock or owned by Merger Sub immediately before the Effective Time or that was irrevocably accepted for purchase by Merger Sub in the Offer (collectively, the “Excluded Shares”) shall be canceled automatically and shall cease to exist, and no consideration shall be paid for those Excluded Shares.

(i) Each share of Common Stock issued and outstanding immediately before the Effective Time (other than Excluded Shares and Dissenting Shares) shall be converted automatically into and shall thereafter represent only the right to receive the Offer Price (the “Merger Consideration”), without interest and subject to any required withholding of Taxes.

(ii) All shares of Common Stock that have been converted pursuant to Section 2.1(c)(i) shall be canceled automatically and shall cease to exist, and the holders of (A) certificates which immediately before the Effective Time represented such shares (the “Certificates”) or (B) shares represented by book-entry immediately before the Effective Time (the “Book-Entry Shares”) shall cease to have any rights with respect to those shares, other than the right to receive the Merger Consideration in accordance with Section 2.2 and any dividends or other distributions with a record date prior to the Effective Time which may have been authorized by the Company and which remain unpaid at the Effective Time.

(d) Equitable Adjustment. If at any time during the period between the date of this Agreement and the Effective Time, any change in the number of outstanding shares of Common Stock shall occur as a result of any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other similar change with respect to the Common Stock, then the Merger Consideration shall be equitably adjusted to reflect such change.

Section 2.2 Surrender of Certificates and Book-Entry Shares.

(a) Paying Agent. Not less than three Business Days before the Closing Date, Parent shall (i) select a bank or trust company, satisfactory to the Company in its reasonable discretion, to act as the paying agent for the payment of the amounts to be paid pursuant to this Article II (the “Paying Agent”) and (ii) enter into a paying agent agreement with the Paying Agent on terms and conditions that are satisfactory to the Company in its reasonable discretion. Parent shall be responsible for all fees and expenses of the Paying Agent.

(b) Payment Fund. At or prior to the Effective Time, Parent shall deposit, or cause to be deposited, with the Paying Agent, for the benefit of the holders of Certificates and Book-Entry Shares, for payment in accordance with this Article II through the Paying Agent, sufficient funds for the payment of (i) the aggregate Merger Consideration and (ii) the aggregate amount payable by the Company under Section 2.3, which amount shall then be paid by the Paying Agent to the Surviving Corporation. Such funds provided to the Paying Agent are referred to as the “Payment Fund”.

(i) Letter of Transmittal. Promptly after the Effective Time, Parent shall cause the Paying Agent to mail the following to each holder of record of a share of Common Stock converted pursuant to Section 2.1(c)(i): (A) a letter of transmittal in customary form, specifying that delivery shall be effected, and risk of loss and title to such holder’s shares shall pass only upon proper delivery of Certificates to the Paying Agent or, in the case of Book-Entry Shares, upon adherence to the procedures set forth in the letter of transmittal; and (B) instructions for surrendering such Certificates or Book-Entry Shares in exchange for payment of the Merger Consideration.

(ii) Surrender of Shares. Upon surrender of a Certificate or of a Book-Entry Share for cancellation to the Paying Agent, together with a duly executed letter of transmittal and any other documents reasonably required by the Paying Agent, the holder of that Certificate or Book-Entry Share shall be entitled to receive, and the Paying Agent shall promptly pay in exchange therefor, the Merger Consideration payable and issuable in respect of the number of shares formerly evidenced by that Certificate or such Book-Entry Share less any required withholding of Taxes. Any Certificates and Book-Entry Shares so surrendered shall be canceled immediately. No interest shall accrue or be paid on any amount payable upon surrender of Certificates or Book-Entry Shares.

(iii) Unregistered Transferees. If any Merger Consideration is to be paid and issued to a Person other than the Person in whose name the surrendered Certificate or Book-Entry Share is registered, then the Merger Consideration may be paid or issued to such a transferee so long as (A) the surrendered Certificate or Book-Entry Share, as applicable, shall be properly endorsed and presented to the Paying Agent or shall otherwise be in proper form for transfer and is accompanied by all documents reasonably required by Parent to evidence and effect that transfer and (B) the Person requesting such payment or issuance (x) pays any applicable transfer Taxes or (y) establishes to the reasonable satisfaction of Parent and the Paying Agent that all such transfer Taxes have already been paid or are not applicable.

(iv) No Other Rights. Until surrendered in accordance with this Section 2.2(c), each Certificate and each Book-Entry Share in respect of shares of Common Stock converted into the right to receive Merger Consideration pursuant to Section 2.1(c)(i) shall be deemed, from and after the Effective Time, to represent only the right to receive the Merger Consideration, subject to the Surviving Corporation’s obligation to pay any dividends or other distributions with a record date prior to the Effective Time which may have been authorized by the Company and which remain unpaid at the Effective Time. The Merger Consideration paid and issued upon the surrender of any Certificate or Book-Entry Share in accordance with the terms of this Article II shall be deemed to have been paid and issued in full satisfaction of all rights pertaining to such Certificate or Book-Entry Share and, in the case of a Certificate, the shares of Common Stock formerly represented by it.

(d) Lost, Stolen or Destroyed Certificates. If any Certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by the Surviving Corporation, the execution and delivery by such Person of a customary indemnity agreement to provide indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent shall pay and issue the Merger Consideration to such Person in respect of the shares of Common Stock represented by such Certificate as contemplated by this Article II.

(e) No Further Transfers. At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of the shares of Common Stock that were outstanding immediately before the Effective Time.

(f) Required Withholding. Parent, Merger Sub, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold, or cause to be deducted and withheld, from any amounts otherwise payable under this Agreement (pursuant to Article I, this Article II, or otherwise) such amounts as are required to be deducted or withheld therefrom under the Internal Revenue Code of 1986, as amended, including any successor provisions and transition rules, whether or not codified (the “Code”), or any applicable state, local or foreign Tax Law. To the extent that any amounts are so deducted and withheld and paid to the appropriate Governmental Authorities, those amounts shall be treated as having been paid to the Person in respect of whom such deduction or withholding was made for all purposes under this Agreement.

(g) No Liability. Notwithstanding any provision of this Agreement to the contrary, none of the parties hereto, the Surviving Corporation or the Paying Agent shall be liable to any Person for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(h) Investment of Payment Fund. The Paying Agent shall invest the Payment Fund as directed by Parent; provided, that such investment shall be in (i) short-term direct obligations of the United States of America, (ii) short-term obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (iii) short-term commercial paper rated the highest quality by either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services, (iv) certificates of deposit, bank repurchase agreements or bankers’ acceptances of commercial banks with capital exceeding $10 billion, or (v) mutual funds investing solely in such assets. Any such investment shall be for the benefit, and at the risk, of Parent, and any interest or other income resulting from such investment shall be for the benefit of Parent; provided, that no such investment or losses thereon shall affect the Merger Consideration payable to the holders of Common Stock immediately prior to the Effective Time and Parent shall promptly provide, or shall cause the Surviving Corporation to promptly provide, additional funds to the Paying Agent for the benefit of such holders of Common Stock in the amount of any such losses to the extent necessary to satisfy the obligations of Parent and the Surviving Corporation under this Article II.

(i) Termination of Payment Fund. Any portion of the Payment Fund that remains unclaimed by the holders of Certificates or Book-Entry Shares one year after the Effective Time shall be delivered by the Paying Agent to Parent upon demand. Thereafter, any holder of Certificates or Book-Entry Shares who has not complied with this Article II shall look only to Parent and/or the Surviving Corporation, which shall remain responsible for payment and issuance of the applicable Merger Consideration.

Section 2.3 Company Equity Awards.

(a) As of the Effective Time, each option to acquire shares of Common Stock granted under the Company Equity Plans (each, a “Company Option”) and outstanding immediately before the Effective Time, whether or not then exercisable or vested, by virtue of the Merger and without any action by Parent, Merger Sub, the Company or the holder of that Company Option, shall be canceled and converted into the right to

receive from Parent or the Surviving Corporation promptly following the Effective Time an amount in cash, without interest, equal to the Option Consideration (as defined below) multiplied by the aggregate number of shares of Common Stock subject to such Company Option immediately before the Effective Time. “Option Consideration” means the excess, if any, of the Merger Consideration over the per share exercise price of the applicable Company Option.

(b) As of the Effective Time, each award of time-based restricted stock units and each award of already earned performance-based restricted stock units granted under the Company Equity Plans (“Company Stock Awards”) and outstanding immediately before the Effective Time, by virtue of the Merger and without any action by Parent, Merger Sub, the Company or the holder of that Company Stock Award, shall be vested and all restrictions thereon shall lapse in full as of immediately before the Effective Time; and each such Company Stock Award shall be canceled and converted into the right to receive from Parent or the Surviving Corporation an amount in cash, without interest, equal in value to the Merger Consideration multiplied by the aggregate number of shares of Common Stock subject to such Company Stock Award immediately before the Effective Time.

(c) As of the Effective Time, each unearned award of performance-based restricted stock units granted under the Company Equity Plans (“Company Performance Awards”) and outstanding immediately before the Effective Time, by virtue of the Merger and without any action by Parent, Merger Sub, the Company or the holder of that Company Performance Award, shall be vested and all restrictions thereon shall lapse at the target level for such Company Performance Award as of immediately before the Effective Time; and each such Company Performance Award shall be canceled and converted into the right to receive from Parent or the Surviving Corporation an amount in cash, without interest, equal in value to the Merger Consideration multiplied by the aggregate number of shares of Common Stock subject to the target level for such Company Performance Award immediately before the Effective Time.

(d) The payment of the amounts set forth in Section 2.3(a), Section 2.3(b) and Section 2.3(c) in respect of the Company Options, Company Stock Awards and Company Performance Awards (collectively, the “Company Equity Awards”) shall be reduced by any Tax withholding required under the Code or any applicable state, local or foreign Tax Law. To the extent that any amounts are so withheld and paid to the appropriate Governmental Authorities, those amounts shall be treated as having been paid to the holder of that Company Equity Award for all purposes under this Agreement.

(e) Parent shall, and shall cause the Surviving Corporation to, at all times from and after the Effective Time, maintain sufficient liquid funds to satisfy their obligations to holders of Company Equity Awards pursuant to this Section 2.3.

(f) As promptly as practicable following the Effective Time and in any event not later than the third Business Day thereafter, Parent shall cause the Surviving Corporation to pay through its payroll system (i) to each applicable holder of a Company Option, in such amount due and payable to such holder pursuant to Section 2.3(a) in respect of such Company Option, if any, (ii) to each applicable holder of a Company Stock Award,

in such amount due and payable to such holder pursuant to Section 2.3(b) in respect of such Company Stock Award, if any, and (iii) to each applicable holder of a Company Performance Award, in such amount due and payable to such holder pursuant to Section 2.3(c) in respect of such Company Performance Award, if any.

(g) In addition to the payment of the amounts as set forth in Section 2.3(a), Section 2.3(b), Section 2.3(c), Section 2.3(d) and Section 2.3(f), the Surviving Corporation and/or Parent shall pay, in accordance with Section 2.3(f), any accrued dividends and other distributions (including dividend equivalents) in respect of all Company Equity Awards with a record date prior to the Effective Time which have been authorized by the Company and which remain unpaid at the Effective Time.

(h) For the avoidance of doubt, as of the Effective Time, each share of Common Stock previously issued under the Company Equity Plans and outstanding as of the Effective Time shall be treated as set forth in Sections 2.1 and 2.2, and by virtue of the Merger and without any action by Parent, Merger Sub, the Company or the holder of such shares, any applicable restrictions or repurchase rights with respect to such shares shall lapse in full as of immediately before the Effective Time.

(i) Prior to the Effective Time, the Company shall take all necessary or appropriate action to effectuate the actions contemplated by this Section 2.3.

Section 2.4 Dissenting Shares.

(a) Notwithstanding any provision of this Agreement to the contrary (but subject to the other provisions of this Section 2.4), any shares of Common Stock that are issued and outstanding immediately prior to the Effective Time and for which the holder thereof is entitled to demand and properly demands the appraisal of such shares in accordance with, and complies in all respects with, the DGCL (collectively, the “Dissenting Shares”), shall not be converted into the right to receive the Merger Consideration in accordance with Section 2.1(c). At the Effective Time, (i) all Dissenting Shares shall be canceled and cease to exist and (ii) the holders of Dissenting Shares shall be entitled only to such rights as may be granted to them under the DGCL.

(b) Notwithstanding the provisions of Section 2.4(a), if any holder of Dissenting Shares effectively withdraws or loses such appraisal rights (through failure to perfect such appraisal rights or otherwise), then that holder’s shares (i) shall be deemed no longer to be Dissenting Shares and (ii) shall be treated as if they had been converted automatically at the Effective Time into the right to receive the Merger Consideration upon adherence to the procedures set forth in Section 2.2(c).

(c) The Company shall give Parent (i) notice of any written demands for appraisal of any shares of Common Stock, the withdrawals of such demands and any other instrument served on the Company under the DGCL relating to stockholders’ appraisal rights and (ii) the right to participate in all negotiations and proceedings with respect to such demands for appraisal. Except to the extent required by applicable Law, the Company shall not offer to make or make any payment with respect to any such demands for appraisal without the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub that, except as (i) set forth in the confidential disclosure letter delivered by the Company to Parent and Merger Sub prior to the execution of this Agreement (the “Company Disclosure Schedule”) (it being understood that, whether or not an explicit cross reference appears, any information, item or matter set forth in one section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to, and shall be deemed to apply to and qualify, the section or subsection of this Agreement to which it corresponds in number and each other section or subsection of this Agreement to the extent that it is reasonably apparent based on the content and context of such disclosure that such information, item or matter is relevant to such other section or subsection) or (ii) disclosed in any report, schedule, form, statement or other document (including exhibits, but excluding, in each case, any disclosures contained or referenced therein under the captions “Risk Factors” or “Quantitative and Qualitative Disclosures About Market Risk,” disclosures contained or referenced therein in any “forward-looking statements” disclaimer or safe harbor statement, and any other disclosures contained or referenced therein to the extent they are predictive, cautionary or forward-looking in nature) filed with, or furnished to, the SEC under Sections 13, 14(a) and 15(d) the Exchange Act on or after January 1, 2018 and publicly available at least three Business Days prior to the date of this Agreement:

Section 3.1 Organization and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted. Each of the Subsidiaries of the Company is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 3.2 Foreign Qualifications. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation, limited liability company or other legal entity and is in good standing in each jurisdiction where such qualification is necessary, except where failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

Section 3.3 Corporate Authorization.

(a) The Company has all necessary corporate power and authority to enter into this Agreement and, assuming the Merger Transactions are consummated in accordance with Section 251(h) of the DGCL, to perform its obligations hereunder to consummate the Merger Transactions. The Company Board at a meeting duly called and

held has: (i) determined that the Merger Transactions are fair to and in the best interests of the Company and its stockholders, (ii) approved this Agreement and the Merger Transactions and declared it advisable that the Company enter into this Agreement and consummate the Merger Transactions, (iii) resolved that this Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, (iv) made the Company Board Recommendation (it being understood that nothing in this clause (iv) shall in any way limit the Company Board’s rights under Section 5.4) and (v) to the extent necessary, take all actions necessary to have the effect of causing the Merger, this Agreement, the Support Agreement, the Merger Transactions and the transactions contemplated by the Support Agreement not to be subject to any state Takeover Law or similar Law that might otherwise apply to the Merger or any of the other Merger Transactions, in each case, on the terms and subject to the conditions of this Agreement.

(b) The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger Transactions have been duly and validly authorized by all necessary corporate action on the part of the Company. The Company has made available to Parent a true and correct copy of the Company Organizational Documents. The Company is not in material violation of any of the provisions of its Company Organizational Documents.

Section 3.4 Enforceability. Assuming due authorization, execution and delivery hereof by the other parties hereto, this Agreement constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

Section 3.5 Subsidiaries. Section 3.5 of the Company Disclosure Schedule lists each Subsidiary of the Company, indicating its jurisdiction of incorporation or formation. Each of the Subsidiaries of the Company is wholly owned by the Company, directly or indirectly, free and clear of any Liens (other than Permitted Liens). Except for the capital stock of, or other equity or voting interests in, its Subsidiaries, the Company does not own, directly or indirectly, any equity, membership interest, partnership interest, joint venture interest, or other equity or voting interest in any Person, or any interest convertible into, exercisable or exchangeable for any of the foregoing. No Subsidiary is in material violation of any of the provisions of its Company Organizational Documents.

Section 3.6 Governmental Authorizations. Assuming that the representations and warranties of Parent and Merger Sub contained in Section 4.4 are true and correct, and assuming that the Merger Transactions are consummated in accordance with Section 251(h) of the DGCL, except as set forth in Section 3.6 of the Company Disclosure Schedule, the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger Transactions do not and will not require any consent, approval or other authorization of, or filing with or notification to (collectively, “Governmental Authorizations”), any Governmental Authority, other than:

(a) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and of appropriate documents with the relevant authorities of other jurisdictions in which the Company or any of its Subsidiaries is qualified to do business;

(b) any filings and reports that may be required in connection with this Agreement and the Merger Transactions either (i) with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”) or (ii) under state securities Laws or “blue sky” Laws;

(d) filings required under, and compliance with the other applicable requirements of, the Hart Scott Rodino Antitrust Improvements Act of 1976 (the “HSR Act”); and

(e) where the failure to obtain such Governmental Authorizations would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.

Section 3.7 Non-Contravention. Except as set forth in Section 3.7 of the Company Disclosure Schedule, the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger Transactions do not and will not (a) contravene or conflict with, or result in any violation or breach of, any provision of the Company Organizational Documents or (b) assuming that all Governmental Authorizations described in Section 3.6 have been obtained or made prior to the Offer Acceptance Time or the Effective Time, as applicable (i) contravene or conflict with, or result in any violation or breach of, any Law applicable to the Company or any of its Subsidiaries or by which any assets of the Company or any of its Subsidiaries (“Company Assets”) are bound or (ii) result in any violation or breach of, or constitute a default under, or entitle any party to terminate, accelerate or adversely modify, or result in the creation of any Lien under (in each case with or without notice or lapse of time or both), any Contracts to which the Company or any of its Subsidiaries is a party or by which any Company Assets are bound, other than in the case of clause (b) of this Section 3.7, as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, which, in any event, would not reasonably be expected to result in Liability of the Company and its Subsidiaries in excess of $250,000 individually or $2,000,000 in the aggregate.

Section 3.8 Capitalization.

(a) The Company’s authorized capital stock consists solely of (i) 200,000,000 shares of Common Stock and (ii) 15,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”). As of the close of business on April 8, 2019, (A) 17,029,528 shares of Common Stock were issued and outstanding, including 30,171 shares of stock issued under the Company Equity Plans and subject to the Company’s repurchase right, (B) no shares of Common Stock were held in treasury by the Company, (C) 200,917 shares of Common Stock were reserved for issuance under the Company Equity Plans, (D) 1,092,717 shares of Common Stock were issuable upon exercise of outstanding Company Options, and 168,809 shares of Common Stock were issuable upon vesting of outstanding awards of restricted stock units (including Company Stock Awards and Company Performance Awards), and (E) no shares of Preferred Stock were issued and

outstanding. Except as set forth above and for changes since April 8, 2019, resulting from the exercise of Company Options or vesting of Company Stock Awards outstanding as of such date, as of the date hereof, (x) no shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding, and (y) there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking.

(b) All issued and outstanding shares of Common Stock and all shares of Common Stock that are subject to issuance, upon issuance prior to the Effective Time in accordance with the terms and subject to the conditions specified in the instruments under which they are issuable (i) are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable and (ii) are not, or upon issuance will not be, subject to any pre-emptive rights.

(c) Since April 8, 2019 through the date hereof, the Company has not issued any shares of its capital stock or any securities convertible into, or exchangeable or exercisable for, shares of capital stock of the Company.

(d) Each outstanding share of capital stock of each Subsidiary of the Company that is a corporation is duly authorized, validly issued, fully paid and non-assessable and not subject to any Liens other than Permitted Liens.

(e) Except as set forth in Section 3.8(e) of the Company Disclosure Schedule, there are no outstanding contractual obligations of the Company or any of its Subsidiaries (i) to repurchase, redeem or otherwise acquire any shares of Common Stock or capital stock of any Subsidiary of the Company or (ii) to provide any funds to or make any investment (including in respect of any unsatisfied subscription obligation or capital contribution or capital account funding obligation) in (A) any Subsidiary of the Company that is not wholly owned by the Company or (B) any other Person.

(f) Except as set forth in Section 3.8(f) of the Company Disclosure Schedule, there are no voting trusts, proxies or similar agreements, arrangements or commitments to which the Company or any of its Subsidiaries is a party with respect to the voting of any shares of capital stock of the Company or any of its Subsidiaries. There are no bonds, debentures or notes issued by the Company or any of its Subsidiaries that entitle the holder thereof to vote together with stockholders of the Company on any matters with respect to the Company.

(g) Section 3.8(g) of the Company Disclosure Schedule sets forth, as of the date hereof, a true and complete list, of all outstanding Company Equity Awards, which shows on an award-by-award basis (i) the holder of each such award, (ii) the grant date of each such award, (iii) if applicable, the exercise price of each such award, (iv) the number

of shares of Common Stock underlying each such award (including, if applicable, determined at target performance levels for unearned performance awards) and (v) the vesting schedule applicable to each such award. The exercise price for each Company Option is equal to or greater than the per share fair market value of the underlying share of Common Stock on the applicable grant date. Each Company Equity Award has been granted, or is currently outstanding, under a Company Equity Plan.

(h) Less than ten percent of the Common Stock is held by residents of Canada on a registered basis and, to the Knowledge of the Company, on a beneficial basis.

Section 3.9 SEC Reports. The Company has timely filed with the SEC (including following any extensions of time for filing provided by Rule 12b-25 promulgated under the Exchange Act) all Company SEC Reports since January 1, 2016. As of their respective effective dates (in the case of Company SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act of 1933 (the “Securities Act”)) and as of their respective filing dates (in the case of all other Company SEC Reports), and except to the extent corrected by subsequent Company SEC Reports filed prior to the date hereof, such Company SEC Reports (a) complied as to form in all material respects with the requirements of the Exchange Act and the Securities Act, as the case may be, applicable to such Company SEC Reports, (b) were prepared in all material respects in accordance with the applicable requirements of the Securities Act, the Exchange Act and other applicable Law and (c) did not, as of such respective dates, or if amended or restated prior to the date hereof, at the time of such later amendment or restatement, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which such statements were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Company SEC Reports. No Subsidiary of the Company is subject to the periodic reporting requirements of the Exchange Act or is otherwise required to file any periodic forms, reports, schedules, statements or other documents with the SEC.

Section 3.10 Financial Statements; Internal Controls.

(a) The consolidated financial statements of the Company included in the Company SEC Reports since January 1, 2016:

(i) as of their respective filing dates, complied as to form in all material respects with applicable accounting requirements and the rules and regulations of the SEC;

(ii) were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in the notes to those financial statements, as permitted by Regulation S-X or, in the case of unaudited statements, as permitted by Form 10-Q under the Exchange Act, and except that the unaudited statements may not contain certain footnotes and are subject to normal, recurring audit adjustments); and

(iii) fairly presented (except as may be indicated in the notes thereto and subject in the case of unaudited statements to normal, recurring audit adjustments) in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended.

(b) Except as set forth in Section 3.10(b) of the Company Disclosure Schedule, the Company has established and maintains disclosure controls and procedures and a system of internal control over financial reporting (within the meaning of Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) required by Rule 13a-15 under the Exchange Act. Such disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed in the Company’s periodic reports under the Exchange Act is recorded, processed, summarized and reported within the required time periods. Since the date of filing of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2018 through the date hereof, the Company has not identified (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s or any of its Subsidiaries’ ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

(c) The Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq. Since January 1, 2016, neither the Company nor any of its Subsidiaries has made any prohibited loans to any executive officer of the Company (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. There are no outstanding loans or other extensions of credit made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company.

(d) Since January 1, 2016 through the date of this Agreement, to the Knowledge of the Company, (i) neither the Company nor any director, officer, auditor or accountant of the Company has received any written material complaint, allegation, assertion or claim that the Company or its Subsidiaries have engaged in illegal or fraudulent accounting or auditing practices and (ii) no attorney representing the Company, whether or not employed by the Company, has reported to the Company Board or any committee thereof or to any director or officer of the Company any evidence of a material violation of United States federal securities Laws and the rules and regulations of the SEC promulgated thereunder, by the Company or any of its officers or directors. As of the date of this Agreement, to the Knowledge of the Company, there are no SEC inquiries or investigations or other inquiries or investigations by a Governmental Authority pending or threatened, in each case regarding any accounting practices of the Company or any of its Subsidiaries or any malfeasance by any executive officer of the Company.

Section 3.11 Liabilities.

(a) There are no liabilities or obligations of any kind, whether accrued, contingent, absolute, inchoate or otherwise (each a “Liability” and, collectively, “Liabilities”), of the Company or any of its Subsidiaries, which are required to be recorded or reflected on a consolidated balance sheet of the Company and its Subsidiaries in accordance with GAAP, other than:

(i) Liabilities disclosed or reserved against in the consolidated balance sheet of the Company as of December 31, 2018 (the “Balance Sheet Date”) or the footnotes thereto set forth in the Company SEC Reports;

(ii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business;

(iii) Liabilities incurred in connection with the Merger Transactions or as permitted or contemplated by this Agreement;

(iv) Liabilities disclosed in Section 3.11(a)(iv) of the Company Disclosure Schedule;

(v) other Liabilities that would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole;

(b) Except as set forth in Section 3.11(b) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries (x) has or is subject to any “Off-Balance Sheet Arrangement” (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act), or (y) has a material ownership or other material economic interest by Contract or otherwise in, any variable interest entity.

Section 3.12 Absence of Certain Changes. Except as otherwise contemplated, required or permitted by this Agreement, since the Balance Sheet Date through the date hereof, (a) or as set forth in Section 3.12 of the Company Disclosure Schedule, the Company has conducted its business, in all material respects, in the ordinary course, (b) there has not been any effect, change, event or occurrence that, individually or in the aggregate, has had, is having or would reasonably be expected to have a Company Material Adverse Effect and (c) or as set forth in Section 3.12 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has taken any action that, if taken between the date of this Agreement and prior to the Effective Time, would have required the consent of Parent under any of clauses (a) through (u) of Section 5.1.

Section 3.13 Litigation. Except as set forth in Section 3.13 of the Company Disclosure Schedule, there are no legal actions, arbitrations, litigations, suits or other civil or criminal proceedings (collectively, “Legal Actions”) pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries that would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. There are no Orders outstanding against the Company or any of its Subsidiaries that would, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, or, in any event, would reasonably be expected to result in Liability of the Company and its Subsidiaries in excess of $100,000 individually or $500,000 in the aggregate.

Section 3.14 Material Contracts. Section 3.14 of the Company Disclosure Schedule lists all of the following Contracts (x) to which the Company or any of its Subsidiaries is a party as of the date of this Agreement or (y) by which the Company, any of its Subsidiaries or the Company Assets are bound as of the date of this Agreement (in each case, other than any Company Benefit Plan) (all Contracts set forth in this Section 3.14, together with all Franchise Agreements, are, collectively, the “Material Contracts”):

(a) Contracts that would be required to be filed as an exhibit to the Company’s Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act or disclosed by the Company in a Current Report on Form 8-K that has not been filed or incorporated by reference in the Company SEC Reports;

(b) any Contract of the Company or any of its Subsidiaries that:

(i) grants a right of exclusivity to a geographic region, area of protection, right of first offer, right of first refusal or similar right with respect to any business or geographic region, other than such rights set forth in the Franchise Agreements and Real Property Leases entered into in the ordinary course of business consistent with past practice;

(ii) authorizes any Person (other than the Company or any of its Subsidiaries) to grant others the right to license any Owned Intellectual Property in any geographic area, other than as set forth in the Franchise Agreements entered into in the ordinary course of business consistent with past practice;

(iii) restricts the ability of the Company or any of its Affiliates (including following the Closing) to compete with any business or with any Person or in any geographical area or to solicit customers, other than such restrictions set forth in the Franchise Agreements and Real Property Leases entered into in the ordinary course of business consistent with past practice;

(iv) requires the disposition of any material assets (other than the disposition of assets licensed to the Company or any of its Subsidiaries upon the expiration of such license) or line of business of the Company or any of its Subsidiaries or, after the Effective Time, of Parent or any of its Subsidiaries;

(v) grants “most favored nation” status (other than exclusivity rights granted under Franchise Agreements in the ordinary course of business consistent with past practice) to, or is a “requirements” Contract with a supplier or Franchisee, in each case that, following the Merger, would apply to Parent or any of its Affiliates (including the Company or any of its Subsidiaries); or

(vi) prohibits or limits the right of the Company or any of its Subsidiaries to use, transfer, license, distribute or enforce any of their respective Owned Intellectual Property, other than limitations on enforcement arising from non-exclusive licenses of Owned Intellectual Property entered into in the ordinary course of business consistent with past practice;

In each case under clauses (i)-(vi), other than such Contracts that (x) do not apply to or otherwise affect, restrict or require or prohibit any action by Parent or any of its Affiliates (other than, after the Closing, the Company and its Subsidiaries) or (y) may be canceled by the Company or any of its Subsidiaries upon notice of ninety days or less without penalty or other material liability of the Company or any of its Subsidiaries or, in any case, without any liability that would reasonably be expected to be in excess of $100,000 individually or $500,000 in the aggregate;

(c) any Contract that is with (i) any officer or director of the Company or (ii) to the Knowledge of the Company, any beneficial owner (as defined in Rule 13d-3 of the Exchange Act) of 5% or more of the shares of Common Stock;

(d) Contracts under which (i) any Person (other than the Company or any of its Subsidiaries) has directly or indirectly guaranteed outstanding Liabilities of the Company or any of its Subsidiaries or (ii) the Company or any Subsidiary of the Company has directly or indirectly guaranteed outstanding Liabilities of any Person (other than the Company or any Subsidiary of the Company) (in each case of clauses (i) and (ii), which guarantee obligation exceeds $500,000, other than, in each case, endorsements for the purpose of collection in the ordinary course of business consistent with past practice);

(e) Contracts which provide for indemnification by the Company or any of its Subsidiaries, other than indemnification obligations (i) with respect to directors and officers of the Company and its Subsidiaries, (ii) under Franchise Agreements, (iii) under Real Property Leases or (iv) which would not otherwise reasonably be expected to be material to the Company;

(f) Contracts, other than Franchise Agreements or Real Property Leases, which grant any right of first refusal, right of first offer, or similar right with respect to any material assets, rights, or properties of the Company or its Subsidiaries;

(g) Contracts that provide for the formation, creation, operation, management, or control of any joint venture, partnership, or limited liability company in which the Company or any of its Subsidiaries is still a member, partner or shareholder in, other than a wholly-owned Subsidiary of the Company;

(h) Contracts under which the Company or the applicable Subsidiary of the Company has borrowed any money from, or issued any note, bond, debenture or other evidence of indebtedness to, any Person (other than the Company or any of its Subsidiaries), in any such case under which the outstanding balance, individually, is in excess of $250,000;

(i) Contracts under which the Company or the applicable Subsidiary of the Company, directly or indirectly, has agreed to make after the date hereof any advance, loan, extension of credit or capital contribution to, or other investment in, any Person (other than the Company or any of its Subsidiaries and other than extensions of trade credit in the ordinary course of business consistent with past practice), in any such case which, individually, is in excess of $250,000;

(j) Contracts that provide for the pending or future acquisition from another Person or pending or future disposition to another Person of assets or capital stock or other equity interest of another Person and other Contracts that relate to an acquisition or similar transaction which contain “earn-out” obligations with respect to the Company or any of its Subsidiaries, in any such case, after the date hereof with a value in excess of $250,000;

(k) Contracts other than Franchise Agreements that contain any provision pursuant to which (i) the Company or any of its Subsidiaries grants any license, covenant not to sue or asserts any right under any material Owned Intellectual Property to any Person, other than any Incidental Outbound License, (ii) any Person grants any license, covenants not to sue or asserts any right under any Intellectual Property to the Company or any of its Subsidiaries, except for any Incidental Inbound License, or (iii) the Company or any of its Subsidiaries consents to or agrees not to assert rights with respect to the use or registration by a third party of any Trademark containing or incorporating any Trademark set forth in Section 3.19(a) of the Company Disclosure Schedule or any derivative thereof, whether alone or in combination with any other Trademark, word or name;

(l) any Contract to which any of the five largest suppliers of the Company and its Subsidiaries is a party based on the consolidated cost of goods and services paid to such Persons by the Company and its Subsidiaries for the fiscal year ended December 31, 2018 (each, a “Principal Supplier”) (excluding purchase orders in the ordinary course of business consistent with past practice) that has a term of more than ninety days and that may not be canceled by the Company or any of its Subsidiaries without material penalty or other material liability of the Company or any of its Subsidiaries, upon notice of ninety days or less; and

(m) Contracts (other than Real Property Leases and Franchise Agreements) that by their terms are reasonably expected to result in future payments to or by the Company in excess of $250,000 per annum, except for Contracts that are terminable on less than 90 days’ notice without material penalty.

The Company has made available to Parent true and complete copies of all Material Contracts (other than Franchise Agreements), including any amendments, extensions, and renewals thereto. Each Material Contract is, subject to the Enforceability Exceptions, a valid and binding agreement of the Company or its applicable Subsidiary and, to the Knowledge of the Company, the other parties thereto, and is in full force and effect in accordance with its terms, except where failure to be valid and binding or in full force or effect would not, individually or in the aggregate, be material to the Company. None of the Company, its applicable Subsidiary and, to the Knowledge of the Company, any other party thereto, is in material breach or default under any such Material Contract, in each case, except as would not, individually or in the aggregate, be material to the Company.

Section 3.15 Benefit Plans.

(a) Section 3.15(a) of the Company Disclosure Schedule lists all material “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (whether or not subject to ERISA),

and all material stock purchase, stock option, severance, employment, consulting, change-of-control, bonus, incentive, and deferred compensation plans or agreements, and all other material benefit plans, agreements, programs, policies arrangements sponsored, maintained, contributed or required to be contributed to by the Company or any of its Subsidiaries for the benefit of any current or former directors, officers or employees of the Company (or any dependent or beneficiary thereof) or with respect to which the Company or any of its Subsidiaries has or would reasonably be expected to have a material Liability (whether actual or contingent) (each such plan, agreement, program, policy or agreement, a “Company Benefit Plan”).

(b) With respect to each Company Benefit Plan, if applicable, the Company has made available to Parent accurate and complete copies of (i) the current plan document, and all amendments thereto, (ii) the most recent summary plan description, (iii) the most recent annual report on Form 5500 (including all schedules and financial statements thereto), and (iv) if the Company Benefit Plan is intended to qualify under Section 401(a) of the Code, the most recent determination, opinion or advisory letter received from the Internal Revenue Service (the “IRS”).

(c) Neither the Company nor any of its Subsidiaries (nor any other entity that, together with the Company or any of its Subsidiaries, would be treated as a single employer under Section 414 of the Code) maintains, sponsors, contributes to or is obligated to contribute to, or within the preceding six years has maintained, sponsored, contributed to or been obligated to contribute to, any employee benefit plan that is a “multiemployer plan” (as such term is defined in Section 3(37) of ERISA) or that is (or was) subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.

(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each Company Benefit Plan has been maintained and administered in accordance with its terms and in compliance with ERISA, the Code and other applicable Law. Each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code is the subject of a favorable determination letter issued by the IRS, a timely application for such a determination letter is now pending or is not yet required to be filed, or such Company Benefit Plan is in the form of a prototype or volume submitter plan with respect to which the IRS has issued a favorable opinion or advisory letter; to the Knowledge of the Company, except as would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect, no event has occurred that would adversely affect the qualification of any such Company Benefit Plan.

(e) Except as set forth in Section 3.15(e) of the Company Disclosure Schedule, no Company Benefit Plan provides health or life insurance benefits to current or former employees of the Company or any of its Subsidiaries beyond their retirement or other termination of service, except (i) to the extent required by applicable Law, including Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA and similar state Law, (ii) coverage through the end of the month of retirement or other termination of employment or service, (iii) disability benefits attributable to disabilities occurring at or prior to retirement or other termination of employment or service, and (iv) conversion rights.

(f) Except as set forth in this Agreement or on Section 3.15(f) of the Company Disclosure Schedule, the execution and delivery of this Agreement and the consummation of the Merger Transactions will not (either alone or in combination with another event) (i) result in any severance, retention, change of control or similar payment in excess of $100,000 individually or $500,000 in the aggregate, from the Company or any of its Subsidiaries to any current or former employee of the Company or any of its Subsidiaries becoming due, (ii) materially increase the amount of any compensation due from the Company or any of its Subsidiaries to any current or former employee of the Company or any of its Subsidiaries, (iii) materially increase any material benefits otherwise payable under any Company Benefit Plan or (iv) result in the acceleration of the time of payment or vesting of any material compensation or benefits from the Company or any of its Subsidiaries to any current or former employee of the Company or any of its Subsidiaries.

(g) There are no pending, or, to the Knowledge of the Company, threatened, Legal Actions against any Company Benefit Plan, other than ordinary claims for benefits, appeals of such claims and domestic relations order proceedings or as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(h) Except as set forth in Section 3.15(h) of the Company Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the Merger (either alone or in conjunction with any other event) will result in any payment or benefit to any Person which would constitute an “excess parachute payment” (within the meaning of Section 280G of the Code) or not be deductible under Section 280G of the Code.

(i) Neither the Company nor any of its Subsidiaries is a party to, nor does the Company or any of its Subsidiaries have any obligation under, any Company Benefit Plan to compensate any Person for excise Taxes payable pursuant to Section 4999 of the Code or for additional Taxes payable pursuant to Section 409A of the Code.

(j) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each Company Benefit Plan which is maintained outside of the United States (i) has been maintained, operated and funded in all material respects in conformance with the applicable Laws relating to such Company Benefit Plan in the jurisdictions in which such Company Benefit Plan is present or operates and, to the extent relevant, the United States, (ii) that is intended to qualify for special Tax treatment meets all requirements for such treatment, and (iii) that is required to be funded, insured and/or book-reserved is funded, insured and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions.

Section 3.16 Labor Relations; Employee Matters.

(a) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or other collective labor contract with any labor union or other labor or employees’ association. To the Knowledge of the Company, no union organizing efforts have been conducted within the last three years or are now being conducted. Neither the Company nor any of its Subsidiaries currently has, or, to the Knowledge of the Company, is there now threatened, a strike, picket, work stoppage, work slowdown or other organized labor dispute.

(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each of the Company and its Subsidiaries is in compliance with all applicable Laws relating to the employment of labor, including all applicable Laws relating to wages, hours, collective bargaining, employment discrimination, harassment, employment classification including classification of independent contractors, civil rights, safety and health, workers’ compensation, immigration, pay equity and the collection and payment of withholding or social security Taxes and (ii) neither the Company nor any of its Subsidiaries has incurred any liability or obligation under the WARN Act prior to the date of this Agreement that remains unsatisfied, and no such action shall be implemented without advance notification to Parent.

(c) None of the Company or any of its Subsidiaries has any liability in excess of $100,000 alone or $500,000 in the aggregate for any payment to any trust or other fund or to any Governmental Authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the ordinary course of business consistent with past practice) and freelancer/independent contractors.

(d) The Company has made available to Parent a complete list as of April 8, 2019, (i) of all the officers of the Company and each of its Subsidiaries, (ii) of all the other employees (whether full-time, part-time or otherwise and whether on furlough, leave, short or long term disability or layoff of any kind, but excluding any employees that principally work at a Company-owned store, such as line-level workers, but including store managers), specifying each employee’s (A) job title, (B) location, (C) date of hire or engagement, (D) full-time or part-time classification, (E) exempt or non-exempt classification, (F) annual salary or hourly wage, (G) vacation accrual rate, (H) accrued but unused sick and vacation leave or paid time off, and (I) visa type (if any), and (iii) of all independent contractors, specifying such contractor’s (A) job title, (B) annual compensation and (C) agency affiliation; provided, that with respect to any employees and independent contractors in Canada, such list shall not include the names of such employees and independent contractors.

(e) To the Company’s Knowledge, no officer, director or management level employee of the Company or any of its Subsidiaries is the subject of a pending allegation of sexual harassment or assault, nor, other than as previously disclosed to Parent, has any officer, director or management level employee of the Company or any of its Subsidiaries engaged in sexual harassment or assault or been accused of sexual harassment or assault within the last five years.

(f) Except as set forth in Section 3.16(f) of the Company Disclosure Schedule or as would not, individually or in the aggregate, be material to the Company or any of its Subsidiaries, there are no Legal Actions pending or, to the Company’s Knowledge, threatened against the Company or any of its Subsidiaries brought by or on behalf of any former employee or current employee of the Company or any of its Subsidiaries alleging breach of any express or implied contract of employment, wrongful termination of employment, or any other discriminatory, wrongful or tortious conduct or any violation of applicable Law in connection with the employment relationship or obligations as an employer.

Section 3.17 Taxes.

(a) All income, sales, use and other material Tax Returns required to be filed by or with respect to the Company or any of its Subsidiaries have been timely filed, and all such Tax Returns are true, complete and correct in all material respects.

(b) The Company and its Subsidiaries have paid all Taxes due and payable, except Taxes that would not reasonably be expected to exceed $100,000 individually or $500,000 in the aggregate, or where payment is not yet due, have established adequate reserves therefor in accordance with GAAP.

(c) The Company and its Subsidiaries have withheld and paid all Taxes required to have been withheld and paid, except Taxes that would not reasonably be expected to exceed $100,000 individually or $500,000 in the aggregate, and have complied in all material respects with all information reporting, backup withholding and similar requirements of applicable Law, in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.

(d) There are no Liens for Taxes (other than Permitted Liens) upon any of the assets of the Company or any of its Subsidiaries.

(e) There are no outstanding written agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment of, Taxes due from the Company or any of its Subsidiaries for any taxable period and no written request for any such waiver or extension is currently pending.

(f) Since January 1, 2014, neither the Company nor any of its Subsidiaries has been subject to any audit, examination, investigation, claim, request for information or other proceeding by any Governmental Authority with respect to Taxes, and no such proceedings are in process, pending or have been threatened in writing.

(g) All deficiencies for Taxes asserted or assessed in writing against the Company or any of its Subsidiaries have been paid or settled or adequate reserves therefor have been established in accordance with GAAP.

(h) Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated, consolidated, combined or unitary group, other than one of which the Company is or was the common parent, or (ii) has any liability for the Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Tax Law), any agreement (other than customary commercial agreements not primarily related to Taxes), as a transferee or successor, by operation of Law or otherwise.

(i) Neither the Company nor any of its Subsidiaries is a party to, or bound by, or has any obligation under, any Tax sharing, allocation, indemnity or similar agreements or arrangements (other than customary commercial agreements not primarily related to Taxes).

(j) Except as set forth in Section 3.17(j) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has granted to any Person any power of attorney that is currently in force with respect to any Tax matter.

(k) During the two-year period ending on the date of this Agreement, neither the Company nor any of its Subsidiaries was a distributing corporation or a controlled corporation in a transaction intended to be governed by Section 355 of the Code.

(l) Neither the Company nor any of the Subsidiaries is, or has been, a U.S. real property holding company (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(m) No written claim has been made by any Governmental Authority in a jurisdiction where the Company or its Subsidiaries do not file a particular type of Tax Return or pay a particular type of Tax that the Company or any of its Subsidiaries is or may be required to file such Tax Return or subject to such Tax in that jurisdiction.

(n) Neither the Company nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

(o) Except as set forth in Section 3.17(o) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting made on or prior to the Closing Date; (ii) “closing agreement” described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Laws regarding Taxes) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition entered into on or prior to the Closing Date; (iv) prepaid amount received on or prior to the Closing Date, except as set forth in Section 3.17(o) of the Company Disclosure Schedule; or (v) intercompany transactions or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Laws regarding Taxes).

(p) The Company and all of its Subsidiaries are and have been in compliance with all applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating transfer pricing practices of the Company and its Subsidiaries.

(q) Neither the Company nor any of its Subsidiaries is subject to Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment or other place of business in such other country.

Section 3.18 Environmental Matters. Since January 1, 2016, the operations of the Company and each of its Subsidiaries have complied with applicable Environmental and Safety Laws except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company and its Subsidiaries possess all Permits required under Environmental and Safety Laws necessary for their respective operations, and such operations are in compliance with applicable Permits, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. No Legal Action arising under or pursuant to Environmental and Safety Laws is pending, or to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. To the Knowledge of the Company, there are no Hazardous Materials on, in or under at any property owned or operated by the Company which have given rise to, or would reasonably be expected to give rise to, any liability or obligation under Environmental and Safety Laws, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Prior to the date hereof, the Company has made available to Parent true and complete copies of any reports that are in possession of or reasonably under the control of the Company or any of its Subsidiaries of any investigations, audits or other assessments conducted since January 1, 2016 (including Phase I environmental site assessments and Phase II environmental site assessments) containing information that pertains to (i) unresolved claims against the Company or any of its Subsidiaries arising under Environmental and Safety Laws, or (ii) any Hazardous Materials in, on, beneath or migrating from or to any property currently or formerly owned or operated by the Company or any of its Subsidiaries, which, in the case of each of (i) and (ii), would reasonably be expected to result in Liability of the Company and its Subsidiaries in excess of $50,000 individually or $250,000 in the aggregate.

Section 3.19 Intellectual Property.

(a) Section 3.19(a) of the Company Disclosure Schedule lists all Owned Intellectual Property that is currently registered, issued or the subject of a currently pending application for registration.

(b) Section 3.19(b) of the Company Disclosure Schedule sets forth a list of all material licenses of Intellectual Property: (i) granted by the Company or any of its Subsidiaries, other than an Incidental Outbound License; and (ii) obtained by the Company or any of its Subsidiaries (the “Licensed Intellectual Property”), other than an Incidental Inbound License. Neither the Company, its Subsidiaries or, to the Knowledge of the Company, any other party thereto is in material breach or default under any Contract required to be scheduled in (i) or (ii) above.

(c) The Company or one of its Subsidiaries (i) owns and possesses all right, title and interest in and to the Owned Intellectual Property, free and clear of all Liens (other than Permitted Liens) and (ii) to the Knowledge of the Company, has valid and enforceable rights or licenses under Contract to use and exploit the Licensed Intellectual Property, except that the foregoing representation in this subsection (ii) does not pertain to any infringement, misappropriation or other violation of any third party Intellectual Property rights resulting from such use or exploitation of the Licensed Intellectual Property by the Company or any of its Subsidiaries as authorized by such Contracts.

(d) To the Knowledge of the Company, the current conduct of the Company’s and its Subsidiaries’ respective businesses do not infringe, misappropriate or otherwise violate any Intellectual Property rights of any Person.

(e) Since January 1, 2016, (i) there is not and has not been any Legal Action pending or, to the Knowledge of the Company, threatened against or affecting, the Company or its Subsidiaries or any current or former officer, director or employee of the Company or its Subsidiaries alleging that the Company has infringed, misappropriated or otherwise violated any Intellectual Property, or other proprietary Right of any third party, and (ii) to the Knowledge of the Company, no Person is infringing upon or misappropriating any Owned Intellectual Property.

(f) Except as set forth in Section 3.19(f) of the Company Disclosure Schedule, the Company and its Subsidiaries have at all times taken commercially reasonable measures to preserve and protect their right, title and interest in and to all Trade Secrets and Trademarks.

(g) All current and former officers and employees of, and consultants and independent contractors to, the Company or any of its Subsidiaries that were materially involved in the development of Owned Intellectual Property have either executed and delivered to the Company or its Subsidiary agreements assigning to the Company or its Subsidiary, all rights, title, and interest in and to any such Intellectual Property or transferred ownership of such Intellectual Property by operation of law; and executed and delivered to the Company or its Subsidiary agreements regarding the protection of proprietary information. No current or former officer or employee of, or consultant or independent contractor to, the Company or any of its Subsidiaries is asserting or to the Knowledge of the Company has grounds to assert any rights to any Owned Intellectual Property. To the Knowledge of the Company, no current or former officers or employees of, or consultants or independent contractors to, the Company or any of its Subsidiaries have breached any material term of any such assignment agreements.

(h) Except as set forth in Section 3.19(h) of the Company Disclosure Schedule, the consummation of the Merger Transactions shall not alter, impair or extinguish any Rights of the Company or any of its Subsidiaries in the Owned Intellectual Property or any material Licensed Intellectual Property.

Section 3.20 Privacy and Data Protection Matters.

(a) The Company and its Subsidiaries have commercially reasonable safeguards in place to protect Personal Data in the possession or control of the Company and its Subsidiaries from unauthorized access by third persons.

(b) Except for those matters that would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, or, in any event, to result in Liability of the Company and its Subsidiaries in

excess of $1,000,000, individually or in the aggregate, the Company and its Subsidiaries are, and for the past three years have been, in material compliance with (i) their posted privacy policies, (ii) all applicable Laws relating to privacy, data protection, and the collection, transfer (including cross-border transfer) storage, use or any other exploitation of Personal Data, and (iii) all contractual commitments of the Company and its Subsidiaries, as applicable, regarding the protection, collection, use, storage, transfer, breach notification, disposal or disclosure (in any form or medium) of Personal Data, including any commitments to comply with the Payment Card Industry Data Security Standards (PCI DSS).

(c) To the Knowledge of the Company, (i) neither the Company nor any of its Subsidiaries is currently under any investigation by any state, federal, or foreign jurisdiction regarding its protection, storage, use, and disclosure of Personal Data and (ii) there are no claims pending or threatened in writing against the Company or any of its Subsidiaries alleging any violation of any Person’s rights in their Personal Data.

Section 3.21 Real Property.

(a) Neither the Company nor any of its Subsidiaries owns any real property.

(b) Section 3.21(b) of the Company Disclosure Schedule lists all real property leased or licensed by the Company or any of its Subsidiaries (including (i) the property address, (ii) the expiration date of such lease or license, and (iii) whether, as of the date hereof, the Company or its Subsidiaries does not intend to occupy such premises during the three month period after the date hereof).

(c) Each of the leases, subleases and other occupancy agreements to which the Company or any of its Subsidiaries is a party as of the date of this Agreement (the “Real Property Leases”) is, subject to the Enforceability Exceptions, a valid and binding agreement of the Company or its applicable Subsidiaries and, to the Knowledge of the Company, each other party thereto. As of the date of this Agreement, no breach or default (beyond applicable notice and cure periods) on the part of the Company or any such Subsidiary of the Company or, to the Knowledge of the Company, any other party thereto, exists under any Real Property Lease, except (i) as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) for breaches or defaults that have been cured. None of the Company’s or its Subsidiaries’ leasehold interest in any such property is subject to any Lien, except for (1) Permitted Liens, (2) title defects, covenants or reservations of interest in title (collectively, “Property Restrictions”) imposed or promulgated by applicable Law or by any Governmental Authority or which are customary and typical for similar properties and (3) Property Restrictions which, individually or in the aggregate, is not reasonably expected to be material to the business, financial condition or results of operations of the Company and its Subsidiaries taken as a whole. The Company has made available to Parent true and complete copies of all Real Property Leases, including any amendments thereto.

(d) Except as set forth in Section 3.21(d) of the Company Disclosure Schedule, the Company has not received any written notice that all or any portion of real property subject to a Real Property Lease is (i) subject to any Order to be sold or is being condemned, expropriated or otherwise taken by any Governmental Authority with or without payment of compensation therefor, (ii) is otherwise non-compliant with applicable Law relating to use, occupancy or operation (including with respect to zoning, building, fire, safety, health codes and sanitation) of a related store owned by the Company or any of its Subsidiaries and such non-compliance remains uncured as of the date of this Agreement or (iii) subject to any latent defects currently existing as of the date of this Agreement that would reasonably be expected to give rise to any material violation of or require remediation under any applicable Law or, in any event, to result in Liability of the Company and its Subsidiaries in excess of $250,000, individually or $2,000,000 in the aggregate.

(e) To the Knowledge of the Company, all structures and other buildings subject to a Real Property Lease are in good operating condition and none of such structures or buildings is in need of maintenance or repairs except for ordinary, routine maintenance and repairs in the ordinary course, and except, in each case, for ordinary wear and tear.

Section 3.22 Insurance.

(a) Section 3.22(a) of the Company Disclosure Schedule sets forth a true and complete list of all policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers’ compensation, vehicular, fiduciary liability and other casualty and property insurance maintained by the Company and its Subsidiaries as of the date hereof that are material to the business of the Company and its Subsidiaries, taken as a whole.

(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect:

(i) the Company and its Subsidiaries own or hold policies of insurance, or are self-insured, in such amounts and against such risks customarily insured against by companies in similar lines of business as the Company and its Subsidiaries;

(ii) there is no claim by the Company or any Subsidiary of the Company pending under any insurance policies which has been denied or disputed by the insurer other than denials and disputes in the ordinary course of business;

(iii) with respect to each such insurance policy, (A) the Company and each of its Subsidiaries have paid, or caused to be paid, all premiums due under the policy, the Company and its Subsidiaries are in compliance with all other terms and conditions (including any notification requirements) of all such policies and neither the Company nor any of its Subsidiaries is in breach of, or default under, any such insurance policy, and (B) to the Knowledge of the Company, as of the date hereof, no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation; and

(iv) neither the Company nor any Subsidiary of the Company has received any written notice of cancellation or termination with respect to any insurance policy existing as of the date hereof that is held by, or for the benefit of, any of the Company or any of its Subsidiaries.

Section 3.23 Franchise Matters.

(a) Section 3.23(a) of the Company Disclosure Schedule lists (i) each state or other jurisdiction in which the Company or any of its Subsidiaries is currently registered, or with which the Company filed an application for registration or an exemption from registration, to sell franchises, and the effective date of each such registration or exemption and (ii) each country outside the United States in which the Company or any of its Subsidiaries has offered or sold franchises. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, all franchise registrations are in full force and effect and, as of the date of this Agreement, no suspension or cancellation of any of the franchise registrations is pending or, to the Knowledge of the Company, threatened.

(b) Section 3.23(b) of the Company Disclosure Schedule lists (i) the name of each U.S. franchisee, (ii) the expiration date of the applicable Franchise Agreement, (iii) the renewal or extension option applicable to such Franchise Agreement, and (iv) the royalty rate applicable to such Franchise Agreement. Except as set forth in Section 3.23(b) of the Company Disclosure Schedule and except for amendments, modifications or waivers to Franchise Agreements that do not alter the economic terms and conditions of such agreements in any material respect, each of the Franchise Agreements conforms in all material respects to the Company’s form of Franchise Agreement in effect at the time such Franchise Agreement was entered into, and the Company has made available to Parent copies of each such form of franchise agreement.

(c) To the Knowledge of the Company, all funds administered by or paid to the Company or any of its Subsidiaries by or on behalf of one or more Franchisees at any time since January 1, 2016, including funds that Franchisees contributed for advertising and promotion and rebates and other payments made by suppliers and other third parties on account of Franchisees’ purchases from those suppliers or other third parties, have been administered and spent in accordance in all material respects with applicable Franchise Agreements, applicable Laws and any other applicable Contracts to which the Company or any of its Subsidiaries is a party.

(d) As of the date of this Agreement and since January 1, 2016, except as set forth in Section 3.23(d) of the Company Disclosure Schedule, no person, to the Knowledge of the Company, has provided written notice alleging that the Company or any Subsidiary of the Company is a joint or co-employer of or has any liability whatsoever with respect to any employees of any Franchisee, and no determination (preliminary or otherwise) has been made by any Governmental Authority that the Company or any Subsidiary of the Company is a joint or co-employer or has any liability whatsoever with respect to any employees of any other employer, including employees of Franchisees.

(e) To the Knowledge of the Company, the Company and each of its Subsidiaries is currently and since January 1, 2016 has been in compliance in all material respects with all franchise Laws in all states and countries where the Company or any of its Subsidiaries is conducting or has conducted franchise activities, and, in any event, has not failed to comply with any such Laws in any manner that would reasonably be expected to result in Liability of the Company and its Subsidiaries in excess of $250,000 individually or $2,000,000 in the aggregate.

(f) Section 3.23(f) of the Company Disclosure Schedule sets forth a true and complete list of all material Franchise Disclosure Documents (“FDDs”) that the Company or any of its Subsidiaries have used to offer or sell franchises in any jurisdiction at any time since January 1, 2016 to the date of this Agreement (“Material FDDs”). None of the Material FDDs contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(g) To the Knowledge of the Company, other than by setting standards, the Company has not undertaken responsibility for, asserted control over or otherwise intervened in the day-to-day management of any of the Franchisees in any material respect.

(h) Except as set forth in Section 3.23(h) of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company has provided any Franchisee with a notice of breach of any Franchise Agreement which has not been cured in accordance with the applicable Franchise Agreement or otherwise resolved (whether by termination of the applicable Franchise Agreement, settlement or otherwise).

Section 3.24 Quality and Safety of Food and Beverage Products. Except as set forth in Section 3.24 of the Company Disclosure Schedule, since January 1, 2016, (a) there have been no recalls of any food or beverage product of the Company or any Subsidiary of the Company, whether ordered by a Governmental Authority or undertaken voluntarily by the Company or a Subsidiary of the Company and (b) to the Knowledge of the Company, none of the food or beverage products of the Company or any of its Subsidiaries have been adulterated, misbranded, mispackaged, or mislabeled in violation of applicable Law, or pose a material threat to the health or safety of consumers when consumed in the intended manner, in each case, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.

Section 3.25 Permits; Compliance with Law.

(a) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, (i) each of the Company and its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, easements, variances, exceptions, consents, certificates, permanent certificates of occupancy, approvals and other permits of any Governmental Authority (“Permits”) necessary for it to own, lease and operate its properties and assets or to carry on its business as it is now being conducted (collectively, the “Company Permits”) and (ii) all such Company Permits are in full force and effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, as of the date of this Agreement, no suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened.

(b) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, since January 1, 2016, none of the Company and any of its Subsidiaries is or has been in conflict with, or in default or violation of, (i) any Law applicable to the Company or such Subsidiary of the Company or by which any of the Company Assets is bound or (ii) any Company Permits. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries is under investigation with respect to or has been threatened to be charged with or given written notice of, nor has any Governmental Authority notified the Company in writing of its intent to conduct an investigation of, any violation of any applicable Law (including with respect to the retail sale of alcohol), except for such investigations or charges which would not reasonably be expected to be material to the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole.

(c) No representation is made under this Section 3.25 with respect to SEC reports, financial statements and internal controls, employee benefits, labor, Tax, environmental or intellectual property matters, which matters are addressed in Section 3.9, Section 3.10, Section 3.15, Section 3.16, Section 3.17, Section 3.18 and Section 3.19, respectively.

Section 3.26 Anti-Corruption. Since January 1, 2014, the Company and each of its Subsidiaries and, to the Knowledge of the Company, their respective directors, officers, employees, representatives or agents acting for or on behalf of the Company or any of its Subsidiaries, has been in compliance with (a) the Foreign Corrupt Practices Act of 1977, the Bank Secrecy Act as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and any rules and regulations promulgated thereunder, (b) any other applicable Law that prohibits corruption or bribery and (c) anti-money laundering Laws or any rules or regulations promulgated thereunder, or any applicable Law of similar effect ((a)—(c) collectively, “Anti-Corruption Laws”). Section 3.26 of the Company Disclosure Schedule sets forth each material action, suit, inquiry, investigation (including any internal investigation) or any other material proceeding by any Governmental Authority, including those pending or threatened in writing, involving the Company and its Subsidiaries, or, to the Company’s Knowledge, any of its directors, officers, employees or agents acting for or on behalf of the Company and its Subsidiaries, each written inquiry of any Governmental Authority received by the Company and its Subsidiaries and any and all voluntary or involuntary disclosure by the Company, any of its Subsidiaries or any of its officers, directors or employees to any Governmental Authority since January 1, 2014, in each case, with respect to Anti-Corruption Laws.

Section 3.27 Company Swaps. Neither the Company nor any of its Subsidiaries is party to any interest rate swaps or currency exchange swaps in effect as of the date of this Agreement.

Section 3.28 Affiliated Transactions. No director, officer or Affiliate (other than Subsidiaries of the Company) of the Company is a party to any Contract with the Company or its Subsidiaries (other than employment agreements) or has any material interest in any property used by the Company or its Subsidiaries, in either case that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act that has not been so disclosed.

Section 3.29 Opinion of Financial Advisor. North Point Advisors LLC (the “Company Financial Advisor”) has delivered to the Company Board its written opinion to the effect that, as of the date of this Agreement, and subject to the various limitations, assumptions, factors and matters set forth therein, the Offer Price and the Merger Consideration are fair to the stockholders of the Company from a financial point of view. The Company has heretofore delivered to Parent a correct copy of the Company’s engagement letters with Company Financial Advisor, which letter describes all fees payable to the Company Financial Advisor in connection with the Merger Transactions, all agreements under which any such fees or any expenses are payable and all indemnification and other agreements related to the engagement of the Company Financial Advisor.

Section 3.30 Brokers. No broker, finder, investment banker or other Person, other than the Company Financial Advisor, is entitled to any brokerage, finder’s or other similar fee or commission in connection with the Merger Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.

Section 3.31 State Takeover Laws. Assuming the representations and warranties of Parent and Merger Sub contained in Section 4.6(c) are true and correct, the Company Board has approved this Agreement and the Merger Transactions as required to render inapplicable to this Agreement and the Merger Transactions the restrictions on “business combinations” set forth in Section 203 of the DGCL or any other “moratorium”, “control share”, “fair price”, “takeover” or “interested stockholder” law (each, a “Takeover Law”).

Section 3.32 No Rights Agreement. The Company is not party to a stockholder rights agreement, “poison pill” or similar antitakeover agreement or plan and the Company Board has not adopted or authorized the adoption of such an agreement or plan.

Section 3.33 No Other Representations or Warranties. Except for the representations and warranties made by the Company in this Article III (subject to the first paragraph of this Article III), neither the Company nor any other Person makes or has made, and Parent and Merger Sub acknowledge and agree that they expressly disclaim any reliance upon, any express or implied representation or warranty with respect to the Company or its Subsidiaries or Affiliates or their respective business, operations, assets, liabilities, results of operations, condition (financial or other) or prospects, or with respect to any estimates, projections, forecasts and other forward-looking information or business or strategic plan information regarding the Company and its Subsidiaries, or as to the accuracy or completeness of any of the information (including any statement, document or agreement delivered pursuant to this Agreement or any financial statements, including projections, estimates, forecasts or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, “data rooms”

maintained by the Company or its Representatives, supplemental information or other materials or information with respect to any of the above) or otherwise made available to Parent and Merger Sub or any of their respective Affiliates, stockholders or Representatives, and each of Parent and Merger Sub acknowledge the foregoing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub, jointly and severally, represent and warrant to the Company that:

Section 4.1 Organization and Power. Except as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect, each of Parent and Merger Sub is duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 4.2 Foreign Qualifications. Each of Parent and Merger Sub is duly qualified to do business as a foreign corporation, limited liability company or other legal entity and is in good standing in each jurisdiction where such qualification is necessary, except where failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.3 Corporate Authorization. Each of Parent and Merger Sub has all necessary corporate power and authority to enter into this Agreement and to perform its obligations hereunder to consummate the Merger Transactions. The board of directors of Parent has adopted resolutions approving this Agreement and the Merger Transactions. The sole stockholder of Merger Sub has adopted resolutions adopting this Agreement. The board of directors of Merger Sub has: (a) approved this Agreement and the Merger Transactions and declared it advisable to enter into this Agreement and consummate the Merger Transactions and (b) recommended that Merger Sub’s stockholder adopt this Agreement. The execution, delivery and performance of this Agreement, by each of Parent and Merger Sub and the consummation by each of Parent and Merger Sub of the Merger Transactions have been duly and validly authorized by all necessary corporate action on the part of Parent and Merger Sub. Assuming due authorization, execution and delivery hereof by the other parties hereto, this Agreement constitutes a legal, valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to the Enforceability Exceptions. No vote or consent of the stockholders of Parent is required by applicable Law, or the certificate of incorporation or bylaws or other equivalent organizational documents of Parent in connection with this Agreement or the Merger Transactions.

Section 4.4 Governmental Authorizations. Assuming that the representations and warranties of the Company contained in Section 3.6 and Section 3.8(h) are true and correct, the execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the Merger Transactions do not and will not require any Governmental Authorization, other than:

(b) any filings and reports that may be required in connection with this Agreement and the Merger Transactions either with the SEC or under state securities Laws or “blue sky” Laws;

(d) filings required under, and compliance with the other applicable requirements of, the HSR Act; and

(e) where the failure to obtain such Governmental Authorization would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.5 Non-Contravention. The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the Merger Transactions do not and will not (a) contravene or conflict with, or result in any violation or breach of, any provision of the organizational documents of Parent or Merger Sub or (b) assuming that all Governmental Authorizations described in Section 4.4 have been obtained or made prior to the Offer Acceptance Time or the Effective Time, as applicable (i) contravene or conflict with, or result in any violation or breach of, any Law applicable to Parent or any of its Subsidiaries or by which any assets of Parent or any of its Subsidiaries (“Parent Assets”) are bound or (ii) result in any violation or breach of, or constitute a default under, or entitle any party to terminate, accelerate or adversely modify, or result in the creation of any Lien under (in each case with or without notice or lapse of time or both), any Contracts to which Parent, Merger Sub or any of their respective Subsidiaries is a party or by which any Parent Assets are bound, other than in the case of clause (b) of this Section 4.5, as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.6 Capitalization; Interim Operations of Merger Sub; Ownership of Common Stock.

(a) All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent. Merger Sub has no outstanding option, warrant, right or any other agreement pursuant to which any Person other than Parent may acquire any equity security of Merger Sub.

(b) Merger Sub was formed solely for the purpose of engaging in the Merger Transactions and has not engaged, nor prior to the Effective Time will it engage, in any business activities or operations other than in connection with the Merger Transactions. Merger Sub has no Subsidiaries.

(c) None of Parent, Merger Sub or their respective Affiliates own, directly or indirectly, beneficially (as defined in Rule 13d-3 under the Exchange Act) or of record, any shares of Common Stock or securities that are convertible, exchangeable or exercisable into Common Stock, and none of Parent, Merger Sub or their respective Affiliates holds any rights to acquire or vote any shares of Common Stock except pursuant to this Agreement.

Section 4.7 Sufficient Funds. Parent’s, Merger Sub’s and Guarantor’s obligations hereunder are not subject to any conditions regarding Parent’s, Merger Sub’s or any other Person’s ability to obtain financing for the completion of the Merger Transactions. Parent and Merger Sub have (or have available to them), and will have as of the Offer Acceptance Time and Effective Time, sufficient cash available to pay all amounts to be paid by Parent and Merger Sub in connection with this Agreement and the Merger Transactions, including Parent’s and Merger Sub’s costs and expenses and the aggregate Offer Price and Merger Consideration on the terms and conditions contained in this Agreement, and there is not, nor will there be, any restriction on the use of such cash or cash equivalents for such purpose.

Section 4.8 Guarantee. Concurrently with the execution of this Agreement, Parent has delivered to the Company the duly executed guarantee of the Guarantor, dated as of the date of this Agreement, in favor of the Company in respect of all of Parent’s obligations under this Agreement (the “Guarantee”). The Guarantee is (a) a legal, valid and binding obligation of the Guarantor, (b) enforceable against the Guarantor in accordance with its terms, subject to the Enforceability Exceptions and (c) in full force and effect. No event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to constitute a default or breach on the part of the Guarantor under the Guarantee.

Section 4.9 Absence of Arrangements with Management and Principal Stockholders. Other than this Agreement and the Support Agreement, as of the date hereof, there are no contracts, undertakings, commitments, agreements or obligations or understandings (a) between Parent or Merger Sub, the Guarantor or any of their respective Affiliates, on the one hand, and any member of the Company’s management or the Company Board or any of their respective Affiliates or any beneficial owner of Common Stock, on the other hand, relating to the Merger Transactions or the operations of the Company or any of its Subsidiaries or (b) pursuant to which any stockholder of the Company would be entitled to receive value or consideration of a different amount or nature than the Offer Price or the Merger Consideration or pursuant to which any stockholder of the Company agrees to tender any shares of Common Stock in the Offer or agrees to vote against or otherwise oppose any Superior Proposal.

Section 4.10 Litigation. There is no Legal Action pending or, to the Knowledge of Parent, threatened, against Parent or any of its Affiliates that would or seeks to materially delay or prevent the consummation of the Merger Transactions or that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect. Neither Parent nor any of its Affiliates is subject to any Order of, or, to the Knowledge of Parent, continuing investigation by, any Governmental Authority that would or seeks to materially delay or prevent the consummation of any of the Merger Transactions or that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.11 Brokers. Except for National Bank Financial Inc., no broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other similar fee or commission in connection with the Merger Transactions based upon arrangements made by or on behalf of Parent, Merger Sub or any of their respective Subsidiaries.

Section 4.12 Independent Investigation. In entering into this Agreement and each of the other documents and instruments relating to the Merger Transactions, Parent and Merger Sub have each relied solely upon its own investigation and analysis of the business, operations, assets and financial condition of the Company and its Subsidiaries, and Parent and Merger Sub acknowledge and agree that (a) except for the representations and warranties made by the Company in Article III (as modified or disclosed against by the Company Disclosure Schedule or the Company SEC Reports identified in clause (ii) of the first paragraph of Article III), neither the Company nor any other Person makes or has made, and Parent and Merger Sub expressly disclaim any reliance upon, any express or implied representation or warranty with respect to the Company or its Subsidiaries or Affiliates or their respective business, operations, assets, liabilities, results of operations, condition (financial or otherwise) or prospects, or with respect to any estimates, projections, forecasts and other forward-looking information or business or strategic plan information regarding the Company and its Subsidiaries, or as to the accuracy or completeness of any of the information (including any statement, document or agreement delivered pursuant to this Agreement or any financial statements, including any projections, estimates, forecasts or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, “data rooms” maintained by the Company or its Representatives, supplemental information or other materials or information with respect to any of the above) or otherwise made available to Parent and Merger Sub or any of their respective Affiliates, stockholders or Representatives and (b) to the fullest extent permitted by applicable Law, none of the Company, its Affiliates or any of its or their respective stockholders, controlling persons or Representatives shall have any Liability or responsibility whatsoever to Parent or Merger Sub, their respective Affiliates, stockholders or Representatives on any basis (including in contract or tort, at law or in equity, under federal or state securities Laws or otherwise) based upon any information provided or made available, or statements made (or any omissions therefrom), to Parent or Merger Sub, their respective Affiliates, stockholders or Representatives, except as and only to the extent expressly set forth in this Agreement. Parent, on behalf of itself and on behalf of its Affiliates, expressly waives any such claim relating to the foregoing matters.

ARTICLE V

COVENANTS

Section 5.1 Conduct of Business of the Company. From and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, except as permitted by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, or as required by applicable Law, without the prior

written consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned, the Company shall, and shall cause each of its Subsidiaries to, conduct its operations in all material respects in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise contemplated or permitted by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, or as otherwise required by applicable Law, from and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, the Company shall not, and shall cause each of its Subsidiaries not to, take any of the following actions, without the prior written consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned:

(a) Organizational Documents. Amend any of the Company Organizational Documents;

(b) Dividends. Make, declare or pay any dividend or distribution on any shares of its capital stock, other than dividends and distributions by wholly owned Subsidiaries of the Company;

(c) Capital Stock. (i) Adjust, split, combine or reclassify its capital stock, (ii) redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (except in connection with acquisitions required pursuant to awards granted under the Company Equity Plans and outstanding on the date of this Agreement), (iii) grant any Person any right or option to acquire any shares of its capital stock, (iv) issue, deliver or sell any additional shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than pursuant to (A) the exercise of the Company Options, or (B) the vesting of outstanding Company Stock Awards or Company Performance Awards;

(d) Compensation and Benefits. (i) Increase the compensation or benefits payable or to become payable to any of its directors, officers or employees, other than increases in base compensation in the ordinary course of business consistent with past practice to employees earning a base salary of less than $100,000 per annum in conjunction with regular annual pay increases or promotions for store level employees (so long as promoted employees are not paid a higher salary or hourly rate than the departed employees that previously filled the applicable positions), (ii) establish, adopt, enter into, amend, renew or terminate any Company Benefit Plan or any employee benefit plan, agreement, policy, program or commitment (including any severance or retention agreement) that, if in effect on the date of this Agreement, would be a material Company Benefit Plan, (iii) adopt, enter into, amend or terminate any collective bargaining agreement or other similar arrangement relating to union or organized employees, (iv) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, employees or other service providers, (v) terminate the employment of any executive officer of the Company, other than for cause or (vi) hire any employee who is an executive officer, except, in the case of each of the foregoing, to the extent required by applicable Law, this Agreement or any Company Benefit Plan existing as of the date of this Agreement;

(e) Acquisitions. Acquire (by merger, consolidation, acquisition of equity interests or assets, or otherwise) any business or any corporation, partnership, limited liability company, joint venture or other business organization or division thereof or any assets that are material, individually or in the aggregate, to the Company and its Subsidiaries, taken as whole, except for any such transaction (i) which is between the Company and any of its wholly owned Subsidiaries or between any such wholly owned Subsidiaries of the Company or (ii) pursuant to any Contract set forth on Section 5.1(e) of the Company Disclosure Schedules;

(f) Dispositions. Sell, lease, license, abandon or dispose of any Company Assets that are material to the Company, or, in any event, have a value in excess of $100,000 individually or $250,000 in the aggregate, including the capital stock of Subsidiaries of the Company, other than (i) such transactions in the ordinary course of business consistent with past practice, (ii) the disposition of obsolete or excess assets, (iii) transfers among the Company and its Subsidiaries or (iv) pursuant to any Contract set forth on Section 5.1(f) of the Company Disclosure Schedules;

(g) Encumbrances. Pledge, encumber or grant any Liens on any Company Assets, other than Permitted Liens;

(h) Loans and Investments. Make any loans, capital contributions or advances to, or investments in, any other Person other than (i) the Company or any of its Subsidiaries or (ii) in the ordinary course of business consistent with past practice up to $150,000 in the aggregate;

(i) Indebtedness; Guarantees. Incur, assume or guarantee any new indebtedness in excess of $150,000 in the aggregate;

(j) Material Contracts. Except as required by applicable Law or the Merger Transactions, enter into, amend, terminate (other than expiration in accordance with their terms) or waive any material rights or obligations under, any Material Contract (or any Contract that would be a Material Contract if entered into on the date hereof), or Real Property Lease (other than, in the case of Franchise Agreements and Real Property Leases, in the ordinary course of business consistent with past practice);

(k) New Business. Enter into any new line of business outside its existing business as of the date of this Agreement;

(l) Capital Expenditures. Make capital expenditures, except (i) as consistent in all material respects with the Company’s current business plan that was previously made available to Parent, (ii) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (iii) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (iii) not to exceed $500,000 in the aggregate;

(m) Corporate Transactions. Merge or consolidate with any Person or adopt a plan of liquidation, dissolution or consolidation, restructuring or recapitalization;

(n) Equity Arrangements. Enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of shares of its capital stock except for any such transaction which is between the Company and any of its wholly owned Subsidiaries or between any such wholly owned Subsidiaries of the Company or pursuant to Contracts set forth on Section 5.1(n) of the Company Disclosure Schedule;

(o) Accounting. Change its accounting methods, policies or procedures, other than as required by GAAP, applicable Law or by any Governmental Authority (including the Financial Accounting Standards Board, the SEC or any similar organization);

(p) Legal Actions. Waive, release, assign, settle or compromise any material Legal Actions, other than (i) in the ordinary course of business consistent with past practice and/or (ii) if the loss resulting from such waiver, release, assignment settlement or compromise (A) is reimbursed to the Company or any of its Subsidiaries by an insurance policy or (B) involves payments by the Company not exceeding $150,000 in the aggregate;

(q) Insurance. Cancel or terminate or allow to lapse without a commercially reasonable substitute policy therefor, or amend in any material respect, any insurance policy;

(r) Taxes. Make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file (i) any income, sales or use Tax Returns or (ii) other material Tax Returns reflecting a Tax liability in excess of $150,000 or amend, refile or otherwise revise any previously filed Tax Returns, enter into any closing agreement, settle or compromise any Tax claim or assessment in excess of $150,000, consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or enter into any Tax sharing, allocation, indemnity or similar agreements or arrangements (other than customary commercial agreements not primarily related to Taxes);

(s) Poison Pill. Enter into, adopt or authorize the adoption of any stockholder rights agreement, “poison pill” or similar antitakeover agreement or plan; or

(t) Delay. take any action or omit to take any action the result of which would reasonably be expected to materially and adversely impair or materially delay or impede the consummation of the Merger Transactions; or

(u) Related Actions. Agree in writing to do any of the foregoing.

Section 5.2 Conduct of Parent and Merger Sub. Except as expressly required or permitted by this Agreement or as required by applicable Law or Order, or to comply with any notice from a Governmental Authority, from and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, neither Parent nor Merger Sub shall, without the prior written consent of the Company, (i) take any action or omit to take any action the result of which would reasonably be expected to materially and adversely impair or materially delay or impede the consummation of the Merger Transactions or (ii) authorize any of, or commit or agree, in writing or otherwise, to take any such action.

Section 5.3 Access to Information; Confidentiality.

(a) The Company shall, and shall cause its Subsidiaries, to (i) provide to Parent and its Representatives reasonable access, at normal business hours and upon prior notice, to the officers, employees, properties, books and records of the Company and its Subsidiaries and (ii) furnish promptly such information concerning the Company and its Subsidiaries as Parent may reasonably request, in each case in a manner so as to not unreasonably disrupt or impair the business or operations of the Company or any of its Subsidiaries. Nothing herein shall require the Company or any of its Subsidiaries to provide such access or information to the extent the Company determines that such action (A) would reasonably be expected to result in a waiver of attorney-client privilege, work product doctrine or similar privilege, (B) would reasonably be expected to cause competitive harm to the Company or any of its Subsidiaries if the Merger Transactions are not consummated, or may expose the Company to the risk of liability for disclosure of sensitive or personal information, (C) specifically relates to the evaluation, deliberation or minutes of the Company Board (or any committee or subcommittee thereof) related to the Merger Transactions, the strategic and financial alternatives process leading thereto, or any information or materials provided to the Company Board (or any committee or subcommittee thereof) in connection therewith or (D) would reasonably be expected to violate any applicable Law or any confidentiality obligation owing to a third party (provided that the Company shall have used commercially reasonable efforts to obtain the consent of such third party to provide such information, if requested). Parent shall ensure that any request for access made by Parent or its Representatives hereunder shall be made by initially contacting the Company’s Chief Financial Officer.

(b) Information disclosed under this Section 5.3 and otherwise pursuant to this Agreement shall be governed under the letter agreement regarding confidentiality, dated October 30, 2018, between Parent and the Company (the “Confidentiality Agreement”).

(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, rights to control or direct the operations of the Company or any of its Subsidiaries before the Effective Time. Before the Effective Time, the Company shall, consistent with the terms and conditions of this Agreement, exercise complete control and supervision over the operations of the Company and its Subsidiaries.

(d) As promptly as reasonably practicable after the date hereof, the Company will provide to Parent, via a digital, electronic or cloud-based medium, one or more copies of all information, documents and materials made available by the Company in the virtual data room for “Columbia” hosted by Donnelley Financial Solutions Venue and the virtual data room hosted by Company Financial Advisor, each as accessible to Parent through April 9, 2019.

Section 5.4 No Solicitation.

(a) From and after the date hereof until the Offer Acceptance Time or, if earlier, the termination of this Agreement in accordance with Article VII, and except as otherwise expressly permitted by this Agreement, the Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their officers, directors and employees not to, and the Company shall use its reasonable best efforts to cause its other Representatives not to, directly or indirectly (i) solicit, initiate or knowingly facilitate or encourage any inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, a Takeover Proposal, (ii) enter into, continue or otherwise participate in any discussions with, or furnish any non-public information with respect to the Company or any of its Subsidiaries to, any Person in connection with a Takeover Proposal (other than to state that the Company is not permitted to have discussions) or (iii) execute or enter into any letter of intent, agreement in principle or Contract with respect to a Takeover Proposal (other than an Acceptable Confidentiality Agreement) (or publicly propose to do any of the foregoing). The Company shall, and shall cause each of its Subsidiaries and each of its and their officers, directors and employees to, and shall use its reasonable best efforts to cause its other Representatives to, (x) immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person (other than Parent and its Subsidiaries) conducted prior to the date of this Agreement with respect to any Takeover Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to a Takeover Proposal, (y) immediately terminate access by any third party to any physical or electronic data room relating to any Takeover Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to a Takeover Proposal and (z) promptly request that each Person promptly return or destroy all non-public information previously furnished to such Person or any of its Representatives in accordance with the terms of the confidentiality or similar agreement in place with such Person. Any breach of this Section 5.4(a) by any officer, director or employee of the Company or any of its Subsidiaries shall be deemed a breach of this Section 5.4(a) by the Company. Any breach of this Section 5.4(a) by any other Representative of the Company acting at the direction or with the encouragement of the Company shall be deemed a breach of this Section 5.4(a) by the Company.

(b) Notwithstanding Section 5.4(a) or any other provision of this Agreement to the contrary (but subject to this Section 5.4(b)), at any time after the date hereof until the Offer Acceptance Time, and following the receipt by the Company of a Takeover Proposal (which Takeover Proposal did not arise out of a material breach of Section 5.4(a)), (i) the Company and its Representatives shall be permitted to participate in discussions regarding such Takeover Proposal solely to clarify the terms of such Takeover Proposal and (ii) if the Company Board determines in good faith (A) that such Takeover Proposal constitutes or is reasonably likely to lead to a Superior Proposal and (B) after consultation with outside legal counsel, that the failure to take the actions set forth in clauses (x) and (y) below with respect to such Takeover Proposal would be reasonably likely to be inconsistent with its fiduciary duties, then the Company may, in response to such Takeover Proposal, (x) furnish access and information (including non-public information) with respect to the Company and any of its Subsidiaries to the Person who has made such Takeover Proposal, and its Representatives, pursuant to an Acceptable Confidentiality Agreement, so long as any written material non-public information provided under this clause (x) has previously been provided to Parent or is provided to Parent substantially concurrently with the time it is provided to such Person, and (y) participate in discussions and negotiations regarding such Takeover Proposal.

(c) From and after the date of this Agreement until the Offer Acceptance Time, the Company shall advise Parent orally and in writing of (i) the receipt of any Takeover Proposal or any inquiry (including requests for information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets, books or records of the Company or any of its Subsidiaries) that would reasonably be expected to lead to a Takeover Proposal, specifying the material terms and conditions thereof (including the identity of the Person making such Takeover Proposal or inquiry providing, in reasonable detail and to the extent known, the identity of the party in interest) and (ii) any material changes or modifications to the financial or other material terms and conditions of such Takeover Proposal, in each case also providing to Parent a copy of each written Takeover Proposal and any written changes or modifications thereto, and in each case as soon as is reasonably practicable and in any event within one Business Day after the Company’s receipt thereof. The Company also shall keep Parent reasonably informed on a prompt basis as to the status (including changes to the material terms) of each such Takeover Proposal or inquiry and any related material discussions or negotiations.

(d) Except as set forth in Section 5.4(e), Section 5.4(f) and Section 5.4(g), the Company Board (or a committee thereof) shall not (i) withdraw, modify or amend, or publicly propose to withdraw, modify or amend, the Company Board Recommendation in any manner adverse to Parent, (ii) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, a Takeover Proposal, (iii) fail to include the Company Board Recommendation in the Schedule 14D-9 or, if any Takeover Proposal has been made public, fail to reaffirm the Company Board Recommendation upon request of Parent within the earlier of three Business Days prior to the then scheduled expiration date or five Business Days after Parent requests such reaffirmation with respect to such Takeover Proposal (any action described in clauses (i) through (iii) being referred to as an “Adverse Recommendation Change”) or (iv) approve, recommend or allow the Company to enter into any letter of intent, agreement in principle or Contract relating to a Takeover Proposal (other than an Acceptable Confidentiality Agreement) (an “Acquisition Agreement”).

(e) Notwithstanding Section 5.4(d) or any other provision of this Agreement to the contrary, the Company Board may, at any time before the Offer Acceptance Time and in response to a Superior Proposal received by the Company Board after the date of this Agreement (x) make an Adverse Recommendation Change or (y) terminate this Agreement to enter into an Acquisition Agreement or authorize, resolve, agree or propose publicly to take any such action, but only if:

(i) the Superior Proposal was not solicited and the Company did not otherwise breach any of its obligations under Section 5.4(a) in any material respect;

(ii) the Company Board has determined in good faith, after consultation with outside legal and financial advisors, that failure to do so would be inconsistent with its fiduciary duties;

(iii) the Company shall have first provided at least four Business Days’ prior written notice (the “Notice Period”) to Parent that the Company is prepared to (A) make an Adverse Recommendation Change or (B) terminate this Agreement to enter into an Acquisition Agreement with respect to a Superior Proposal, which notice shall include the material terms and conditions of and a copy of the written definitive agreements providing for the transaction that constitutes such Superior Proposal;

(iv) during the Notice Period, the Company has negotiated with Parent in good faith (to the extent Parent desires to so negotiate) to enable Parent to propose in writing such adjustments in the terms and conditions of the Transaction Documents so that such Superior Proposal ceases to constitute a Superior Proposal; and

(v) following the end of the Notice Period (it being understood and agreed that any material change to the financial or other material terms and conditions of such Superior Proposal shall require an additional notice to Parent and a new three Business Day period), and after considering such negotiations and any adjustments in the terms and conditions of the Transaction Documents that have been agreed to in writing by Parent, the Company Board has determined in good faith that, after consultation with its financial advisor, such Superior Proposal continues to constitute a Superior Proposal.

(f) Notwithstanding Section 5.4(d) or any other provision of this Agreement to the contrary, the Company Board may, at any time before the Offer Acceptance Time, make an Adverse Recommendation Change in response to an Intervening Event, but only if:

(i) the Company Board has determined in good faith, after consultation with its outside legal counsel, that failure to do so would be inconsistent with its fiduciary duties;

(ii) the Company shall have first provided prior written notice to Parent for at least the duration of the Notice Period that the Company is prepared to make an Adverse Recommendation Change, which notice shall specify in reasonable detail the Intervening Event and the basis upon which the Company proposes to make an Adverse Recommendation Change;

(iii) during the Notice Period, the Company has negotiated with Parent in good faith (to the extent Parent has requested to so negotiate) for a period of not less than three Business Days to enable Parent to propose in writing such adjustments in the terms and conditions of the Transaction Documents so that the failure to make such Adverse Recommendation Change would no longer be inconsistent with the directors’ exercise of their fiduciary duties; and

(iv) following the end of the Notice Period, and after considering such negotiations and any adjustments in the terms and conditions of the Transaction Documents that have been agreed to in writing by Parent, the Company Board has determined that, after consultation with its outside legal counsel, the failure to make such Adverse Recommendation Change continues to be inconsistent with the directors’ exercise of their fiduciary duties.

(g) Nothing contained in this Agreement shall prohibit the Company, the Company Board or any committee or subcommittee thereof from complying with Rules 14d-9 and 14e-2 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act, or from making any disclosure to the Company’s stockholders if the Company Board determines, in good faith after consultation with its outside legal counsel, that the failure to do so would be inconsistent with its fiduciary duties or such disclosure is otherwise required under applicable Law. For the avoidance of doubt, in no event shall the issuance of a “stop, look and listen” statement (or other similar statement pursuant to any requirement of applicable Law) constitute an Adverse Recommendation Change.

Section 5.5 Employees; Benefit Plans.

(a) As of the Effective Time and through December 31, 2019 (the “Continuation Period”), Parent shall, or shall cause the Surviving Corporation or any of their respective Subsidiaries or Affiliates to, provide to each individual who is an employee of the Company or any of its Subsidiaries immediately prior to the Effective Time and who remains employed by the Surviving Corporation, Parent or any of their Subsidiaries or Affiliates (each, an “Employee”) (i) a base salary or an hourly wage rate, as applicable, that is not less than that provided to such Employee immediately prior to the Effective Time, (ii) cash incentive pay opportunities for performance periods ending during the Continuation Period, including bonus and commission opportunities, but not including equity and equity-based awards, that are not less than those provided to such Employee immediately prior to the Effective Time, and (iii) other compensation and employee benefits (excluding equity and equity-based awards) that are, in the aggregate, no less favorable than those provided to such Employee under the compensation and employee benefit plans, programs, policies, agreements, arrangements and practices of the Company and its Subsidiaries in effect immediately prior to the Effective Time. Notwithstanding anything to the contrary set forth herein, after the Effective Time, nothing herein shall preclude the Surviving Corporation, Parent or any of their respective Subsidiaries or Affiliates from terminating the employment of any Employee for any lawful reason, or from entering into an agreement with an Employee to accept compensation other than as provided in this Section 5.5(a).

(b) Parent, the Surviving Corporation and their respective Subsidiaries and Affiliates shall treat, and shall cause each plan, agreement, program, policy and arrangement sponsored or maintained by Parent, the Surviving Corporation or any of their respective Subsidiaries or Affiliates following the Effective Time and in which any Employee (or the spouse, domestic partner or dependent of any Employee) participates or is eligible to participate (each, a “New Plan”) to treat, for all purposes (but not for benefit accrual purposes, except for paid time off and severance), all service with the Company and its Subsidiaries (and any predecessor employers if the Company or any of its Subsidiaries or any Company Benefit Plan provides past service credit) as service with Parent, the Surviving Corporation and their respective Subsidiaries and Affiliates; provided, however, that such service need not be counted to the extent it would result in duplication of benefits and such service need only be credited to same extent and for the same purpose as such service was credited under the corresponding Company Benefit Plan. Parent, the Surviving Corporation and their respective Subsidiaries and Affiliates will use commercially reasonable efforts to cause each New Plan that is a welfare benefit plan, within the meaning of Section 3(1) of ERISA, (i) to waive any and all eligibility waiting periods, actively-at-work requirements, evidence of insurability requirements, pre-existing condition limitations and other

exclusions and limitations regarding the Employees and their spouses, domestic partners and dependents to the extent waived, satisfied or not included under the corresponding Company Benefit Plan, and (ii) to recognize for each Employee for purposes of applying annual deductible, co-payment and out-of-pocket maximums under such New Plan any deductible, co-payment and out-of-pocket expenses paid by such Employee and his or her spouse, domestic partner and dependents under the corresponding Company Benefit Plan during the plan year of such Company Benefit Plan in which occurs the later of the Effective Time and the date on which such Employee begins participating in such New Plan.

(c) With respect to any earned but unused paid time off (“PTO”) or PTO time to which any Employee is entitled pursuant to the PTO policy or individual agreement or other arrangement applicable to such Employee immediately prior to the Effective Time, Parent shall, or shall cause the Surviving Corporation or any of their respective Subsidiaries and Affiliates to, (i) allow such Employee to use such earned PTO and (ii) if any Employee’s employment terminates during the Continuation Period under circumstances entitling the Employee to severance pay, or as otherwise required by applicable Law, pay the Employee, in cash, an amount equal to the value of the earned and unused PTO.

(d) Nothing in this Section 5.5, whether express or implied, shall confer upon any current or former employee of the Company, Parent, the Surviving Corporation or any of their respective Subsidiaries or Affiliates, any rights or remedies including any right to employment or continued employment for any specified period, of any nature or kind whatsoever under or by reason of this Section 5.5. No provision of this Section 5.5 is intended to modify, amend or create any employee benefit plan of the Company, Parent, Surviving Corporation or any of their respective Subsidiaries or Affiliates.

Section 5.6 Directors’ and Officers’ Indemnification and Related Insurance.

(a) From and after the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, in each case to the fullest extent permitted under applicable Law, (i) indemnify and hold harmless, and advance expenses to, each individual who at the Effective Time is, or at any time prior to the Effective Time was, a director, officer, employee, agent or fiduciary of the Company or of a Subsidiary of the Company (each, an “Indemnitee” and, collectively, the “Indemnitees”) with respect to all claims, Liabilities, losses, damages, judgments, fines, penalties, costs (including amounts paid in settlement or compromise) and expenses (including fees and expenses of legal counsel) in connection with any Legal Action (including as may be administrative or investigative), whenever asserted, based on or arising out of, in whole or in part, (A) the fact that an Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company or such Subsidiary or was acting in such capacity, or (B) acts or omissions by an Indemnitee in the Indemnitee’s capacity as a director, officer, employee or agent of the Company or such Subsidiary or taken at the request of the Company or such Subsidiary (including in connection with serving at the request of the Company or such Subsidiary as a representative of another Person (including any employee benefit plan)), in each case under clause (A) or (B), at, or at any time prior to, the Effective Time (including any Legal Action (including as may be administrative or investigative) relating in whole or in part to the Merger Transactions or relating to the enforcement of this provision) and (ii) assume all obligations

of the Company and such Subsidiaries to the Indemnitees in respect of indemnification, advancement of expenses and exculpation from Liabilities for acts or omissions occurring at or prior to the Effective Time as provided in the Company Organizational Documents as in effect on the date of this Agreement or in any agreement in existence as of the date of this Agreement providing for indemnification between the Company or any of its Subsidiaries and any Indemnitee. Without limiting the foregoing, Parent, from and after the Effective Time, shall cause, unless otherwise required by Law, the certificate of incorporation and bylaws of the Surviving Corporation to contain provisions no less favorable to the Indemnitees with respect to limitation of liabilities of directors and officers and indemnification than are set forth as of the date of this Agreement in the Company Organizational Documents, which provisions shall not be amended, repealed or otherwise modified in a manner that would adversely affect the rights thereunder of the Indemnitees for a period of six years after the Effective Time.

(b) In the event of any Legal Action (including as may be administrative or investigative) related to the acts or omissions covered under this Section 5.6 (each, a “Claim”) (i) the Surviving Corporation shall cooperate with the Indemnitee and its insurer in the defense of any such Claim and (ii) the Surviving Corporation shall not settle, compromise or consent to the entry of any judgment in any Claim pending or threatened in writing to which an Indemnitee is a party (and in respect of which indemnification could be sought by such Indemnitee hereunder), unless such settlement, compromise or consent includes an unconditional release of such Indemnitee from all Liability arising out of such Claim or the Indemnitee otherwise consents.

(c) Parent and the Surviving Corporation shall, jointly and severally, maintain in effect for at least six years after the Effective Time the current policies of directors’ and officers’ liability and fiduciary liability insurance maintained by the Company on terms and scope with respect to coverage, and in amount, no less favorable to its covered individuals than those of such policies in effect on the date of this Agreement, or policies, issued by a reputable insurer at least equivalent to the insurer(s) of the Company’s current directors’ and officers’ liability insurance and fiduciary liability insurance, of at least the same coverage and amounts containing terms and conditions which are no less advantageous with respect to claims arising out of or relating to events which occurred before or at the Effective Time (including in connection with the negotiation and execution of this Agreement and the consummation of the Merger Transactions) so long as Parent and the Surviving Corporation are not required to pay an annual premium in excess of 300% of the last annual premium paid by the Company for such insurance before the date of this Agreement (such 300% amount being the “Maximum Premium”). If Parent or the Surviving Corporation are unable to obtain the insurance described in the prior sentence for an amount less than or equal to the Maximum Premium, then Parent and the Surviving Corporation shall, jointly and severally, instead obtain as much comparable insurance as possible for an annual premium equal to the Maximum Premium. Notwithstanding the foregoing, in lieu of the arrangements contemplated by this Section 5.6(c), before the Effective Time and in consultation with Parent, the Company shall be entitled to, and at the request of Parent shall, purchase “tail” directors’ and officers’ liability and fiduciary liability insurance policies covering the matters described in this Section 5.6(c) and on like terms, scope and amount (and covering, without limitation, the Merger Transactions) and, if the Company purchases

such policies before the Effective Time, then Parent and the Surviving Corporation’s obligations under this Section 5.6(c) shall be satisfied so long as Parent and the Surviving Corporation cause such policies to be maintained in effect for a period of six years following the Effective Time.

(d) The covenants contained in this Section 5.6 are intended to be for the benefit of, and shall be enforceable by, each of the Indemnitees and their respective heirs and legal representatives and shall not be deemed exclusive of, or in substitution for, any other rights to which an Indemnitee is entitled, whether pursuant to Law, Contract or otherwise. The obligations of Parent and the Surviving Corporation under this Section 5.6 shall not be terminated or modified in such a manner as to adversely affect the rights of any Indemnitee to whom this Section 5.6 applies unless (i) such termination or modification is required by applicable Law or (ii) the affected Indemnitee shall have consented in writing to such termination or modification (it being expressly agreed that the Indemnitees to whom this Section 5.6 applies shall be third party beneficiaries of this Section 5.6).

(e) In the event that Parent or the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, Parent and the Surviving Corporation shall take all necessary action so that the successors or assigns of Parent or the Surviving Corporation, as the case may be, shall succeed to the obligations set forth in this Section 5.6.

Section 5.7 Reasonable Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with applicable Law, each of the parties to this Agreement shall, and shall cause its Affiliates to, use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that, as promptly as practicable, the Offer Conditions and the conditions set forth in Article VI are satisfied and to consummate the Merger Transactions as promptly as practicable, including by preparing and filing promptly and fully all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents. The terms of this Section 5.7 shall not limit the rights of the Company set forth in Section 5.4.

Section 5.8 Consents; Filings; Further Action.

(a) Upon the terms and subject to the conditions of this Agreement and in accordance with applicable Law, each of the parties to this Agreement shall, and shall cause its Affiliates to, use its reasonable best efforts to promptly (i) obtain any consents, approvals, registrations, waivers, permits, orders or other authorizations from, and make any filings and notifications with, any Governmental Authority or third party necessary, proper or advisable to consummate the Merger Transactions, (ii) make any other submissions necessary, proper or advisable in connection with the Merger Transactions under the Securities Act, the Exchange Act, the HSR Act, the DGCL, the Nasdaq rules and regulations and any other applicable Law and (iii) take or cause to be taken all other actions reasonably necessary, proper or advisable consistent with this Section 5.8 to cause the expiration of the

applicable waiting periods, or receipt of required consents, approvals or authorizations, as applicable, under such Laws as soon as practicable. Parent and the Company shall cooperate and consult with each other in connection with the making of all such filings and notifications, including by providing copies of all relevant documents to the non-filing party and its advisors before filing. Parent shall not consent to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated by this Agreement at the behest of any Governmental Authority without the consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned.

(b) As promptly as practicable after the date of this Agreement, each of Parent and the Company shall file and not withdraw any Notification and Report Forms and related material required to be filed by it with the Federal Trade Commission and the United States Department of Justice, as applicable, with respect to the Merger Transactions (which shall request the early termination of any waiting period applicable to the Merger Transactions under the HSR Act), and shall promptly make any further filings pursuant thereto that may be necessary, proper or advisable.

(c) Each of Parent and the Company shall promptly inform the other party upon receipt of any communication from any Governmental Authority regarding any of the Merger Transactions. If Parent or the Company (or any of their respective Affiliates) receives a request for additional information from any Governmental Authority that is related to the Merger Transactions, then such party shall endeavor in good faith to make, or cause to be made, to the extent practicable and after consultation with the other party, an appropriate response to such request as promptly as reasonably practicable. No party shall participate in any meeting or engage in any material substantive conversation with any Governmental Authority related to the Merger Transactions without giving the other party prior notice of the meeting or conversation and, unless prohibited by such Governmental Authority, the opportunity to attend or participate. Parent shall advise the Company promptly of any understandings, undertakings or agreements (oral or written) which Parent proposes to make or enter into with any Governmental Authority in connection with the Merger Transactions. In furtherance and not in limitation of the foregoing, Parent shall use its reasonable best efforts to resolve any objections that may be asserted with respect to the Merger Transactions under any antitrust, competition or trade regulatory Law, including the HSR Act, as promptly as practicable.

(d) Notwithstanding anything to the contrary in this Agreement, Parent shall take, and shall cause its Affiliates to take (and, notwithstanding anything to the contrary in this Agreement, the Company and its Affiliates shall be permitted to take, without affecting any representation, warranty, covenant or condition in this Agreement), any action reasonably necessary to avoid the entry or to effect the dissolution of, or vacate or lift, any Order that would otherwise have the effect of preventing, impairing or delaying the consummation of the Merger Transactions, or to resolve any objections as the Federal Trade Commission, the United States Department of Justice or any other Governmental Authority may assert under any Law with respect to the Merger Transactions and to obtain any clearance required under the HSR Act, or any other approval, consent or authorization necessary under applicable Law for the consummation of the Merger Transactions, including

(i) (A) selling, licensing, divesting or disposing of or holding separate any non-material entities, assets or businesses (including, after the Effective Time, the Surviving Corporation or any of its Subsidiaries), (B) terminating, amending or assigning existing non-material relationships or contractual rights or obligations, (C) changing or modifying any course of conduct regarding future operations in non-material respects, (D) otherwise taking actions that would limit their respective freedom of action with respect to, or its ability to retain, one or more of their respective non-material businesses, assets or rights or interests therein, and (E) committing to take any such actions in the foregoing clauses (A) through (D) (each, a “Divestiture Action”) and (ii) defending through litigation any Legal Action brought or threatened to be brought by any Person (including any Governmental Authority) in order to avoid entry of, or to have vacated, lifted or terminated, any Order that would prevent the consummation of the Merger Transactions from occurring prior to the Outside Date. For the avoidance of doubt, the Company shall cooperate with Parent and shall use its reasonable best efforts to assist Parent in resisting and reducing any Divestiture Action, and the Company and its Affiliates shall not, and shall not permit any of its or their Representatives to, offer or agree to any Divestiture Action without the prior written consent of Parent. Parent shall not require the Company or its Subsidiaries to, and the Company and its Subsidiaries shall not be required to, take any action with respect to any Order or any applicable Law which would bind the Company or its Subsidiaries prior to the Effective Time or in the event the Merger does not occur.

Section 5.9 Public Announcements. The initial press release regarding the Merger Transactions shall be a joint press release by the Company and Parent. Unless and until an Adverse Recommendation Change has occurred, Parent and the Company shall consult with each other before issuing any press release or otherwise making any public statements about this Agreement or any of the Merger Transactions and shall give each other reasonable opportunity to review and comment upon any such release or statement. Neither Parent nor the Company shall issue any such press release or make any such public statement prior to such consultation, except to the extent required by applicable Law, Order, Canadian securities Laws, Toronto Stock Exchange requirements or the Nasdaq requirements. Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to consult with Parent in connection with, or provide Parent an opportunity to review or comment upon, any press release or other public statement or comment to be issued or made with respect to any Takeover Proposal or with respect to any actions contemplated by Section 5.4(e), Section 5.4(f) or Section 5.4(g). Notwithstanding the foregoing, this Section 5.9 shall not apply to any press release or other public statement (a) that contains substantially similar information that has been previously announced or made public in accordance with the terms of this Agreement or (b) is made in the ordinary course of business consistent with past practice and does not relate specifically to the signing of this Agreement or the Merger Transactions.

Section 5.10 Fees and Expenses. Except as explicitly provided otherwise in this Agreement, whether or not the Merger is consummated, all expenses (including those payable to Representatives) incurred by any party to this Agreement or on its behalf in connection with this Agreement and the Merger Transactions (“Expenses”) shall be paid by the party incurring those Expenses.

Section 5.11 Financing. Prior to the Closing Date, upon Parent’s request, the Company shall use its reasonable efforts to, and to cause its Subsidiaries to use reasonable efforts to, prior to or at, and conditioned upon, the occurrence of the Closing, deliver all notices and take all other actions required to facilitate the termination of commitments under the Credit Agreement, dated as of August 28, 2014, among PMI Holdings, Inc., as borrower, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent for the lenders party thereto (as successor to Antares Capital LP (as successor to General Electric Capital Corporation)) (as the same may be amended, modified, supplemented, restated or amended and restated from time to time, including by the First Amendment to Credit Agreement, dated as of October 31, 2016, and the Second Amendment to Credit Agreement, dated as of November 6, 2018, the “Subject Indebtedness”), the repayment in full of all obligations then outstanding thereunder and the release of all Liens in connection therewith on the Closing Date, and deliver to Parent prior to or at the Closing a customary payoff letter in respect of the Subject Indebtedness (the “Payoff Letter”), which Payoff Letter shall (i) indicate the total amount required to be paid to fully satisfy all principal, interest, prepayment premiums, penalties, breakage costs or other similar obligations related to the Subject Indebtedness as of the Closing Date (the “Payoff Amount”) and (ii) state that all obligations (including guarantees) in respect thereof (other than those contingent indemnification obligations that customarily remain following termination of a credit agreement) and Liens in connection therewith on the assets of the Company or any of its Subsidiaries shall be, substantially concurrently with the receipt of the Payoff Amount on the Closing Date, released or arrangements reasonably satisfactory to Parent for such release shall have been made by such time; provided that, notwithstanding anything to the contrary in this Agreement, Parent and Merger Sub acknowledge and agree that the delivery of the Payoff Letter pursuant to this paragraph by the Company to Parent shall not be a condition to the Closing, and the Offer and the Closing are not conditioned upon Parent receiving such Payoff Letter. Notwithstanding anything to the contrary herein, all such requested cooperation provided in accordance with this Section 5.11 shall not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries and in no event shall the Company or any of its Subsidiaries be required to bear any cost or expense other than de minimis cost or expenses, pay any commitment or other fee, enter into any definitive agreement, incur any other Liability, make any other payment or agree to provide any indemnity in connection with any of the foregoing prior to the Effective Time. In addition, nothing in this Section 5.11 shall require any action that would conflict with or violate the Company Organizational Documents or any Law or result in, prior to the Effective Time, the contravention of, or that would reasonably be expected to result in, prior to the Effective Time, a violation or breach of, or default under, any Contract to which the Company or its Subsidiaries is a party.

Section 5.12 Rule 16b-3. Prior to the Effective Time, the Company shall (and shall be permitted to) take such steps as may be reasonably required or advisable to cause dispositions of the Company’s equity securities (including derivative securities) pursuant to the Merger Transactions by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Section 5.13 Notification of Certain Matters. Prior to the Effective Time, Parent shall give prompt notice to the Company, and the Company shall give prompt notice to Parent, of (a) any notice or other communication received by such party from any Governmental Authority in connection with this Agreement or the Merger Transactions or from any Person alleging that the consent of such Person is or may be required in connection with the Merger Transactions, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Corporation or Parent, (b) any Legal Actions commenced or, to such party’s Knowledge, threatened against such party which relates to this Agreement or the Merger Transactions and (c) any fact, event or circumstance that (i) has had or would reasonably be expected to result in any Company Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (ii) is reasonably likely to result in the failure of any of the Offer Conditions or any of conditions set forth in Article VI to be satisfied; provided, however, that no such notification (or failure to provide such notification) shall affect any of the representations, warranties, covenants, rights or remedies, or the conditions to the obligations of, the parties hereunder. The Company shall give Parent the opportunity to consult with the Company in the defense and settlement of any stockholder litigation against the Company or its directors or officers relating to this Agreement or the Merger Transactions, and no such settlement shall be agreed to without Parent’s prior written consent (such consent not to be unreasonably withheld, delayed or conditioned); provided, that, for the avoidance of doubt, the Company shall otherwise fully control the defense and settlement of any such stockholder litigation.

Section 5.14 Delisting. The Company shall cooperate with Parent and shall use its reasonable best efforts prior to the Closing Date to cause the Common Stock to be delisted from the Nasdaq and deregistered under the Exchange Act as soon as reasonably practicable following the Effective Time.

Section 5.15 Rule 14d-10. Prior to the Offer Acceptance Time, the Compensation Committee of the Company Board (the “Compensation Committee”) will take such steps as are required to cause each employment compensation, severance or other employee benefit arrangement pursuant to which consideration is payable to any officer, director or employee of the Company or any Affiliate of the Company who is a holder of any security of the Company to be approved by the Compensation Committee in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(2) under the Exchange Act and to satisfy the requirements of the non-exclusive safe harbor set forth in Rule 14d-10(d) of the Exchange Act.

Section 5.16 Takeover Laws. The Company and Parent shall each use its reasonable best efforts to (a) take all action necessary to ensure that no Takeover Law is or becomes applicable to any of the Merger Transactions and refrain from taking any actions that would cause the applicability of such Laws and (b) if the restrictions of any Takeover Law become applicable to any of the Merger Transactions, take all action necessary to ensure that the Merger Transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise lawfully minimize the effect of such Takeover Law on the Merger Transactions.

Section 5.17 FIRPTA Certificate. Immediately prior to the Effective Time, the Company shall deliver to Parent a statement from the Company, signed by an authorized officer of the Company, that the Company is not, and has not been at any time during the five years preceding the date of such statement, a “United States real property holding corporation,” as defined in Section 897(c)(2) of the Code, such statement in form and substance reasonably satisfactory to Parent and conforming to the requirements of Treasury Regulations Section 1.1445-2(c)(3) and 1.897-2(h), and proof reasonably satisfactory to Parent that the Company has provided notice of such statement to the IRS in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2).

ARTICLE VI

CONDITIONS

Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to this Agreement to effect the Merger are subject to the satisfaction or waiver on or before the Closing Date of each of the following conditions:

(a) No Orders or Legal Actions. No Governmental Authority shall have issued any Order that enjoins or otherwise prohibits consummation of the Merger. There shall not be instituted and pending any Legal Action of any kind or character by any Governmental Authority against Parent, the Company, or their respective Affiliates challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to enjoin or otherwise prohibit consummation of the Merger.

(b) Consummation of Offer. Merger Sub shall have irrevocably accepted for payment all shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer.

Section 6.2 Frustration of Closing Conditions. Neither the Company, on the one hand, nor Parent or Merger Sub, on the other hand, may rely, either as a basis for not consummating the Merger or for terminating this Agreement and abandoning the Merger, on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such party’s breach of, or failure to perform with respect to, any provision of this Agreement, including Section 5.7 and Section 5.8.

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

Section 7.1 Termination by Mutual Consent. This Agreement may be terminated and the Merger Transactions abandoned at any time before the Offer Acceptance Time by mutual written consent of Parent and the Company.

Section 7.2 Termination by Either Parent or the Company. This Agreement may be terminated and the Merger Transactions abandoned at any time before the Offer Acceptance Time by either Parent or the Company:

(a) if the Offer Acceptance Time has not occurred by August 8, 2019 (the “Outside Date”); provided, that the right to terminate this Agreement under this Section 7.2(a) shall not be available to any party to this Agreement if the failure of such party to perform any of its covenants or agreements under this Agreement has been a principal cause of the failure of the Offer Acceptance Time to occur by the Outside Date;

(b) if any Order having the effect set forth in paragraph (b) of Annex I shall be in effect and shall have become final and nonappealable; provided, that the right to terminate this Agreement under this Section 7.2(b) shall not be available to any party to this Agreement unless such party shall have complied with its obligations under Section 5.7 and Section 5.8; or

(c) if the Offer (as it may have been extended pursuant to and in accordance with this Agreement) shall have expired at a time when the Minimum Condition shall not have been satisfied and without the acceptance for payment of shares of Common Stock pursuant to the Offer; provided, that the right to terminate this Agreement under this Section 7.2(c) shall not be available to any party to this Agreement if the failure of such party to perform any of its covenants or agreements under this Agreement has been a principal cause of the failure of the Offer Acceptance Time to occur by the Outside Date.

Section 7.3 Termination by Parent. This Agreement may be terminated and the Merger Transactions abandoned at any time before the Offer Acceptance Time by Parent:

(a) if the Company breaches any of its representations or warranties, or fails to perform any of its covenants or agreements contained in this Agreement and which breach or failure (i) would give rise to the failure of a condition set forth in paragraphs (d), (e) or (f) of Annex I and (ii) by its nature cannot be cured or has not been cured by the Company by the earlier of (A) the Outside Date and (B) the date that is 20 Business Days after the Company’s receipt of written notice of such breach from Parent, but only so long as neither Parent nor Merger Sub are then in material breach of their respective representations or warranties or then materially failing to perform their respective covenants or agreements contained in this Agreement; or

(b) following an Adverse Recommendation Change, or a Willful and Material Breach by the Company of its obligations under Section 5.4.

Section 7.4 Termination by the Company. This Agreement may be terminated and the Merger Transactions abandoned at any time before the Offer Acceptance Time by the Company:

(a) in order to enter into an Acquisition Agreement pursuant to and in accordance with Section 5.4(e); provided that prior to or concurrently with such termination the Company pays the Termination Fee under Section 7.6(b)(i); or

(b) if Parent or Merger Sub breaches any of their respective representations or warranties, or fails to perform any of their respective covenants or agreements contained in this Agreement and which breach or failure (i) would, individually or when aggregated with any such other breaches of failures, reasonably be expected to result

in a Parent Material Adverse Effect and (ii) by its nature cannot be cured or has not been cured by Parent or Merger Sub, as applicable, by the earlier of (A) the Outside Date and (B) the date that is 20 Business Days after Parent’s receipt of written notice of such breach from the Company, but only so long as the Company is not then in material breach of its representations or warranties or then materially failing to perform its covenants or agreements contained in this Agreement.

Section 7.5 Effect of Termination. In the event of termination of this Agreement as provided in this Article VII, notice thereof shall be given to the other party or parties hereto, specifying the provision hereof pursuant to which such termination is made, and this Agreement shall immediately become void and of no effect, without any Liability or obligation on the part of Parent, Merger Sub, the Company or their respective directors, officers and Affiliates; provided, that:

(a) the Confidentiality Agreement, the Guarantee, Section 5.3(b), Section 5.9, Section 5.10, this Section 7.5, Section 7.6 and Article VIII shall survive the termination hereof;

(b) the Company may have Liability as provided in Section 7.6; and

(c) no such termination shall relieve any party from any Liability resulting from a Willful and Material Breach of this Agreement or for fraud based upon such party’s specific representations and warranties made under this Agreement.

Section 7.6 Fees Following Termination.

(a) Except as set forth in this Section 7.6, all Expenses incurred in connection with this Agreement and the Merger Transactions shall be paid in accordance with the provisions of Section 5.10.

(b) The Company shall pay, or cause to be paid, to Parent by wire transfer of immediately available funds an amount equal to the Termination Fee:

(i) if this Agreement is terminated by the Company pursuant to Section 7.4(a), in which case payment shall be made concurrently with such termination;

(ii) if this Agreement is terminated by Parent pursuant to Section 7.3(b), in which case payment shall be made within five Business Days following such termination; or

(iii) if (A) a Takeover Proposal shall have been publicly made or publicly proposed to the Company or otherwise publicly announced or made to the Company Board in writing, in each case prior to the Offer Acceptance Time and not subsequently withdrawn, (B) thereafter this Agreement is terminated (x) by the Company or Parent pursuant to Section 7.2(a) or Section 7.2(c) and there shall not have been a failure of an Offer Condition set forth in clause (b) or (c) of Annex I or (y) by Parent pursuant to Section 7.3(a) and (C) within 12 months following the date of such termination set forth in clause (B) of this Section 7.6(b)(iii), the Company enters into a definitive Contract with respect to any

transaction specified in the definition of “Takeover Proposal” or any such transaction is consummated, in each case whether or not involving the same Takeover Proposal or the Person making the Takeover Proposal referred to in clause (A), in which case payment shall be made within five Business Days following the earlier of the date on which the Company (1) enters into such Contract or (2) consummates such transaction. For purposes of the foregoing clauses (A) and (C) only, references in the definition of the term “Takeover Proposal” to the figure “20%” shall be deemed to be replaced by “50%”.

(d) Parent and the Company acknowledge that the fees and other provisions of this Section 7.6 are an integral part of the Merger Transactions and that without these agreements, Parent and the Company would not enter into this Agreement. Accordingly, if the Company fails to timely pay any amount due pursuant to this Section 7.6, and, in order to obtain the payment, Parent or Merger Sub commences a Legal Action which results in a judgment against the Company for the payment set forth in this Section 7.6, the Company shall pay, as applicable, Parent’s or Merger Sub’s out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) in connection with such Legal Action, in addition to any other amounts due pursuant to this Section 7.6, together with interest on each such amount at the prime rate as published in The Wall Street Journal in effect on the date each such payment was required to be made through the date each such payment was actually received.

(e) Except in the case of the Company’s fraud based upon its specific representations and warranties made under this Agreement, (i) Parent’s right to receive the Termination Fee pursuant to this Section 7.6 shall constitute the sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) of Parent and Merger Sub and the Guarantor against the Company and its Subsidiaries, their respective Associated Parties or Representatives, or any Associated Party of such Associated Parties for any damages suffered as a result of the failure of the Merger Transactions to be consummated, and (ii) upon payment of such amount, no Person shall have any rights or claims against any of the Company, its Subsidiaries, any of their respective Associated Parties or Representatives, or any Associated Party of such Associated Parties under this Agreement or otherwise, whether at law or equity, in contract, in tort or otherwise, and none of the Company, its Subsidiaries, any of their respective Associated Parties or Representatives, or any Associated Party of such Associated Parties shall have any further Liability or obligation relating to or arising out of this Agreement or the Merger Transactions; provided that nothing in this Section 7.6(e) shall impair the rights of Parent and Merger Sub under Section 8.15, it being understood that in no event shall Parent and Merger Sub be entitled to specific performance set forth in Section 8.15 and to receive the Termination Fee pursuant to this Section 7.6. Except in the case of the Company’s fraud based upon such its specific representations and warranties made under this Agreement, in the event Parent has received all amounts to which it is entitled pursuant to this Section 7.6, none of the Company, any of its Subsidiaries, any of their respective Associated Parties or Representatives, nor any Associated Party or such Associated Parties shall have any further Liability under this Agreement or in connection with the Merger Transactions.

(f) For the avoidance of doubt, in no event shall the Company be obligated to pay, or cause to be paid, the Termination Fee on more than one occasion.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Certain Definitions. For purposes of this Agreement:

(a) “Acceptable Confidentiality Agreement” means a confidentiality agreement between the Company and a Person making a Takeover Proposal entered into prior to the date hereof, or if entered into on or after the date hereof, on terms no less favorable (except with respect to standstill provisions) to the Company than those contained in the Confidentiality Agreement.

(b) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), when used with respect to any Person, means the power to direct or cause the direction of the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

(c) “Associated Party” means, with respect to any Person, such Person’s former, current and future direct or indirect equity holders, controlling persons, stockholders, directors, officers, employees, agents, Affiliates, members, financing sources, managers, general or limited partners or assignees.

(d) “Business Day” means any day other than Saturday, Sunday or a day on which the SEC or commercial banks in New York, New York, are authorized or required by Law to close.

(e) “Company Equity Plans” means the Company’s 2014 Equity Incentive Plan and the 2010 Amended Management Incentive Plan.

(f) “Company Material Adverse Effect” means any fact, change, event or occurrence that, individually or in the aggregate, (i) has had, or would reasonably be expected to have, a material adverse effect on the business, results of operations, assets or financial condition of the Company and its Subsidiaries, taken as a whole or (ii) has prevented or materially delayed, or would reasonably be expected to prevent or materially delay, the consummation by the Company of any of the Merger Transactions; provided, that the term “Company Material Adverse Effect” shall not include any such fact, change, event or occurrence relating to or arising from (A) any national, international, or regional economic, financial, social or political conditions (including changes therein) in general, including the results of elections, trade disputes or the imposition of trade restrictions, tariffs or similar taxes, (B) changes in any financial, credit, capital or securities markets or conditions (including any disruption thereof), (C) changes in interest, currency or exchange rates or the price of any commodity, security or market index, (D) changes in legal or

regulatory conditions, including changes or proposed changes in Law, GAAP or other accounting principles or requirements, or in standards, guidance, interpretations or enforcement thereof, (E) changes in the Company’s and its Subsidiaries’ industries in general, (F) seasonal fluctuations in the business of the Company and its Subsidiaries substantially consistent with prior such fluctuations, (G) any change in the market price or trading volume or ratings of any securities of the Company, or the change in, or failure of the Company to meet, or the publication of any report regarding, any internal or public projections, forecasts, guidance, budgets, predictions or estimates of or relating to the Company or any of its Subsidiaries for any period, including with respect to revenue, earnings, profit, cash flow or cash position (it being understood that the underlying causes of such change or failure may, if they are not otherwise excluded from the definition of Company Material Adverse Effect, be taken into account in determining whether a Company Material Adverse Effect has occurred), (H) the occurrence, escalation, outbreak or worsening of any hostilities, war, police action, acts of terrorism, sabotage or military conflicts, whether or not pursuant to the declaration of an emergency or war, (I) the existence, occurrence or continuation of any force majeure events, including any earthquakes, floods, hurricanes, tropical storms, fires or other natural or manmade disasters, any epidemic, pandemic or other similar outbreak (including any non-human epidemic, pandemic or other similar outbreak) or any other national, international or regional calamity, (J) outbreaks of food contamination or food-borne illness, (K) any Legal Action arising from or relating to this Agreement or the Merger Transactions, (L) the execution, announcement, performance or existence of this Agreement, the identity of Parent or its Affiliates, the taking or not taking of any action to the extent required by this Agreement, or the pendency or contemplated consummation of the Merger Transactions, including any actual or potential loss or impairment of any Contract or relationship with any supplier, investor, landlord, Franchisee, partner, employee or other business relation due to any of the foregoing in this subclause (provided that this clause (L) shall not apply in Section 3.3 (Corporate Authorizations), Section 3.6 (Government Authorizations) and Section 3.7 (Non-Contravention)), (M) compliance by the Company and its Subsidiaries with the terms of this Agreement, including the failure to take any action restricted by this Agreement, (N) any actions taken, or not taken, with the consent, waiver or at the request of Parent, or (O) any effect that is cured by the Company prior to the termination of this Agreement; provided, further, that with respect to subclauses (A), (B), (C), (D), (E), (G), (H), (I) and (J), only to the extent such fact, change, event or occurrence does not materially and disproportionately affect the Company or its Subsidiaries, taken as a whole, compared to other similarly situated companies (in which case the incremental disproportionate impact or impacts may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect).

(g) “Company Organizational Documents” means the certificate of incorporation and bylaws (or the equivalent organizational documents) of the Company and its Subsidiaries as in effect on the date of this Agreement.

(h) “Company SEC Reports” means any report, schedule, form, statement or other document (including exhibits) filed with or furnished to, or required to be filed with or furnished to, the SEC.

(i) “Contract” means any contract, agreement, indenture, note, bond, loan, lease, sublease, conditional sales contract, mortgage, license, sublicense, obligation, promise, undertaking, commitment or other binding arrangement (in each case, whether written or oral).

(j) “Enforceability Exceptions” means (i) any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws of general applicability affecting or relating to creditors’ rights generally and (ii) general principles of equity, whether considered in a proceeding at law or in equity.

(k) “Environmental and Safety Laws” means all Laws concerning protection of the environment, employee health and safety, and natural resources, including regulation of Hazardous Materials and other pollutants, and including, without limitation, the federal Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response and Compensation, and Liability Act of 1980, Safe Drinking Water Act, Occupational Safety and Health Act, Hazardous Materials Transportation Act, Federal Food, Drug and Cosmetic Act, and their state and local counterparts.

(l) “Franchise Agreement” means any Contract, including, any franchise agreement, area development agreement or similar agreement that relates to the development or franchising of franchises, pursuant to which the Company or any Subsidiary of the Company grants or has granted any franchise or the right or option to acquire any franchise to develop or operate or license others to develop or operate any retail business that sells Company products.

(m) “Franchisee” means any person other than the Company or any Subsidiary of the Company that is granted a right to develop or operate or is granted a right to license others to develop or operate, any retail business that sells Company products.

(n) “Governmental Authority” means (i) any federal, state, local, municipal, foreign or international government or governmental authority, quasi-governmental entity of any kind, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body (public or private) or any body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, (ii) any self-regulatory organization, including the Nasdaq, or (iii) any political subdivision of any of the foregoing.

(o) “Hazardous Materials” means any pollutant, contaminant, toxic substance, petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive material or radon that is regulated pursuant to Environmental and Safety Laws.

(p) “Incidental Inbound License” means any (i) permitted use right in a non-disclosure agreement; (ii) non-exclusive license of Intellectual Property, including any generally-available Software (including Software as-a-Service), data, or content that does

not call for aggregate payments by the Company in excess of $50,000; (iii) non-exclusive license that is included in but ancillary to a Contract to purchase or lease standard office equipment, such as a photocopier, computer, or mobile phone that also contains a license of Intellectual Property in the nature of a “shrink-wrap” and other generally-available end-user license or permission; or (iv) non-exclusive license of Intellectual Property implied by law to end-user customers of the Company or any of its Subsidiaries in order for them to use products, data, goods or services.

(q) “Incidental Outbound License” means any (i) permitted use right in a non-disclosure agreement; (ii) non-exclusive license of Intellectual Property granted by the Company or any of its Subsidiaries that is included in any of the following: a franchise, sales, marketing, reseller, distributor or similar Contract; (iii) a vendor Contract and that grants permission to the vendor to identify the Company or any of its Subsidiaries as a customer of the vendor during the term of the Contract; (iv) a license granted to a current or former vendor, employee, or contractor of the Company or any of its Subsidiaries solely to use Intellectual Property for the benefit of the Company or any of its Subsidiaries; or (v) a non-exclusive license of Intellectual Property implied by law to end-user customers.

(r) “Intellectual Property” means all rights with respect to: (i) patents and applications therefor, and patents issuing thereon, including continuations, divisionals, continuations-in-part, reissues, reexaminations, renewals and extensions; (ii) copyrights and registrations and applications therefor; (iii) domain names, uniform resource locators and other names and locators associated with the internet, including applications and registrations thereof; (iv) Trademarks; (v) Trade Secrets; and (vi) all claims, causes of action and rights to sue for past, present and future infringement or misappropriation of the foregoing.

(s) “Intervening Event” means any material event, fact, circumstance, development or occurrence that (i) was not known to, or reasonably foreseeable by, the Company Board as of or prior to the date hereof, and (ii) becomes known to the Company Board prior to the Offer Acceptance Time.

(t) “Knowledge” means (i) when used with respect to the Company, the actual knowledge after reasonable inquiry of the individuals listed on Section 8.1(t) of the Company Disclosure Schedule and (ii) when used with respect to Parent, the actual knowledge after reasonable inquiry of any of the officers or directors of Parent or Merger Sub.

(u) “Law” means any law, common law, statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority, and any Orders.

(v) “Liens” means any mortgages, liens, pledges, security interests, hypothecations, claims, deeds of trust, options, rights of first offer or refusal, restrictions on transfer, charges or other encumbrances in respect of any property or asset.

(w) “Orders” means any orders, decisions, judgments, writs, injunctions, decrees, awards or other determination of any Governmental Authority.

(x) “Owned Intellectual Property” means all material Intellectual Property related to the business of the Company and its Subsidiaries that is owned by either the Company or any of its Subsidiaries, as the case may be.

(y) “Parent Material Adverse Effect” means any effect, change, event or occurrence that prevents or materially delays, interferes with, hinders or impairs (i) the consummation by Parent or Merger Sub of any of the Merger Transactions on a timely basis or (ii) the compliance by Parent or Merger Sub with their respective obligations under this Agreement.

(z) “Permitted Lien” means (i) any Lien for Taxes which are not yet due or which are being contested in good faith by appropriate proceedings and for which, in each case, adequate reserves have been established therefore in accordance with GAAP, (ii) Liens securing indebtedness or liabilities that are reflected in the Company SEC Reports, (iii) such non-monetary Liens or other imperfections of title with respect to real property, if any, that are not materially adverse to the Company and its Subsidiaries, including (A) easements whether or not shown by the public records, overlaps, encroachments and any matters not of record which would be disclosed by an accurate survey or a personal inspection of the property, (B) any supplemental Taxes or assessments not shown by the public records and (C) title to any portion of the premises lying within the right of way or boundary of any public road or private road, (iv) Liens imposed or promulgated by Laws with respect to real property and improvements, including zoning regulations, (v) Liens disclosed on existing title insurance policies, title reports or existing surveys which have (together with all documents creating or evidencing such Liens) been delivered to Parent, (vi) mechanics’, carriers’, workmen’s, repairmen’s and similar Liens incurred in the ordinary course of business consistent with past practice for amounts not yet due or which are being contested in good faith by appropriate proceedings, but only if adequate reserves have been established therefor in accordance with GAAP, (vii) in the case of leased real property, any Lien to which the fee or any other interest in the leased premises is subject, (viii) any right, restriction or covenant associated with any license of Intellectual Property and (ix) other Liens that would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries taken as a whole.

(aa) “Person” means any natural person, corporation, company, partnership, association, limited liability company, limited partnership, limited liability partnership, trust or other legal entity or organization, including a Governmental Authority.

(bb) “Personal Data” means any information that specifically identifies, or is capable of identifying, any individual Person, including any information that could be associated with such individual, such as an address, e-mail address, telephone number, health information, financial information, drivers’ license number, location information, or government issued identification number.

(cc) “Representatives” means, when used with respect to any Person, the directors, officers, employees, consultants, accountants, legal counsel, investment bankers or other financial advisors, agents and other representatives of such Person and its Subsidiaries.

(dd) “Rights” or “rights” means any rights, title, interest or benefit of whatever kind or nature.

(ee) “Subsidiary” means, when used with respect to any Person, any other Person that such Person directly or indirectly owns or has the power to vote or control more than 50% of the equity interests, capital stock, voting stock or other equity or voting interests of such other Person.

(ff) “Superior Proposal” means any bona fide written Takeover Proposal that was not solicited in, and did not otherwise result from, a violation of Section 5.4 that the Company Board or any committee thereof or subcommittee thereof has determined in its good faith judgment (i) would be more favorable to the Company’s stockholders from a financial point of view than the Merger Transactions and (ii) is reasonably likely to be consummated, taking into account all legal, regulatory, financial, financing and other aspects of such proposal and of this Agreement; provided that for purposes of the definition of “Superior Proposal”, the references to “20%” in the definition of Takeover Proposal shall be deemed to be references to “50%.”

(gg) “Takeover Proposal” means any proposal or offer relating, directly or indirectly, to (i) a merger, consolidation, spin-off, share exchange (including a split-off) or business combination involving 20% or more of the capital stock of the Company or consolidated assets of the Company and its Subsidiaries, taken as a whole, (ii) a sale, lease, exchange, mortgage, transfer or other disposition, in a single transaction or series of related transactions, of assets representing 20% or more of the consolidated assets, revenues or gross profits of the Company and its Subsidiaries, taken as a whole, (iii) a purchase or other acquisition or sale of shares of capital stock or other securities, in a single transaction or series of related transactions, representing 20% or more of the voting power of the capital stock of the Company, including by way of a tender offer or exchange offer, (iv) a reorganization, recapitalization, liquidation or dissolution of the Company or (v) any other transaction having a similar effect to those described in clauses (i) through (iv).

(hh) “Tax Returns” means any and all reports, returns, declarations, claims for refund, information reports or returns or statements required to be supplied to a Governmental Authority or required by a Governmental Authority to be collected and maintained in connection with Taxes, including any schedule or attachment thereto or amendment thereof.

(ii) “Taxes” means any and all federal, state, local or foreign taxes, levies, imposts, duties, and similar governmental charges or fees (including any interest, penalties or additions to tax imposed in connection therewith or with respect thereto) imposed by any Governmental Authority, including (i) taxes imposed on, or measured by, income, franchise, profits or gross receipts and (ii) ad valorem, value added, capital gains, sales, goods and services, use, excise, stamp, real or personal property, capital stock, business, license, branch, profits, payroll, estimated, withholding, employment, social security (or similar), unemployment compensation, occupation, premium, windfall profits, transfer and gains taxes.

(jj) “Trade Secrets” means information, including a formula, algorithm, data architecture, pattern, compilation, program, device, method, technique, know-how or process, that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other Persons who can obtain economic value from its disclosure or use, and (b) is subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(kk) “Trademarks” means, trademarks, trade dress, trade names, logos and service marks, together with the goodwill symbolized by or associated with any of the foregoing and any applications, registrations and renewals therefore.

(ll) “Willful and Material Breach” means a material breach, or a material failure to perform, in each case that is the consequence of an act or omission by a party with the actual knowledge that the taking of such act or failure to take such act would or would reasonably be expected to cause a breach of this Agreement, it being understood that such term shall include, in any event, Parent’s or Merger Sub’s failure to cause the Offer Acceptance Time to occur or to consummate the Closing when required to do so by this Agreement.

Section 8.2 Interpretation. Unless the express context otherwise requires:

(a) the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa;

(d) references herein (whether capitalized or not) to a specific Section, Subsection, Recital, Schedule, Exhibit or Annex shall refer, respectively, to Sections, Subsections, Recitals, Schedules, Exhibits of Annexes of this Agreement unless the context otherwise requires;

(e) wherever the word “include”, “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;

(f) references herein to any gender shall include each other gender;

(g) references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, that nothing contained in this Section 8.2 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement;

(h) references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity;

(i) with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”;

(j) the word “or” shall be disjunctive but not exclusive;

(k) references herein to any Law shall be deemed to refer to such Law as amended, modified, codified, reenacted, supplemented or superseded in whole or in part and in effect from time to time, and also to all rules and regulations promulgated thereunder;

(l) references herein to any Contract mean such Contract as amended, supplemented or modified (including any waiver thereto) in accordance with the terms thereof;

(m) the headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement;

(n) with regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence;

(o) if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action, unless otherwise required by Law, shall be extended to the next succeeding Business Day;

(p) references herein to “as of the date hereof”, “as of the date of this Agreement” or words of similar import shall be deemed to mean “as of immediately prior to the execution and delivery of this Agreement”; and

(q) “made available” to Parent refers to information posted by the Company in the virtual data room for “Columbia” hosted by Donnelley Financial Solutions Venue and the virtual data room hosted by Company Financial Advisor, each as accessible to Parent through April 9, 2019.

Section 8.3 No Survival. None of the representations and warranties contained in this Agreement or in any instrument delivered under this Agreement shall survive the Effective Time. This Section 8.3 shall not limit any covenant or agreement of the parties to this Agreement which, by its terms, contemplates performance after the Effective Time.

Section 8.4 Governing Law. This Agreement, and any dispute, claim, legal action, suit, proceeding or controversy arising out of or relating hereto, shall be governed by, and construed in accordance with, the Law of the State of Delaware, without regard to conflict of law principles thereof.

Section 8.5 Submission to Jurisdiction. Each party to this Agreement (a) irrevocably and unconditionally submits to the personal jurisdiction of the Court of Chancery of the State of Delaware, County of Newcastle (or, only if such court declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware),

and any appellate court therefrom (the “Chosen Courts”), (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that any actions or proceedings arising in connection with this Agreement or the Merger Transactions shall be brought, tried and determined only in the Chosen Courts, (d) waives any claim of improper venue or any claim that the Chosen Courts are an inconvenient forum and (e) agrees that it will not bring any action relating to this Agreement or the Merger Transactions in any court other than the Chosen Courts.

Section 8.6 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER DOCUMENTS AND AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 8.6.

Section 8.7 Notices. All notices and other communications hereunder shall be in writing and shall be addressed as follows (or at such other address for a party as shall be specified by like notice):

If to Parent or Merger Sub, to:

MTY Group

8210, route Transcanadienne

St. Laurent, QC, H4S 1M5

Canada

Attention: Eric Lefebvre

Email: eric@mtygroup.com

with a copy (which shall not constitute notice) to:

Morrison & Foerster LLP

12531 High Bluff Drive

San Diego, CA 92130-2040

United States

Attention: Steven G. Rowles; Shai Kalansky

Email: SRowles@mofo.com; SKalansky@mofo.com

with a copy (which shall not constitute notice) to:

Fasken

800, rue du Square-Victoria

bureau 3700

Montréal, Québec H4Z 1E9

Canada

Attention: Neil Kravitz

Email: NKravitz@fasken.com

If to the Company, to:

Papa Murphy’s Holdings, Inc.

8000 NE Parkway Drive, Suite 350

Vancouver, WA 98662

United States

Attention: Chief Executive Officer

Facsimile: 360-397-6665

Email: legal@papamurphys.com

with a copy (which shall not constitute notice) to each of:

Perkins Coie LLP

1120 NW Couch St., Tenth Floor

Portland, OR 97209

United States

Attention: John R. Thomas; Joe Bailey

Email: JRThomas@perkinscoie.com;

joebailey@perkinscoie.com

All such notices or communications shall be deemed to have been delivered and received (a) if delivered in person, on the day of such delivery, (b) if by facsimile and electronic mail, on the day on which such facsimile and electronic mail were sent; provided, that receipt is confirmed, (c) if by certified or registered mail (return receipt requested), on the fifth Business Day after the mailing thereof or (d) if by reputable overnight delivery service, on the second Business Day after the sending thereof.

Section 8.8 Amendment. Subject to compliance with applicable Law, at any time prior to the Effective Time, this Agreement may be amended or supplemented in any and all respects by written agreement of the parties hereto; provided that following the Offer Acceptance Time, this Agreement may not be amended in any manner that causes the Merger Consideration to differ from the Offer Price. This Agreement may not be amended or supplemented after the Effective Time.

Section 8.9 Extension; Waiver. At any time before the Offer Acceptance Time, Parent and Merger Sub, on the one hand, and the Company, on the other hand, may (a) extend the time for the performance of any of the obligations of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement or (c) subject to applicable Law, waive compliance by the other party with any of the covenants or conditions contained in this Agreement. Any agreement on the part of a party to any extension or waiver shall be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement.

Section 8.10 Entire Agreement. This Agreement (including the Exhibits and Annexes hereto), the Company Disclosure Schedule, the Support Agreements, the Confidentiality Agreement and the Guarantee constitute the entire agreement and supersede all prior or contemporaneous agreements, negotiations, correspondence, undertakings, understandings, representations and warranties, both written and oral, among the parties to this Agreement with respect to the subject matter of this Agreement.

Section 8.11 No Third-Party Beneficiaries. Except (a) as provided in Section 5.6, Section 7.6(e), Section 8.15 and Section 8.17, (b) if the Offer Acceptance Time occurs, for the rights of holders of Common Stock that validly tendered their shares in the Offer to receive the Offer Price in respect of such shares and (c) if the Effective Time occurs, for the rights of the holders of Common Stock to receive the Merger Consideration and for the rights of the holders of Company Equity Awards to receive such amounts as provided for in Section 2.3, Parent, Merger Sub and the Company hereby agree that their respective representations, warranties, covenants and agreements set forth herein are solely for the benefit of the other party hereto, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.

Section 8.12 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is determined by a court of competent jurisdiction to be invalid or unenforceable, then (a) the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law and (b) the remainder of this Agreement and the application of that provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction.

Section 8.13 Rules of Construction. The parties have participated jointly in negotiating and drafting this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. Subject to and without limiting the

introductory language to Article III, the Company has or may have set forth information in the Company Disclosure Schedule in a section of such Company Disclosure Schedule that corresponds to the section of this Agreement to which it relates. The fact that any item of information is disclosed in the Company Disclosure Schedule shall not constitute an admission by the Company that such item is material, that such item has had or would reasonably be expected to result in any Company Material Adverse Effect or that the disclosure of such be construed to mean that such information is required to be disclosed by this Agreement.

Section 8.14 Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. No party to this Agreement may assign or delegate, by operation of Law or otherwise, all or any portion of its rights or Liabilities under this Agreement without the prior written consent of the other parties to this Agreement, which any such party may withhold in its absolute discretion. No assignment by any party shall relieve such party of any of its obligations hereunder. Any purported assignment not permitted hereby shall be null and void.

Section 8.15 Specific Performance.

(a) The parties to this Agreement agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that money damages or other legal remedies (including those as set forth in Section 7.6) would not be an adequate remedy for any such non-performance or breach. It is accordingly agreed that, subject to Section 8.15(b), the parties to this Agreement shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Chosen Courts, without proof of damages or otherwise, this being in addition to any other remedy at law or in equity, and the parties to this Agreement hereby waive any requirement for the posting of any bond or similar collateral in connection therewith. Each party hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that or otherwise assert that (i) the other party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity.

(b) Notwithstanding anything to the contrary in Section 8.15(a), the right of the Company to seek an injunction, specific performance or other equitable relief in connection with enforcing Parent’s obligation to fund the Offer Price and the Merger Consideration and Parent’s and Merger Sub’s obligations to cause the Offer Acceptance Time to occur and to effect the Closing (but not the right of the Company to seek such injunctions, specific performance or other equitable relief for any other reason) shall be subject to the requirements that (i) all of the Offer Conditions have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Offer Acceptance Time, but subject to such conditions being able to be satisfied) or waived at the Expiration Time, and (ii) the Company has irrevocably confirmed that it would take such actions required of it by this Agreement to cause the Closing to occur.

Section 8.16 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this Agreement. Facsimile signatures or signatures received as a pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement. This Agreement shall become effective when, and only when, each party hereto shall have received a counterpart signed by all of the other parties hereto.

Section 8.17 Non-Recourse. All claims or causes of action (whether in contract or in tort, at law or in equity) that may be based upon, arise out of or relate to this Agreement or the Merger Transactions or the negotiation, execution, performance or non-performance of this Agreement or the Merger Transactions (including any representation or warranty made in or in connection with this Agreement or the Merger Transactions) may be made by any party hereto only against the Persons that are expressly identified as parties hereto or thereto. In no event shall any named party to this Agreement have any shared or vicarious liability for the actions or omissions of any other Person. No Person who is not a named party to this Agreement, including any director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any named party to this Agreement that is not itself a named party to this Agreement (“Non-Party Affiliates”), shall have any liability (whether in contract or in tort, at law or in equity, or based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates) to any party to this Agreement for any obligations or liabilities arising under, in connection with or related to this Agreement, or for any claim based on, in respect of, or by reason of this Agreement or its negotiation or execution; and each party hereto waives and releases all such liabilities, claims and obligations against any such Non-Party Affiliates. The parties acknowledge and agree that the Non-Party Affiliates are intended third-party beneficiaries of this Section 8.17.

[Signature page follows]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties to this Agreement as of the date first written above.


MTY FRANCHISING USA, INC.

By:		/s/ Eric Lefebvre
		Name: Eric Lefebvre
		Title: President

MTY COLUMBIA MERGER SUB, INC.

By:		/s/ Eric Lefebvre
		Name: Eric Lefebvre
		Title: President

PAPA MURPHY’S HOLDINGS, INC.

By:		/s/ Weldon Spangler
		Name: Weldon Spangler
		Title: Chief Executive Officer

Annex I

Offer Conditions

Notwithstanding any other provision of the Agreement or the Offer and subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, Merger Sub shall not be required to (and Parent shall not be required to cause Merger Sub to) accept for payment or pay for, and, subject to such rules and regulations, may delay the acceptance for payment or payment for, any shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer and may terminate or amend the Offer in accordance with the terms of this Agreement, if any of the following conditions exist or have occurred and are continuing at the scheduled Expiration Time of the Offer:

(a) Minimum Condition. The number of shares of Common Stock validly tendered (and not properly withdrawn) prior to the expiration of the Offer (but excluding shares tendered pursuant to guaranteed delivery procedures that have not yet been “received” by the “depository,” as such terms are defined by Section 251(h)(6) of the DGCL), together with any shares of Common Stock otherwise owned by Merger Sub or its Affiliates, do not represent at least one share more than 50% of the then outstanding shares of Common Stock (the “Minimum Condition”).

(b) Orders. Any Law or Order shall be in effect enjoining or otherwise prohibiting consummation of the Offer or the Merger. There shall not be instituted and pending any Legal Action of any kind or character by any Governmental Authority against Parent, the Company, or their respective Affiliates challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to enjoin or otherwise prohibit consummation of the Merger.

(c) Governmental Consents. The waiting period (and any extension thereof) applicable to the consummation of the Offer and the Merger under the HSR Act shall not have expired or early termination thereof shall not have been granted and there shall not be in effect any voluntary agreement between the Company and the Federal Trade Commission or the Department of Justice pursuant to which the Company has agreed not to consummate the transactions contemplated by this Agreement for any period of time that has not yet passed.

(d) Representations and Warranties. The representations and warranties of the Company (i) set forth in Section 3.12(b) shall not be true and correct in all respects as of the date of the Agreement and as of the Expiration Time with the same effect as though made as of the Expiration Time, (ii) set forth in Section 3.8(a), Section 3.8(c) and Section 3.8(g) shall not be true and correct in all respects, other than inaccuracies that are de minimis in amount (meaning that such inaccuracies, collectively, would not result in more than a de minimis increase in the aggregate consideration payable by Parent and Merger Sub as contemplated by Article I and Article II of the Agreement), as of the date of the Agreement and as of the Expiration Time with the same effect as though made as of the Expiration Time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), (iii) set forth in Section 3.1, Section 3.3, Section 3.4, Section 3.30 and Section 3.31

shall not be true and correct in all material respects as of the date of the Agreement and as of the Expiration Time with the same effect as though made as of the Expiration Time (except to the extent expressly made as of an earlier date, in which case as of such earlier date) and (iv) set forth in the Agreement, other than those Sections specifically identified in clause (i) through (iii) of this paragraph (d), shall not be true and correct (disregarding all qualifications or limitations as to “materiality”, “Company Material Adverse Effect” and words of similar import set forth therein) as of the date of this Agreement and as of the Expiration Time with the same effect as though made as of the Expiration Time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this clause (iv), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(e) Compliance with Covenants. The Company shall not have complied with or performed in all material respects its obligations required to be complied with or performed by it prior to the Expiration Time under the Agreement and such failure to comply or perform shall not have been cured by the Expiration Time.

(f) Company Material Adverse Effect Condition. Since the date of the Agreement there shall have been any effect, change, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.

(g) No Termination of Agreement. The Agreement shall have been terminated in accordance with its terms.

(h) Certificate. Parent shall not have received a certificate signed on behalf of the Company by an executive officer of the Company, certifying that none of the conditions set forth in clause (d), (e) or (f) hereof shall be continuing as of the Expiration Time.

The foregoing conditions are for the sole benefit of Parent and Merger Sub and, other than the Minimum Condition, may be waived by Parent and Merger Sub in whole or in part at any time and from time to time in their respective sole discretion, in each case subject to the terms and conditions of this Agreement and to the extent permitted by applicable Law. The failure by Parent, Merger Sub or any other Affiliate of Parent at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.

The capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed unless specifically defined in this Annex I.

Papa Murphy's Holdings, Inc. 8-K