ATII 8-K
Archimedes Tech SPAC Partners II Co. (ATII)
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(State or Other Jurisdiction
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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(Address of Principal Executive Offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading
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Name of each exchange
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The
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The
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The
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Item 1.01
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Entry into a Material Definitive Agreement.
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30,000,000 Earn-Out Shares if, within the Earn-Out Period, (1) the VWAP (as defined in the Merger Agreement) of Pubco Common Stock equals or exceeds $15.00 per share over any 30 trading day period or (2) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”) for the preceding twelve months equals or exceeds $400,000,000;
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30,000,000 Earn-Out Shares if, within the Earn-Out Period, (1) the VWAP of Pubco Common Stock equals or exceeds $20.00 per share over any 30 trading day period or (2) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the SEC for the preceding twelve months equals or exceeds $600,000,000; and
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30,000,000 Earn-Out Shares if, within the Earn-Out Period, (1) the VWAP of Pubco Common Stock equals or exceeds $25.00 per share over any 30 trading day period or (2) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the SEC for the preceding twelve months equals or exceeds $800,000,000.
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each party providing access to their books and records and providing information relating to their respective businesses to the other party, its legal counsel and representatives;
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Forge Nano delivering the financial statements required by ATII to make applicable filings with the SEC;
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ATII timely filing all of its public filings with the SEC and otherwise complying in all material respects with applicable securities laws and using its commercially reasonable efforts prior to the Closing to maintain the listing of ATII Units, ATII Ordinary Shares and ATII Warrants on Nasdaq;
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each party not soliciting, initiating, encouraging or continuing discussions with any third party with respect to any transaction other than the transactions contemplated or permitted by the Merger Agreement; and
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ATII and Forge Nano jointly preparing and ATII causing Pubco to file with the SEC a registration statement on Form S-4 (the “Form S-4”) registering the Pubco Common Stock to be issued under the Merger Agreement as the Merger Consideration and in connection with the Reincorporation, which will also contain a proxy statement of ATII for the purpose of soliciting proxies from ATII’s shareholders for approval of certain matters related to the transactions contemplated by the Merger Agreement.
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ATII complying with all of its obligations under the Merger Agreement in all material respects;
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the representations and warranties of ATII being true on and as of the Closing, other than as would not reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement); and
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there having been no occurrence of a Material Adverse Effect with respect to ATII that is continuing and uncured.
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the representations and warranties of Forge Nano being true on and as of the Closing, other than as would not reasonably be expected to have a Material Adverse Effect;
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Forge Nano complying with all of the obligations under the Merger Agreement in all material respects; and
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there having been no occurrence of a Material Adverse Effect with respect to Forge Nano that is continuing and uncured.
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by mutual written consent of ATII and Forge Nano;
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by written notice by either ATII or Forge Nano, if any of the conditions to the Closing set forth in the Merger Agreement have not been satisfied or waived by the Outside Date, unless a breach or violation by such party or their respective affiliates of any representation, warranty, covenant or obligation under the Merger Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;
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by written notice by either ATII or Forge Nano, if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Business Combination, and such Order or other action has become final and non-appealable, unless the failure by such party or their respective affiliates to comply with any provision of the Merger Agreement was the substantial cause of, or substantially resulted in, such action by such Governmental Authority;
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by written notice by Forge Nano to ATII, if (i) there has been a material breach by ATII or any of its subsidiaries of any of their respective representations, warranties, covenants or agreements under the Merger Agreement, or if any representation or warranty of ATII or any of its subsidiaries has become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Sections 7.2(a) or 7.2(b) of the Merger Agreement to be satisfied (treating the Closing Date for such purposes as the date of the Merger Agreement, or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earliest of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to ATII or (B) the Outside Date, unless, at such time, Forge Nano is in material uncured breach of the Merger Agreement;
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by written notice by ATII to Forge Nano, if (i) there has been a material breach by Forge Nano of any of its representations, warranties, covenants or agreements under the Merger Agreement, or if any representation or warranty of the Company will have become untrue or inaccurate, in any case, which would result in a failure of a condition set in Sections 7.3(a) and 7.3(b) of the Merger Agreement to be satisfied (treating the Closing Date for such purposes as the date of the Merger Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to Forge Nano or (B) the Outside Date, unless, at such time, ATII is in material uncured breach of the Merger Agreement;
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by written notice by ATII to Forge Nano, if there is a Material Adverse Effect on Forge Nano and its subsidiaries, taken as a whole, following the date of the Merger Agreement which is uncured for at least ten (10) business days after written notice of such Material Adverse Effect is provided by ATII to Forge Nano;
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by written notice by either ATII or Forge Nano to the other, if the Purchaser Extraordinary General Meeting was held (including any adjournment or postponement thereof) and has concluded, ATII’s shareholders have duly voted, and the Required Purchaser Shareholder Approval was not obtained;
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by written notice by ATII to Forge Nano, if Forge Nano failed to deliver the Written Consent to ATII within two (2) business days of the date of the Merger Agreement;
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by ATII if (i) all of the conditions set forth in Sections 7.1 and 7.2 of the Merger Agreement have been satisfied or waived (other than conditions that by their terms or nature are to be satisfied at Closing), (ii) ATII has irrevocably confirmed by written notice to Forge Nano that all of the conditions set forth in Section 7.3 of the Merger Agreement have been satisfied (other than conditions that by their terms or nature are to be satisfied at the Closing) or that it is willing to waive any such unsatisfied conditions and that ATII is ready, willing and able to consummate the Closing and (iii) Forge Nano fails to consummate the Business Combination within ten (10) business days after such notice; or
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by Forge Nano if (i) all of the conditions set forth in Sections 7.1 and 7.3 of the Merger Agreement have been satisfied or waived (other than conditions that by their terms or nature are to be satisfied at the Closing), (ii) Forge Nano has irrevocably confirmed by written notice to ATII that all of the conditions set forth in Section 7.2 of the Merger Agreement have been satisfied (other than conditions that by their terms or nature are to be satisfied at the Closing) or that it is willing to waive any such unsatisfied conditions and that Forge Nano is ready, willing and able to consummate the Closing and (iii) ATII fails to consummate the Business Combination within ten (10) business days after such notice.
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If, on the 24-month anniversary of the Closing Date, the Investor certifies in writing that it beneficially owns 5,000,000 shares of Pubco Common Stock, Pubco will issue to the Investor additional PIPE Warrants (the “Additional Warrants”) entitling the Investor to purchase 5,000,000 shares of Pubco Common Stock (after giving effect to any reclassification, recapitalization, share division or consolidation, exchange or readjustment or change in the number of Pubco Common Stock that may have occurred during the period from the Closing Date to and including the date of issuance of the Additional Warrants).
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In the event that on the 21st trading day following the six-month anniversary of the Closing Date, the VWAP (as defined in the warrant certificate representing the PIPE Warrants (the “Warrant Certificate”)) of the Pubco Common Stock is less than the Exercise Price (as defined in the Warrant Certificate) then in effect, the Investor will receive PIPE Warrants to purchase a number of additional shares of Pubco Common Stock equal to (i) the product of (x) 5,000,000, multiplied by (y) the Exercise Price then in effect divided by the Reset Price (as defined below) minus (ii) 5,000,000 (the “Reset Warrants”).
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The Additional Warrants and the Reset Warrants will contain substantially the same terms and conditions (including as to expiration date) as the PIPE Warrants, except that, (i) in the case of the Additional Warrants, if the exercise price of the PIPE Warrants has been adjusted to the Measurement Price (as defined below), the initial exercise price of the Additional Warrants shall be the same as the exercise price of the PIPE Warrants after giving effect to such adjustment, and (ii) in the case of the Reset Warrants, the initial exercise price will be the Reset Price. The “Reset Price” is the greater of (x) the VWAP of the shares of Pubco Common Stock on the 21st trading day following the six-month anniversary of the Closing Date and (y) the Reset Floor. The “Reset Floor” means (A) if, as of the Closing, the Pubco or any of its subsidiaries, including Forge Nano, is party to a binding agreement with a financing source reasonably acceptable to the Investor pursuant to which such financing source has committed to provide debt financing in amount at least equal to $200,000,000, subject only to customary funding conditions (as determined in good faith by Pubco), and such debt financing has been publicly disclosed prior to or in connection with the closing of the PIPE Financing, $7.28 or (B) otherwise, $5.00.
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At the Investor’s election, the number of shares of Pubco Common Stock originally subscribed for may be reduced on a one-for-one basis by up to the aggregate number of (i) ordinary shares of ATII purchased by the Investor for their own account pursuant to open-market transactions with third parties prior to the record date for the ATII shareholder meeting at which the Business Combination will be considered, and (ii) ordinary shares of ATII the Investor beneficially owns as of the date of the Subscription Agreement, in each case, that are held through the Closing Date.
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ATII has agreed that on or prior to the Closing Date, and no later than 30 days thereafter, Pubco will endeavor to file with the SEC (at its sole cost and expense) a registration statement on Form S-1 (the “PIPE Registration Statement”) registering the resale of the Registrable Securities (as defined in the Subscription Agreement), and will use its commercially reasonable efforts to have such PIPE Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) 60 calendar days after its filing (or 90 calendar days after its filing if the SEC notifies Pubco that it will “review” such PIPE Registration Statement) and (ii) five business days after Pubco is notified by the SEC that such PIPE Registration Statement will not be “reviewed” or will not be subject to further review, subject to customary liquidated damages in the event Pubco is unable to meet the filing deadline. Pubco will cause such Registration Statement, or another shelf registration statement registering the Registrable Securities, to remain effective until the earliest of: (i) the second anniversary of the effectiveness date of the Registration Statement; (ii) the date on which the Investor ceases to hold any Registrable Securities issued pursuant to the Subscription Agreement; or (iii) the first date on which the Investor is able to sell all of its Registrable Securities issued pursuant to the Subscription Agreement (or shares received in exchange therefor) under Rule 144 of the Securities Act without volume or manner of sale limitations.
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From the date of the Subscription Agreement until six months from the effective date of the PIPE Registration Statement, Pubco will not, without the prior written consent of the Investor who purchased at least a majority of the Subscribed Shares under the Subscription Agreements, issue, enter into any agreement to issue or announce the issuance of any shares of Pubco Common Stock or any securities of Pubco that would entitle the holder thereof to acquire at any time shares of Pubco Common Stock other than issuances of securities (i) to employees, directors and officers, and other agents of Pubco pursuant to certain share or adoption plans, (ii) pursuant to the Merger Agreement, (iii) to certain specified investors prior to the Closing Date in an aggregate amount up to $60,000,000, (iv) with respect to the shares underlying the PIPE Warrants or (v) pursuant to any merger, acquisition or strategic transaction, subject to certain limitations (each, an “Exempt Issuance”).
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Item 3.02.
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Unregistered Sales of Equity Securities.
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Item 7.01.
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Regulation FD Disclosure.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
No. |
Description
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2.1*†
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4.1
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10.1
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10.2
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10.3
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10.4
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99.1
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104
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Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
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*
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Certain exhibits to the Merger Agreement are filed separately as exhibits to this Current Report on Form 8-K. Schedules to the Merger Agreement are omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.
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†
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Certain portions of these exhibits have been redacted pursuant to Item 601(b)(2)(ii) or 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibits to the SEC upon request.
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ARCHIMEDES TECH SPAC PARTNERS II CO.
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Date: April 20, 2026
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By:
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/s/ Long Long
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Long Long
Chief Executive Officer
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Exhibit 2.1
Execution Version
AGREEMENT AND PLAN OF MERGER
by and among
Archimedes Tech SPAC Partners II Co.,
as the Purchaser,
ATII Holdings Inc.,
as Pubco,
ATII Merger Sub Inc.,
as Merger Sub I,
ATII Merger Sub II LLC,
as Merger Sub II,
and
Forge Nano, Inc.,
as the Company,
Dated as of April 20, 2026
TABLE OF CONTENTS
| Page | |||
| ARTICLE I REINCORPORATION AND MERGERS | 8 | ||
| 1.1 | Company Mergers | 8 | |
| 1.2 | Effective Times | 8 | |
| 1.3 | Effect of the Company Mergers | 9 | |
| 1.4 | Tax Treatment of the Company Mergers | 9 | |
| 1.5 | Governing Documents Relating to the Company Mergers | 9 | |
| 1.6 | Directors and Officers Relating to the Company Mergers | 10 | |
| 1.7 | Reincorporation of the Purchaser | 10 | |
| 1.8 | Merger Consideration | 12 | |
| 1.9 | Conversion of Company Convertible Securities | 12 | |
| 1.10 | Treatment of Company Options | 12 | |
| 1.11 | Conversion of Company Stock | 12 | |
| 1.12 | Treasury Stock | 13 | |
| 1.13 | Rights Cease to Exist | 13 | |
| 1.14 | [Reserved.] | 13 | |
| 1.15 | Surrender of Company Stock and Disbursement of Merger Consideration | 13 | |
| 1.16 | Effect of Company Mergers on Merger Sub I and Merger Sub II | 15 | |
| 1.17 | Consideration Spreadsheet | 15 | |
| 1.18 | Escrow; Earnout | 16 | |
| 1.19 | Taking of Necessary Action; Further Action | 17 | |
| 1.20 | [Reserved.] | 18 | |
| 1.21 | Withholding Rights | 18 | |
| ARTICLE II CLOSING | 18 | ||
| 2.1 | Closing | 18 | |
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER, PUBCO, MERGER SUB I AND MERGER SUB II | 18 | ||
| 3.1 | Organization and Standing | 19 | |
| 3.2 | Authorization; Binding Agreement | 19 | |
| 3.3 | Governmental Approvals | 20 | |
| 3.4 | Non-Contravention | 21 | |
| 3.5 | Capitalization | 21 | |
| 3.6 | SEC Filings and Purchaser Financials | 23 | |
| 3.7 | Absence of Certain Changes | 24 | |
| 3.8 | Compliance with Laws | 24 | |
| 3.9 | Actions; Orders; Permits | 25 | |
| 3.10 | Taxes and Returns | 25 | |
| 3.11 | Employees and Employee Benefit Plans | 27 | |
| 3.12 | Properties | 27 | |
| 3.13 | Material Contracts | 27 | |
| 3.14 | Transactions with Affiliates | 27 | |
| 3.15 | Subsidiary Activities | 27 | |
| 3.16 | Investment Company Act | 27 | |
| 3.17 | Finders and Brokers | 28 | |
| 3.18 | Ownership of Stockholder Merger Consideration | 28 | |
| 3.19 | Certain Business Practices | 28 | |
| 3.20 | Insurance | 29 | |
| 3.21 | Purchaser Trust Account | 29 | |
| 3.22 | Independent Investigation | 29 | |
| 3.23 | Indebtedness | 29 | |
| 3.24 | Litigation; Permits | 29 | |
| 3.25 | No Other Representations | 30 | |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 30 | ||
| 4.1 | Organization and Standing | 31 | |
| 4.2 | Authorization; Binding Agreement | 31 | |
| 4.3 | Capitalization | 32 | |
| 4.4 | Subsidiaries | 32 | |
| 4.5 | Governmental Approvals | 33 | |
| 4.6 | Non-Contravention | 33 | |
| 4.7 | Financial Statements | 34 | |
| 4.8 | Absence of Certain Changes | 34 | |
| 4.9 | Compliance with Laws | 35 | |
| 4.10 | Company Permits | 35 | |
| 4.11 | [Reserved] | 35 | |
| 4.12 | Litigation | 35 | |
| 4.13 | Material Contracts | 35 | |
| 4.14 | Intellectual Property | 37 | |
| 4.15 | Taxes and Returns | 39 | |
| 4.16 | Real Property | 41 | |
| 4.17 | Personal Property | 42 | |
| 4.18 | Title to and Sufficiency of Assets | 42 | |
| 4.19 | Employee Matters. | 42 | |
| 4.20 | Benefit Plans | 44 | |
| 4.21 | Environmental Matters | 46 | |
| 4.22 | Transactions with Related Persons | 47 | |
| 4.23 | Insurance | 47 | |
| 4.24 | Books and Records | 48 | |
| 4.25 | Top Customers and Suppliers | 48 | |
| 4.26 | Certain Business Practices | 48 | |
| 4.27 | Investment Company Act | 49 | |
| 4.28 | Finders and Brokers | 49 | |
| 4.29 | [Reserved]. | 49 | |
| 4.30 | Independent Investigation | 49 | |
| 4.31 | Information Supplied | 49 | |
| 4.32 | Disclosure | 50 | |
| ARTICLE V COVENANTS | 50 | ||
| 5.1 | Access and Information | 50 | |
| 5.2 | Conduct of Business of the Company | 51 | |
| 5.3 | Conduct of Business of the Purchaser | 54 | |
| 5.4 | Annual and Interim Financial Statements | 57 | |
| 5.5 | Purchaser Public Filings | 57 | |
| 5.6 | No Solicitation | 57 | |
| 5.7 | No Trading | 59 | |
| 5.8 | Notification of Certain Matters | 59 | |
| 5.9 | Efforts | 59 | |
| 5.10 | Tax Matters | 61 | |
| 5.11 | Further Assurances | 61 | |
| 5.12 | The Registration Statement and Proxy Statement | 62 | |
| 5.13 | Company Stockholder Approval | 64 | |
| 5.14 | Public Announcements | 64 | |
| 5.15 | Confidential Information | 65 | |
| 5.16 | Documents and Information | 66 | |
| 5.17 | Post-Closing Board of Directors and Executive Officers | 66 | |
| 5.18 | Indemnification of Directors and Officers; Tail Insurance | 67 | |
| 5.19 | Trust Account Proceeds | 68 | |
| 5.20 | Registration Rights Agreement | 68 | |
| 5.21 | Section 280G | 68 | |
| ARTICLE VI NO SURVIVAL | 69 | ||
| 6.1 | No Survival | 69 | |
| ARTICLE VII CLOSING CONDITIONS | 69 | ||
| 7.1 | Conditions to Each Party’s Obligations | 69 | |
| 7.2 | Conditions to Obligations of the Company | 70 | |
| 7.3 | Conditions to Obligations of the Purchaser | 71 | |
| 7.4 | Frustration of Conditions | 72 | |
| ARTICLE VIII TERMINATION AND EXPENSES | 72 | ||
| 8.1 | Termination | 72 | |
| 8.2 | Effect of Termination | 74 | |
| 8.3 | Fees and Expenses | 74 | |
| ARTICLE IX WAIVERS AND RELEASES | 75 | ||
| 9.1 | Waiver of Claims Against Trust | 75 | |
| ARTICLE X MISCELLANEOUS | 76 | ||
| 10.1 | Non-Recourse | 76 | |
| 10.2 | Notices | 76 | |
| 10.3 | Binding Effect; Assignment | 76 | |
| 10.4 | Third Parties | 77 | |
| 10.5 | [Reserved] | 77 | |
| 10.6 | Governing Law; Jurisdiction | 77 | |
| 10.7 | WAIVER OF JURY TRIAL | 77 | |
| 10.8 | Specific Performance | 77 | |
| 10.9 | Severability | 78 | |
| 10.10 | Amendment | 78 | |
| 10.11 | Waiver | 78 | |
| 10.12 | Entire Agreement | 78 | |
| 10.13 | Interpretation | 79 | |
| 10.14 | Counterparts | 79 | |
| 10.15 | Legal Representation | 79 | |
| ARTICLE XI DEFINITIONS | 80 | ||
| 11.1 | Certain Definitions | 80 | |
| 11.2 | Section References | 92 | |
INDEX OF EXHIBITS
| Exhibit | Description |
| Exhibit A | Form of Written Consent |
| Exhibit B | Form of Purchaser Support Agreement |
| Exhibit C | Form of Lock-Up Agreement |
| Exhibit D | Form of Registration Rights Agreement |
| Exhibit E | Form of Pubco Ascent Warrant Agreement |
| Exhibit F | Form of Subscription Agreement |
| Exhibit G | Form of PIPE Investor Warrant Agreement |
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of April 20, 2026 by and among (i) Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (the “Purchaser”), (ii) ATII Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Pubco”), (iii) ATII Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub I”), (iv) ATII Merger Sub II LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Purchaser (“Merger Sub II”) and (v) Forge Nano, Inc., a Delaware corporation (the “Company”). The Purchaser, Pubco, Merger Sub I, Merger Sub II and the Company are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”
RECITALS:
A. At least one (1) day prior to the First Effective Time (as defined below), and subject to receipt of the Required Purchaser Shareholder Approval (as defined below), the Purchaser intends to effect the Reincorporation (as defined below), whereby the Purchaser shall merge with and into Pubco, following which the separate corporate existence of the Purchaser shall cease and Pubco shall continue as the surviving corporation pursuant to the Companies Act (as revised) of the Cayman Islands (the “Companies Act”) and the applicable provisions of the Delaware General Corporation Law (as amended, the “DGCL”).
B. At least one (1) day after the completion of the Reincorporation, or on a later date as agreed by the Parties, and upon the terms and subject to the conditions of this Agreement and in accordance with DGCL and the Delaware Limited Liability Company Act (the “DLLCA”), as applicable, the Parties intend to (i) at the First Effective Time, effect the merger of Merger Sub I with and into the Company, with the Company continuing as the Initial Surviving Corporation (as defined below) (the “First Company Merger”), as a result of which all of the issued and outstanding capital stock of the Company immediately prior to the First Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for each Company Stockholder (as defined below) to receive its Pro Rata Share (as defined below) of the Closing Payment Shares (as defined below), all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the DGCL, and (ii) immediately following the First Company Merger, effect the merger of the Initial Surviving Corporation with and into Merger Sub II, with Merger Sub II continuing as the Surviving Company (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”), as a result of which all of the issued and outstanding capital stock of the Initial Surviving Corporation immediately prior to the Second Effective Time (as defined below) shall no longer be outstanding and shall thereupon be converted into and become one membership interest in the Surviving Company and such membership interest shall constitute the only outstanding equity of the Surviving Company as of immediately following the Second Effective Time.
C. The board of directors of the Purchaser has (i) approved this Agreement and the transactions contemplated hereby, including the Reincorporation and the Company Mergers (preceded by the Reincorporation), (ii) determined that this Agreement and the transactions contemplated hereby are fair to, advisable and in the best interests of the Purchaser and the Purchaser’s shareholders, (iii) determined that this Agreement be submitted to the Purchaser’s shareholders for the adoption and the approval of the transactions contemplated hereby, including the Reincorporation and the Company Mergers (preceded by the Reincorporation), and (iv) determined to recommend to the Purchaser’s shareholders the adoption of this Agreement and the approval of the transactions contemplated hereby, including, as applicable, the Reincorporation (including the execution of the Plan of Merger (as defined below)) and the Company Mergers.
D. The respective boards of directors of Pubco and Merger Sub I, and the Purchaser, as the sole stockholder of each of Pubco and Merger Sub I, have each (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including, as applicable, the Reincorporation and the First Company Merger (preceded by the Reincorporation), (ii) declared that this Agreement and the transactions contemplated hereby are fair to, advisable and in the best interests of Pubco and Merger Sub I, as applicable, and the Purchaser, as the sole stockholder of Pubco and Merger Sub I, as applicable, and (iii) adopted this Agreement and approved the transactions contemplated hereby, including, as applicable, the Reincorporation (including the execution of the Plan of Merger (as defined below)), the issuance of Pubco Common Stock to the Escrow Account pursuant to Section 1.18 and the First Company Merger.
E. The Purchaser, as the sole member of Merger Sub II, has (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Second Company Merger (preceded by the First Company Merger), (ii) declared that this Agreement and the transactions contemplated hereby are fair to, advisable and in the best interests of Merger Sub II and the Purchaser, as its sole member and (iii) adopted this Agreement and approved the transactions contemplated hereby, including the Second Company Merger.
F. The board of directors of the Company has (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Company Mergers, (ii) declared that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the Company and the Company’s stockholders, (iii) determined that this Agreement be submitted to the Company’s stockholders for the adoption and the approval of the transactions contemplated hereby, including the Company Mergers, and (iv) determined to recommend to the Company’s stockholders the adoption of this Agreement and the approval of the transactions contemplated hereby, including the Company Mergers.
G. Promptly following the execution of this Agreement (and in any event within two (2) Business Days of execution of this Agreement), the Company shall seek the Required Company Stockholder Approval (as defined below) and deliver to the Purchaser a true and correct copy of an irrevocable written consent signed by the Company’s Key Management Members (as defined below) and directors and the Significant Company Holders (as defined below), substantially in the form attached hereto as Exhibit A, sufficient to approve the First Company Merger and the other transactions contemplated by this Agreement (the “Written Consent”).
H. Contemporaneously with the execution of, and as a condition and an inducement to the Purchaser and the Company entering into this Agreement, the Sponsor is entering into and delivering a support agreement, substantially in the form attached hereto as Exhibit B (the “Purchaser Support Agreement”), pursuant to which the Sponsor has agreed (i) not to transfer or redeem any Purchaser Ordinary Shares held by the Sponsor in accordance with the Insider Letter, (ii) to vote in favor of this Agreement, the Reincorporation and the Company Mergers at the Purchaser Extraordinary General Meeting in accordance with the Insider Letter, (iii) to waive any anti-dilution or similar protection with respect to such Purchaser Ordinary Shares (whether resulting from the transactions contemplated hereby, by the Ancillary Documents or by any other transaction consummated in connection with the transactions contemplated hereby and thereby) and (iv) to contribute up to 3,300,000 Contribution Shares (as defined in the Purchaser Support Agreement) to secure one or more Financing Transactions (as defined in the Purchaser Support Agreement) as follows: to the extent the PIPE Investors (as defined below) fund any Financing Transaction of at least $100,000,000, to transfer to such PIPE Investors 3,000,000 Contribution Shares to secure such Financing Transaction and to transfer up to 300,000 Contribution Shares to investors to secure other Financing Transactions to the extent such Financing Transactions are funded by such investors.
I. Contemporaneously with the execution of this Agreement, (i) the Purchaser, Pubco and the Company are entering into a subscription agreement, substantially in the form attached as Exhibit F hereto (the “Subscription Agreement”), with the PIPE Investors pursuant to which, among other things, such PIPE Investors have agreed to subscribe for, and Pubco has agreed to issue to such PIPE Investors, an aggregate of 10,000,000 shares of Pubco Common Stock at a purchase price of no less than $10.00 per share (the “Subscribed Shares”) on the terms and subject to the conditions set forth in the Subscription Agreement and (ii) Pubco and the PIPE Investors are entering into a warrant agreement, substantially in the form attached as Exhibit G hereto (the “PIPE Investor Warrant Agreement”), pursuant to which Pubco has agreed to issue to the PIPE Investors warrants with the right to purchase up to an aggregate of 15,000,000 shares of Pubco Common Stock at an exercise price of $10.00 per share (subject to applicable adjustments) during the five (5) year period following the Closing Date (the “PIPE Investor Warrants” and together with the Subscribed Shares and the Contribution Shares, the “PIPE Investment”) on the terms and subject to the conditions set forth in the PIPE Investor Warrant Agreement.
J. The Parties intend that each of the Reincorporation and the Company Mergers will qualify for the Merger Intended Tax Treatment and the Reincorporation Intended Tax Treatment, respectively (each as defined below).
K. Certain capitalized terms used herein are defined in Article XI hereof.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereto agree as follows:
ARTICLE I
REINCORPORATION AND MERGERS
1.1 Company Mergers.
(a) At the First Effective Time, which shall be at least one (1) day after the Reincorporation Effective Time (as defined below), and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the DGCL, Merger Sub I and the Company shall consummate the First Company Merger, pursuant to which Merger Sub I shall be merged with and into the Company, following which the separate corporate existence of Merger Sub I shall cease and the Company shall continue as the surviving corporation and a wholly-owned subsidiary of Pubco. The Company, as the surviving corporation after the First Company Merger, is hereinafter sometimes referred to as the “Initial Surviving Corporation” (provided, that references to the Company for periods after the First Effective Time shall include the Initial Surviving Corporation).
(b) Immediately following the First Effective Time, upon the terms and subject to the conditions of this Agreement and in accordance with the applicable provisions of the DGCL and DLLCA, as applicable, the Initial Surviving Corporation and Merger Sub II shall consummate the Second Company Merger, pursuant to which the Initial Surviving Corporation shall be merged with and into Merger Sub II, following which the separate corporate existence of the Initial Surviving Corporation shall cease and Merger Sub II shall continue as the surviving entity and a wholly-owned subsidiary of Pubco. Merger Sub II, as the surviving entity after the Second Company Merger, is hereinafter sometimes referred to as the “Surviving Company” (provided, that references to Merger Sub II for periods after the Second Effective Time shall include the Surviving Company).
1.2 Effective Times.
(a) Subject to and upon the terms and conditions of this Agreement, at the First Effective Time, the Parties hereto shall cause the First Company Merger to be consummated by filing a certificate of merger (the “First Certificate of Merger”) with the Secretary of State of the State of Delaware and make such other filings or recordings, in each case in accordance with the relevant provisions of the DGCL in connection with the First Company Merger (the time of such filing, or such later time as may be specified in the First Certificate of Merger, being the “First Effective Time”).
(b) Subject to and upon the terms and conditions of this Agreement, immediately following the First Effective Time, the Parties hereto shall cause the Second Company Merger to be consummated by filing a certificate of merger (the “Second Certificate of Merger”) with the Secretary of State of the State of Delaware and make such other filings or recordings, in each case in accordance with the relevant provisions of the DGCL and DLLCA, as applicable, in connection with the Second Company Merger (the time of such filing, or such later time as may be specified in the Second Certificate of Merger, the “Second Effective Time”).
1.3 Effect of the Company Mergers.
(a) At the First Effective Time, the effect of the First Company Merger shall be as provided in this Agreement, the First Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the First Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of Merger Sub I and the Company shall vest in the Initial Surviving Corporation, and all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Company and Merger Sub I will be the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Initial Surviving Corporation
(b) At the Second Effective Time, the effect of the Second Company Merger shall be as provided in this Agreement, the Second Certificate of Merger and the applicable provisions of the DGCL and DLLCA, as applicable. Without limiting the generality of the foregoing, and subject thereto, at the Second Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Initial Surviving Corporation and Merger Sub II shall vest in the Surviving Company, and all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Initial Surviving Corporation and Merger Sub II will be the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Surviving Company.
1.4 Tax Treatment of the Company Mergers. For federal income tax purposes, the Company Mergers, taken together, are intended to constitute a tax-free “reorganization” within the meaning of Section 368(a)(1)(A) of the Code (the “Merger Intended Tax Treatment”). The Parties hereby (i) adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations, (ii) agree to file and retain such information with respect to the Company Mergers as shall be required under Section 1.368-3 of the United States Treasury regulations, and (iii) agree to file all Tax and other informational returns with respect to the Company Mergers on a basis consistent with such characterization, unless required to do otherwise pursuant to a final determination as defined in Section 1313(a) of the Code (or pursuant to any similar provision of applicable state, local or foreign Law). Each of the parties acknowledge and agree that each such party (a) has had the opportunity to obtain independent legal and tax advice with respect to the transactions contemplated by this Agreement and (b) is responsible for paying its own Taxes, including any adverse Tax consequences that may result if the Company Mergers are determined not to qualify for the Merger Intended Tax Treatment.
1.5 Governing Documents Relating to the Company Mergers.
(a) At the First Effective Time, the certificate of incorporation and bylaws of the Company as in effect immediately prior to the First Effective Time shall be the certificate of incorporation and bylaws of the Initial Surviving Corporation, in each case, until thereafter amended or restated as provided therein and in accordance with the applicable provisions of the DGCL.
(b) At the Second Effective Time, the certificate of formation of Merger Sub II as in effect immediately prior to the Second Effective Time, shall be amended and restated in the form agreed by the parties prior to the effectiveness of the Registration Statement, and as so amended shall be the certificate of formation of the Surviving Company, until thereafter supplemented or amended in accordance with the applicable provisions of the DLLCA and the certificate of formation of the Surviving Company.
(c) At the Second Effective Time, the limited liability company agreement of Merger Sub II as in effect immediately prior to the Second Effective Time, shall be amended and restated in the form agreed by the parties prior to the effectiveness of the Registration Statement, and as so amended shall be the limited liability company agreement of the Surviving Company, until thereafter supplemented or amended in accordance with the DLLCA, the certificate of formation or limited liability company agreement of the Surviving Company.
1.6 Directors and Officers Relating to the Company Mergers. The Parties shall take all requisite actions such that, from and after the Second Effective Time, the board of directors and executive officers of the Company as of immediately prior to the First Effective Time shall be the board of directors and executive officers of the Surviving Company, each to hold office, after giving effect to Section 5.17, in accordance with the DLLCA, and the Surviving Company’s Organizational Documents, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.
1.7 Reincorporation of the Purchaser.
(a) Subject to receipt of the Required Purchaser Shareholder Approval (as defined below), at least one (1) day prior to the First Effective Time, the Purchaser shall re-domicile and become a Delaware corporation by means of causing a merger of the Purchaser with and into Pubco, following which the separate corporate existence of the Purchaser shall cease and Pubco shall continue as the surviving corporation under the DGCL, such merger pursuant to Section 237 of the Companies Act and the applicable provisions of the DGCL (the “Reincorporation”). The Purchaser and Pubco shall cause the Reincorporation to be consummated by filing a plan of merger (the “Plan of Merger”) (and any other documents required by the Companies Act) with the Registrar of Companies in the Cayman Islands (the “Cayman Registrar”) pursuant to Sections 233 and 237 of the Companies Act, filing a certificate of merger with the Secretary of State of the State of Delaware and make such other filings or recordings, in each case, in accordance with the Companies Act and the relevant provisions of the DGCL, in connection with the Reincorporation (the time when the Plan of Merger is registered by the Cayman Registrar and when the certificate of merger is filed with the Secretary of State of the State of Delaware, or such later time as may be specified in the Plan of Merger and certificate of merger, being the “Reincorporation Effective Time”).
(b) At the Reincorporation Effective Time, the certificate of incorporation and bylaws of Pubco, each as in effect immediately prior to the Reincorporation Effective Time, shall be amended and restated in the form agreed by the parties prior to the effectiveness of the Registration Statement, and as so amended shall be the certificate of incorporation and bylaws of Pubco, until thereafter supplemented or amended in accordance with the terms therein and the applicable provisions of the DGCL (with such changes as may be agreed in writing by the Purchaser and the Company), including providing that the name of Pubco shall be amended to be “Forge Nano Holdings, Inc.”
(c) In accordance with applicable Law, immediately prior to Reincorporation Effective Time, each then issued and outstanding Purchaser Unit shall separate and convert automatically into one (1) Purchaser Ordinary Share and one-half (1/2) of one Purchaser Warrant, and all Purchaser Units shall cease to exist. Immediately following the unit separation, at the Reincorporation Effective Time, each then issued and outstanding Purchaser Ordinary Share (which, for the avoidance of doubt, includes the Purchaser Ordinary Shares held as a result of the separation of the Purchaser Units) (other than the Redeeming Purchaser Shares and the shares set forth in Section 1.7(f)) shall be cancelled in exchange for the right to receive one (1) share of Pubco Common Stock. All Purchaser Ordinary Shares (other than the Redeeming Purchaser Shares and the shares set forth in Section 1.7(f)) shall no longer be issued and outstanding and shall be cancelled and cease to exist, and each holder of Purchaser Ordinary Shares (other than the Redeeming Purchaser Shares and the shares set forth in Section 1.7(f)) shall thereafter cease to have any rights with respect thereto, except for the right to receive the consideration set forth in this Section 1.7(c);
(d) At the Reincorporation Effective Time, each Purchaser Warrant that is outstanding and unexercised shall convert automatically into a warrant to acquire one (1) share of Pubco Common Stock (each a “Pubco Warrant”) pursuant to the terms of the Warrant Agreement;
(e) At the Reincorporation Effective Time, each Redeeming Purchaser Share issued and outstanding immediately prior to the Reincorporation Effective Time shall automatically be cancelled and cease to exist and shall thereafter represent only the right of the holder thereof to be paid a pro rata share of the Redemption Price in accordance with the Purchaser Memorandum and Articles; and
(f) Notwithstanding Section 1.7(c) above or any other provision of this Agreement to the contrary, if there are any Purchaser Ordinary Shares or other classes of shares of Purchaser that are owned by Purchaser as treasury shares immediately prior to the Merger Effective Time, such shares shall be cancelled and shall cease to exist without any conversion thereof or payment or other consideration therefor.
(g) Effects of the Reincorporation. At the Reincorporation Effective Time, the Reincorporation shall have the effects specified in this Agreement, the Plan of Merger, the relevant certificate of merger, the Companies Act and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Reincorporation Effective Time, all the rights, property of every description, including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of each of Pubco and Purchaser shall vest in Pubco as the surviving corporation, and Pubco shall be liable for and subject in the same manner as Pubco and the Purchaser to all mortgages, charges or security interests and all Contracts, obligations, claims, debts and liabilities of Pubco and the Purchaser in accordance with the Companies Act and the DGCL.
(h) Tax Treatment of the Reincorporation. For federal income tax purposes, the Reincorporation is intended to constitute a “reorganization” within the meaning of Section 368 of the Code (the “Reincorporation Intended Tax Treatment”). The Purchaser hereby (i) adopts this Agreement insofar as it relates to the Reincorporation as a “plan of reorganization” within the meaning of Section 1.368-2(g) of the United States Treasury Regulations, (ii) agrees to file and retain such information as shall be required under Section 1.368-3 of the United States Treasury Regulations with respect to the Reincorporation, and (iii) agrees to file all Tax and other informational returns on a basis consistent with such characterization, except if otherwise required by a “determination” within the meaning of Code Section 1313 (or pursuant to any similar provision of applicable state, local or foreign Law). Each of the parties acknowledge and agree that each (i) has had the opportunity to obtain independent legal and tax advice with respect to the transactions contemplated by this Agreement, and (ii) is responsible for paying its own Taxes, including any adverse Tax consequences that may result if the Reincorporation is determined not to qualify for the Reincorporation Intended Tax Treatment.
1.8 Merger Consideration. At the First Effective Time, as consideration for the First Company Merger, the Company Stockholders collectively shall be entitled to receive from Pubco, in the aggregate, a number of shares of Pubco Common Stock (the “Merger Consideration”) with an aggregate value equal to One Billion Two Hundred Million U.S. Dollars ($1,200,000,000) (the total portion of the Merger Consideration amount payable to all Company Stockholders in accordance with this Agreement is also referred to herein as the “Stockholder Merger Consideration”).
1.9 Conversion of Company Convertible Securities.
(a) At the First Effective Time, automatically and without any action on the part of the holder thereof, each Company Warrant that is issued and outstanding and unexpired immediately prior to the First Effective Time shall be assumed by Pubco and shall become a corresponding Pubco Warrant. Each such assumed Pubco Warrant shall be subject to the same terms and conditions (including vesting and exercisability) as were applicable to the corresponding Company Warrant immediately prior to the First Effective Time, except that such convertible security shall be exercisable or convertible for, or shall otherwise confer the right to acquire, on the same terms and conditions, the number and type of equity interests of Pubco as the holder would have been entitled to receive if such Company Warrant had been exercised, converted, or settled immediately prior to the First Effective Time.
(b) At the First Effective Time, each Company Ascent Option that is issued and outstanding and unexpired immediately prior to the First Effective Time shall be cancelled and converted into a warrant to purchase shares of Pubco Common Stock (each, a “Pubco Ascent Warrant”) pursuant to the Pubco Ascent Warrant Agreement, substantially in the form attached as Exhibit E hereto (the “Pubco Ascent Warrant Agreement”), to be executed on the Closing Date by Pubco and Ascent Funds International Management LLC.
1.10 Treatment of Company Options. At the First Effective Time, automatically and without any action on the part of the holder thereof, each Company Option that is issued and outstanding and unexpired immediately prior to the First Effective Time shall be assumed by Pubco and shall be converted into an option to purchase a number of shares of Pubco Common Stock (a “Pubco Option”) equal to the product (rounded down to the nearest whole number) of (a) the number of shares of Company Common Stock subject to such Company Option immediately prior to the First Effective Time and (b) the quotient of (1) the Applicable Per Share Merger Consideration divided by (ii) the Equity Award Conversion Amount, with an exercise price per Pubco Option (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (x) the exercise price per Company Option by (ii) the Equity Award Conversion Amount; provided, that, in the case of any Pubco Options to which Section 422 of the Code applies, the exercise price and the number of shares of Pubco Common Stock purchasable pursuant to such Pubco Options shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code.
1.11 Conversion of Company Stock.
(a) At the First Effective Time, by virtue of the First Company Merger and without any action on the part of the Purchaser, Pubco, Merger Sub I, the Company or the Company Stockholders, (i) each share of Company Preferred Stock issued and outstanding immediately prior to the First Effective Time shall be converted into shares of Company Common Stock pursuant to the Company’s Organizational Documents as in effect immediately prior to the First Effective Time and (ii) each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time (including the shares of Company Common Stock issued upon conversion of the Company Preferred Stock pursuant to subclause (i) of this Section 1.11(a), but not including shares to be canceled in accordance with Section 1.12) shall be canceled and automatically converted into the right to receive, without interest, the applicable pro rata portion of the Closing Payment Shares for such number of shares of Company Common Stock (the “Applicable Per Share Merger Consideration”). For avoidance of any doubt, following the First Effective Time, each Company Stockholder will cease to have any rights with respect to the Company Stock, except for the right to receive the Applicable Per Share Merger Consideration and Company Earn-Out Shares on the terms set forth in Section 1.18.
(b) At the Second Effective Time, by virtue of the Second Company Merger and without any action on the part of any holder thereof, each share of common stock, par value $0.001 per share, of the Initial Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall no longer be outstanding and shall thereupon be converted into and become one (1) validly issued fully paid membership interest of the Surviving Company and such membership interest shall constitute the only outstanding membership interest of the Surviving Company.
1.12 Treasury Stock. At the First Effective Time, if there is any Company Stock owned by the Company as treasury shares or any Company Stock owned by any direct or indirect Subsidiary of the Company immediately prior to the First Effective Time, such shares of Company Stock shall be canceled and shall cease to exist without any conversion thereof or payment therefor.
1.13 Rights Cease to Exist. As of the First Effective Time, all shares of Company Stock shall no longer be outstanding, shall automatically be canceled and shall cease to exist and each holder of shares of Company Stock shall cease to have any rights with respect thereto, except the rights set forth in this Agreement.
1.14 [Reserved.].
1.15 Surrender of Company Stock and Disbursement of Merger Consideration.
(a) Prior to the First Effective Time, the Purchaser or Pubco, as the surviving corporation following the Reincorporation Effective Time, shall appoint the Purchaser’s transfer agent, Odyssey Transfer and Trust Company, or another agent reasonably acceptable to the Company (the “Exchange Agent”), for the purpose of disbursing the Stockholder Merger Consideration. At or prior to the First Effective Time, the Purchaser or Pubco, as the surviving corporation following the Reincorporation Effective Time, shall deposit, or cause to be deposited, with the Exchange Agent the Stockholder Merger Consideration. At or prior to the First Effective Time, the Purchaser or Pubco, as the surviving corporation following the Reincorporation Effective Time, shall send, or shall cause the Exchange Agent to send, to each Company Stockholder a letter of transmittal, in form and substance satisfactory to the Purchaser or Pubco, as the surviving corporation following the Reincorporation Effective Time, and the Company (the “Letter of Transmittal”), for use in such exchange (which shall specify that the delivery of any share of Company Stock in respect of any portion of the Stockholder Merger Consideration shall be effected, and risk of loss and title shall pass, only upon proper delivery of a properly completed and duly executed Letter of Transmittal to the Exchange Agent for use in such exchange).
(b) Each Company Stockholder shall be entitled to receive its Applicable Per Share Merger Consideration in respect of the Company Stock tendered for exchange as soon as reasonably practicable after the First Effective Time, but subject to the delivery to the Exchange Agent of the following items prior thereto (collectively, the “Transmittal Documents”): (i) a properly completed and duly executed Letter of Transmittal; (ii) if a Lock-Up Company Holder, a duly executed Lock-Up Agreement, substantially in the form attached as Exhibit C hereto (each, a “Lock-Up Agreement”); and (ii) such other documents as may be reasonably requested by the Exchange Agent or the Purchaser.
(c) If any portion of the Stockholder Merger Consideration is to be delivered or issued to a Person other than the Person in whose name the Company Stock is registered immediately prior to the First Effective Time, it shall be a condition to such delivery that (i) the transfer of such Company Stock shall have been permitted in accordance with the terms of the Company’s Organizational Documents and any stockholders agreement with respect to the Company, each as in effect immediately prior to the First Effective Time, (ii) the recipient of such portion of the Stockholder Merger Consideration, or the Person in whose name such portion of the Stockholder Merger Consideration is delivered or issued, shall have already executed and delivered, the Lock-Up Agreement (if applicable) and such other Transmittal Documents as are reasonably deemed necessary by the Exchange Agent or the Purchaser and (iii) the Person requesting such delivery shall pay to the Exchange Agent any transfer or other Taxes required as a result of such delivery to a Person other than the registered holder of such Company Stock or establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
(d) After the First Effective Time, there shall be no further registration of transfers of Company Stock. If, after the First Effective Time, the Transmittal Documents are presented to the Initial Surviving Corporation, the Surviving Company, Pubco or the Exchange Agent, the Company Stock shall be canceled and exchanged for the applicable portion of the Stockholder Merger Consideration provided for, and in accordance with the procedures set forth in this Section 1.15. No dividends or other distributions declared or made after the date of this Agreement with respect to Pubco Common Stock with a record date after the First Effective Time will be paid to the holders of any Company Stock that has not yet been surrendered with respect to Pubco Common Stock to be issued upon surrender thereof until the holders of record of such Company Stock shall provide the Transmittal Documents. Subject to applicable Law, following delivery of the Transmittal Documents, the Purchaser shall promptly deliver to the record holders thereof, without interest, evidence representing Pubco Common Stock issued in exchange therefor and the amount of any such dividends or other distributions with a record date after the First Effective Time theretofore paid with respect to such Pubco Common Stock.
(e) All securities issued upon the surrender of Company Warrants in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Warrants. Any portion of the Stockholder Merger Consideration made available to the Exchange Agent pursuant to Section 1.15(a) that remains unclaimed by Company Stockholders two (2) years after the First Effective Time shall be returned to Pubco, upon demand, and any such Company Stockholder who has not exchanged its Company Stock for the applicable portion of the Stockholder Merger Consideration in accordance with this Section 1.15 prior to that time shall thereafter look only to Pubco for payment of the portion of the Stockholder Merger Consideration in respect of such shares of Company Stock without any interest thereon (but with any dividends paid with respect thereto). Notwithstanding the foregoing, none of the Initial Surviving Corporation, the Surviving Company, Pubco, nor any Party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(f) Notwithstanding anything to the contrary contained herein, no fraction of a share of Pubco Common Stock will be issued by virtue of the First Company Merger or the transactions contemplated hereby, and each Person who would otherwise be entitled to a fraction of a share of Pubco Common Stock (after aggregating all fractional shares of Pubco Common Stock that otherwise would be received by such holder) shall instead have the number of shares of Pubco Common Stock issued to such Person rounded down in the aggregate to the nearest whole share of Pubco Common Stock.
1.16 Effect of Company Mergers on Merger Sub I and Merger Sub II.
(a) At the First Effective Time, by virtue of the First Company Merger and without any action on the part of any Party or the holders of any Company Stock or the holders of any shares of capital stock of the Purchaser, Pubco, or Merger Sub I, each share of Merger Sub I Common Stock outstanding immediately prior to the First Effective Time shall be converted into an equal number of shares of common stock of the Initial Surviving Corporation, with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Initial Surviving Corporation.
(b) At the Second Effective Time, by virtue of the Second Company Merger and without any action on the part of any Party, all limited liability company interests of Merger Sub II outstanding immediately prior to the Second Effective Time shall be converted into an equal number of limited liability company interests of the Surviving Company, which shall constitute 100% of the outstanding equity of the Surviving Company, all of which shall be owned by Pubco, which shall continue as the sole member of the Surviving Company, and the Surviving Company shall be classified as an entity disregarded as separate from Pubco for U.S. federal income tax purposes.
1.17 Consideration Spreadsheet.
(a) At least five (5) Business Days prior to the Closing, the Company shall deliver to the Purchaser a spreadsheet (the “Closing Consideration Spreadsheet”), prepared by the Company in good faith and detailing the following, in each case, as of immediately prior to the First Effective Time:
(i) the name and address of record of each holder of Company Stock and the number and class, type or series of Company Stock held by each;
(ii) the aggregate number of shares subject to Company Warrants, Company Ascent Option and Company Options;
(iii) detailed calculations of each of the following (in each case, determined without regard to withholding):
(A) the portion of the Closing Payment Shares allocable to each of holder of Company Stock;
(B) the Applicable Per Share Merger Consideration;
(C) the Pro Rata Share; and
(D) any other determination or calculation reasonably called for by the Purchaser.
(b) The contents of the Closing Consideration Spreadsheet delivered by the Company hereunder shall be subject to reasonable review and comment by the Purchaser, but the Company shall, in all events, remain solely responsible for the contents of the Closing Consideration Spreadsheet. The parties agree that the Purchaser and Pubco, as applicable, shall be entitled to rely on the Closing Consideration Spreadsheet in making payments under ARTICLE I.
1.18 Escrow; Earnout.
(a) At or prior to the Closing Date, the Purchaser, Pubco, the Company and the Exchange Agent (or such other escrow agent mutually acceptable to the Purchaser and the Company), as escrow agent (“Escrow Agent”), shall enter into an Escrow Agreement, effective as of the First Effective Time, in form and substance reasonably satisfactory to the Purchaser and the Company (the “Escrow Agreement”), pursuant to which the Purchaser shall cause Pubco to issue on the Closing Date to the Escrow Agent an aggregate amount of 90,000,000 shares of Pubco Common Stock, being the shares payable pursuant to Section 1.18(b) (the “Company Earn-out Shares”), free and clear of all Liens other than applicable federal and state securities restrictions and restrictions set forth in this Agreement, the Ancillary Documents or the Escrow Agreement, to be held, along with any other dividends, distributions or other income on the Company Earn-Out Shares, in a segregated escrow account (the “Escrow Account”) pursuant to the Escrow Agreement and shall not be disbursed therefrom until they are earned in accordance with this Section 1.18 and the Escrow Agreement. The Company Earn-Out Shares shall be allocated among and transferred to the Persons who received Closing Payment Shares and the holders of Pubco Convertible Securities issued in exchange for Company Convertible Securities, if any, pursuant to this Agreement, pro rata based on the number of shares of Company Common Stock held by such Persons, determined on an as-converted basis) as of the First Effective Time; provided, that any Company Earn-Out Shares attributable to such holders of Pubco Convertible Securities shall be issued only upon the exercise, conversion or settlement thereof in accordance with their terms.
(b) Following the First Effective Time, the Persons who received Closing Payment Shares and each holder of a Pubco Convertible Security issued in exchange for Company Convertible Securities, if any, pursuant to this Agreement, shall be entitled to receive from the Escrow Account, and the Escrow Agent shall disburse therefrom, a proportional amount of Company Earn-Out Shares as follows:
(i) an aggregate of 30,000,000 shares of Pubco Common Stock in the event that, between the Closing Date and the date that is sixty (60) months after the Closing Date, (A) the VWAP of the Pubco Common Stock over any thirty (30) Trading Day period is greater than or equal to $15.00, or (B) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the SEC for the preceding twelve months equals or exceeds $400,000,000;
(ii) an aggregate of 30,000,000 shares of Pubco Common Stock in the event that, between the Closing Date and the date that is sixty (60) months after the Closing Date, (A) the VWAP of the Pubco Common Stock over any thirty (30) Trading Day period is greater than or equal to $20.00, or (B) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the SEC for the preceding twelve months equals or exceeds $600,000,000; and
(iii) an aggregate of 30,000,000 shares of Pubco Common Stock in the event that, between the Closing Date and the date that is sixty (60) months after the Closing Date, (A) the VWAP of the Pubco Common Stock over any thirty (30) Trading Day period is greater than or equal to $25.00, or (B) the revenue, determined in accordance with GAAP applied on a consistent basis, publicly reported by Pubco in its annual or quarterly reports filed with the SEC for the preceding twelve months equals or exceeds $800,000,000.
(c) The Company Earn-out Shares shall be disbursed from the Escrow Account within five (5) Business Days after the satisfaction of the requirements as set forth in Section 1.18(b). The achievement thresholds set forth in Section 1.18(b) are intended to be cumulative.
(d) All shares and per share amounts in this Section 1.18 shall be appropriately adjusted to reflect splits, combinations, recapitalizations, subdivisions, share dividends and similar events relating to the Pubco Common Stock occurring subsequent to the date hereof, including to account for any equity securities into which such shares are exchanged or converted.
(e) No certificates or scrip or shares representing fractional shares of Pubco Common Stock shall be issued in respect of Company Earn-Out Shares to any Persons who received Closing Payment Shares and such fractional share interests will not entitle the owner thereof to vote or to have any rights of a stockholder of Pubco or a holder of shares of Pubco Common Stock. In lieu of any fractional share of Pubco Common Stock to which any Persons would otherwise be entitled in respect of the Company Earn-Out Shares (after aggregating all fractional shares of Pubco Common Stock that otherwise would be received by such Person), the Exchange Agent shall round up or down to the nearest whole share of Pubco Common Stock, as applicable, with a fraction of 0.5 rounded up. No cash settlements shall be made with respect to fractional shares eliminated by rounding.
(f) Notwithstanding anything to the contrary in this Agreement, in the event that, between the Closing Date and the date that is sixty (60) months after the Closing Date, Pubco consummates a merger, consolidation, business combination, tender offer, reorganization, recapitalization, or other transaction or series of related transactions pursuant to which the holders of Pubco Common Stock have the right to receive cash or securities (collectively, the “Transaction Consideration”) in exchange for their shares, and the Transaction Consideration Value of such Transaction Consideration per share of Pubco Common Stock (the “Per Share Transaction Value”) equals or exceeds the applicable thresholds set forth in Section 1.18(b)(i)(B), Section 1.18(b)(ii)(B) and Section 1.18(b)(iii)(B), then immediately prior to the consummation of such transaction, the Persons who received Closing Payment Shares and each holder of a Pubco Convertible Security issued in exchange for Company Convertible Securities, if any, pursuant to this Agreement, shall be entitled to receive from the Escrow Account, and the Escrow Agent shall disburse therefrom, the lesser of (i) the number of Company Earn-Out Shares that would have been issued under Section 1.18(b) if the Per Share Transaction Value had been the VWAP of the Pubco Common Stock over any thirty (30) Trading Day period and (ii) the remaining Company Earn-out Shares that have not yet been issued as of such date. For the avoidance of doubt, if the Per Share Transaction value is less than each of the applicable thresholds set forth in Section 1.18(b)(i)(B), Section 1.18(b)(ii)(B) and Section 1.18(b)(iii)(B), no Company Earn-out Shares shall be issued pursuant to this Section 1.18(f).
(g) Any payments made pursuant to Section 1.18 shall be treated by the Parties as an adjustment to the purchase price pursuant to the “plan of reorganization” without recognition of gain or loss for all Tax purposes, and shall be reported consistently by the parties on all Tax Returns, except as otherwise required by applicable Law.
1.19 Taking of Necessary Action; Further Action.
(a) If, at any time after the First Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Initial Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Merger Sub I, the officers and directors of the Company and Merger Sub I are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
(b) If, at any time after the Second Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Company with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Initial Surviving Corporation and Merger Sub II, the officers and directors of the Initial Surviving Corporation and Merger Sub II are fully authorized in the name of their respective entities or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
1.20 [Reserved.].
1.21 Withholding Rights. Notwithstanding anything to the contrary contained in this Agreement, each of the Parties shall be entitled to deduct and withhold from any amounts otherwise deliverable or payable under this Agreement, such amounts that any such Parties are required to deduct and withhold with respect to any of the deliveries and payments contemplated by this Agreement under the Code or any provision of state, local, provincial or foreign Tax Law. To the extent that amounts are so withheld and are remitted to the appropriate Governmental Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been delivered and paid to such Person in respect of which such deduction and withholding was made. Notwithstanding the foregoing, each of the Purchaser and Pubco agrees that (i) provided the Company delivers the certificate set forth in Section 7.3(d)(viii), no such deduction or withholding is intended on any payments hereunder and (ii) the Purchaser or Pubco, as applicable, shall use commercially reasonable efforts to, and shall cooperate with the Company to, reduce or eliminate any such withholding, including providing recipients of consideration a reasonable opportunity to provide documentation establishing exemptions from or reductions of such withholdings.
ARTICLE II
CLOSING
2.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article VII, the Reincorporation shall take place no later than the first (1st) Business Day after all the Closing conditions to this Agreement have been satisfied or waived, or at such other date as the Purchaser and the Company may agree. The Company Mergers shall take place on the Business Day after the completion of the Reincorporation and in no event later than the second (2nd) Business Day after all the Closing conditions to this Agreement have been satisfied or waived, or at such later date as the Purchaser and the Company may agree. The consummation of the remaining transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Loeb & Loeb LLP, counsel to the Purchaser, 345 Park Avenue, New York, NY 10154, on a date and at a time to be agreed upon by the Purchaser and the Company, which date shall be no later than the second (2nd) Business Day after all the Closing conditions to this Agreement have been satisfied or waived, or at such other date, time or place (including remotely) as the Purchaser and the Company may agree (the date and time at which the Closing is actually held being the “Closing Date”).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER, PUBCO, MERGER SUB I AND MERGER SUB II
Except as set forth in (i) the disclosure schedules delivered by the Purchaser to the Company on the date hereof (the “Purchaser Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer (provided, however, that an item disclosed in any Section of the Purchaser Disclosure Schedules shall be deemed to have been disclosed with respect to all other Sections of this ARTICLE III to which the relevance of such disclosure is reasonably apparent on its face), or (ii) the SEC Reports that are available on the SEC’s website through EDGAR, each of the Purchaser, Pubco, Merger Sub I and Merger Sub II represents and warrants to the Company as of the date of this Agreement and as of the Closing Date (or, if such representations and warranties are made with respect to a certain date, as of such date), as follows:
3.1 Organization and Standing. On the date hereof, (i) the Purchaser is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands, (ii) each of Pubco and Merger Sub I is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and (iii) Merger Sub II is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II has all requisite corporate or limited liability company, as applicable, power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser. The Purchaser has heretofore made available to the Company accurate and complete copies of its, Pubco’s, Merger Sub I’s and Merger Sub II’s Organizational Documents, as currently in effect. None of the Purchaser, Pubco, Merger Sub I nor Merger Sub II is in violation of any provision of its respective Organizational Documents in any material respect, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser.
3.2 Authorization; Binding Agreement.
(a) The Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser Shareholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which the Purchaser is a party and the consummation of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by the board of directors of the Purchaser and other than the Required Purchaser Shareholder Approval, no other corporate or equivalent proceedings, other than as set forth elsewhere in the Agreement, on the part of the Purchaser is necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which each of the Purchaser is a party shall be when delivered, duly and validly executed and delivered by the Purchaser and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of the Purchaser, enforceable against the Purchaser, Pubco, Merger Sub I and Merger Sub II, as applicable, in accordance with its terms, except to the extent that enforceability thereof may be limited by the Enforceability Exceptions. The Purchaser’s board of directors, by resolutions duly adopted at a meeting duly called and held (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Reincorporation and the Company Mergers (preceded by the Reincorporation), (ii) declared that this Agreement and the transaction contemplated hereby are fair to and in the best interests of the Purchaser and the Purchaser’s shareholders, (iii) determined that this Agreement be submitted to the Purchaser’s shareholders for the adoption and the approval of the transactions contemplated hereby, including the Reincorporation and the Company Mergers (preceded by the Reincorporation) and (iv) determined to recommend to the Purchaser’s shareholders the adoption of this Agreement.
(b) Each of Pubco and Merger Sub I has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser Shareholder Approval. The Purchaser, as the sole stockholder of Pubco and Merger Sub I, has authorized, or will authorize immediately after the execution of this Agreement, the execution, delivery and performance of this Agreement and the Ancillary Documents by and on behalf of Pubco and Merger Sub I and the consummation of the Reincorporation, the First Company Merger and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement and each Ancillary Document to which Pubco or Merger Sub I, as applicable, is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors of each of Pubco and Merger Sub I and, other than the Required Purchaser Shareholder Approval, no other corporate or equivalent proceedings, other than as set forth elsewhere in the Agreement, on the part of each of the Pubco and Merger Sub I are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which each of Pubco and Merger Sub I is a party shall be when delivered, duly and validly executed and delivered by Pubco and Merger Sub I and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of each of Pubco and Merger Sub I, enforceable against Pubco and Merger Sub I, as applicable, in accordance with its terms, except to the extent that enforceability thereof may be limited by the Enforceability Exceptions. The respective boards of directors of Pubco, Merger Sub I and the Purchaser, as the sole stockholder of each of Pubco and Merger Sub I, have each, by resolutions duly adopted by written consent (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Reincorporation and the First Company Merger (preceded by the Reincorporation), (ii) declared that this Agreement and the transactions contemplated hereby are fair to and in the best interest of the Purchaser and the Purchaser, as the sole stockholder of Pubco and Merger Sub I, and (iii) adopted this Agreement and approved the transactions contemplated hereby, including the First Company Merger.
(c) Merger Sub II has all requisite limited liability company power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser Shareholder Approval. The Purchaser, as the sole member of Merger Sub II, has authorized, or will authorize immediately after the execution of this Agreement, the execution, delivery and performance of this Agreement and the Ancillary Documents by and on behalf of Merger Sub II and the consummation of the Second Company Merger and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement and each Ancillary Document to which Merger Sub II is a party and the consummation of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by the sole member of Merger Sub II and (b) other than the Required Purchaser Shareholder Approval, no other corporate or equivalent proceedings, other than as set forth elsewhere in the Agreement, on the part of Merger Sub II are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which Merger Sub II is a party shall be when delivered, duly and validly executed and delivered by the Merger Sub II and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of Merger Sub II, enforceable against Merger Sub II in accordance with its terms, except to the extent that enforceability thereof may be limited by the Enforceability Exceptions. The Purchaser, as the sole member of Merger Sub II, by resolutions duly adopted by written consent (i) approved this Agreement and the transactions contemplated hereby, including the Second Company Merger (preceded by the First Company Merger), (ii) determined that this Agreement and the transactions contemplated hereby are fair, advisable and in the best interests of Merger Sub II and (iii) adopted this Agreement and approved the transactions contemplated hereby, including the Second Company Merger.
3.3 Governmental Approvals. Except as otherwise described in Schedule 3.3, no Consent of or with any Governmental Authority, on the part of any of the Purchaser, Pubco, Merger Sub I and Merger Sub II is required to be obtained or made in connection with the execution, delivery or performance by the Purchaser, Pubco, Merger Sub I or Merger Sub II of this Agreement and each Ancillary Document to which it is a party or the consummation by each of the Purchaser, Pubco, Merger Sub I and Merger Sub II of the transactions contemplated hereby and thereby, other than (a) pursuant to Antitrust Laws, (b) such filings as contemplated by this Agreement, (c) any filings required with Nasdaq or the SEC with respect to the transactions contemplated by this Agreement, (d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (e) such other items that the failure of which to obtain or make would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser.
3.4 Non-Contravention. Except as otherwise described in Schedule 3.4, the execution and delivery by each of the Purchaser, Pubco, Merger Sub I and Merger Sub II of this Agreement and each Ancillary Document to which each of the Purchaser, Pubco, Merger Sub I or Merger Sub II is a party, the consummation by each of the Purchaser, Pubco, Merger Sub I and Merger Sub II of the transactions contemplated hereby and thereby, and compliance by the Purchaser, Pubco, Merger Sub I and Merger Sub II with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Purchaser’s, Pubco’s, Merger Sub I’s or Merger Sub II’s Organizational Documents, (b) subject to the receipt of the filing and recordation of appropriate merger documents as required by the DGCL or the DLLCA, as applicable, and obtaining the Consents from Governmental Authorities referred to in Section 3.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to the Purchaser, Pubco, Merger Sub I, Merger Sub II, or any of their respective material properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Purchaser, Pubco, Merger Sub I or Merger Sub II under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the material properties or assets of the Purchaser, Pubco, Merger Sub I or Merger Sub II under (other than Permitted Liens), (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Purchaser Material Contract, except for, in the case of the foregoing clauses (a), (b) or (c), as have not been and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser.
3.5 Capitalization.
(a) The Purchaser is authorized to issue 400,000,000 Purchaser Ordinary Shares and 1,000,000 Purchaser Preference Shares. The issued and outstanding Purchaser Securities as of the date of this Agreement are set forth in the SEC Reports. There are no issued or outstanding Purchaser Preference Shares. All outstanding Purchaser Ordinary Shares are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companies Act, the Purchaser Memorandum and Articles or any Contract to which Purchaser is a party. None of the outstanding Purchaser Securities has been issued in violation of any applicable securities Laws.
(b) As of the date hereof, Pubco is authorized to issue 100 shares of Pubco Common Stock, of which 100 shares are issued and outstanding, and all of which are owned by the Purchaser and Pubco has no other authorized, issued or outstanding shares of capital stock. All of the issued and outstanding shares of Pubco Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. No Person other than the Purchaser has any rights with respect to such equity securities of Pubco and no such rights will arise by virtue of or in connection with the Reincorporation and the other transactions contemplated by this Agreement.
(c) As of the date hereof, Merger Sub I is authorized to issue 100 shares of Merger Sub I Common Stock, of which 100 shares are issued and outstanding, and all of which are owned by the Purchaser and Merger Sub I has no other authorized, issued or outstanding shares of capital stock. All of the issued and outstanding shares of Merger Sub I Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. No Person other than the Purchaser has any rights with respect to such equity securities of Merger Sub I and no such rights will arise by virtue of or in connection with the First Company Merger and the other transactions contemplated by this Agreement.
(d) As of the date hereof, all of the membership interests of Merger Sub II are beneficially held (and held of record), directly or indirectly, by Purchaser and Merger Sub II has no other authorized, issued or outstanding membership interests. All of the issued and outstanding membership interests of Merger Sub II have been duly authorized and validly issued, and are fully paid and non-assessable. No Person other than the Purchaser has any rights to such equity securities of Merger Sub II and no such rights will arise by virtue of or in connection with the Second Company Merger and the other transactions contemplated by this Agreement.
(e) Prior to giving effect to the transactions contemplated by this Agreement, other than Pubco, Merger Sub I and Merger Sub II, the Purchaser does not have any Subsidiaries or own any equity interests in any other Person.
(f) Except as disclosed in the SEC Reports, there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued shares or membership interests, as applicable, of the Purchaser, Pubco, Merger Sub I or Merger Sub II or (B) obligating the Purchaser, Pubco, Merger Sub I or Merger Sub II to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for such shares or membership interests, as applicable, or (C) obligating the Purchaser, Pubco, Merger Sub I or Merger Sub II to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such capital shares or membership interests, as applicable. Other than the Redemption or as expressly set forth in this Agreement, there are no outstanding obligations of the Purchaser, Pubco, Merger Sub I or Merger Sub II to repurchase, redeem or otherwise acquire any shares or membership interests, as applicable, of the Purchaser, Pubco, Merger Sub I or Merger Sub II or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. Except as expressly contemplated by this Agreement or as disclosed in the SEC Reports, there are no shareholders agreements, voting trusts or other agreements or understandings to which the Purchaser, Pubco, Merger Sub I or Merger Sub II is a party with respect to the voting of any shares or membership interests, as applicable, of the Purchaser, Pubco, Merger Sub I or Merger Sub II.
(g) All Indebtedness of the Purchaser, Pubco, Merger Sub I or Merger Sub II as of the date of this Agreement is disclosed in the SEC Reports. No Indebtedness of the Purchaser, Pubco, Merger Sub I or Merger Sub II contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by the Purchaser, Pubco, Merger Sub I or Merger Sub II or (iii) the ability of the Purchaser, Pubco, Merger Sub I or Merger Sub II to grant any Lien on its properties or assets.
(h) Since the date of formation of the Purchaser, Pubco, Merger Sub I or Merger Sub II, and except as contemplated by this Agreement, none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has declared or paid any distribution or dividend in respect of its shares or membership interests, as applicable, and has not repurchased, redeemed or otherwise acquired any of its shares or membership interests, as applicable, and each of its board of directors or sole member, as applicable, has not authorized any of the foregoing.
3.6 SEC Filings and Purchaser Financials.
(a) The Purchaser, since the IPO, has timely filed all forms, reports, schedules, statements, registration statements, prospectuses and other documents required to be filed or furnished by the Purchaser with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements or supplements thereto, and will file all such forms, reports, schedules, statements and other documents required to be filed by the Purchaser or Pubco subsequent to the date of this Agreement. Except to the extent available on the SEC’s web site through EDGAR, the Purchaser has delivered to the Company copies in the form filed with the SEC of all of the following: (i) the Purchaser’s annual reports on Form 10-K for each fiscal year of the Purchaser beginning with the first year the Purchaser was required to file such a form, (ii) the Purchaser’s quarterly reports on Form 10-Q for each fiscal quarter that the Purchaser filed such reports to disclose its quarterly financial results in each of the fiscal years of the Purchaser referred to in clause (i) above, (iii) all other forms, reports, registration statements, prospectuses and other documents (other than preliminary materials) filed by the Purchaser with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, prospectuses and other documents referred to in clauses (i), (ii) and (iii) above, whether or not available through EDGAR, are, collectively, the “SEC Reports”) and (iv) all certifications and statements required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of SOX) with respect to any report referred to in clause (i) above (collectively, the “Public Certifications”). The SEC Reports (x) complied in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (or, if amended or superseded by a filing prior to the date hereof, on the date of such amended or superseding filing) (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments received from the SEC with respect to any SEC Reports. None of the SEC Reports filed on or prior to the date of this Agreement is subject to ongoing SEC review or investigation as of the date of this Agreement. The Public Certifications are each true as of their respective dates of filing. Each director and executive officer of the Purchaser has filed with the SEC all statements required with respect to the Purchaser by Section 16(a) of the Exchange Act and the rules and regulations thereunder. As used in this Section 3.6, the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC. As of the date of this Agreement, (A) the Purchaser Public Units, the Purchaser Ordinary Shares and the Purchaser Public Warrants are listed on Nasdaq, (B) the Purchaser has not received any written deficiency notice from Nasdaq relating to the continued listing requirements of such Purchaser Securities, (C) there are no Actions pending or, to the Knowledge of the Purchaser, threatened against the Purchaser by the Financial Industry Regulatory Authority with respect to any intention by such entity to suspend, prohibit or terminate the quoting of such Purchaser Securities on Nasdaq, and (D) the Purchaser is in compliance with all the applicable corporate governance rules of Nasdaq.
(b) Since the latest Purchaser Financials, there have been no material changes in the accounting policies of the Purchaser (including any change in depreciation or amortization policies or rates, or policies with respect to reserves for uncollectable accounts receivable or excess or obsolete inventory) that would be required to be disclosed in the Purchaser’s financial statements in accordance with GAAP consistently applied and no revaluation of the Purchaser’s assets.
(c) The Purchaser has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) that are designed to ensure that material information relating to Purchaser and other material information required to be disclosed by Purchaser in the reports and other documents that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and all such material information is accumulated and communicated to the Purchaser’s principal executive officer and its principal financial officer as appropriate to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are effective in timely alerting the Purchaser’s principal executive officer and principal financial officer to material information required to be included in the Purchaser’s periodic reports required under the Exchange Act.
(d) There are no outstanding loans or other extensions of credit made by the Purchaser to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Purchaser.
(e) The financial statements and notes of the Purchaser contained or incorporated by reference in the SEC Reports (the “Purchaser Financials”), fairly present in all material respects the financial position and the results of operations, changes in shareholders’ equity, and cash flows of the Purchaser at the respective dates of and for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).
(f) Except as and to the extent reflected or reserved against in the Purchaser Financials, the Purchaser has not incurred any Liabilities or obligations of the type required to be reflected on a balance sheet in accordance with GAAP that are not adequately reflected or reserved on or provided for in the Purchaser Financials, other than Liabilities of the type required to be reflected on a balance sheet in accordance with GAAP that have been incurred since the Purchaser’s formation in the ordinary course of business. All debts and Liabilities, fixed or contingent, which should be included under U.S. GAAP on a balance sheet are included in all material respects in the Purchaser Financials as of the date of such Purchaser Financials.
3.7 Absence of Certain Changes. Except as expressly contemplated by this Agreement, as of the date of this Agreement, the Purchaser has, (a) since its formation, conducted no business other than its formation, the public offering of its securities (and the related private offerings), public reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Target Companies and the negotiation and execution of this Agreement) and related activities, (b) since February 10, 2025, not been subject to a Material Adverse Effect on the Purchaser and (c) has not taken any action that would constitute a material breach of any of the covenants set forth in Section 5.3(b) if such action were taken after the date hereof without the consent of the Company.
3.8 Compliance with Laws. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II is, and has since its formation been, in compliance with all Laws applicable to it and the conduct of its business except for such noncompliance which would not reasonably be expected to have a Material Adverse Effect on the Purchaser, Pubco, Merger Sub I or Merger Sub II, and none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has received written notice alleging any violation of applicable Law in any material respect. None of the Purchaser, Pubco, Merger Sub I or Merger Sub II is under investigation with respect to any violation or alleged violation of, any law, or judgment, order or decree entered by any court, arbitrator or Governmental Authority, domestic or foreign, and none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has previously received any subpoenas from any Governmental Authority.
3.9 Actions; Orders; Permits. There is no pending or, to the Knowledge of the Purchaser, threatened material Action to which the Purchaser is subject which would reasonably be expected to have a Material Adverse Effect on the Purchaser. There is no material Action that the Purchaser has pending against any other Person. The Purchaser is not subject to any material Orders of any Governmental Authority, nor are any such Orders pending. The Purchaser holds all material Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such Consent or for such Consent to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on the Purchaser.
3.10 Taxes and Returns.
(a) Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II has or will have timely filed, or caused to be timely filed, all federal, state, local, and foreign income Tax Returns and other material Tax Returns required to be filed by it (taking into account all available extensions), which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Purchaser Financials have been established in accordance with GAAP. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II has (i) complied in all material respects with all applicable Laws relating to Tax since their formation, and (ii) has not failed to comply with an applicable Law relating to material Taxes for which the applicable statute of limitations has not expired as of the date hereof.
(b) There are no claims, assessments, Actions, audits, examinations, investigations or other proceedings pending or, to the Knowledge of Purchaser, threatened against the Purchaser, Pubco, Merger Sub I or Merger Sub II in respect of any income Taxes and other material Taxes, and none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has been notified in writing of any proposed Tax claims or assessments against it (other than, in each case, claims or assessments for which adequate reserves in the Purchaser Financials have been established).
(c) There are no Liens with respect to any Taxes upon any of the Purchaser’s assets, other than Permitted Liens.
(d) None of the Purchaser, Pubco, Merger Sub I or Merger Sub II has any outstanding waivers or extensions of any applicable statute of limitations to assess any amount of income Taxes or material amounts of any other Taxes. There are no outstanding requests by the Purchaser, Pubco, Merger Sub I or Merger Sub II for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(e) Since the date of its formation, none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has (i) changed any Tax accounting methods, policies or procedures except as required by a change in Law, (ii) made, revoked, or amended any material Tax election, (iii) filed any amended Tax Returns or claim for refund or (iv) entered into any closing agreement affecting or otherwise settled or compromised any material Tax liability or refund.
(f) There is no Action currently pending or, to the Knowledge of Purchaser, Pubco, Merger Sub I or Merger Sub II, threatened against Purchaser, Pubco, Merger Sub I or Merger Sub II by a Governmental Authority in a jurisdiction where the Purchaser, Pubco, Merger Sub I or Merger Sub II does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(g) None of Purchaser, Pubco, Merger Sub I or Merger Sub II has engaged in any “listed transaction” or has failed to disclose a “reportable transaction,” in each case as defined in U.S. Treasury Regulation section 1.6011-4(b).
(h) None of Purchaser, Pubco, Merger Sub I or Merger Sub II has any Liability or potential Liability for the Taxes of another Person (other than another of Purchaser, Pubco, Merger Sub I or Merger Sub II) that is not adequately reflected in the Purchaser Financials (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract or indemnity (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes). None of Purchaser, Pubco, Merger Sub I or Merger Sub II is a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice (excluding commercial agreements, arrangements or practices entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes (including advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Authority) that will be binding on any Target Company with respect to any period following the Closing Date.
(i) None of Purchaser, Pubco, Merger Sub I or Merger Sub II: (i) has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of securities (to any Person or entity that is not a member of the consolidated group of which the Company is the common parent corporation) qualifying for, or intended to qualify for, Tax-free treatment under Section 355 of the Code (A) within the two-year period ending on the date hereof or (B) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement; or (ii) is or has ever been (A) a member of any consolidated, combined, unitary or affiliated group of corporations for any Tax purposes other than a group of which the Company is or was the common parent corporation, or (B) has Liability for the Taxes under Treasury Regulation section 1.1502-6 (or any similar provision of state, local, or non-U.S. law), as a transferee or successor, or by contract.
(j) None of Purchaser, Pubco, Merger Sub I or Merger Sub II will be required to include any material item of income or exclude any material item of deduction for any taxable period beginning after the Closing Date as a result of: (i) any installment sale or open sale transaction disposition made by a Target Company before the Closing; (ii) any prepaid amount received outside of the ordinary course of business by a Target Company before the Closing; or (iii) any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax law) existing before the Closing.
(k) Each of Purchaser, Pubco, Merger Sub I and Merger Sub II has, with advice of U.S. tax counsel, considered the qualification of the Reincorporation for the Reincorporation Intended Tax Treatment and, after such consideration, to the Knowledge of each of Purchaser, Pubco, Merger Sub I or Merger Sub II, there are no facts or circumstances that would reasonably be expected to prevent the Reincorporation from qualifying for the Reincorporation Intended Tax Treatment.
(l) Each of Purchaser, Pubco, Merger Sub I and Merger Sub II has, with the advice of U.S. tax counsel, considered the representations to be made to counsel in the certificate set forth in Section 5.10(b) of the Purchaser Disclosure Schedules (the “Parent Rep Letter”) and, after such consideration, to the Knowledge of each of Purchaser, Pubco, Merger Sub I or Merger Sub II, there are no facts or circumstances that would cause such representations to be made in the Parent Rep Letter not to be true, correct, and complete, subject to the assumptions set forth therein.
3.11 Employees and Employee Benefit Plans. None of the Purchaser, Pubco, Merger Sub I or Merger Sub II (a) has any paid employees or (b) maintain, sponsor, contribute to or otherwise have any Liability under, any Benefit Plans.
3.12 Properties. None of the Purchaser, Pubco, Merger Sub I or Merger Sub II owns, licenses or otherwise has any right, title or interest in any material Intellectual Property. Except as disclosed in the SEC Reports, none of the Purchaser, Pubco, Merger Sub I or Merger Sub II owns or leases any material real property or material Personal Property.
3.13 Material Contracts.
(a) Except as disclosed in the SEC Reports, other than this Agreement and the Ancillary Documents, there are no Contracts to which the Purchaser is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a Liability greater than $50,000, (ii) may not be cancelled by the Purchaser on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of the Purchaser as its business is currently conducted, any acquisition of material property by the Purchaser, or restricts in any material respect the ability of the Purchaser to engage in business as currently conducted by it or compete with any other Person (each, a “Purchaser Material Contract”). All Purchaser Material Contracts have been made available to the Company other than those that are exhibits to the SEC Reports.
(b) With respect to each Purchaser Material Contract: (i) the Purchaser Material Contract was entered into at arms’ length and in the ordinary course of business; (ii) the Purchaser Material Contract is legal, valid, binding and enforceable in all material respects against the Purchaser and, to the Knowledge of the Purchaser, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (iii) the Purchaser is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by the Purchaser, or permit termination or acceleration by the other party, under such Purchaser Material Contract; and (iv) to the Knowledge of the Purchaser, no other party to any Purchaser Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Purchaser under any Purchaser Material Contract.
3.14 Transactions with Affiliates. Schedule 3.14 sets forth the true, correct and complete list of the Contracts and arrangements that are in existence as of the date of this Agreement under which there are any existing or future Liabilities or obligations between the Purchaser and any (a) present or former director, officer or employee or Affiliate of the Purchaser, or any immediate family member of any of the foregoing, or (b) record or beneficial owner of more than five percent (5%) of the Purchaser’s outstanding capital stock as of the date hereof.
3.15 Subsidiary Activities. Since its formation, each of Pubco, Merger Sub I and Merger Sub II has not engaged in any business activities other than as contemplated by this Agreement, does not own directly or indirectly any ownership, equity, profits or voting interest in any Person and has no assets or Liabilities except those incurred in connection with this Agreement and the Ancillary Documents to which it is a party and the transactions, and, other than this Agreement and the Ancillary Documents to which it is a party, each of Pubco, Merger Sub I and Merger Sub II is not party to or bound by any Contract.
3.16 Investment Company Act. The Purchaser is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment company,” in each case within the meaning of the Investment Company Act of 1940, as amended.
3.17 Finders and Brokers. Except as set forth on Schedule 3.17, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from the Purchaser or any of its Affiliates in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Purchaser.
3.18 Ownership of Stockholder Merger Consideration. All shares of Pubco Common Stock to be issued and delivered to the Company Stockholders as Stockholder Merger Consideration in accordance with ARTICLE I shall be, upon issuance and delivery of such Pubco Common Stock, fully paid and non-assessable, free and clear of all Liens, other than restrictions arising from applicable securities Laws, any applicable Lock-Up Agreement and any Liens incurred by any Company Stockholder, and the issuance and sale of such Pubco Common Stock pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.
3.19 Certain Business Practices.
(a) None of the Purchaser, Pubco, Merger Sub I, Merger Sub II or any Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law, (iii) made any other unlawful payment or (iv) since the formation of the Purchaser, directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the Purchaser, Pubco, Merger Sub I or Merger Sub II or assist it in connection with any actual or proposed transaction.
(b) The operations of the Purchaser, Pubco, Merger Sub I and Merger Sub II are and have been conducted at all times in material compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving the Purchaser, Pubco, Merger Sub I or Merger Sub II with respect to any of the foregoing is pending or, to the Knowledge of the Purchaser, Pubco, Merger Sub I or Merger Sub II, threatened.
(c) None of the Purchaser, Pubco, Merger Sub I, Merger Sub II or any of their directors or officers, or, to the Knowledge of the Purchaser, Pubco, Merger Sub I or Merger Sub II, any other Representative acting on behalf of the Purchaser, Pubco, Merger Sub I or Merger Sub II is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has, since its respective formation, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any Sanctioned Country or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.
3.20 Insurance. Schedule 3.20 lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by the Purchaser relating to the Purchaser or its Subsidiaries, businesses, properties, assets, directors, officers and employees, copies of which have been provided to the Company. All premiums due and payable under all such insurance policies have been timely paid and the Purchaser is otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of the Purchaser, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by the Purchaser or its Subsidiaries. The Purchaser has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to have a Material Adverse Effect on the Purchaser or its Subsidiaries.
3.21 Purchaser Trust Account. As of the date hereof, the Trust Account has a balance of no less than $237,500,000. Such monies are invested solely in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, and held in trust by Odyssey Transfer and Trust Company pursuant to the Trust Agreement. The Trust Agreement is valid and in full force and effect and enforceable in accordance with its terms (subject to the Enforceability Exceptions) and has not been amended or modified. There are no separate agreements, side letters or other agreements that would cause the description of the Trust Agreement in the SEC Reports to be inaccurate in any material respect and/or that would entitle any Person (other than the underwriters of the IPO, the Public Shareholders who shall have elected to redeem their Purchaser Ordinary Shares pursuant to the Purchaser Memorandum and Articles (or in connection with an extension of the Purchaser’s deadline to consummate a Business Combination) or Governmental Authorities for Taxes) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except as described in the Trust Agreement.
3.22 Independent Investigation. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Target Companies, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Target Companies for such purpose. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Company set forth in this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to the Purchaser, Pubco, Merger Sub I or Merger Sub II pursuant hereto, and the information provided by or on behalf of the Company for the Registration Statement; and (b) none of the Company nor its respective Representatives have made any representation or warranty as to the Target Companies, or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Company Disclosure Schedules) or in any certificate delivered to the Purchaser, Pubco, Merger Sub I or Merger Sub II pursuant hereto, or with respect to the information provided by or on behalf of the Company for the Registration Statement.
3.23 Indebtedness. Except as disclosed on Schedule 3.23, none of the Purchaser, Pubco, Merger Sub I or Merger Sub II has any Indebtedness.
3.24 Litigation; Permits. There is no (a) Action pending, or, to the Knowledge of the Purchaser, threatened against the Purchaser, Pubco, Merger Sub I or Merger Sub II or that affects their respective assets or properties, or (b) Order outstanding against the Purchaser, Pubco, Merger Sub I or Merger Sub II or that affects their respective assets or properties, except such Actions or Orders that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Purchaser. None of the Purchaser, Pubco, Merger Sub I or Merger Sub II are party to any material settlement or similar agreement regarding any of the matters set forth in the preceding sentence that contains any ongoing obligations, restrictions or liabilities (of any nature) that are material to the Purchaser, Pubco, Merger Sub I and Merger Sub II. Each of the Purchaser, Pubco, Merger Sub I and Merger Sub II holds all material Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect.
3.25 No Other Representations.
(a) Except for the representations and warranties expressly made in this ARTICLE III, neither Purchaser, Pubco, Merger Sub I, Merger Sub II nor any other Person has made or makes any representation or warranty (express, implied or otherwise) with respect to Purchaser, Pubco, Merger Sub I, Merger Sub II or their respective Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) whether in connection with this Agreement, the Company Mergers or otherwise, and Purchaser, Pubco, Merger Sub I and Merger Sub II hereby disclaim any such other representations or warranties (express, implied or otherwise). In particular, without limiting the foregoing disclaimer, except as expressly provided in this ARTICLE III, neither Purchaser, Pubco, Merger Sub I, Merger Sub II nor any other Person makes or has made any representation or warranty (express, implied or otherwise) to the Company or any of its Affiliates or any of its or their respective Representatives with respect to (i) any financial projection, forecast, estimate, forward-looking statement, budget or prospect information relating to Purchaser, Pubco, Merger Sub I, Merger Sub II or any of their respective Subsidiaries or their respective businesses or (ii) any oral or written information made available or otherwise presented to the Company, any of its Affiliates or any of its or their respective Representatives whether in the course of their due diligence investigation of Purchaser, the negotiation of this Agreement or in the course of the Company Mergers or otherwise.
(b) Notwithstanding anything to the contrary in this Agreement, Purchaser, Pubco, Merger Sub I and Merger Sub II each acknowledges and agrees that neither the Company nor any other Person has made or is making, and Purchaser expressly disclaims reliance upon, any representations or warranties (express, implied or otherwise) relating to the Company or any of its Subsidiaries beyond those expressly made by the Company or in ARTICLE IV, including any implied representation or warranty as to the accuracy or completeness of any information regarding the Company or its Subsidiaries made available or otherwise presented to Purchaser, Pubco, Merger Sub I, Merger Sub II, any of its and their respective Affiliates or any of its and their respective Representatives. Without limiting the generality of the foregoing, Purchaser, Pubco, Merger Sub I and Merger Sub II each acknowledges that, except as expressly made in ARTICLE IV, no representations or warranties (express, implied or otherwise) are made with respect to (i) any projections, forecasts, estimates, budgets or prospects or (ii) any oral or written information made available or otherwise presented to Purchaser or any of its Affiliates or any of its or their respective Representatives whether in the course of the negotiation of this Agreement or in the course of the Company Mergers or otherwise.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules delivered by the Company to the Purchaser on the date hereof (the “Company Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer (provided, however, that an item disclosed in any Section of the Company Disclosure Schedules shall be deemed to have been disclosed with respect to all other Sections of this ARTICLE IV to which the relevance of such disclosure is reasonably apparent on its face), the Company hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date (or, if such representations and warranties are made with respect to a certain date, as of such date), as follows:
4.1 Organization and Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the DGCL. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. Each Subsidiary of the Company is a corporation or other entity duly formed, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. Each Target Company is duly qualified or licensed and in good standing in the jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does business or operates to the extent that the character of the property owned, or leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. Schedule 4.1 lists all jurisdictions in which any Target Company is qualified to conduct business and, if applicable, all names other than its legal name under which any Target Company does business. The Company has provided to the Purchaser accurate and complete copies of its Organizational Documents and the Organizational Documents of each of its Subsidiaries, each as amended to date and as currently in effect. No Target Company is in violation of any provision of its Organizational Documents, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
4.2 Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is or is required to be a party, to perform the Company’s obligations hereunder and thereunder and, subject to obtaining the Required Company Stockholder Approval, which the Written Consent shall satisfy, to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which the Company is or is required to be a party and the consummation of the transactions contemplated hereby and thereby, (a) have been duly and validly authorized by the Company’s board of directors in accordance with the Company’s Organizational Documents, the DGCL, any other applicable Law or any Contract to which the Company is a party or by which it or its securities are bound and (b) other than, with respect to the First Company Merger, the Required Company Stockholder Approval, which the Written Consent shall satisfy, and the filing and recordation of appropriate merger documents as required by the DGCL, no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Company is or is required to be a party shall be when delivered, duly and validly executed and delivered by the Company and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other Parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions. On or prior to the date of this Agreement, the Company’s board of directors, by resolutions duly adopted at a meeting duly called and held or by action by unanimous written consent in accordance with the Company’s Organizational Documents (i) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Company Mergers, (ii) declared that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the Company and the Company’s stockholders, (iii) determined that this Agreement be submitted to the Company’s stockholders for the adoption and the approval of the transactions contemplated hereby, including the Company Mergers, and (iv) determined to recommend to the Company’s stockholders the adoption of this Agreement and the approval of the transactions contemplated hereby, including the Company Mergers. The Written Consent, if executed and delivered, would qualify as the Required Company Stockholder Approval and no additional approval or vote from any holders of any class or series of capital stock of the Company would then be necessary to adopt this Agreement and to approve the transactions contemplated hereby, including the First Company Merger.
4.3 Capitalization.
(a) The Company is authorized to issue (i) 4,850,000 shares of Company Common Stock, of which 1,636,378 shares are issued and outstanding as of April 14, 2026 (the “Capitalization Date”) and (ii) 2,204,216 shares of Company Preferred Stock, of which 2,015,673 shares are issued and outstanding as of the date Capitalization Date. As of the Capitalization Date, (i) 124,265 shares of Company Common Stock are reserved for future issuance under the Company Stock Plan, (ii) 442,172 shares of Company Common Stock are reserved for future issuance pursuant to outstanding Company Options, (iii) 125,012 shares of Company Common Stock are reserved for future issuance pursuant to outstanding Company Ascent Options and (iv) 313,127 shares of Company Common Stock are reserved for future issuance pursuant to the Company Warrants. Prior to giving effect to the transactions contemplated by this Agreement, all of the issued and outstanding Company Stock and other equity interests of the Company are set forth on Schedule 4.3(a), along with the beneficial and record owners thereof, all of which shares and other equity interests are, to the Knowledge of the Company, owned free and clear of any Liens other than Permitted Liens and those imposed under the Company Charter. Except as set forth on Schedule 4.3(a), there are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which the Company is a party or which are binding upon the Company providing for the issuance or redemption of any equity interests of the Company. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by the Company. Subject to Section 5.2(b)(ii), all of the outstanding shares and other equity interests of the Company have been duly authorized, are fully paid and non-assessable and not in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, any other applicable Law, the Company’s Organizational Documents or any Contract to which the Company is a party or by which it or its securities are bound. The Company holds no shares or other equity interests of the Company in its treasury. None of the outstanding shares or other equity interests of the Company were issued in violation of any applicable securities Laws. The rights, privileges and preferences of the Company Preferred Stock are as stated in the Company’s Organizational Documents and as provided by the DGCL.
(b) Except as disclosed in the Company Financials, the Company has not declared or paid any distribution or dividend in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the board of directors of the Company has not authorized any of the foregoing.
4.4 Subsidiaries. Schedule 4.4 sets forth the name of each Subsidiary of the Company, and with respect to each Subsidiary (a) its jurisdiction of organization, (b) its authorized shares or other equity interests (if applicable), (c) the number of issued and outstanding shares or other equity interests and the record holders and beneficial owners thereof and (d) its Tax election to be treated as a corporate or a disregarded entity under the Code and any state or applicable non-U.S. Tax laws, if any. All of the outstanding equity securities of each Subsidiary of the Company are duly authorized and validly issued, fully paid and non-assessable (if applicable), and were offered, sold and delivered in compliance with all applicable securities Laws, and owned by one or more of the Company or its Subsidiaries free and clear of all Liens (other than those, if any, imposed by such Subsidiary’s Organizational Documents). There are no Contracts to which the Company or any of its Affiliates is a party or bound with respect to the voting (including voting trusts or proxies) of the equity interests of any Subsidiary of the Company other than the Organizational Documents of any such Subsidiary. Other than the Company Warrants, the Company Ascent Options and the Company Options, there are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which any Subsidiary of the Company is a party or which are binding upon any Subsidiary of the Company providing for the issuance or redemption of any equity interests of any Subsidiary of the Company. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by any Subsidiary of the Company. Except for the equity interests of the Subsidiaries listed on Schedule 4.4, the Company does not own any equity interests of any Person.
4.5 Governmental Approvals. Except as otherwise described in Schedule 4.5, no Consent of or with any Governmental Authority on the part of any Target Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Documents or the consummation by the Company of the transactions contemplated hereby or thereby other than (a) such filings as are expressly contemplated by this Agreement, (b) pursuant to Antitrust Laws or (c) such other items that the failure of which to obtain or make would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
4.6 Non-Contravention. Except as otherwise described in Schedule 4.6, the execution and delivery by the Company (or any other Target Company, as applicable) of this Agreement and each Ancillary Document to which any Target Company is or is required to be a party or otherwise bound, and the consummation by any Target Company of the transactions contemplated hereby and thereby and compliance by any Target Company with any of the provisions hereof and thereof, will not, subject to the receipt of the Written Consent, (a) conflict with or violate any provision of any Target Company’s Organizational Documents, (b) subject to receipt of the filing and recordation of appropriate merger documents as required by the DGCL and obtaining the Consents from Governmental Authorities referred to in Section 4.5 hereof, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to any Target Company or any of its material properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by any Target Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the material properties or assets of any Target Company under (other than Permitted Liens), (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any Company Material Contract, except in the cases of clauses (b) and (c), as has not been and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
4.7 Financial Statements.
(a) As used herein, the term “Company Financials” means (i) the audited consolidated financial statements of the Company (including, in each case, any related notes thereto), consisting of the consolidated balance sheets of the Company as of December 31, 2024 and December 31, 2023, and the related consolidated audited income statements, changes in stockholder equity and statements of cash flows for the fiscal years then ended, each audited by a PCAOB qualified auditor in accordance with GAAP and PCAOB standards, and the related unaudited consolidated income statement, changes in stockholder equity and statement of cash flows for the twelve months then ended and (ii) the unaudited financial statements of the Target Companies as of and for the 12-month period ended December 31, 2025 (the “Interim Balance Sheet Date”), consisting of the unaudited consolidated balance sheets as of such date, the unaudited consolidated income statement for the 12-month period ended on such date, and the unaudited consolidated cash flow statements for the 12-month period ended on such date. True and correct copies of the Company Financials have been provided to the Purchaser. The Company Financials (i) accurately reflect the books and records of the Company as of the times and for the periods referred to therein, (ii) were prepared in accordance with GAAP, consistently applied throughout and among the periods involved (except that the unaudited statements exclude the footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments which will not be material in amount), (iii) comply with all applicable accounting requirements under the Securities Act and the rules and regulations of the SEC thereunder and (iv) fairly present in all material respects the consolidated financial position of the Target Companies as of the respective dates thereof and the consolidated results of the operations and cash flows of the Target Companies for the periods indicated, in each case, except as otherwise noted therein and subject to normal and recurring year-end adjustments and the absence of notes. No Target Company has ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
(b) The Company maintains a system of internal accounting controls which is reasonably designed to provide, in all material respects, reasonable assurance that (i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of the financial statements and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s authorization and (iv) the recorded accountability of assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The financial books and records of the Company have been, and are being, maintained in all material respects in accordance with applicable Laws. The Company has not been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal accounting controls utilized by any Target Company. In the past five (5) years, none of the Company or, to the Knowledge of the Company, any of its Representatives has received any written complaint, allegation, assertion or claim regarding any significant deficiency or material weakness in the system of internal accounting controls utilized by any Target Company or any material fraud that involves management or other employees that have a significant role in the internal accounting controls utilized by any Target Company.
(c) Except as and to the extent set forth on Schedule 4.7(c), no Target Company is subject to any Liabilities or obligations of a nature (whether accrued, absolute, contingent or otherwise) required to be reflected on a balance sheet prepared in accordance with GAAP, except for those that are either (i) adequately reflected or reserved on or provided for in the consolidated balance sheet of the Company and its Subsidiaries as of the Interim Balance Sheet Date contained in the Company Financials in accordance with GAAP, (ii) incurred in the ordinary course of business since the Interim Balance Sheet Date or (iii) such other Liabilities or obligations which are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
(d) The financial projections provided by the Company and included in the “Investor Presentation” dated December 2025, which was provided to prospective investors in connection with the PIPE Investment were prepared in good faith using assumptions that the Company believes as of the date of this Agreement to be reasonable.
4.8 Absence of Certain Changes. Except as set forth on Schedule 4.8 or as expressly contemplated by this Agreement, since the Interim Balance Sheet Date, and on and prior to the date of this Agreement, each Target Company has (a) conducted its business in all material respects in the ordinary course of business consistent with past practice, (b) not been subject to a Material Adverse Effect and (c) has not taken any action that would constitute a material breach of any of the covenants set forth in Section 5.2(b) (other than Sections 5.2(b)(vi), (xxiv) and (xxv)) if such action were taken after the date hereof without the consent of the Purchaser.
4.9 Compliance with Laws. Except as disclosed on Schedule 4.9, since inception, and on or prior to the date of this Agreement, no Target Company is or, since January 1, 2023, has been in material conflict or, to the Company’s Knowledge, material non-compliance with, or in material default or violation of, nor has any Target Company received, since inception, any written or, to the Knowledge of the Company, oral notice of any material conflict or non-compliance with, or material default or violation of, any applicable Laws by which it or any of its properties, assets, employees, business, products or operations are or were bound or affected. For purposes of this Section 4.9, “material” shall mean material to the Company and its Subsidiaries, taken as a whole.
4.10 Company Permits. Each Target Company (and, to the Company’s Knowledge, its employees who are legally required to be licensed by a Governmental Authority in order to perform his or her duties with respect to his or her employment with any Target Company), holds all material Permits necessary to lawfully conduct its business as presently conducted and as currently contemplated to be conducted; to own, lease and operate its assets and properties; and to market and sell its products and services (collectively, the “Company Permits”). The Company has made available to the Purchaser true, correct and complete copies of all material Company Permits, all of which Company Permits are listed on Schedule 4.10. All of the Company Permits are in full force and effect, and no suspension or cancellation of any of the Company Permits is pending or, to the Company’s Knowledge, threatened. No Target Company is in violation in any material respect of the terms of any Company Permit, and no Target Company has received any written or oral notice of any Actions relating to the revocation or modification of any Company Permit.
4.11 [Reserved].
4.12 Litigation. Except as described on Schedule 4.12, there is no (a) Action of any nature currently pending or, to the Company’s Knowledge, threatened (and no such Action has been brought, or, to the Company’s Knowledge, threatened, in the past five (5) years); or (b) Order now pending or outstanding or that was rendered by a Governmental Authority in the past five (5) years, in either case of (a) or (b) by or against any Target Company, its current or former directors, officers or equity holders (provided, that any litigation involving the directors, officers or equity holders of a Target Company must be related to the Target Company’s business, equity securities or assets), its business, equity securities or assets that, if determined adversely for such Target Company, would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The items listed on Schedule 4.12, if finally determined adversely to the Target Companies, will not have, either individually or in the aggregate, a Material Adverse Effect upon the Target Companies, taken as a whole. In the past five (5) years, none of the current or former officers, senior management or directors of any Target Company have been charged with, indicted for, arrested for, or convicted of any felony or any crime involving fraud or been assessed any administrative fines following an investigation by a Governmental Authority.
4.13 Material Contracts.
(a) Schedule 4.13(a) sets forth, as of the date of this Agreement, a true, correct and complete list of, and the Company has made available to the Purchaser (including written summaries of oral Contracts), true, correct and complete copies of, each Contract that is in effect on the date of this Agreement to which any Target Company is a party or by which any Target Company, or any of its properties or assets are bound or affected, excluding for this purpose, any statements of work, purchase orders or other work orders under a master agreement (each Contract required to be set forth on Schedule 4.13(a), excluding any Company Benefit Plan, a “Company Material Contract”) that:
(i) contains covenants that materially limit the ability of any Target Company (A) to compete in any line of business or with any Person or in any geographic area or to sell, or provide any service or product or solicit any Person, including any non-competition covenants, employee and customer non-solicit covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest in any other Person;
(ii) involves any joint venture, strategic partnership, profit-sharing, partnership, limited liability company or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;
(iii) involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;
(iv) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of any Target Company having an outstanding principal amount in excess of $500,000;
(v) involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with consideration paid or payable to the Company or any of its Subsidiaries in excess of $500,000 over any 12-month period (other than in the ordinary course of business consistent with past practice) or shares or other equity interests of any Target Company or another Person;
(vi) relates to any merger, consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business or material assets or the sale of any Target Company, its business or material assets;
(vii) by its terms, individually or with all related Contracts, other than Contracts referenced in another subsection of this Section 4.13(a), calls for aggregate payments or receipts by the Target Companies under such Contract or Contracts of at least $500,000 per year or $500,000 in the aggregate;
(viii) is a material Contract with any Top Customer or Top Supplier;
(ix) obligates the Target Companies to provide continuing indemnification or a guarantee of obligations of a third party after the date hereof in excess of $500,000 other than in the ordinary course of business;
(x) obligates the Target Companies to make any capital commitment or expenditure in excess of $500,000 (including pursuant to any joint venture);
(xi) relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which any Target Company has outstanding obligations (other than customary confidentiality obligations);
(xii) provides another Person (other than another Target Company or any manager, director or officer of any Target Company) with a power of attorney;
(xiii) provides for the licensing of any Intellectual Property to or from any Target Company, other than (A) Off-the-Shelf Software, (B) employee or consultant invention assignment agreements entered into on a Target Company’s standard form of such agreement, (C) confidentiality and non-disclosure agreements entered into in the ordinary course of business, (D) licenses to or from customers or distributors of any Target Company entered into in the ordinary course of business, (E) non-exclusive licenses that are incidental to the primary purpose of the applicable Contract, or (F) feedback and ordinary course trade name or logo rights that are not material to any Target Company;
(xiv) that will be required to be filed with the Registration Statement under applicable SEC requirements or would otherwise be required to be filed by the Company as an exhibit for a Form S-1 pursuant to Items 601(b)(1), (2), (4), (9) or (10) of Regulation S-K under the Securities Act as if the Company was the registrant;
(xv) is a collective bargaining agreement or other agreement with a labor union or labor organization; or
(xvi) is otherwise material to the Company and its Subsidiaries taken as a whole and not described in clauses (i) through (xvii) above.
(b) Except as disclosed in Schedule 4.13(b), with respect to each Company Material Contract: (i) such Company Material Contract is valid and binding and enforceable in all respects against the Target Company party thereto and, to the Knowledge of the Company, each other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) the consummation of the transactions contemplated by this Agreement will not affect the validity or enforceability of any Company Material Contract; (iii) no Target Company is in breach or default in any material respect, and, to the Knowledge of the Company, no event has occurred that with the passage of time or giving of notice or both would constitute a material breach or default by any Target Company, or permit termination or acceleration by the other party thereto, under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a material breach or default by such other party, or permit termination or acceleration by any Target Company, under such Company Material Contract; (v) no Target Company has received written or, to the Company’s Knowledge, notice of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate such Company Material Contract or amend the terms thereof, other than modifications in the ordinary course of business that do not adversely affect any Target Company in any material respect; and (vi) no Target Company has waived any material rights under any such Company Material Contract; except, with respect to each of the foregoing clauses (i) – (vi), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Target Companies, taken as a whole.
4.14 Intellectual Property.
(a) Schedule 4.14(a)(i) sets forth all U.S. and foreign registered Patents, Trademarks, Copyrights and Internet Assets and applications owned or licensed by a Target Company in which a Target Company is the owner, applicant or assignee (“Company Registered IP”), specifying as to each item, as applicable: (A) the title and status (for each patent and patent application), (B) the owner of the item, (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration or application numbers and dates. No material Company Registered IP has lapsed or been abandoned, disclaimed, dedicated to the public, cancelled or forfeited, in whole or in part by the Company. All material Company Registered IP is subsisting and to the Knowledge of the Company, valid and enforceable. Except as set forth on Schedule 4.14(a)(ii), each Target Company owns, free and clear of all Liens (other than Permitted Liens), all material Company IP. Except as set forth on Schedule 4.14(a)(i), all material Company Registered IP is owned exclusively by the applicable Target Company without obligation to pay royalties or licensing fees, or otherwise account to any third party with respect to such Company Registered IP.
(b) Except as would not be material to the business of the Target Companies, taken as a whole, all registrations for Copyrights, Patents, Trademarks and Internet Assets that are owned by any Target Company are in force and in good standing with all required fees and maintenance fees having been paid, and all applications to register any Copyrights, Patents and Trademarks that are pending are in good standing.
(c) No Action is pending or, to the Company’s Knowledge, threatened in writing against a Target Company that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense any material Company IP. Since January 1, 2023, no Target Company has received any written claim asserting that any material infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of any other Person is occurring or has occurred, through the conduct by any Target Company of the business activities of such Target Company. Except as set forth in Schedule 4.14(c), there are no Orders to which any Target Company is a party or, to the Company’s Knowledge, by which it is otherwise bound that (i) restrict the rights of a Target Company to use, transfer, license or enforce any Company IP or (ii) restrict the conduct of the business of a Target Company in order to accommodate a third Person’s Intellectual Property. To the Knowledge of the Company, no Target Company is currently infringing, or has, since January 1, 2023, infringed, misappropriated or violated any Intellectual Property of any other Person in any material respect in connection with the ownership, use or license of any Company IP. To the Company’s Knowledge, no third party is currently, or in the past three (3) years has been, infringing upon, misappropriating or otherwise violating any Company IP in any material respect.
(d) The Company has not used or distributed any Open Source Code in a manner which imposes a requirement or condition (i) that any material Business Source Code (A) be disclosed or distributed in source code form; (B) be licensed for the purpose of making modifications or derivative works; or (C) be redistributable at no charge; (ii) requiring Company to grant or purport to grant to any third party person any rights or immunities under material Company IP, or (iii) requiring any Business Source Code be subject to an Open Source Code license (including for the avoidance of doubt any copyleft License) or contributed to an open source project.
(e) Except as identified on Schedule 4.14(e), no government, university, college, other educational institution or research center: (i) was or is involved in the research and development of any material Company IP (collectively, “Institutions”), or (ii) provided facilities or funding for the development of any material Company IP. Except as may be granted in connection with the purchase or authorized use of the Company Products, no Institutions have any ownership or license rights in or with respect to any material Company IP or Company Products.
(f) Except as would not be material to the business of the Target Companies, taken as a whole, (i) all officers, directors, employees and independent contractors (to the extent any such independent contractor has contributed to Company IP) of a Target Company are obligated to assign and have assigned to the Target Companies all Company IP arising from the services performed for a Target Company by such Persons, (ii) no current or former officers, employees or independent contractors of a Target Company have claimed in writing any ownership interest in any Company IP and (iii) to the Knowledge of the Company, there has been no violation of any confidentiality or nondisclosure Contract relating to the Company IP. The Company has made available to the Purchaser true and complete copies of its current standard forms of written Contracts referenced in subsection (i) under which employees and independent contractors assign their Intellectual Property to a Target Company. Each Target Company has taken commercially reasonable security measures in order to protect the secrecy, confidentiality and value of the material Trade Secret included in the Company IP.
(g) There exist no agreements pursuant to which the Company has the obligation to deposit with an escrow agent or deliver or license to any Person, now or in the future, any of the Business Source Code. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in a release of Business Source Code or the grant of rights to Business Source Code to any Person. All material Business Source Code has been maintained in confidence, and has been disclosed only to employees, service providers and consultants of Company having a bona fide purpose in connection with the performance of their duties and who are bound by confidentiality obligations to the Company consistent with industry norms of confidentiality for source code.
(h) To the Knowledge of the Company, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, during the last two (2) years, (i) no Person has obtained unauthorized access to personally identifiable information or information that can be used to identify a natural person (“Personal Information”) in the possession of any Target Company, (ii) nor has there been any other material compromise of the security, confidentiality or integrity of such Personal Information, and (iii) no written complaint relating to an improper use or disclosure of, or a breach in the security of, any such Personal Information has been received by a Target Company. During the last two (2) years, each Target Company has complied in all material respects with all applicable Laws and Contract requirements relating to privacy, Personal Information protection, and the collection, processing and use of Personal Information and its own privacy policies and guidelines, if any, each with respect to the Target Companies’ collection, processing and use of Personal Information.
(i) The Company owns and has good, valid, and marketable title in or sufficient legal rights to use as currently used in its business all Company IT Systems. To the Company’s Knowledge, the Company IT Systems are, taken as a whole, sufficient to meet the current requirements of the Company in all material respects. To the Company’s Knowledge, the Company IT Systems (i) operate and perform in all material respects as required by the Company’s business as currently conducted; (ii) have not suffered any material breakdown or failure within the last two (2) years; (iii) are free from any material defects; and (iv) are in good repair and operating condition in all material respects.
(j) Except as would not reasonably expected to be material to the Company and its Subsidiaries, taken as a whole, the Target Companies have taken commercially reasonable steps designed to protect and maintain the security of the Company IT Systems and Personal Information from any unauthorized use, access, interruption or modification by any third party Person. The Target Companies are in compliance in all material respects with their information security programs, which programs include: (i) administrative, technical and physical safeguards designed to safeguard the security, confidentiality, and integrity of Personal Information and (ii) protection against unauthorized access to the Company IT Systems and Personal Information. To the Company’s Knowledge, there have been no unauthorized intrusions into the Company IT Systems within the last two (2) years.
4.15 Taxes and Returns.
(a) Each Target Company has or will have timely filed, or caused to be timely filed, all federal, state, local, and foreign income Tax Returns and other material Tax Returns required to be filed by it (taking into account all available extensions), which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Company Financials have been established in accordance with GAAP. Each Target Company (i) has complied in all material respects with all applicable Laws relating to Tax during the past six (6) years and (ii) has not failed to comply with an applicable Law relating to material Taxes for which the applicable statute of limitations has not expired as of the date hereof.
(b) There is no Action currently pending or, to the Knowledge of the Company, threatened against a Target Company by a Governmental Authority in a jurisdiction where the Target Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(c) No Target Company is being audited by any Tax authority or has been notified in writing that any such audit is contemplated or pending. There are no claims, assessments, audits, examinations, investigations or other Actions pending against a Target Company in respect of any material Tax, and no Target Company has been notified in writing of any proposed material Tax claims or assessments against it (other than, in each case, claims or assessments for which adequate reserves in the Company Financials have been established).
(d) There are no Liens with respect to any Taxes upon any Target Company’s assets, other than Permitted Liens.
(e) Each Target Company has collected or withheld all Taxes currently required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due.
(f) No Target Company has any outstanding waivers or extensions of any applicable statute of limitations to assess any amount of income Taxes or material amounts of any other Taxes. There are no outstanding requests by a Target Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(g) No Target Company has made any change in accounting method (except as required by a change in Law) or received a ruling from, or signed an agreement with, any taxing authority that would reasonably be expected to have a material impact on its Taxes following the Closing.
(h) No Target Company has engaged in any “listed transaction” or has failed to disclose a “reportable transaction,” in each case as defined in U.S. Treasury Regulation section 1.6011-4(b).
(i) No Target Company has any Liability for the Taxes of another Person (other than another Target Company) that are not adequately reflected in the Company Financials (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract or indemnity (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes). No Target Company is a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice (excluding commercial agreements, arrangements or practices entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes (including advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Authority) that will be binding on any Target Company with respect to any period following the Closing Date.
(j) No Target Company has requested, or is it the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any Taxes, nor is any such request outstanding.
(k) No Target Company: (i) has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of securities (to any Person or entity that is not a member of the consolidated group of which the Company is the common parent corporation) qualifying for, or intended to qualify for, Tax-free treatment under Section 355 of the Code (A) within the two-year period ending on the date hereof or (B) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement; (ii) is or has ever been (A) a U.S. real property holding corporation within the meaning of Section 897(c)(2) of the Code, (B) a member of any consolidated, combined, unitary or affiliated group of corporations for any Tax purposes other than a group of which the Company is or was the common parent corporation, or (C) has Liability for the Taxes under Treasury Regulation section 1.1502-6 (or any similar provision of state, local, or non-U.S. law), as a transferee or successor, or by contract; (iii) is a “controlled foreign corporation” as defined in Section 957 of the Code; (iv) is a ‘‘passive foreign investment company’’ within the meaning of Section 1297 of the Code; or (v) has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
(l) The Target Companies have been in compliance in all material respects with all applicable transfer pricing laws and legal requirements.
(m) The unpaid Taxes of the Target Companies (i) did not, as of the most recent fiscal month end, materially exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the financial statements and (ii) will not materially exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company in filing its Tax Return.
(n) No Target Company will be required to include any material item of income or exclude any material item of deduction for any taxable period beginning after the Closing Date as a result of: (i) any installment sale or open sale transaction disposition made by a Target Company before the Closing; (ii) any prepaid amount received outside of the ordinary course of business by a Target Company before the Closing; or (iii) any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax law) existing before the Closing.
(o) The Target Companies have, with advice of U.S. tax counsel, considered the qualification of the Company Mergers for the Merger Intended Tax Treatment and, after such consideration, to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected to prevent the Company Mergers from qualifying for the Merger Intended Tax Treatment.
4.16 Real Property. Schedule 4.16 contains a complete and accurate list of all premises currently leased or subleased or otherwise used or occupied by a Target Company for the operation of the business of a Target Company, and of all current leases, lease guarantees, agreements and documents related thereto, including all amendments, terminations and modifications thereof or waivers thereto (collectively, the “Company Real Property Leases”), as well as the current annual rent and term under each Company Real Property Lease. The Company has provided to the Purchaser a true and complete copy of each of the Company Real Property Leases, and in the case of any oral Company Real Property Lease, a written summary of the material terms of such Company Real Property Lease. The Company Real Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect, subject to Enforceability Exceptions. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of a Target Company or any other party under any of the Company Real Property Leases, and no Target Company has received notice of any such condition. No Target Company owns or has ever owned any real property or any interest in real property (other than the leasehold interests in the Company Real Property Leases).
4.17 Personal Property. Each item of Personal Property which is currently owned, used or leased by a Target Company with a book value or fair market value of greater than fifty thousand dollars ($50,000) is set forth on Schedule 4.17, along with, to the extent applicable, a list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including all amendments, terminations and modifications thereof or waivers thereto (“Company Personal Property Leases”). Except as set forth in Schedule 4.17, all such items of Personal Property are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items), and are suitable for their intended use in the business of the Target Companies. The operation of each Target Company’s business as it is now conducted or presently proposed to be conducted is not in any material respect dependent upon the right to use the Personal Property of Persons other than a Target Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to a Target Company. The Company has provided to the Purchaser a true and complete copy of each of the Company Personal Property Leases, and in the case of any oral Company Personal Property Lease, a written summary of the material terms of such Company Personal Property Lease. The Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of a Target Company or any other party under any of the Company Personal Property Leases, and no Target Company has received notice of any such condition.
4.18 Title to and Sufficiency of Assets. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Target Companies, taken as a whole, and assuming the Required Consents (as defined below) have been made or obtained, as applicable, the Target Companies, taken as a whole, have good and marketable title to, or a valid leasehold interest in, license to or other right to use, such assets as are necessary for the operation of the business of the Target Companies in substantially the same manner as it is currently conducted as of the date of this Agreement other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests and (c) Liens specifically identified on the consolidated balance sheet of the Target Companies as of the Interim Balance Sheet Date included in the Company Financials. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Target Companies, taken as a whole, the assets of the Target Companies as of the date of this Agreement, taken as a whole, constitute the assets necessary for the operation of the businesses of the Target Companies in substantially the same manner as it is currently conducted as of the date hereof, assuming all filings, notices, reports, consents, registrations, approvals, permits, expirations of waiting periods or authorizations required in connection with the consummation of the transactions contemplated by this Agreement and the transactions contemplated by the Ancillary Documents have been made or obtained, as applicable (the “Required Consents”). Notwithstanding the foregoing, this Section 4.18 shall not be deemed a representation or warranty regarding non-infringement, validity or enforceability of Intellectual Property or as to the cash, capital or other liquidity needs of the Target Companies.
4.19 Employee Matters.
(a) Except as set forth in Schedule 4.19, no Target Company is a party to any collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of the employees of any Target Company, and the Company has no Knowledge of any activities or proceedings of any labor union or other party to organize or represent such employees. There has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect to any such employees. Schedule 4.19 sets forth all unresolved labor controversies (including unresolved grievances and age or other discrimination claims other than any workers’ compensation or unemployment claims that are not material), if any, that are pending or, to the Knowledge of the Company, threatened between any Target Company and Persons employed by or providing services as independent contractors to a Target Company. No current officer or material employee of a Target Company has provided any Target Company written or, to the Knowledge of the Company, oral notice of his or her plan to terminate his or her employment with any Target Company.
(b) Except as set forth in Schedule 4.19(b), each Target Company (i) is and has been in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, classification of employees as exempt or non-exempt, classification of employees and independent contractors, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, and employee terminations, and has not received written or, to the Knowledge of the Company, oral notice that there is any pending Action involving unfair labor practices against a Target Company, (ii) is not liable for any material past due arrears of wages or any material penalty for failure to comply with any of the foregoing, and (iii) is not liable for any material payment to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations with respect to employees, independent contractors or consultants (other than routine payments to be made in the ordinary course of business and consistent with past practice). Except as set forth in Schedule 4.19(b), there are no Actions pending or, to the Company’s Knowledge, threatened against a Target Company brought by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment or service provider relationship. Except as would not be material to the Company and its Subsidiaries, taken as a whole, the Target Company has no liability with respect to any misclassification of: (1) any person as an independent contractor rather than as an employee under applicable federal and state law, (2) any employee leased from another employer, or (3) any employee currently or formerly classified as exempt from overtime wages under applicable federal and state law. Except as would not be material to the Company and its Subsidiaries, taken as a whole, no current or former employee of the Target Company could reasonably be deemed misclassified for overtime purposes under Applicable Wage and hour laws, and no current or former independent contractor could reasonably be deemed a misclassified employee.
(c) Schedule 4.19(c) hereto sets forth a complete and accurate list as of the date hereof of all employees of the Target Companies showing for each as of such date (i) the employee’s name, job title or description, employing entity, location, hourly rate or salary, classification as exempt or non-exempt, any bonus, commission, deferred compensation or other remuneration payable (other than any such arrangements under which payments are at the discretion of the Target Companies), (ii) any bonus, commission or other remuneration other than salary paid during the fiscal year ended December 31, 2024, and (iii) any wages, salary, bonus, commission or other compensation due and owing to each employee during or for the fiscal year ending December 31, 2025. Except as set forth on Schedule 4.19(c), (A) no employee is a party to a written employment Contract with a Target Company that is not terminable “at will” and without any severance or other monetary obligation, and (B) the Target Companies have paid in full to all their employees all wages, salaries, commission, bonuses and other compensation due to their employees, including overtime compensation, in all material respects, and no Target Company has any obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under the terms of any written or, to the Company’s Knowledge, oral agreement, or commitment or any applicable Law, custom, trade or practice. Except as set forth in Schedule 4.19(c), each Target Company employee has entered into the Company’s standard form of employee non-disclosure, inventions and restrictive covenants agreement with a Target Company (whether pursuant to a separate agreement or incorporated as part of such employee’s overall employment agreement), a copy of which has been made available to the Purchaser by the Company.
(d) Schedule 4.19(d) contains a list of all independent contractors (including consultants) currently engaged by any Target Company, along with a description of the general nature of the work performed, date of retention, location from which the services are performed, rate of remuneration, and most recent increase (or decrease) in remuneration and amount thereof, for each such Person. Except as set forth on Schedule 4.19(d), all of such independent contractors are a party to a written Contract with a Target Company. Except as set forth on Schedule 4.19(d), each such independent contractor has entered into customary covenants regarding confidentiality and assignment of inventions and copyrights in such Person’s agreement with a Target Company, a copy of which has been provided to the Purchaser by the Company. Except as would not be material to the Company and its Subsidiaries, taken as a whole, for the purposes of applicable Law, including the Code, all independent contractors who are currently, or within the last six (6) years have been, engaged by a Target Company are properly classified as independent contractors and not employees of a Target Company. Each independent contractor engagement is terminable on fewer than thirty (30) days’ notice, without any obligation of any Target Company to pay severance or a termination fee.
(e) Except as would not be material to the Company and its Subsidiaries, taken as a whole, each Target Company is in compliance with all Laws respecting immigration and work authorization. Except as would not be material to the Company and its Subsidiaries, taken as a whole, all current and former employees of each Target Company have provided the Target Company with all required documentation to establish their authorization to work in the jurisdiction in which they are working.
(f) No allegations of discrimination, retaliation, harassment, sexual harassment or sexual misconduct while employed by, or providing services to, any Target Company have been made, or to the Company’s Knowledge, threatened by or against any employee of the Target Company with a title of vice president or above. No Target Company has entered into any settlement agreement or conducted any investigation related to allegations of discrimination, retaliation, harassment, sexual harassment or sexual misconduct by or regarding any current or former employee, or other representative of the Target Company with a title of vice president or above. To the extent required by applicable Law, each Target Company has established and distributed to its employees a policy against harassment and a complaint procedure, and it has required all employees to undergo anti-harassment training.
(g) Since January 1, 2023, no Target Company has taken any action that would constitute a “plant closing,” “mass layoff” or similar action within the meaning of the WARN Act, issued any notification of a plant closing, mass layoff or other action required by the WARN Act, or incurred any liability or obligation under the WARN Act. No reduction in salary or wages, employee layoff, facility closure, shutdown, reduction-in-force, furlough, temporary layoff, work schedule change or reduction in hours, or other action that could reasonably be expected to trigger notice under the WARN Act, has occurred within the past six months or is currently contemplated, planned or announced.
4.20 Benefit Plans
(a) Set forth on Schedule 4.20 is a true and complete list of each material Benefit Plan of a Target Company (each, a “Company Benefit Plan”). Except as would not be material to the Company and its Subsidiaries, taken as a whole, with respect to each Company Benefit Plan, there are no funded benefit obligations for which contributions have not been made or properly accrued and there are no unfunded benefit obligations that have not been accounted for by reserves, or otherwise properly footnoted in accordance with GAAP on the Company Financials. No Target Company is or has in the past been a member of a “controlled group” for purposes of Section 414(b), (c), (m) or (o) of the Code, nor does any Target Company have any Liability with respect to any collectively-bargained for plans, whether or not subject to the provisions of ERISA.
(b) Each Company Benefit Plan is and has been established, operated, funded and maintained at all times in compliance with its terms and all applicable Laws in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code (i) has been determined by the IRS to be so qualified (or is based on a prototype plan which has received a favorable opinion letter) during the period from its adoption to the date of this Agreement and (ii) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code or the Target Companies have requested an initial favorable IRS determination of qualification and/or exemption within the period permitted by applicable Law. To the Company’s Knowledge, no fact exists which could adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts, or impose any material liability, penalty or tax under ERISA or the Code.
(c) With respect to each Company Benefit Plan which covers any current or former officer, director, consultant or employee (or beneficiary thereof) of a Target Company, the Company has provided to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan documents and agreements and related trust agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) all summary plan descriptions and summary of material modifications thereto; (iii) the three (3) most recent Forms 5500, if applicable, and annual report, including all schedules thereto; (iv) the most recent annual and periodic accounting of plan assets; (v) the three (3) most recent nondiscrimination testing reports; (vi) the most recent determination letter received from the IRS; (vii) the most recent actuarial valuation; and (viii) all material communications with any Governmental Authority within the last three (3) years.
(d) With respect to each material Company Benefit Plan, and except as would not be material to the Company and its Subsidiaries, taken as a whole: (i) no such Company Benefit Plan is presently under audit or examination (nor has written notice been received of a potential audit or examination) by any Governmental Authority; (ii) no breach of fiduciary duty has occurred; (iii) no Action is pending, or to the Company’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); (iv) no prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to a statutory or administration exemption; and (v) all contributions and premiums due through the Closing Date have been made in all material respects as required under ERISA or have been fully accrued in all material respects on the Company Financials.
(e) Except as set forth on Schedule 4.20(e), no Company Benefit Plan is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer plan” (as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code) or is otherwise subject to Title IV of ERISA or Section 412 of the Code, and no Target Company has incurred any Liability or otherwise could have any Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such Liability to be incurred. No Target Company currently maintains or has ever maintained, or is required currently or has ever been required to contribute to or otherwise participate in, a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined in Section 501(c)(9) of the Code.
(f) No arrangement exists pursuant to which a Target Company will be required to “gross up” or otherwise compensate any person because of the imposition of any excise tax on a payment to such person.
(g) With respect to each Company Benefit Plan which is a “welfare plan” (as described in Section 3(1) of ERISA): (i) no such plan provides medical or death benefits with respect to current or former employees of a Target Company beyond their termination of employment (other than coverage mandated by Law, which is paid solely by such employees); and (ii) there are no reserves, assets, surplus or prepaid premiums under any such plan. Each Target Company has complied in all material respects with the provisions of Section 601 et seq. of ERISA and Section 4980B of the Code.
(h) Except as set forth on Schedule 4.20(h), the consummation of the transactions contemplated by this Agreement and the Ancillary Documents will not: (i) entitle any individual to severance pay, unemployment compensation or other benefits or compensation (except as set forth on Schedule 4.19); (ii) accelerate the time of payment or vesting, or increase the amount of any compensation due, or in respect of, any individual; or (iii) result in or satisfy a condition to the payment of compensation that would, in combination with any other payment, result in an “excess parachute payment” within the meaning of Section 280G of the Code.
(i) Except as would not be material to the Company and its Subsidiaries, taken as a whole, each Company Benefit Plan that is subject to Section 409A of the Code has been administered in compliance, and is in documentary compliance, in all material respects, with the applicable provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder. There is no Contract or plan to which any Target Company is a party or by which it is bound to compensate any employee, consultant or director for penalty taxes paid pursuant to Section 409A of the Code.
(j) Except as would not be material to the Company and its Subsidiaries, taken as a whole, each Company Benefit Plan that is subject to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) has been established, maintained and administered in compliance with the requirements of the Affordable Care Act. Neither the Company nor any of its Subsidiaries has attempted to maintain the grandfathered health plan status under the Affordable Care Act of any Company Benefit Plan.
(k) No Plan covers any employees outside of the United States.
4.21 Environmental Matters. Except as set forth in Schedule 4.21:
(a) Each Target Company is in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good standing, and complying in all material respects with all Permits required for its business and operations by Environmental Laws (“Environmental Permits”), no material Action is pending or, to the Company’s Knowledge, threatened to revoke, modify, or terminate any such Environmental Permit, and, to the Company’s Knowledge, no facts, circumstances, or conditions currently exist that would reasonably be expected to materially and adversely affect such continued compliance with Environmental Laws and Environmental Permits or require material capital expenditures to achieve or maintain such continued compliance with Environmental Laws and Environmental Permits, except, in each case, as would not be material to the Company and its Subsidiaries, taken as a whole.
(b) No Target Company is the subject of any outstanding Order or Contract with any Governmental Authority or other Person in respect of any obligation of the Target Companies arising out of (i) Environmental Laws, (ii) Remedial Action, or (iii) Release or threatened Release of a Hazardous Material. No Target Company has contractually assumed any Liabilities or obligations under any Environmental Laws.
(c) No Action is pending, or to the Company’s Knowledge, threatened against any Target Company or any assets of a Target Company alleging either or both that a Target Company is in material violation of any Environmental Law or Environmental Permit or has any material Liability under any Environmental Law.
(d) No Target Company has manufactured, treated, stored, disposed of, arranged for or permitted the disposal of, generated, handled or released any Hazardous Material, or owned or operated any property or facility, in a manner that has given rise to any material Liability or obligation under applicable Environmental Laws.
(e) To the Knowledge of the Company, there is no investigation of the business, operations, or currently owned, operated, or leased property of a Target Company or, to the Company’s Knowledge, previously owned, operated, or leased property of a Target Company pending or, to the Company’s Knowledge, threatened that would reasonably be expected to lead to the imposition of any Liens under any Environmental Law or material Environmental Liabilities.
(f) The Company has provided to the Purchaser all environmentally related site assessments, audits, studies, reports, analysis and results of investigations that have been performed in respect of the currently or previously owned, leased, or operated properties of any Target Company.
4.22 Transactions with Related Persons. Except as set forth on Schedule 4.22, as contemplated in this Agreement and benefits and expense reimbursement and advances in the ordinary course of business, or as provided in the Company Financials, no Target Company nor any of its Affiliates, no officer, director or other Affiliate of the Company or any of its Subsidiaries (each of the foregoing, a “Related Person”) is presently, or since January 1, 2024, has been a party to any Company Material Contract with a Target Company, or has otherwise entered into any material transaction, understanding or arrangement, with the Target Company and its Subsidiaries (other than with respect to Contracts entered into after the date hereof that are either permitted pursuant to Section 5.2(b) or entered into in accordance with Section 5.2(b)). Except as set forth on Schedule 4.21, no Target Company has outstanding any Company Material Contract or other material arrangement or commitment with any Related Person, and no Related Person owns any material real property or Personal Property, or material right, tangible or intangible (including Intellectual Property) which is material to the Target Company and its Subsidiaries, taken as a whole, and used by the Target Company and its Subsidiaries to operate the Business. The assets of the Target Companies do not include any material receivable or other material obligation from a Related Person, and the liabilities of the Target Companies do not include any material payable or other material obligation or commitment to any Related Person.
4.23 Insurance.
(a) Schedule 4.23(a) lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by a Target Company relating to a Target Company or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Purchaser. All premiums due and payable under all such insurance policies have been timely paid and the Target Companies are otherwise in material compliance with the terms of such insurance policies. Each such insurance policy (i) is legal, valid, binding, enforceable and in full force and effect and (ii) will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the Closing. No Target Company has any self-insurance or co-insurance programs. In the past five (5) years, (i) excluding insurance policies that have expired and been replaced in the ordinary course of business, no insurance policy has been cancelled or not renewed and (ii) no Target Company has received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance policy or non-renewal of a policy.
(b) Schedule 4.23(b) identifies each individual insurance claim in excess of $50,000 made by a Target Company in the past five (5) years. Each Target Company has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to be material to the Target Companies. To the Knowledge of the Company, no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) give rise to or serve as a basis for the denial of any such insurance claim. No Target Company has made any claim against an insurance policy as to which the insurer is currently denying coverage.
4.24 Books and Records. All of the financial books and records of the Target Companies are complete and accurate in all material respects and have been maintained in the ordinary course of business consistent with past practice and in accordance with applicable Laws.
4.25 Top Customers and Suppliers. Schedule 4.25 lists, by dollar volume received or paid, as applicable, for the fiscal year ended December 31, 2024 , the ten (10) largest customers of goods or services of the Target Companies (the “Top Customers”) and the ten (10) largest suppliers of goods or services to the Target Companies (the “Top Suppliers”), along with the amounts of such dollar volumes. The relationships of each Target Company with such suppliers and customers are good commercial working relationships and (i) no Top Supplier or Top Customer within the last twelve (12) months has cancelled or otherwise terminated, or, to the Company’s Knowledge, intends to cancel or otherwise terminate, any material relationships of such Person with a Target Company, (ii) no Top Supplier or Top Customer has during the last twelve (12) months decreased materially or, to the Company’s Knowledge, threatened to stop, decrease or limit materially, or intends to modify materially its material relationships with a Target Company or stop, decrease or limit materially its products or services to any Target Company or its usage or purchase of the products or services of any Target Company, (iii) to the Company’s Knowledge, no Top Supplier or Top Customer intends to refuse to pay any amount due to any Target Company or seek to exercise any remedy against any Target Company, and (iv) no Target Company has within the past two (2) years been engaged in any material dispute with any Top Supplier or Top Customer, and (v) to the Company’s Knowledge, the consummation of the transactions contemplated in this Agreement and the Ancillary Documents will not adversely affect the relationship of any Target Company with any Top Supplier or Top Customer.
4.26 Certain Business Practices.
(a) No Target Company, nor any of their respective Representatives acting on their behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law or (iii) made any other unlawful payment. No Target Company, nor any of their respective Representatives acting on their behalf, has directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee, or other Person who is or may be in a position to help or hinder any Target Company or assist any Target Company in connection with any actual or proposed transaction.
(b) The operations of each Target Company are and have been conducted at all times in material compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving a Target Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened.
(c) No Target Company or any of their respective directors or officers, or, to the Knowledge of the Company, any other Representative acting on behalf of a Target Company is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by OFAC, and no Target Company has in the last three (3) fiscal years, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any Sanctioned Country or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.
4.27 Investment Company Act. No Target Company is an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment company,” in each case within the meaning of the Investment Company Act of 1940, as amended.
4.28 Finders and Brokers. Except as set forth in Schedule 4.28, no Target Company has incurred or will incur any Liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby.
4.29 [Reserved].
4.30 Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Purchaser, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Purchaser for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, the Company has not relied on any statement, representation, or warranty, oral or written, express or implied, made by the Purchaser, and the Company has relied solely upon its own investigation and the express representations and warranties of the Purchaser set forth in Agreement (including the related portions of the Purchaser Disclosure Schedules) and in any certificate delivered to the Company pursuant hereto; and (b) neither the Purchaser nor any of its Representatives has made any representation or warranty as to the Purchaser or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Purchaser Disclosure Schedules) or in any certificate delivered to the Company pursuant hereto.
4.31 Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference: (a) in any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority or stock exchange with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b) in the Registration Statement; or (c) in the mailings or other distributions to the Purchaser’s shareholders and/or prospective investors with respect to the consummation of the transactions contemplated by this Agreement or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading at (i) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the stockholders of the Company and (ii) the Closing Date. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Purchaser or its Affiliates.
4.32 Disclosure.
(a) Except for the representations and warranties expressly made in this ARTICLE IV, neither the Company nor any other Person has made or makes any representation or warranty (express, implied or otherwise) with respect to the Company or its Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) whether in connection with this Agreement, the Company Mergers or otherwise, and the Company hereby disclaims any such other representations or warranties (express, implied or otherwise). In particular, without limiting the foregoing disclaimer, except as expressly provided in this ARTICLE IV, neither the Company nor any other Person makes or has made any representation or warranty (express, implied or otherwise) to Purchaser or any of its Affiliates or any of its or their respective Representatives with respect to (i) any financial projection, forecast, estimate, forward-looking statement, budget, or prospect information relating to the Company or any of its Subsidiaries or their respective businesses or (ii) any oral or written information made available or otherwise presented to Purchaser, Pubco, Merger Sub I, Merger Sub II, any of their respective Affiliates or any of their respective Representatives whether in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the Company Mergers or otherwise.
(b) Notwithstanding anything to the contrary in this Agreement, the Company acknowledges and agrees that neither Purchaser, Pubco, Merger Sub I, Merger Sub II, nor any other Person has made or is making, and the Company expressly disclaims reliance upon, any representations or warranties (express, implied or otherwise) relating to Purchaser or its Subsidiaries beyond those expressly made by Purchaser, Pubco, Merger Sub I and Merger Sub II in ARTICLE III, including any implied representation or warranty as to the accuracy or completeness of any information regarding Purchaser or its Subsidiaries made available or otherwise presented to the Target Company or any of its Subsidiaries, its and their respective Affiliates, and its and their respective Representatives. Without limiting the generality of the foregoing, the Company acknowledges that, except as expressly made in ARTICLE III, no representation or warranties (express, implied or otherwise) are made with respect to (i) any projections, forecasts, estimates, budgets or prospect or (ii) any oral or written information made available or otherwise presented to the Company or any of its Affiliates or Representatives whether in the course of the negotiation of this Agreement or in the course of the Company Mergers or otherwise.
ARTICLE V
COVENANTS
5.1 Access and Information.
(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 8.1, and the Second Effective Time (the “Interim Period”), subject to Section 5.15 (including the limitations in Section 5.15(b)), solely for the purposes of furthering the transactions contemplated by this Agreement and integration planning related thereto, the Company shall give, and shall cause its Representatives to give, the Purchaser and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access, consistent with applicable Law, to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements) of or pertaining to the Target Companies, in each case, solely for the purposes of furthering the transactions contemplated by this Agreement and integration planning related thereto; provided, however, that the Purchaser and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Target Companies and shall be subject the Company’s reasonable security measures and insurance requirements; provided, further, that the Purchaser and its Representatives shall not conduct any invasive sampling of the environment or building materials in connection with such investigation. Notwithstanding the foregoing, the Company shall not be required to (or to cause any of its Subsidiaries to), after notice to Purchaser, afford such access or furnish such information to the extent that the Company believes in good faith that doing so would: (i) result in loss of attorney-client privilege, the work product immunity or any other legal privilege or similar doctrine (provided, that the Company shall use its reasonable best efforts to allow for such access or disclosure in a manner that does not result in loss of such privilege or doctrine); (ii) violate any confidentiality obligations of the Company or any of its Subsidiaries to any third person or otherwise breach, contravene or violate any then effective Contract to which the Company or any of its Subsidiaries is party; (iii) result in a competitor of the Company or any of its Subsidiaries receiving information that is competitively sensitive (provided, that information will be disclosed, to the extent legally permissible (as advised by the Company’s counsel)); or (iv) breach, contravene or violate any applicable Law.
(b) During the Interim Period, subject to Section 5.15 (including the limitations in Section 5.15(b)), the Purchaser shall give, and shall cause its Representatives to give, the Company and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access, consistent with applicable Law, to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements) of or pertaining to the Purchaser or its Subsidiaries, in each case, solely for the purposes of furthering the transactions contemplated by this Agreement and integration planning related thereto; provided, however, that the Company and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Purchaser and shall be subject the Purchaser’s reasonable security measures and insurance requirements. Notwithstanding the foregoing, the Purchaser shall not be required to (or to cause any of its Subsidiaries to), after notice to the Company, afford such access or furnish such information to the extent that the Purchaser believes in good faith that doing so would: (i) result in loss of attorney-client privilege, the work product immunity or any other legal privilege or similar doctrine (provided, that the Purchaser shall use its reasonable best efforts to allow for such access or disclosure in a manner that does not result in loss of such privilege or doctrine; (ii) violate any confidentiality obligations of the Purchaser or any of its Subsidiaries to any third person or otherwise breach, contravene or violate any then-effective Contract to which the Purchaser or any of its Subsidiaries is party; or (iii) breach, contravene or violate any applicable Law.
5.2 Conduct of Business of the Company.
(a) Unless the Purchaser shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except (i) as expressly permitted or required by this Agreement or the Ancillary Documents (including in connection with the PIPE Investment), (ii) as required by applicable Law or (iii) as set forth on Schedule 5.2, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (A) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (B) materially comply with all Laws applicable to the Target Companies and their respective businesses, assets and employees, and (C) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice; provided, that no action by the Company or any of its Subsidiaries with respect to matters specifically addressed by Section 5.2(b)(i) through Section 5.2(b)(xxix) shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of Section 5.2(b)(i) through Section 5.2(b)(xxix).
(b) Without limiting the generality of Section 5.2(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents or as set forth on Schedule 5.2(b), during the Interim Period, without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall cause its Subsidiaries to not:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents, except as required by applicable Law;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) declare or distribute any cash or other dividends or distributions to any Company Stockholders or any bonus to any executive employee, except bonuses to employees in the ordinary course of business;
(v) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $500,000 individually or $1,000,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $500,000 individually or $1,000,000 in the aggregate;
(vi) (a) increase the wages, salaries or compensation of its employees in the aggregate by more than five percent (5%), (b) make or commit to make any bonus payment (whether in cash, property or securities) to any employee, (c) materially increase other benefits of employees generally or (d) enter into, establish, materially amend or terminate any Company Benefit Plan with, for or in respect of any current consultant, officer, manager director or employee, in each of clauses (a), (b), (c) and (d), other than as required by applicable Law, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business consistent with past practice;
(vii) make, change or rescind any material election relating to Taxes, settle any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended material Tax Return or claim for a material refund of Taxes, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP, enter into any closing agreement, settle any material Tax claim or assessment relating to any Target Company, surrender any right to claim a material refund of Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to any Target Company, or take any other similar action relating to the filing of any material Tax Return;
(viii) Transfer or license to any Person or otherwise permit to lapse any material Company Registered IP or other material Company IP (excluding non-exclusive licenses of Company IP or any abandonment, lapse or expiration of Company Registered IP permitted in the exercise of the Company’s reasonable business judgment, in each case in the ordinary course of business), or disclose to any Person who has not entered into a confidentiality agreement or is not otherwise bound by any legal duty of confidentiality any material Trade Secrets included in the Company IP;
(ix) terminate or waive or assign any material right under, any Company Material Contract or enter into any Contract that would be a Company Material Contract, in any case outside of the ordinary course of business consistent with past practice;
(x) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(xi) establish any Subsidiary or enter into any new line of business;
(xii) fail to use commercially reasonable efforts to keep in force material insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xiii) change its fiscal year;
(xiv) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting with the Company’s outside auditors;
(xv) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), except if such waiver, release, assignment, settlement or compromise (A) with respect to the payment of monetary damages, involved an amount less than or equal to $500,000 individually or $1,000,000 in the aggregate (excluding, in each case, amounts to be paid under existing insurance policies or renewals thereof) and (B) with respect to any non-monetary terms and conditions therein, that does not impose any material restrictions on the operations or businesses of the Company or any of its Subsidiaries, taken as a whole, or any equitable relief that would materially impact the operations or businesses of the Company or any of its Subsidiaries, taken as a whole, or involve the admission of criminal wrongdoing by, the Company or any of its Subsidiaries;
(xvi) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business consistent with past practice;
(xvii) other than in accordance with the Company’s capital expenditure budget made available to Purchaser, make capital expenditures in excess of $500,000 individually for any project (or set of related projects) or $1,000,000 in the aggregate;
(xviii) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Company Mergers);
(xix) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $500,000 individually or $1,000,000 in the aggregate other than pursuant to the terms of a Company Material Contract or Company Benefit Plan;
(xx) sell, lease, exclusively license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xxi) except for the Ancillary Documents, enter into any agreement, understanding or arrangement with respect to the voting of equity securities of the Company;
(xxii) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement;
(xxiii) create any consensual Liens on any property or assets of the Company;
(xxiv) other than as required by applicable Law, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business: (A) hire any employee, officer, consultant, freelancer, independent contractor or sub-contractor or (B) adopt or enter into any new employee benefit or compensatory plan, policy, program, agreement, trust or arrangement;
(xxv) other than as required by applicable Law, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business: (A) pay or promise to pay, fund any new, enter into or make any grant of any severance, change in control, retention or termination payment to any director, officer, employee, consultant, freelancer, independent contractor or sub-contractor of the Company with an annual base salary above $250,000 or (B) take any action to accelerate any material payments or benefits, or the funding of any material payments or benefits, payable or to become payable to any director, officer, other employee of the Company with an annual base salary above $250,000;
(xxvi) accelerate the collection of any trade receivables or delay the payment of trade payables or any other Liabilities other than in the ordinary course of business consistent with past practice;
(xxvii) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related Person to the extent such transaction is identified on Schedule 4.22;
(xxviii) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union or labor organization; or
(xxix) authorize or agree to do any of the foregoing actions.
5.3 Conduct of Business of the Purchaser.
(a) Unless the Company will otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents or as set forth on Schedule 5.3, the Purchaser shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Purchaser and its Subsidiaries and their respective businesses, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice. Notwithstanding anything to the contrary in this Section 5.3, nothing in this Agreement shall prohibit or restrict Purchaser from extending, in accordance with the Purchaser Memorandum and Articles and the IPO Prospectus, the deadline by which it must complete its Business Combination (an “Extension”), and no consent of any other Party shall be required in connection therewith.
(b) Without limiting the generality of Section 5.3(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents (including the Reincorporation) or as set forth on Schedule 5.3, during the Interim Period, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), the Purchaser shall not, and shall cause its Subsidiaries to not:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents, other than in connection with the Reincorporation and except as required by applicable Law;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its shares or other equity securities, or other securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, other than the issuance of Purchaser securities issuable upon conversion or exchange of outstanding Purchaser securities in accordance with their terms, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $500,000 individually or $1,000,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person (provided, that this Section 5.3(b)(iv) shall not prevent the Purchaser from borrowing funds necessary to finance its ordinary course administrative costs and expenses and Expenses incurred in connection with the consummation of the Reincorporation, the Company Mergers and the other transactions contemplated by this Agreement);
(v) make, change or rescind any material election relating to Taxes, settle any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended material Tax Return or claim for a material refund of Taxes, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP, enter into any closing agreement, settle any material Tax claim or assessment relating to the Purchaser, surrender any right to claim a material refund of Taxes, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Purchaser, or take any other similar action relating to the filing of any material Tax Return;
(vi) amend, waive or otherwise change the Trust Agreement in any manner adverse to the Purchaser;
(vii) terminate, waive or assign any material right under any Purchaser Material Contract or enter into any Contract that would be a Purchaser Material Contract, in any case outside of the ordinary course of business consistent with past practice;
(viii) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(ix) establish any Subsidiary or enter into any new line of business;
(x) fail to use commercially reasonable efforts to keep in force material insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xi) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting the Purchaser’s outside auditors;
(xii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), except if such waiver, release, assignment, settlement or compromise (A) with respect to the payment of monetary damages, involved an amount less than or equal to $500,000 individually or $1,000,000 in the aggregate (excluding, in each case, amounts to be paid under existing insurance politics or renewals thereof), unless such amount has been reserved in the Purchaser Financials, and (B) with respect to any non-monetary terms and conditions therein, that does not impose any material restrictions on the operations or business of the Purchaser or any of its Subsidiaries, any equitable relief that would materially impact the operations or businesses of the Purchaser or any of its Subsidiaries, or involve the admission of criminal wrongdoing by, the Purchaser or any of its Subsidiaries;
(xiii) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business;
(xiv) authorize, recommend, propose, or announce an intention to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Reincorporation and the Company Mergers);
(xv) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $500,000 individually or $1,000,000 in the aggregate (excluding the incurrence of any Expenses) other than pursuant to the terms of a Contract in existence as of the date of this Agreement or entered into in the ordinary course of business or in accordance with the terms of this Section 5.3 during the Interim Period;
(xvi) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xvii) enter into any agreement, understanding or arrangement with respect to the voting of Purchaser Securities;
(xviii) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or
(xix) authorize or agree to do any of the foregoing actions.
5.4 Annual and Interim Financial Statements. During the Interim Period, within thirty (30) days following the end of each three-month quarterly period and each fiscal year, the Company shall deliver to the Purchaser an unaudited consolidated financial statements, including an income statement, balance sheet, statement of changes in stockholders’ equity, and statement of cash flows of the Target Companies for the period from the Interim Balance Sheet Date through the end of such quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, reviewed by the Company’s auditor and in form appropriate for inclusion in the Registration Statement, in each case accompanied by a certificate of the CFO of the Company to the effect that all such financial statements fairly present the consolidated financial position and results of operations of the Target Companies as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes. From the date hereof through the Closing Date, the Company will also promptly deliver to the Purchaser copies of any audited consolidated financial statements of the Target Companies that the Target Companies’ certified public accountants may issue.
(b) The Company shall use its commercially reasonable efforts to deliver to the Purchaser by April 20, 2026, or as promptly as practicable thereafter, audited consolidated financial statements of the Target Companies for the fiscal years ended December 31, 2024 and December 31, 2023, which financial statements shall have been audited in accordance with PCAOB auditing standards by a PCAOB qualified auditor. Such audited financial statements shall be accompanied by a certificate of the CFO of the Company to the effect that such financial statements fairly present the financial position and results of operations of the Company as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes.
5.5 Purchaser Public Filings. During the Interim Period, the Purchaser will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws and shall use its commercially reasonable efforts prior to the Closing to maintain the listing of the Purchaser Public Units, Purchaser Ordinary Shares and Purchaser Public Warrants on Nasdaq; provided, that the Parties acknowledge and agree that from and after the Closing, the Parties intend to list on Nasdaq only the Pubco Common Stock and Pubco Warrants.
5.6 No Solicitation.
(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means (A) with respect to the Company and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning the sale of (x) all or any material part of the business or assets of the Target Companies (other than in the ordinary course of business consistent with past practice) or (y) any material number of the shares or other equity interests or profits of the Target Companies, in any case, whether such transaction takes the form of a sale of shares or other equity interests, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise and (B) with respect to the Purchaser and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning a business combination involving the Purchaser.
(b) During the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance of the transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written consent of the Company and the Purchaser, directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality agreement to which such Party is a party.
(c) Each Party shall notify the others as promptly as practicable (and in any event within 48 hours) in writing of the receipt by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such Party or its Affiliates in connection with any Acquisition Proposal, specifying in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
(d) During the Interim Period, the board of directors of the Purchaser, or any committee thereof, shall not: (i) withhold, withdraw, qualify or modify (or publicly propose or resolve to withhold, withdraw, qualify or modify) the Purchaser Recommendation; (ii) approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, any Alternative Transaction with respect to the Purchaser; (iii) approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, or allow Purchaser to execute or enter into, any agreement related to an Alternative Transaction; (iv) enter into any agreement, letter of intent, or agreement in principle requiring Purchaser to abandon, terminate or fail to consummate the transactions contemplated hereby; (v) fail to recommend against any Alternative Transaction with respect to the Purchaser; (vi) fail to re-affirm the Purchaser Recommendation at the written request of the Company within five (5) Business Days of such request; (vi) fail to include the Purchaser Recommendation in the Registration Statement and Proxy Statement; or (vii) resolve or agree in writing to do any of the foregoing. Nothing contained in this Agreement shall prohibit the Purchaser or the board of directors of the Purchaser or any committee thereof from (x) taking and disclosing to the Purchaser’s shareholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act or issuing a “stop, look and listen” statement to the Purchaser’s shareholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act pending disclosure of its position thereunder or (ii) directing any Person (or the Representative of that Person) who makes an Acquisition Proposal to the provisions of this Section 5.6.
(e) During the Interim Period, the board of directors of the Company, or any committee thereof, shall not: (i) withhold, withdraw, qualify or modify (or publicly propose or resolve to withhold, withdraw, qualify or modify) the Company Recommendation; (ii) approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, any Alternative Transaction with respect to the Company; (iii) approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, or allow the Company to execute or enter into, any agreement related to an Alternative Transaction; (iv) enter into any agreement, letter of intent, or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions contemplated hereby; (v) fail to recommend against any Alternative Transaction with respect to the Company; (vi) fail to re-affirm the Company Recommendation at the written request of the Purchaser within five (5) Business Days of such request; (vi) fail to include the Company Recommendation in any solicitation materials that its prepares or sends to Company Stockholders; or (vii) resolve or agree in writing to do any of the foregoing.
5.7 No Trading. The Company acknowledges and agrees that it is aware, and that the Company’s Affiliates are aware (and each of their respective Representatives is aware or, upon receipt of any material nonpublic information of the Purchaser, will be advised) of the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or otherwise (the “Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of the Purchaser (other than to engage in the Company Mergers in accordance with ARTICLE I), communicate such information to any third party, take any other action with respect to the Purchaser in violation of such Laws, or cause or encourage any third party to do any of the foregoing.
5.8 Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates; (b) receives any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; or (c) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.
5.9 Efforts.
(a) Subject to the terms and conditions of this Agreement, each Party shall use its best efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable Consents of Governmental Authorities) and to comply as promptly as practicable with all requirements of Governmental Authorities applicable to the transactions contemplated by this Agreement.
(b) In furtherance and not in limitation of Section 5.9(a), to the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (“Antitrust Laws”), each Party hereto agrees to make any required filing or application under Antitrust Laws, as applicable, at such Party’s sole cost and expense (subject to the last sentence of Section 8.3 with respect to Antitrust Expenses), with respect to the transactions contemplated hereby as promptly as practicable (and in any event, within twenty-five (25) Business Days following the date hereof), to supply as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the Antitrust Laws. Each Party shall, in connection with its efforts to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement under any Antitrust Law, use its commercially reasonable efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each case regarding any of the transactions contemplated by this Agreement; (iii) permit a Representative of the other Parties and their respective outside counsel to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences, the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use commercially reasonable efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the transactions contemplated hereby, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority.
(c) As soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) their respective commercially reasonable efforts to prepare and file with Governmental Authorities requests for approval of the transactions contemplated by this Agreement and shall use all commercially reasonable efforts to have such Governmental Authorities approve the transactions contemplated by this Agreement. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives receives any notice from such Governmental Authorities in connection with the transactions contemplated by this Agreement, and shall promptly furnish the other Parties with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection with its approval of the transactions contemplated hereby, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the transactions contemplated by this Agreement under any applicable Law or if any Action is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private Person challenging any of the transactions contemplated by this Agreement or any Ancillary Document as violative of any applicable Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby, the Parties shall use their commercially reasonable efforts to resolve any such objections or Actions so as to timely permit consummation of the transactions contemplated by this Agreement and the Ancillary Documents, including in order to resolve such objections or Actions which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby. In the event any Action is instituted (or threatened to be instituted) by a Governmental Authority or private Person challenging the transactions contemplated by this Agreement, or any Ancillary Document, the Parties shall, and shall cause their respective Representatives to, reasonably cooperate with each other and use their respective commercially reasonable efforts to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement or the Ancillary Documents.
(d) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any Consents of Governmental Authorities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.
5.10 Tax Matters.
(a) Intended Tax Treatment. Each of the Parties shall use its reasonable best efforts to cause each of the Reincorporation and the Company Mergers to qualify for the Reincorporation Intended Tax Treatment and the Merger Intended Tax Treatment, respectively. None of the Parties shall (and each of the Parties shall cause their respective Subsidiaries not to) take any action, or fail to take any action, that could reasonably be expected to cause the Company Mergers to fail to qualify for the Merger Intended Tax Treatment. The Parties intend to report and, except to the extent otherwise required by Law, shall report, for federal income tax purposes, the Reincorporation and the Company Mergers consistently with the Reincorporation Intended Tax Treatment and the Merger Intended Tax Treatment, respectively.
(b) Tax Opinions. If, in connection with the preparation and filing of the Registration Statement and Proxy Statement, the SEC requires that tax opinions be prepared and submitted regarding: (i) the qualification of the Reincorporation for the Reincorporation Intended Tax Treatment, the Purchaser will use its reasonable best efforts to cause U.S. tax counsel engaged by the Purchaser to deliver such tax opinion to the Purchaser, or (ii) the qualification of the Company Mergers for the Merger Intended Tax Treatment, the Company will use its reasonable best efforts to cause U.S. tax counsel engaged by the Company to deliver such tax opinion to the Company. Each party shall use reasonable best efforts to execute and deliver customary Tax representation letters to the applicable tax advisor in form and substance reasonably satisfactory to such applicable advisor. Notwithstanding anything to the contrary in this Agreement, Loeb & Loeb LLP shall not be required to provide any opinion to any Party regarding the tax consequences of the Company Mergers.
(c) Tax Matters Cooperation. Each of the parties hereto shall (and shall cause its respective Affiliates to) cooperate fully, as and to the extent reasonably requested by another party hereto, in connection with the filing of relevant Tax Returns, and any audit or tax proceeding. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information reasonably relevant to any tax proceeding or audit, making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.
(d) The Parties shall file all Tax Returns consistent with the Reincorporation Intended Tax Treatment and the Merger Intended Tax Treatment, respectively (including attaching the statement described in Treasury Regulations Section 1.368-3(a) on or with its Tax Return for the taxable year of the Company Mergers), and shall take no position inconsistent with the Reincorporation Intended Tax Treatment and the Merger Intended Tax Treatment, respectively (whether in audits, Tax Returns or otherwise), unless otherwise required by a taxing authority as a result of a “determination” within the meaning of Section 1313(a) of the Code.
(e) Each of Purchaser and Pubco shall use its reasonable best efforts not to, and not permit any affiliate to, take or cause to be taken any action that would cause to be untrue (or fail to take or cause not to be taken any action which inaction would cause to be untrue) any of the representations and covenants to be made to counsel in the certificate set forth in Section 5.10(b) of the Purchaser Disclosure Schedules.
5.11 Further Assurances. The Parties hereto shall further cooperate with each other and use their respective commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the transactions contemplated by this Agreement as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings.
5.12 The Registration Statement and Proxy Statement.
(a) As promptly as practicable after the date hereof, the Purchaser and the Company shall jointly prepare, and Purchaser shall cause Pubco to file with the SEC a registration statement (for which the Company shall be a co-registrant) on Form S-4 (as amended or supplemented from time to time, and including the Proxy Statement contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of Pubco Common Stock to be issued under this Agreement as the Merger Consideration and in connection with the Reincorporation, which Registration Statement will also contain a proxy statement (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from the Purchaser’s shareholders for the matters to be acted upon at the Purchaser Extraordinary General Meeting and providing Purchaser’s shareholders an opportunity in accordance with the Purchaser Memorandum and Articles and the IPO Prospectus to have their Purchaser Ordinary Shares redeemed (the “Redemption”) in conjunction with the shareholder vote on the Purchaser Shareholder Approval Matters. The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from Purchaser’s shareholders to vote, at an extraordinary general meeting of the Purchaser to be called and held for such purpose (the “Purchaser Extraordinary General Meeting”), in favor of resolutions approving (i) by ordinary resolution, the adoption and approval of this Agreement and the transactions contemplated hereby or referred to herein, including the Company Mergers and the Reincorporation, by the holders of Purchaser Ordinary Shares entitled to vote thereon at the Purchaser Extraordinary General Meeting in accordance with the Purchaser Memorandum and Articles, the Securities Act, the Companies Act, the DGCL, the DLLCA and the rules and regulations of the SEC and Nasdaq, (ii) by special resolution, the effecting of the Reincorporation and the adoption and approval of the Plan of Merger in accordance with the Companies Act and the DGCL, (iii) by ordinary resolution, the election of the members of the Post-Closing Pubco Board designated in accordance with Section 5.17 hereof, (iv) by ordinary resolution, for purposes of complying with the applicable provisions of Nasdaq listing rules, the issuance of more than 20% of the issued and outstanding shares of Pubco Common Stock and securities convertible into shares of Pubco Common Stock upon the Closing, (v) by special resolution, the adoption and approval of the amended certificate of incorporation and bylaws of Pubco, (vi) by ordinary resolution, the adoption and approval of the advisory proposals relating to the amended certificate of incorporation and bylaws of Pubco, (vii) by ordinary resolution, the adoption and approval of a new equity incentive plan in substantially the form agreed by the parties prior to the effectiveness of the Registration Statement (the “Equity Incentive Plan”), and which will provide for awards for a number of shares of Pubco Common Stock equal to ten percent (10%) of the aggregate number of shares of Pubco Common Stock issued and outstanding immediately after the Closing (giving effect to the Redemption), (viii) such other matters as the Company and the Purchaser shall hereafter mutually determine to be necessary or appropriate in order to effect the Reincorporation, the Company Mergers and the other transactions contemplated by this Agreement (the approvals described in foregoing clauses (i) through (viii), collectively, the “Purchaser Shareholder Approval Matters”), and (ix) by ordinary resolution, the adjournment of the Purchaser Extraordinary General Meeting, if necessary or desirable in the reasonable determination of the chairperson of the Purchaser Extraordinary General Meeting. If on the date for which the Purchaser Extraordinary General Meeting is scheduled, the Purchaser has not received proxies representing a sufficient number of shares to obtain the Required Purchaser Shareholder Approval, whether or not a quorum is present, the chairperson of the Purchaser Extraordinary General Meeting may make one or more successive postponements or adjournments of the Purchaser Extraordinary General Meeting; provided, that without the prior written consent of the Company, the Purchaser Extraordinary General Meeting shall not be postponed or adjourned to a date that is more than fifteen (15) days after the date for which the Purchaser Extraordinary General Meeting was originally scheduled (excluding any adjournments required by applicable Law). In connection with the Registration Statement, the Purchaser will cause Pubco to file with the SEC financial and other information about the transactions contemplated by this Agreement in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in the Purchaser Memorandum and Articles, the Securities Act, the DGCL, the DLLCA and the rules and regulations of the SEC and Nasdaq. The Purchaser and Pubco shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Registration Statement and any amendment or supplement thereto prior to filing the same with the SEC, and the Purchaser and Pubco shall consider any such comments timely made in good faith. The Company shall provide the Purchaser and Pubco with such information concerning the Target Companies and their stockholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Registration Statement, or in any amendments or supplements thereto, which information provided by the Company shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading. If required by applicable SEC rules or regulations, such financial information provided by the Target Companies shall be reviewed or audited by the Target Companies’ auditors. The Purchaser shall cause any information concerning the Purchaser, Pubco, or their stockholders, officers, directors, assets, Liabilities, condition (financial or otherwise), business and operations included in the Registration Statement, or in any amendments or supplements thereto, to be true and correct and to not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading. The Purchaser and the Company shall each pay fifty percent (50%) of all filing fees payable to the SEC in connection with the Registration Statement.
(b) Each Party shall take any and all reasonable and necessary actions required to satisfy the requirements of the Securities Act, the Exchange Act and other applicable Laws in connection with the Registration Statement, the Purchaser Extraordinary General Meeting and the Redemption. Each Party shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company and the Purchaser and their respective Representatives in connection with the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Registration Statement, and responding promptly to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Registration Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. The Purchaser shall, in consultation with the Company, cause Pubco to amend or supplement the Registration Statement and cause the Registration Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to the Purchaser’s shareholders, in each case as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and the Purchaser Memorandum and Articles.
(c) The Purchaser, with the assistance of the other Parties, shall cause Pubco to promptly respond to any SEC comments on the Registration Statement and shall otherwise use its commercially reasonable efforts to cause the Registration Statement to “clear” comments from the SEC and become effective and to keep the Registration Statement effective as long as is necessary to consummate the Company Mergers. The Purchaser shall provide the Company with copies of any written comments, and shall inform the Company of any material oral comments, that the Purchaser, Pubco, or their Representatives receive from the SEC or its staff with respect to the Registration Statement, the Purchaser Extraordinary General Meeting and the Redemption promptly after the receipt of such comments and shall give the Company and its counsel a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments, and the Purchaser and Pubco shall consider any such comments timely made in good faith under the circumstances. If at any time prior to receipt of the Required Purchaser Shareholder Approval there shall occur any event that should be set forth in an amendment or supplement to the Registration Statement, including correcting any information that has become false and misleading in any material respect, the Purchaser will promptly prepare and mail to its shareholders such an amendment or supplement. The Purchaser shall (i) commence mailing the Registration Statement to the Purchaser’s shareholders as promptly as practicable after filing with the SEC, and, in any event, within twenty (20) Business Days of the receipt and resolution of SEC comments with respect to the Registration Statement), and (ii) take all necessary action, including establishing a record date and completing a broker search pursuant to Section 14a-13 of the Exchange Act, to permit the foregoing.
(d) As soon as practicable following the Registration Statement “clearing” comments from the SEC and becoming effective, the Purchaser shall distribute the Registration Statement to Purchaser’s shareholders and the Company Stockholders, and, pursuant thereto, shall call the Purchaser Extraordinary General Meeting in accordance with the Companies Act, the Purchaser Memorandum and Articles and the applicable provisions of the DGCL and DLLCA, for a date no later than thirty (30) days following the effectiveness of the Registration Statement.
(e) The Purchaser and Pubco shall comply with all applicable Laws, any applicable rules and regulations of Nasdaq, the Purchaser Memorandum and Articles and this Agreement in the preparation, filing and distribution of the Registration Statement, any solicitation of proxies thereunder, the calling and holding of the Purchaser Extraordinary General Meeting and the Redemption. The Purchaser and Pubco, as applicable, shall apply for, and shall take commercially reasonable actions to cause, the Pubco Common Stock to be issued in connection with the Company Mergers to be approved for listing on Nasdaq as of the Closing.
5.13 Company Stockholder Approval. Promptly following the execution of this Agreement (and in any event within two (2) Business Days), the Company shall deliver to the Purchaser the Written Consent, which shall represent the requisite vote of the Company Stockholders (including any separate class or series vote(s) required pursuant to the Company’s Organizational Documents, any stockholders agreement or otherwise), as necessary, to authorize, approve and consent to, the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which the Company is or is required to be a party or bound, and the consummation of the transactions contemplated hereby and thereby, including the Company Mergers (the “Required Company Stockholder Approval”).
5.14 Public Announcements.
(a) The Parties agree that during the Interim Period no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent of the Purchaser and the Company (which consent shall not be unreasonably withheld, conditioned or delayed), except (i) as such release, filing or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable Party shall use commercially reasonable efforts to allow the other Parties reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement in advance of such issuance or (ii) if the press release, filing or announcement contains only information that is consistent with any press release, filing or announcement previously issued or made in accordance with this Section 5.14.
(b) The Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press Release, the Purchaser shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by Federal Securities Laws, which the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing (with the Company reviewing, commenting upon and approving such Signing Filing in any event no later than the third (3rd) Business Day after the execution of this Agreement); provided, that the Purchaser provides the Company with a reasonable amount of time to complete such review, comment and approval prior to the third (3rd) Business Day after the date hereof. The Parties shall mutually agree upon and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”). Promptly after the issuance of the Closing Press Release, the Purchaser shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which the Purchaser and the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Filing, the Closing Press Release, or any other report, statement, filing notice or application made by or on behalf of a Party to any Governmental Authority or other third party in connection with the transactions contemplated hereby, each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/or any Governmental Authority in connection with the transactions contemplated hereby.
5.15 Confidential Information.
(a) Any information provided to or obtained by Purchaser or its Representatives pursuant to Section 5.1(a) shall be “Confidential Information” as defined in the Confidentiality Agreement, and shall be held by Purchaser, Pubco, Merger Sub I and Merger Sub II in accordance with and be subject to the terms of the Confidentiality Agreement. Except if legally compelled by any Governmental Authority, the Company hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with ARTICLE VIII, for a period of one (1) year after such termination, they shall, and shall cause their respective Representatives to: (i) treat and hold in strict confidence any Purchaser Confidential Information in accordance with the Confidentiality Agreement, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement, the Ancillary Documents or the Confidentiality Agreement, performing their obligations hereunder or thereunder, enforcing their rights hereunder or thereunder, or in furtherance of their authorized duties on behalf of the Purchaser or its Subsidiaries), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Purchaser Confidential Information without the Purchaser’s prior written consent; and (ii) in the event that the Company or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with ARTICLE VIII, for a period of one (1) year after such termination, becomes legally compelled by any Governmental Authority to disclose any Purchaser Confidential Information, (A) provide the Purchaser to the extent legally permitted with prompt written notice of such requirement so that the Purchaser or an Affiliate thereof may seek, at Purchaser’s cost, a protective Order or other remedy or waive compliance with this Section 5.15(a), and (B) in the event that such protective Order or other remedy is not obtained, or the Purchaser waives compliance with this Section 5.15(a), furnish only that portion of such Purchaser Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Purchaser Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Company shall, and shall cause its Representatives to, promptly deliver to the Purchaser or destroy (at Purchaser’s election) any and all copies (in whatever form or medium) of Purchaser Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Company and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; provided, further, that any Purchaser Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement.
(b) The Purchaser hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with ARTICLE VIII, for a period of two (2) years after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Company’s prior written consent; and (ii) in the event that the Purchaser or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with ARTICLE VIII, for a period of two (2) years after such termination, becomes legally compelled to disclose any Company Confidential Information, (A) provide the Company to the extent legally permitted with prompt written notice of such requirement so that the Company may seek, at the Company’s sole expense, a protective Order or other remedy or waive compliance with this Section 5.15(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Company waives compliance with this Section 5.15(b), furnish only that portion of such Company Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Company Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Purchaser shall, and shall cause its Representatives to, promptly deliver to the Company or destroy (at the Purchaser’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Purchaser and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; provided, further, that any Company Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement.
5.16 Documents and Information. After the Closing Date, the Purchaser and the Company shall, and shall cause their respective Subsidiaries to, until the seventh (7th) anniversary of the Closing Date, retain all books, records and other documents pertaining to the business of the Target Companies in existence on the Closing Date and make all books, records and other documents pertaining to the business of the Target Company reasonably available for inspection by the Purchaser during normal business hours of the Company and its Subsidiaries, as applicable, upon reasonable request and upon reasonable prior written notice.
5.17 Post-Closing Board of Directors and Executive Officers.
(a) At the Reincorporation Effective Time, the board of directors of Pubco (as the surviving corporation thereunder) shall consist of the members of the board of directors of the Purchaser as of immediately prior to the Reincorporation Effective Time, as set out in the Plan of Merger.
(b) Unless otherwise agreed by the Parties, the Parties shall take all necessary action, including causing the directors of the Purchaser and Pubco to resign as may be required pursuant to the Reincorporation or the Company Mergers, so that effective as of the Closing, Pubco’s board of directors (the “Post-Closing Pubco Board”) will consist of eight (8) individuals, seven (7) individuals to be designated by the Company and one (1) individual to be designated by the Sponsor; provided, that the size of the Post-Closing Pubco Board may be increased from time to time up to a maximum of nine (9) directors as determined by the Post-Closing Pubco Board in good faith to comply with applicable Law or the relevant listing rules. The Post-Closing Pubco Board will be classified, with respect to the term for which they severally hold office, into three classes. The initial Class I Directors will serve for a term expiring at the first annual meeting of stockholders to be held following the Closing (the “Class I Directors”); the initial Class II Directors will serve for a term expiring at the second annual meeting of stockholders following the Closing (the “Class II Directors”); and the initial Class III Directors will serve for a term expiring at the third annual meeting of stockholders to be held following the Closing (the “Class III Directors”). At each succeeding annual meeting of stockholders, beginning with the first annual meeting of stockholders following the Closing, directors elected to succeed those directors whose terms expire will be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. At or before the Closing, the Purchaser will provide each director of Pubco with a customary director indemnification agreement, in form and substance reasonably acceptable to the Parties.
(c) The Parties shall take all action necessary, including causing the executive officers of the Purchaser to resign prior to and with effect from the Reincorporation, so that the individuals serving as the chief executive officer and chief financial officer, respectively, of Pubco immediately after the Closing will be the same individuals (in the same office) as that of the Company immediately prior to the First Effective Time (unless, at its sole discretion, the Company desires to appoint another qualified person to either such role, in which case, such other person identified by the Company shall serve in such role).
5.18 Indemnification of Directors and Officers; Tail Insurance.
(a) The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of the Purchaser or the Company and each Person who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of the Purchaser or the Company (the “D&O Indemnified Persons”) as provided in their respective Organizational Documents or under any indemnification, employment or other similar agreements between any D&O Indemnified Person and the Purchaser or the Company, in each case as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law. For a period of six (6) years after the Effective Time, Pubco shall cause the Organizational Documents of Pubco and the Surviving Company to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses to D&O Indemnified Persons than are set forth as of the date of this Agreement in the Organizational Documents of the Purchaser and the Company to the extent permitted by applicable Law; provided, that the Person to whom expenses are advanced shall provide an undertaking to repay such advances if it is ultimately determined that such Person is not entitled to indemnification. The provisions of this Section 5.18 shall survive the consummation of the Reincorporation and the Company Mergers and are intended to be for the benefit of, and shall be enforceable by, each of the D&O Indemnified Persons and their respective heirs and representatives, each of whom will be a third party beneficiary of the provisions of this Section 5.18(a).
(b) For the benefit of the Purchaser’s and the Company’s directors and officers, the Purchaser and the Company shall be permitted prior to the First Effective Time to obtain and fully pay from the capital of the Surviving Company upon release of funds from the Trust Account the premium for a “tail” insurance policy that provides coverage for up to a six (6) year period from and after the First Effective Time for events occurring prior to the First Effective Time (the “D&O Tail Insurance”) that shall be effective as of the First Effective Time and substantially equivalent to and in any event not less favorable in the aggregate than the Purchaser’s and the Company’s existing policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage; provided, that the annual cost for such “tail” policy does not exceed 300% of the amount paid by the Purchaser or the Company for coverage under the Purchaser’s or the Company’s existing policy for full the fiscal year. If obtained, Pubco shall maintain the D&O Tail Insurance in full force and effect for its full term, and continue to honor the obligations thereunder, and Pubco shall timely pay or caused to be paid all premiums with respect to the D&O Tail Insurance.
(c) In the event Pubco or the Surviving Company or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving 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, proper provision shall be made so that the successors and assigns of Pubco or the Surviving Company (or their respective successors and assigns), as applicable, assume in writing the obligations set forth in this Section 5.18.
5.19 Trust Account Proceeds. The Parties agree that after the Closing, the funds in the Trust Account, after taking into account payments for the Redemption, shall first be used to pay (in the following order): (i) the Purchaser’s accrued Expenses, including the premiums for the D&O Tail Insurance, (ii) the Purchaser’s deferred Expenses (including cash amounts payable to the IPO Underwriter and any legal fees) of the IPO, (iii) any loans owed by the Purchaser to the Sponsor for any Expenses (including deferred Expenses), (iv) any administrative Expenses incurred by or on behalf of the Purchaser, and (v) any other Liabilities of the Purchaser as of the Closing. Such Expenses and Liabilities, as well as any Expenses and Liabilities that are required to be paid by delivery of the Purchaser’s securities, will be paid at the Closing. Any remaining cash will be used for payment of Expenses and Liabilities of the Target Companies and for working capital and general corporate purposes of the Surviving Company. In the event that, following the Redemption, there are not sufficient funds remaining in the Trust Account at Closing, the Surviving Company shall pay on the Closing Date all Expenses and Liabilities of the Purchaser as of the Closing; provided, that the Purchaser and the Company shall not be required to pay on the Closing Date any amount in excess of $3,000,000 in the aggregate (not including amounts payable for D&O insurance or deferred underwriting compensation) without the prior written consent of the Company.
5.20 Registration Rights Agreement. At the Closing, Parties will enter into a registration rights agreement in the form attached as Exhibit E hereto, providing for certain registration rights for certain shareholders of the Purchaser (the “Registration Rights Agreement”).
5.21 Section 280G. To the extent necessary to avoid the application of Section 280G of the Code and the Treasury regulations thereunder, as soon as reasonably practicable following the date of this Agreement, but in no event later than three (3) Business Days prior to the Closing Date, the Company shall (i) obtain waivers (the form and substance of which shall be provided to Purchaser for reasonable review and comment) from each Person who has a right to any payments and/or benefits as a result of or in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “parachute payments” within the meaning of Section 280G of the Code and as to which such Person waives his or her rights to some or all of such payments and/or benefits (the “Waived 280G Benefits”) applicable to such Person so that all remaining payments and/or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code), and (ii) following the execution of the waivers described in clause (i), solicit the approval of the stockholders of the Company of any Waived 280G Benefits pursuant to a vote intended to meet the requirements of Section 280G(b)(5)(B) of the Code and the Treasury regulations thereunder, in a manner and with a disclosure document that shall be provided to Purchaser for reasonable review and comment. At least three (3) Business Days prior to obtaining any waiver or soliciting stockholder approval, the Company shall provide Purchaser with copies of all Section 280G-related documents, including, without limitation, any Section 280G analysis prepared by the Company, the stockholder disclosure document, waivers and stockholder consents, for Purchaser’s reasonable review and comment. Prior to the Closing Date, the Company shall deliver to Purchaser evidence that a vote of the stockholders of the Company was solicited in accordance with the foregoing provisions of this Section 5.21 and that either (A) the requisite number of votes were obtained with respect to the Waived 280G Benefits (the “Section 280G Approval”), or (B) that the Section 280G Approval was not obtained, and, as a consequence, the Waived 280G Benefits shall not be made or provided.
ARTICLE VI
NO SURVIVAL
6.1 No Survival. Representations and warranties of the Company and the Purchaser contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Company or the Purchaser pursuant to this Agreement shall not survive the Closing, and from and after the Closing, the Company and the Purchaser and their respective Representatives shall not have any further obligations, nor shall any claim be asserted or action be brought against the Company or the Purchaser or their respective Representatives with respect thereto. The covenants and agreements made by the Company and the Purchaser in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Reincorporation, the Company Mergers and the other transactions described herein shall be subject to the satisfaction or written waiver (where permissible) by the Company and the Purchaser of the following conditions:
(a) Required Purchaser Shareholder Approval. The Purchaser Shareholder Approval Matters that are submitted to the vote of the shareholders of the Purchaser at the Purchaser Extraordinary General Meeting in accordance with the Proxy Statement and the Purchaser Memorandum and Articles shall have been approved by the requisite vote of the shareholders of the Purchaser at the Purchaser Extraordinary General Meeting in accordance with the Purchaser Memorandum and Articles, applicable Law and the Proxy Statement (the “Required Purchaser Shareholder Approval”).
(b) Written Consent. The Written Consent shall have been delivered to Purchaser.
(c) Antitrust Laws. Any waiting period (and any extension thereof) applicable to the consummation of this Agreement under any Antitrust Laws shall have expired or been terminated.
(d) [Reserved.]
(e) Requisite Consents. The Consents required to be obtained from or made with any third Person (other than a Governmental Authority) in order to consummate the transactions contemplated by this Agreement that are set forth in Schedule 7.1(d) shall have each been obtained or made.
(f) No Adverse Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by this Agreement.
(g) Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall remain effective as of the Closing, and no stop order or similar order shall be in effect with respect to the Registration Statement.
(h) Nasdaq Listing. The Pubco Common Stock shall have been approved for listing on Nasdaq, subject to official notice of issuance.
7.2 Conditions to Obligations of the Company. In addition to the conditions specified in Section 7.1, the obligations of the Company to consummate the First Company Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Company) of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Purchaser and its Subsidiaries set forth in this Agreement and in any certificate delivered by or on behalf of the Purchaser or its Subsidiaries pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Purchaser.
(b) Agreements and Covenants. The Purchaser and its Subsidiaries shall have performed in all material respects all of the Purchaser’s and its Subsidiaries’ obligations and complied in all material respects with all of the Purchaser’s and its Subsidiaries’ agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Purchaser Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Purchaser since the date of this Agreement which is continuing and uncured.
(d) Closing Deliveries.
(i) Officer Certificate. The Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive officer of the Purchaser in such capacity, certifying as to the satisfaction of the conditions specified in Sections 7.2(a), 7.2(b) and 7.2(c).
(ii) Secretary Certificate. The Purchaser shall have delivered to the Company a certificate from its secretary or other executive officer certifying as to, and attaching, (A) copies of the Purchaser Memorandum and Articles as in effect as of the Closing Date (after giving effect to the Reincorporation), (B) the resolutions of the Purchaser’s and each of its Subsidiaries’ respective board of directors or other governing body authorizing and approving the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which Purchaser or any of its Subsidiaries is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby, (C) evidence that the Required Purchaser Shareholder Approval has been obtained and (D) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which the Purchaser is or is required to be a party or otherwise bound.
(iii) Good Standing. The Purchaser shall have delivered to the Company a good standing certificate (or similar documents applicable for such jurisdictions) for the Purchaser, Pubco, Merger Sub I and Merger Sub II, in each case certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Purchaser’s, Pubco’s, Merger Sub I’s or Merger Sub II’s, as applicable, jurisdiction of organization and from each other jurisdiction in which the Purchaser, Pubco, Merger Sub I or Merger Sub II are qualified to do business as a foreign entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.
(iv) Registration Rights Agreement. The Company shall have received a copy of the Registration Rights Agreement, duly executed by Pubco.
7.3 Conditions to Obligations of the Purchaser. In addition to the conditions specified in Section 7.1, the obligations of the Purchaser, Pubco, Merger Sub I and Merger Sub II to consummate the Reincorporation, the Company Mergers and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Purchaser) of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Company set forth in this Agreement and in any certificate delivered by or on behalf of the Company pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Target Companies, taken as a whole.
(b) Agreements and Covenants. The Company shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Target Companies taken as a whole since the date of this Agreement which is continuing and uncured as of the Closing Date.
(d) Closing Deliveries.
(i) Officer Certificate. The Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive officer of the Company in such capacity, certifying as to the satisfaction of the conditions specified in Sections 7.3(a), 7.3(b) and 7.3(c).
(ii) Secretary Certificate. The Company shall have delivered to the Purchaser a certificate executed by the Company’s secretary certifying as to the validity and effectiveness of, and attaching, (A) copies of the Company’s Organizational Documents as in effect as of the Closing Date (immediately prior to the Effective Time), (B) the requisite resolutions of the Company’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which the Company is or is required to be a party or bound, and the consummation of the Company Mergers and the other transactions contemplated hereby and thereby, and the adoption of the Surviving Company Organizational Documents, and recommending the approval and adoption of the same by the Company Stockholders, (C) evidence that the Required Company Stockholder Approval has been obtained and (D) the incumbency of officers of the Company authorized to execute this Agreement or any Ancillary Document to which the Company is or is required to be a party or otherwise bound.
(iii) Good Standing. The Company shall have delivered to the Purchaser good standing certificates (or similar documents applicable for such jurisdictions) for each Target Company certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Target Company’s jurisdiction of organization and from each other jurisdiction in which the Target Company is qualified to do business as a foreign corporation or other entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.
(iv) Certified Charter. The Company shall have delivered to the Purchaser a copy of the Company Charter, as in effect as of immediately prior to the First Effective Time, certified by the Secretary of State of the State of Delaware as of a date no more than ten (10) Business Days prior to the Closing Date.
(v) Transmittal Documents. The Exchange Agent shall have received from each Company Stockholder the Transmittal Documents, each in form reasonably acceptable for transfer on the books of the Company.
(vi) Resignations. Subject to the requirements of Section 5.18, the Purchaser shall have received written resignations, effective as of the Closing, of each of the directors and officers of the Company as requested by the Purchaser prior to the Closing.
(vii) Registration Rights Agreement. The Purchaser shall have received a copy of the Registration Rights Agreement, duly executed by the Company.
(viii) Firpta Certificate. The Purchaser shall have received from the Company a duly executed certificate conforming to the requirements of Sections 1.897-2(h)(1)(i) and 1.1445-2(c)(3)(i) of the United States Treasury regulations, and a notice to be delivered to the United States Internal Revenue Service as required under Section 1.897-2(h)(2) of the United States Treasury regulations, each dated no more than thirty (30) days prior to the Closing Date and in form and substance reasonably acceptable to the Purchaser (the “Withholding Certificates”); provided, however, that notwithstanding anything to the contrary, the sole remedy under this Agreement for any failure of the Company to deliver the Withholding Certificates shall be for the Purchaser to withhold from payments pursuant to this Agreement in accordance with Section 1.21 any Taxes that are required to be withheld by the Purchaser by reason of such failure.
7.4 Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company, any Target Company or Company Stockholder) failure to comply with or perform any of its covenants or obligations set forth in this Agreement.
ARTICLE VIII
TERMINATION AND EXPENSES
8.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:
(a) by mutual written consent of the Purchaser and the Company;
(b) by written notice by the Purchaser or the Company if any of the conditions to the Closing set forth in ARTICLE VII have not been satisfied or waived by January 20, 2027 (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;
(c) by written notice by either the Purchaser or the Company if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(c) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority;
(d) by written notice by the Company to Purchaser, if (i) there has been a material breach by the Purchaser or any of its Subsidiaries of any of their respective representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of the Purchaser or any of its Subsidiaries shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 7.2(a) or Section 7.2(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Purchaser or (B) the Outside Date; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(d) if at such time the Company is in material uncured breach of this Agreement;
(e) by written notice by the Purchaser to the Company, if (i) there has been a material breach by the Company of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of the Company shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 7.3(a) or Section 7.3(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Company or (B) the Outside Date; provided, that the Purchaser shall not have the right to terminate this Agreement pursuant to this Section 8.1(e) if at such time the Purchaser is in material uncured breach of this Agreement;
(f) by written notice by the Purchaser to the Company, if there shall have been a Material Adverse Effect on the Target Companies taken as a whole following the date of this Agreement which is uncured for at least ten (10) Business Days after written notice of such Material Adverse Effect is provided by the Purchaser to the Company;
(g) by written notice by either the Purchaser or the Company to the other, if the Purchaser Extraordinary General Meeting is held (including any adjournment or postponement thereof) and has concluded, the Purchaser’s shareholders have duly voted, and the Required Purchaser Shareholder Approval was not obtained;
(h) by written notice by the Purchaser to the Company, if the Company shall have failed to deliver the Written Consent to the Purchaser within two (2) Business Days of this Agreement;
(i) by the Purchaser if (i) all of the conditions set forth in Section 7.1 and Section 7.2 have been satisfied or waived (other than conditions that by their terms or nature are to be satisfied at the Closing), (ii) the Purchaser has irrevocably confirmed by written notice to Company that all of the conditions set forth in Section 7.3 have been satisfied (other than conditions that by their terms or nature are to be satisfied at the Closing) or that it is willing to waive any such unsatisfied conditions and that the Purchaser is ready, willing and able to consummate the Closing, and (iii) Company shall have failed to consummate the transactions contemplated in this Agreement within ten (10) Business Days after such notice; or
(j) by the Company if (i) all of the conditions set forth in Section 7.1 and Section 7.3 have been satisfied or waived (other than conditions that by their terms or nature are to be satisfied at the Closing), (ii) the Company has irrevocably confirmed by written notice to Purchaser that all of the conditions set forth in Section 7.2 have been satisfied (other than conditions that by their terms or nature are to be satisfied at the Closing) or that it is willing to waive any such unsatisfied conditions and that the Company is ready, willing and able to consummate the Closing, and (iii) the Purchaser shall have failed to consummate the transactions contemplated in this Agreement within ten (10) Business Days after such notice.
8.2 Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 8.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of Section 8.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives, and all rights and obligations of each Party shall cease, except: (i) Sections 5.14, 5.15, 8.3, 9.1, ARTICLE X, ARTICLE XI and this Section 8.2 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any Party from Liability for any willful breach of any covenant or obligation under this Agreement or any Fraud Claim (in each case of clauses (i) and (ii) above, subject to Section 9.1). Without limiting the foregoing, and except as provided in Section 8.3 and this Section 8.2 (but subject to Section 9.1) and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with Section 10.8, the Parties’ sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the transactions contemplated by this Agreement shall be the right, if applicable, to terminate this Agreement pursuant to Section 8.1.
8.3 Fees and Expenses. Subject to Section 9.1 and except as set forth in this Section 8.3 or elsewhere in this Agreement, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expenses, whether or not the Company Mergers or any other transaction contemplated by this Agreement is consummated; provided, that, if the Closing shall occur, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid first from the capital of the Purchaser and Pubco upon release of funds from the Trust Account, it being understood that any payments to be made (or to cause to be made) by the Purchaser or Pubco under this Section 8.3 shall be paid as soon as reasonably practicable upon consummation of the Company Mergers and release of proceeds from the Trust Account. As used in this Agreement, “Expenses” shall include all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts and consultants to a Party hereto or any of its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution or performance of this Agreement or any Ancillary Document related hereto and all other matters related to the consummation of this Agreement. With respect to the Purchaser, Expenses shall include any and all deferred expenses (including fees or commissions payable to the underwriters and any legal fees) of the IPO upon consummation of the Business Combination. The Purchaser shall pay all filing fees and Expenses under any applicable Antitrust Laws, including the fees and Expenses relating to any pre-merger notification required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“Antitrust Expenses”). For the avoidance of doubt, if any shares of Pubco Common Stock are issued in payment of Expenses incurred by the Purchaser (including, without limitation, fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts and consultants retained by the Purchaser or any of its Affiliates), such issuance shall in no event reduce the number of shares of Pubco Common Stock that the Company Stockholders are entitled to receive as Merger Consideration under this Agreement.
ARTICLE IX
WAIVERS AND RELEASES
9.1 Waiver of Claims Against Trust. Reference is made to the IPO Prospectus. The Company hereby represents and warrants that it has read the IPO Prospectus and understands that Purchaser has established the Trust Account containing the proceeds of the IPO and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Purchaser’s public shareholders (including over-allotment shares acquired by the Purchaser’s underwriters) (the “Public Shareholders”) and that, except as otherwise described in the IPO Prospectus, the Purchaser may disburse monies from the Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their Purchaser Ordinary Shares in connection with the consummation of its initial business combination (as such term is used in the IPO Prospectus) (“Business Combination”) or in connection with an amendment to the Purchaser Memorandum and Articles to extend the Purchaser’s deadline to consummate a Business Combination, (b) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay for any taxes and up to $100,000 in dissolution expenses, and (c) to the Purchaser after or concurrently with the consummation of a Business Combination. For and in consideration of the Purchaser entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the contrary in this Agreement, none of the Company or any of its Affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any proposed or actual business relationship between the Purchaser or any of its Representatives, on the one hand, and the Company or any of its Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). The Company on behalf of itself and its Affiliates hereby irrevocably waives any Released Claims that any such Party or any of its Affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Purchaser or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with the Purchaser or its Affiliates). The Company agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by the Purchaser and its Affiliates to induce the Purchaser to enter in this Agreement, and the Company further intends and understands such waiver to be valid, binding and enforceable against such Party and each of its Affiliates under applicable Law. To the extent that the Company or any of its Affiliates commences any Action based upon, in connection with, relating to or arising out of any matter relating to the Purchaser or its Representatives, which proceeding seeks, in whole or in part, monetary relief against the Purchaser or its Representatives, the Company hereby acknowledges and agrees that its and its Affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit such Party or any of its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event that the Company or any of its Affiliates commences Action based upon, in connection with, relating to or arising out of any matter relating to the Purchaser or its Representatives which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Shareholders, whether in the form of money damages or injunctive relief, the Purchaser and its Representatives, as applicable, shall be entitled to recover from the Company and its Affiliates, as applicable, the associated legal fees and costs in connection with any such Action, in the event the Purchaser or its Representatives, as applicable, prevails in such Action. This Section 9.1 shall survive termination of this Agreement for any reason and continue indefinitely.
ARTICLE X
MISCELLANEOUS
10.1 Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the entities that are expressly named as Parties and then only with respect to the specific obligations set forth herein with respect to such Party. Except to the extent a Party (and then only to the extent of the specific obligations undertaken by such Party in this Agreement), (a) no past, present or future director, officer, employee, sponsor, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or Representative of any Party and (b) no past, present or future director, officer, employee, sponsor, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or Representative of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Parties under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
10.2 Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by e-mail, with affirmative confirmation of receipt, (iii) one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case, to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):
|
If to the Purchaser, Pubco, Merger Sub I or Merger Sub II at or prior to the Closing, to:
Archimedes Tech SPAC Partners II Co. Claymont, DE 19703 Attn: Long Long, CEO |
with a copy (which will not constitute notice) to:
Loeb & Loeb LLP |
|
If to the Company or the Initial Surviving Corporation at or prior to the Closing, or if to Pubco or the Surviving Company following the Closing, to:
Forge Nano, Inc. Thornton, CO 80241 |
with a copy (which will not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP |
10.3 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the Purchaser and the Company, and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.
10.4 Third Parties. Except for the rights of the D&O Indemnified Persons set forth in Section 5.18, which the Parties acknowledge and agree are express third party beneficiaries of this Agreement, nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.
10.5 [Reserved].
10.6 Governing Law; Jurisdiction. Except for matters related to the Reincorporation under which the Laws of the Cayman Islands will also apply, this Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of Delaware without regard to the conflict of laws principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in Delaware (or in any appellate court thereof) (the “Specified Courts”). Each Party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 10.2. Nothing in this Section 10.6 shall affect the right of any Party to serve legal process in any other manner permitted by Law.
10.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.7.
10.8 Specific Performance. Each Party acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party agrees that, in the event of any breach or threatened breach by any other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in Law, equity or otherwise, including monetary damages) to (i) an injunction, temporary restraining order, or other order of specific performance to enforce the observance and performance of such covenant or obligation and (ii) an injunction restraining such breach or threatened breach. Each Party further agrees that no other Party or any other person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10.8, and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. The Parties acknowledge and agree that the right of specific performance contemplated by this Section 10.8 is an integral part of the Agreement, and without that right, none of the Parties would have entered into this Agreement.
10.9 Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
10.10 Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser and the Company.
10.11 Waiver. The Purchaser on behalf of itself and its Affiliates and the Company on behalf of itself and its Affiliates may in its sole discretion (i) extend the time for the performance of any obligation or other act of any other non-Affiliate party hereto, (ii) waive any inaccuracy in the representations and warranties by such other non-Affiliated Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance by such other non-Affiliated Party with any covenant or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.
10.12 Entire Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules attached hereto, which exhibits and schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.
10.13 Interpretation. The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. In this Agreement, unless the context otherwise requires: (a) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and words in the singular, including any defined terms, include the plural and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP; (d) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (e) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (f) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (g) the term “or” means “and/or”; (h) any reference to the term “ordinary course” or “ordinary course of business” shall be deemed in each case to be followed by the words “consistent with past practice”; (i) any agreement, instrument, insurance policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (j) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article,” “Schedule” and “Exhibit” are intended to refer to Sections, Articles, Schedules and Exhibits to this Agreement; and (k) the term “Dollars” or “$” means United States dollars. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling a substantially similar position for such Person. Any reference in this Agreement or any Ancillary Document to a Person’s shareholders or stockholders shall include any applicable owners of the equity interests of such Person, in whatever form, including with respect to the Purchaser its stockholders under the Companies Act, DGCL, or DLLCA as then applicable, or its Organizational Documents. The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties hereto, 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. To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, in order for such Contract, document, certificate or instrument to have been deemed to have been given, delivered, provided and made available to the Purchaser or its Representatives, such Contract, document, certificate or instrument shall have been posted to the electronic data site maintained on behalf of the Company for the benefit of the Purchaser and its Representatives and the Purchaser and its Representatives have been given access to the electronic folders containing such information.
10.14 Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
10.15 Legal Representation.
(a) The Parties agree that, notwithstanding the fact that Loeb may have, prior to the Closing, jointly represented the Purchaser, Pubco, Merger Sub I, Merger Sub II and/or the Sponsor, and each of their respective officers, employees and directors (each such Person, a “Designated Person”) in one or more matters relating this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby (including any matter that may be related to a proceeding or dispute arising under or related to this Agreement or such other agreements or in connection with such transactions) (each, an “Existing Representation”), and may continue those representations in the future in such matters, in the event of any post-Closing matters (i) relating to this Agreement, any other agreements contemplated hereby or the transactions contemplated hereby (including any matter that may be related to a proceeding or dispute arising under or related to this Agreement or such other agreements or in connection with such transactions) and (ii) in which Pubco or any of its Subsidiaries or equity holders of Pubco or any of Pubco’s Affiliates, on the one hand, and one or more Designated Persons, on the other hand, are or may be adverse to each other (each a “Post-Closing Matter”), the Designated Persons reasonably anticipate that Loeb will represent them in connection with such matters. Accordingly, following the Closing, the Parties agree that Loeb may represent the Sponsor or its Affiliates in connection with matters in which such Persons are adverse to Pubco or any of its Affiliates, including any disputes arising out of, or related to, this Agreement. The Company, Pubco, the Purchaser, Merger Sub I and Merger Sub II, who are or have the right to be represented by independent counsel in connection with the transactions contemplated by this Agreement, hereby agree, in advance, to waive (and to cause their Affiliates to waive) any actual or potential conflict of interest that may hereafter arise in connection with Loeb’s future representation of one or more of the Sponsor or its Affiliates in which the interests of such Person are adverse to the interests of Pubco, the Purchaser and the Company, or any of their respective Affiliates, including any matters that arise out of this Agreement or that are substantially related to this Agreement or to any prior representation by Loeb of Sponsor, the Purchaser or any of their respective Affiliates.
(b) The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, the Sponsor shall be deemed the client of Loeb with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications in any form or format whatsoever between or among any of Loeb, Sponsor or the Purchaser, or any of their respective Representatives, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, or, beginning on the date of this Agreement, any dispute arising under this Agreement (the “SPAC Deal Communications”), shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to the Sponsor, shall be controlled by the Sponsor and shall not pass to or be claimed by the Purchaser, Pubco, the Initial Surviving Corporation or the Surviving Company; provided, that nothing contained herein shall be deemed to be a waiver by the Designated Persons (including, (i) after the First Effective Time, the Initial Surviving Corporation and its Affiliates and (ii) after the Second Effective Time, the Surviving Company and its Affiliates) of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to a third-party. Pubco agrees on behalf of itself, the Purchaser and the Target Companies that after the Closing, (a) to the extent that the Purchaser or, after the Reincorporation Effective Time, Pubco or the Target Companies receives or takes physical possession of any SPAC Deal Communications, (i) such physical possession or receipt shall not, in any way, be deemed a waiver by Sponsor or any other Person, of the privileges or protections described in this Section 10.15 and (ii) neither the Purchaser nor the Target Companies after the Closing shall assert any claim that Sponsor or any other Person waived the attorney-client privilege, attorney work-product protection or any other right or expectation of client confidence applicable to any such materials or communications, (b) not to access or use the SPAC Deal Communications, including by way of review of any electronic data, communications or other information, or by seeking to have the Purchaser or any Target Company waive the attorney-client or other privilege, or by otherwise asserting that the Purchaser or the Target Companies after the Closing have the right to waive the attorney-client or other privilege and (c) not to seek to obtain the SPAC Deal Communications from Loeb so long as such SPAC Deal Communications would be subject to a privilege or protection if they were being requested in a proceeding by an unrelated third-party.
ARTICLE XI
DEFINITIONS
11.1 Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings:
“Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. For the avoidance of doubt, the Sponsor shall be deemed to be an Affiliate of the Purchaser prior to the Closing.
“Ancillary Documents” means each agreement, instrument or document attached hereto as an Exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the Parties hereto in connection with or pursuant to this Agreement, including, as applicable, the Written Consent, Purchaser Support Agreement, Lock-Up Agreement, the Confidentiality Agreement, the Registration Rights Agreement, the Escrow Agreement, the Subscription Agreement, the PIPE Investor Warrant Agreement and the Pubco Ascent Warrant Agreement.
“Applicable Taxes” means “Applicable Taxes” as defined in IRS Notice 2020-65 (and any corresponding Taxes under comparable state or local tax applicable Laws).
“Applicable Wages” means “Applicable Wages” as defined in IRS Notice 2020-65 (and any corresponding wages under comparable state or local tax applicable Laws).
“Benefit Plans” of any Person means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based compensation plan, severance or termination pay, vacation or other bonus plan or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to for the benefit of any current employee, director or consultant (or any beneficiary thereof), or with respect to which such Person has any Liability, whether direct or indirect, and whether actual or contingent.
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized to close for business, excluding as a result of “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day.
“Business Source Code” means source code (i) owned or purported to be owned by the Company or any of its Subsidiaries and (ii) embedded or incorporated in any Company Product (e.g., when compiled into executable object code or firmware) or otherwise material to the Company or any of its Subsidiaries in connection with the Business, taken as a whole.
“Closing Payment Shares” means a number of shares of Pubco Common Stock equal to (a) (i) $1,200,000,000 divided by (ii) $10.00 minus (b) the Pubco Common Stock issuable upon exercise of Pubco Convertible Securities issued in exchange for Company Convertible Securities, if any.
“Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code shall include such section and any valid treasury regulation promulgated thereunder.
“Company Ascent Options” means, collectively, the options or other rights to acquire securities of the Company and/or its Affiliates held by Ascent Funds International Management LLC, including those specified in the Amended and Restated Consulting Agreement between Ascent Funds International Management LLC and the Company dated September 1, 2025.
“Company Charter” means the Sixth Amended and Restated Certificate of Incorporation of the Company, as amended and effective under the DGCL, prior to the First Effective Time.
“Company Common Stock” means the common stock, par value $0.0001 per share, of the Company before the First Effective Time.
“Company Confidential Information” means all confidential or proprietary documents and information concerning the Target Companies or any of their respective Representatives, furnished in connection with this Agreement, the Ancillary Documents or the transactions contemplated hereby and thereby; provided, however, that Company Confidential Information shall not include any information which, (i) at the time of disclosure by the Purchaser or its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Company or its Representatives to the Purchaser or its Representatives was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.
“Company Convertible Securities” means, collectively, the Company Warrants and the Company Ascent Options.
“Company IP” means all Intellectual Property owned by the Target Companies.
“Company IT Systems” means the systems that are owned, controlled by, or in the possession of the Company, including as part of any Company Product.
“Company Options” means the options to purchase Company Common Stock specified on Schedule 11.1(a) hereto.
“Company Preferred Stock” means the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, par value $0.0001 per share, of the Company.
“Company Products” means each of the products and service that are currently developed, marketed, distributed, licensed, sold, offered for sale, or provided by or on behalf of the Company.
“Company Recommendation” means the recommendation by the board of directors of the Company to the Company stockholders that the Company stockholders entitled to vote approve this Agreement and the related transactions.
“Company Stock” means any shares of the Company Common Stock and the Company Preferred Stock.
“Company Stock Plan” means the Company’s 2017 Equity Incentive Plan.
“Company Stockholders” means, collectively, the holders of Company Stock.
“Company Warrants” means, collectively, the warrants to purchase Company Stock specified on Schedule 11.1(b) hereto.
“Confidentiality Agreement” means the Confidentiality and Non-Disclosure Agreement dated August 12, 2025, among the Company and Purchaser.
“Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any other Person.
“Contaminants” means disabling devices, codes or instructions and “back door,” “time bomb,” “logic bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” or other malicious or surreptitious Software routines or hardware components designed or intended to permit unauthorized access or the unauthorized disruption, impairment, damage, corruption, disablement or erasure of any Company Products, Company IT Systems or other Intellectual Property or Personal Information (or any parts thereof) or any hardware, systems, Software or data of any customers or licensee of Company.
“Contracts” means all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase orders, licenses, franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto).
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract, or otherwise. “Controlled,” “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a Person described in clause (a) above) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.
“Copyrights” means any works of authorship, mask works and all copyrights therein, including all renewals and extensions, copyright registrations and applications for registration and renewal, and non-registered copyrights.
“Enforceability Exceptions” means, collectively, applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from which such relief may be sought.
“Environmental Law” means any Law concerning (a) the protection of human health and safety as it relates to exposure to Hazardous Materials, (b) the protection, preservation or restoration of the environment and natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (c) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC. Section 9601 et. seq., the Resource Conservation and Recovery Act, 42 USC. Section 6901 et. seq., the Toxic Substances Control Act, 15 USC. Section 2601 et. seq., the Federal Water Pollution Control Act, 33 USC. Section 1151 et seq., the Clean Air Act, 42 USC. Section 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC. Section 111 et. seq., Occupational Safety and Health Act, 29 USC. Section 651 et. seq. (to the extent it relates to exposure to Hazardous Materials), the Asbestos Hazard Emergency Response Act, 15 USC. Section 2601 et. seq., the Safe Drinking Water Act, 42 USC. Section 300f et. seq., the Oil Pollution Act of 1990 and analogous state acts.
“Environmental Liabilities” means, in respect of any Person, all Liabilities, losses, damages, costs, and expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other Person, that relates to any environmental condition, violation of Environmental Law, or a Release or threatened Release of Hazardous Materials.
“Equity Award Conversion Amount” means the quotient obtained by dividing the Applicable Per Share Merger Consideration by the VWAP of Pubco Common Stock on the Nasdaq as reported by Bloomberg, L.P. for the five (5) consecutive Trading Days ending on the Trading Day immediately preceding the Closing Date.
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Fraud Claim” means an actual, intentional and knowing common law fraud (and not a constructive fraud, negligent misrepresentation or omission or any form of fraud premised on recklessness or negligence) claim based in whole or in part upon fraud.
“GAAP” means generally accepted accounting principles as in effect in the United States of America.
“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body, including any Regulatory Authority.
“Hazardous Material” means any waste, gas, liquid, solid, mixture, compound, derivative, mixture, mineral or other substance or material, in each case, whether naturally occurring or manmade, that is defined, listed or designated as a “hazardous substance,” “pollutant,” “contaminant,” “hazardous waste,” “regulated substance,” “hazardous chemical,” “toxic chemical,” “radioactive” (or by any similar term or regulatory effect) under any Environmental Law, or any other material regulated, the storage, manufacture, generation, treatment, transportation, release, remediation, use, handling or disposal of which is in any way governed by or subject to or that could result in the imposition of Liability or responsibility, under any Environmental Law, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, urea formaldehyde insulation, antimony, and per- and poly-fluoroalkyl substances (PFAS) and other emerging contaminants, flammable or explosive substances, or pesticides.
“Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than accounts payable to creditors for goods or services incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person under leases required to be accounted for as capital leases in accordance with GAAP, (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (g) all Indebtedness secured by a Lien on any property owned or acquired by such Person, (h) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person, (i) any unfunded or underfunded liabilities pursuant to any pension, retirement or nonqualified deferred compensation plan or arrangement, and (j) all obligations described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.
“Insider Letter” means the letter dated February 10, 2025 to the Purchaser from the parties thereto, as filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Purchaser with the SEC on February 14, 2025.
“Intellectual Property” means all of the following as they exist in any jurisdiction throughout the world: Patents, Trademarks, Copyrights, Trade Secrets, Internet Assets, proprietary rights in Software, and any other intellectual property.
“Internet Assets” means any and all domain name registrations, social media accounts and web addresses.
“IPO” means the initial public offering of Purchaser Public Units pursuant to the IPO Prospectus.
“IPO Prospectus” means the final prospectus of the Purchaser, dated as of February 10, 2025, and filed with the SEC on February 11, 2025 (File No. 333-282885).
“IPO Underwriter” means BTIG, LLC.
“IRS” means the U.S. Internal Revenue Service (or any successor Governmental Authority).
“Key Management Members” means Paul Lichty, James Trevey, Michael Kleinberg, Don Kaiser and Curtis Zimmermann.
“Knowledge” means, with respect to (i) the Company, the actual knowledge of the Key Management Members, after reasonable inquiry or (ii) any other Party, (A) if an entity, the actual knowledge of its directors and executive officers, after reasonable inquiry, or (B) if the Purchaser, the actual knowledge of the executive officers or directors of the Purchaser after reasonable inquiry.
“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards), including Tax liabilities due or to become due.
“Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.
“Lock-up Company Holders” means, collectively, the Company Stockholders specified on Schedule 11.1(c) hereto.
“Material Adverse Effect” means, with respect to any specified Person, any fact, event, occurrence, development, circumstance, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, (a) a material adverse effect upon the business, assets and Liabilities (considered together), results of operations or condition (financial or otherwise) of such Person and its Subsidiaries, taken as a whole, or (b) would prevent, materially delay or materially impede the ability of such Person or any of its Subsidiaries on a timely basis to consummate the transactions contemplated by this Agreement or the Ancillary Documents to which it is a party or bound or to perform its obligations hereunder or thereunder, in each case by the Outside Date; provided, however, for purposes of clause (a) above, that any changes or effects directly or indirectly attributable to, resulting from, relating to or arising out of the following (by themselves or when aggregated with any other, changes or effects) shall not be deemed to be, constitute, or be taken into account when determining whether there has or may, would or could have occurred a Material Adverse Effect: (i) general changes in the financial or securities markets or any downturn in general economic or regulatory, legislative or political conditions (including the imposition of new or increased trade restrictions, tariffs or trade policies) in the credit, debt, securities, financial or capital markets in any jurisdiction; (ii) changes, conditions or effects that generally affect the industries or geographic areas in which such Person or any of its Subsidiaries operate (including changes generally in prevailing interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets), in each case in the United States or elsewhere in the world; (iii) changes after the date hereof in GAAP or other applicable Law (or the authoritative interpretation thereof) ; (iv) geopolitical conditions, acts of God, terrorism, war (whether or not declared) , outbreak of hostilities, sabotage, cyberterrorism, terrorism, military actions, epidemic, pandemic, disease outbreak, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural or manmade disasters, weather conditions, epidemics, pandemics or other force majeure events (including any escalation or general worsening thereof); (v) any failure in and of itself by such Person and its Subsidiaries to meet any internal or published projections, forecasts, estimates or predictions in respect of revenue, earnings or other financial or operating metrics, on or after the date of this Agreement (provided, that the underlying cause of any such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein), (vi) the negotiation, execution, public announcement, pendency, performance or consummation of the Company Mergers or the Reincorporation or any of the transactions contemplated hereby and in the Ancillary Documents, including, with respect to the Company, the impact of the foregoing on the relationships, contractual or otherwise, with employees, labor unions, works councils, financing sources, customers, franchises, suppliers, partners, Governmental Authorities, or other business relationships (other than for purposes of any representation or warranty in Section 4.5 or Section 4.6 or conditions to Closing related thereto but subject to disclosures in Schedule 4.5 or Schedule 4.6 of the Company Disclosure Schedules), (vii) any actions required to be taken pursuant to the express terms of this Agreement, or the failure of the Company or the Purchaser, as applicable, to take any action that the Company or the Purchaser, as applicable, is prohibited by the express terms of this Agreement from taking, (viii) with respect to the Company, any action taken or omitted to be taken by the Company or any of its Subsidiaries at the prior written request or with the prior written consent of Purchaser following the date of this Agreement or that is expressly required by this Agreement, (ix) the matters set forth in Schedule 11.1(e) of the Company Disclosure Schedules and (x) with respect to the Purchaser, the consummation and effects of the Redemption, except, in the case of clauses (i), (ii), (iii) or (iv), to the extent that the Company and its Subsidiaries, taken as a whole, are disproportionately affected thereby as compared with other participants in the industries which the Company and its Subsidiaries operate (in which case the incremental disproportionate impact or impacts may be taken into account in determining whether a Material Adverse Effect has occurred with respect to the Company). Notwithstanding the foregoing, with respect to the Purchaser, the amount of the Redemption or the failure to obtain the Required Purchaser Shareholder Approval shall not be deemed to be a Material Adverse Effect on or with respect to the Purchaser.
“Merger Sub I Common Stock” means the shares of common stock, par value $0.0001 per share, of Merger Sub.
“Nasdaq” means The Nasdaq Stock Market LLC.
“Off-the-Shelf Software” means “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for Software on commercially available terms.
“Open Source Code” means any Software that is distributed under the terms of a license meeting the definition of “Open Source” promulgated by the Open Source Initiative, or meeting the definition of “Free Software” promulgated by the Free Software Foundation, or any substantially similar license for “free,” “publicly available,” or “open source” Software, including but not limited to the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD License, Artistic License, MIT License and the Creative Commons license.
“Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents” means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws, operating agreement, memorandum and articles of association or similar organizational documents, in each case, as amended.
“Patents” means any patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights (including any divisionals, provisionals, continuations, continuations-in-part, substitutions, or reissues thereof.
“PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“Permits” means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions, licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations, ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
“Permitted Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves in accordance with GAAP have been established with respect thereto, (b) other Liens imposed by operation of Law arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Liens incurred or deposits made in the ordinary course of business in connection with social security, (d) Liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, (e) licenses, covenants not to sue or similar rights granted with respect to Intellectual Property in the ordinary course of business or (f) Liens arising under this Agreement or any Ancillary Document.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Personal Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible personal property.
“PIPE Investors” means the investors that are set forth on Schedule 11.1(a) of the Purchaser Disclosure Schedule or an Affiliate of any such investor to whom the applicable Subscription Agreement with such PIPE Investor is assigned in accordance with its terms after the date hereof.
“Pro Rata Share” means with respect to each Company Stockholder, a fraction expressed as a percentage equal to (i) the portion of the Stockholder Merger Consideration payable by the Purchaser and Pubco to such Company Stockholder in accordance with the terms of this Agreement, divided by (ii) the total Stockholder Merger Consideration payable by the Purchaser and Pubco to all Company Stockholders in accordance with the terms of this Agreement.
“Pubco Common Stock” means the shares of common stock, par value $0.0001 per share, of Pubco following the Reincorporation Effective Time.
“Pubco Convertible Securities” mean, collectively, convertible securities of Pubco issued in exchange for the Company Convertible Securities.
“Purchaser Confidential Information” means all confidential or proprietary documents and information concerning the Purchaser or any of its Representatives; provided, however, that Purchaser Confidential Information shall not include any information which, (i) at the time of disclosure by the Company or any of its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Purchaser or its Representatives to the Company or any of its Representatives, was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Purchaser Confidential Information. For the avoidance of doubt, from and after the Closing, Purchaser Confidential Information will include the confidential or proprietary information of the Target Companies.
“Purchaser Memorandum and Articles” means the amended and restated memorandum and articles of association of the Purchaser (as amended or amended and restated).
“Purchaser Ordinary Shares” means the ordinary shares, par value $0.0001 per share, of the Purchaser.
“Purchaser Preference Shares” means the preference shares, par value $0.0001 per share, of the Purchaser.
“Purchaser Private Units” means the units issued by the Purchaser in a private placement to its initial shareholders concurrently with the consummation of the IPO consisting of one Purchaser Ordinary Share and one-half of one Purchaser Private Warrant.
“Purchaser Private Warrants” means the warrants included as part of each Purchaser Private Unit, each whole warrant entitling the holder thereof to purchase one Purchaser Ordinary Share at a purchase price of $11.50 per share.
“Purchaser Public Units” means the units issued in the IPO (including over-allotment units acquired by the Purchaser’s underwriters) consisting of one (1) Purchaser Ordinary Share and one half of one Purchaser Public Warrant.
“Purchaser Public Warrants” means the warrants that were included as part of the Purchaser Public Units in the IPO, each whole warrant entitling the holder thereof to purchase one Purchaser Ordinary Share at a purchase price of $11.50 per share.
“Purchaser Recommendation” means the recommendation by the board of directors of the Purchaser to the Purchaser shareholders that the Purchaser shareholders entitled to vote at the Purchaser Extraordinary General Meeting vote in favor of the Purchaser Shareholder Approval Matters.
“Purchaser Securities” means the Purchaser Units, Purchaser Ordinary Shares and the Purchaser Warrants, collectively.
“Purchaser Units” means Purchaser Public Units and Purchaser Private Units, collectively.
“Purchaser Warrants” means Purchaser Public Warrants and Purchaser Private Warrants, collectively.
“Redeeming Purchaser Shares” means Purchaser Ordinary Shares in respect of which the eligible (as determined in accordance with the Purchaser Memorandum and Articles) holder thereof has validly exercised (and not validly revoked, withdrawn or lost) his, her or its Redemption right.
“Redemption Price” means an amount equal to the price at which each Purchaser Ordinary Share is redeemed or converted pursuant to the Redemption pursuant to the Purchaser Memorandum and Articles (as equitably adjusted for share splits, share dividends, combinations, recapitalizations and the like after the Closing).
“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out of any property.
“Remedial Action” means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct a condition of noncompliance with Environmental Laws.
“Representatives” means, as to any Person, such Person’s Affiliates and the respective managers, directors, officers, employees, independent contractors, consultants, advisors (including counsel and accountants), agents and other legal representatives of such Person or its Affiliates.
“Sanctioned Country” means any country or territory that is the target of comprehensive sanctions Laws (as of the date of this Agreement, Cuba, Iran, North Korea, Syria, the Crimea region, and the so-called Donetsk and Luhansk People’s Republics, except, in the case of Syria, only such dealings for the three years preceding July 1, 2025) as administered by the U.S. government, including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department and the U.S. Department of State.
“SEC” means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).
“Securities Act” means the Securities Act of 1933, as amended.
“Significant Company Holder” means any Company Stockholder listed on Schedule 11.1(d) of the Company Disclosure Schedules.
“Software” means any computer software programs, whether in source code or object code form, and documentation related thereto and all associated software modules and databases.
“SOX” means the U.S. Sarbanes-Oxley Act of 2002, as amended.
“Sponsor” means Archimedes Tech SPAC Sponsors II LLC, a Delaware limited liability company.
“Subsidiary” means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Target Company” means each of the Company and its direct and indirect Subsidiaries.
“Tax Return” means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes” means (a) all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges in the nature of a tax, (b) any Liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law, (c) any Liability for the payment of amounts described in clauses (a) or (b) as a result of any tax sharing, tax group, tax indemnity or tax allocation agreement (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with, or any other express or implied agreement to indemnify, any other Person, and (d) any interest, fines, penalties, or additions to tax relating thereto, whether disputed or not.
“Trade Secrets” means any trade secrets and other proprietary confidential information that derives economic value from not being generally known, and not being readily ascertainable by proper means, by other Persons, including, as applicable, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods and know-how (whether or not patentable or subject to copyright or trademark protection).
“Trademarks” means any trademarks, service marks, trade dress, trade names, brand names, internet domain names, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration and renewal thereof.
“Trading Day” means a period where the New York Stock Exchange and Nasdaq are open for business, typically from 9:30 am to 4:00 pm EST, excluding weekends and designated holidays, allowing for the buying and selling of securities.
“Transaction Consideration Value” means, in respect of any Transaction Consideration (expressed on a per-share basis (i.e., per share of Pubco Common Stock exchanged in the transaction)), either:
(a) with respect to Transaction Consideration in the form of cash, the U.S. dollar amount of such cash;
(b) with respect to Transaction Consideration in the form of securities listed and publicly traded on one or more national securities exchanges:
(i) if the holders of shares of Pubco Common Stock will receive a “floating” amount of such securities equal to a fixed U.S. dollar amount of consideration, the Transaction Consideration Value shall be such fixed U.S. dollar amount of consideration;
(ii) if the holders of shares of Pubco Common Stock will receive a “fixed” number of such securities per share of Pubco Common Stock, the Transaction Consideration Value of such consideration shall equal the product of (A) the number of securities to be received per share of Pubco Common Stock multiplied by (B) the VWAP of one such security determine over the thirty (30) Trading Day period ending three (3) Business Days prior to the closing date of such transaction;
(c) with respect to Transaction Consideration in the form of other securities (if any), the Transaction Consideration Value shall be $0.00.
“Transaction Expenses” means all fees and expenses of any of the Target Companies incurred or payable as of the Closing and not paid prior to the Closing (i) in connection with the consummation of the transactions contemplated hereby, including any amounts payable to professionals (including investment bankers, brokers, finders, attorneys, accountants and other consultants and advisors) retained by or on behalf of any Target Company, (ii) any change in control bonus, transaction bonus, retention bonus, termination or severance payment (including the employer portion of any withholding, payroll, employment or similar Taxes, if any, associated therewith), in each case, that becomes payable solely as a result of the Company Mergers, and (iii) any sales, use, real property transfer, stamp, stock transfer or other similar transfer Taxes imposed on Purchaser, Pubco, Merger Sub I, Merger Sub II or any Target Company in connection with the Company Mergers or the other transactions contemplated by this Agreement.
“Trust Account” means the trust account established by Purchaser with the proceeds from the IPO pursuant to the Trust Agreement in accordance with the IPO Prospectus.
“Trust Agreement” means that certain Investment Management Trust Agreement, dated as of February 10, 2025, as it may be amended, by and between the Purchaser and the Trustee, as well as any other agreements entered into related to or governing the Trust Account.
“Trustee” means Odyssey Transfer and Trust Company, in its capacity as trustee under the Trust Agreement.
“VWAP” means, for any security as of any date(s), the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded each day as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the day, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such day, then the closing price for such day. If the VWAP (or closing price) cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such date(s) shall be the fair market value as determined reasonably and in good faith by Pubco. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
“Warrant Agreement” means that certain Warrant Agreement, dated as of February 10, 2025, by and between the Purchaser and Odyssey Transfer and Trust Company, as warrant agent.
“Written Consent” means a written consent for the Required Company Stockholder Approval signed by the Company’s Key Management Members and the Significant Company Holders sufficient to approve the First Company Merger and the other transactions contemplated by this Agreement.
11.2 Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:
|
Acquisition Proposal Affordable Care Act Agreement Alternative Transaction Antitrust Expenses Antitrust Laws Applicable Per Share Merger Consideration Business Combination Capitalization Date Cayman Registrar Class I Directors Class II Directors Class III Directors |
5.6(a) 4.19(j) Preamble 5.6(a) 5.9(b) 5.9(b) 1.11(a) 9.1 4.3(a) 1.7(a) 5.17(a) 5.17(a) 5.17(a) |
Closing Closing Consideration Spreadsheet Closing Date Closing Filing Closing Press Release Companies Act Company Company Benefit Plan Company Disclosure Schedules Company Earn-Out Shares Company Financials Company Material Contract Company Mergers Company Permits |
2.1 1.17(a) 2.1 5.14(b) 5.14(b) Recitals Preamble 4.19(a) Article IV 1.18(b) 4.7(a) 4.13(a) Recitals 4.10 |
|
Company Personal Property Leases Company Real Property Leases Company Registered IP D&O Indemnified Persons D&O Tail Insurance Designated Person DGCL DLLCA Environmental Permits Equity Incentive Plan Escrow Account Escrow Agent Escrow Agreement Exchange Agent Existing Representation Expenses Extension Federal Securities Laws First Certificate of Merger First Company Merger First Effective Time Initial Surviving Corporation Institutions Interim Balance Sheet Date Interim Period Letter of Transmittal Lock-Up Agreement Merger Consideration Merger Intended Tax Treatment Merger Sub I Merger Sub II OFAC Outside Date Parent Rep Letter Parties Party Per Share Transaction Value Personal Information PIPE Investor Warrant Agreement PIPE Investment Plan of Merger Post-Closing Matter Post-Closing Pubco Board |
4.17 4.16 4.14(a) 5.18(a) 5.18(b) 10.15(a) Recitals Recitals 4.20(a) 5.12(a) 1.18(a) 1.18(a) 1.18(a) 1.15(a) 10.15(a) 8.3 5.3(a) 5.7 1.2(a) Recitals 1.2(a) 1.1(a) 4.14(e) 4.7(a) 5.1(a) 1.15(a) 1.15(b) 1.8 1.4 Preamble Preamble 3.19(c) 8.1(b) 3.10(l) Preamble Preamble 1.18(f) 4.14(h) Recitals Recitals 1.7(a) 10.15(a) 5.17(a) |
Proxy Statement Pubco Pubco Option Pubco Warrant Public Certifications Public Shareholders Purchaser Purchaser Disclosure Schedules Purchaser Extraordinary General Meeting Purchaser Financials Purchaser Material Contract Purchaser Shareholder Approval Matters Purchaser Support Agreement Redemption Registration Rights Agreement Registration Statement Reincorporation Reincorporation Effective Time Reincorporation Intended Tax Treatment Related Person Released Claims Required Company Stockholder Approval Required Consents Required Purchaser Shareholder Approval SEC Reports Second Certificate of Merger Second Company Merger Second Effective Time Section 280G Approval Signing Filing Signing Press Release SPAC Deal Communications Specified Courts Stockholder Merger Consideration Subscribed Shares Subscription Agreement Surviving Company Transaction Consideration Top Customers Top Suppliers Transmittal Documents Waived 280G Benefits Withholding Certificates |
5.12(a) Preamble 1.10 1.7(c) 3.6(a) 9.1 Preamble Article III 5.12(a) 3.6(e) 3.13(a) 5.12(a) Recitals 5.12(a) 5.20 5.12(a) 1.7(a) 1.7(a) 1.7(d) 4.21 9.1 5.13 4.18 7.1(a) 3.6(a) 1.2(b) Recitals 1.2(b) 5.21 5.14(b) 5.14(b) 10.15(a) 10.6 1.8 Recitals Recitals 1.1(b) 1.18(f) 4.24 4.24 1.15(b) 5.21 7.3(d)(viii) |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each Party hereto has caused this Agreement and Plan of Merger to be signed and delivered as of the date first written above.
| The Purchaser: | |||
| Archimedes Tech SPAC Partners II Co. | |||
| By: | /s/ Long Long | ||
| Name: Long Long | |||
| Title: Chief Executive Officer | |||
| Pubco: | |||
| ATII Holdings Inc. | |||
| By: | /s/ Long Long | ||
| Name: Long Long | |||
| Title: Chief Executive Officer | |||
| Merger Sub I: | |||
| ATII Merger Sub Inc. | |||
| By: | /s/ Long Long | ||
| Name: Long Long | |||
| Title: Chief Executive Officer | |||
| Merger Sub II: | |||
| ATII Merger Sub II LLC | |||
| By: | /s/ Long Long | ||
| Name: Long Long | |||
| Title: Sole Member | |||
| The Company: | |||
| Forge Nano, Inc. | |||
| By: | /s/ Paul Lichty | ||
| Name: Paul Lichty | |||
| Title: Chief Executive Officer | |||
[Signature Page to Merger Agreement]
Exhibit A
FORGE NANO, INC.
ACTION BY CONSENT OF STOCKHOLDERS IN LIEU OF A MEETING
[ ], 2026
The undersigned stockholder (the “Stockholder”) of Forge Nano, Inc. (the “Company”), a Delaware corporation, being the beneficial or record holder, as of the date hereof, of the number of shares of Company Stock set forth opposite its name on Schedule 1 attached hereto, which shares collectively represent the votes that would be necessary to authorize or take the following actions at the meeting of the stockholders (or certain stockholders, as the case may be) of the Company at which all shares entitled to vote thereon were present and voted, hereby irrevocably consents to the adoption of, and hereby adopts, the following resolutions and does hereby take the following actions by consent without a meeting, without prior notice and without a vote, pursuant to Section 228 of the General Corporation Law of the State of Delaware (the “DGCL”) and in accordance with the certificate of incorporation and bylaws of the Company (in each case, as amended, amended and restated or otherwise modified through the date hereof), and hereby directs that this consent (the “Consent”) be filed with the minutes of the proceedings of the Company:
WHEREAS, the Company has entered into an Agreement and Plan of Merger, (the “Merger Agreement”), dated as of April 20, 2026, among (i) the Company, (ii) Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (the “Purchaser”), (iii) ATII Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Pubco”), (iv) ATII Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub I”), and (v) ATII Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Purchaser (“Merger Sub II”), a copy of which has been provided to the Stockholder and is attached hereto as Exhibit A;
WHEREAS, capitalized terms used herein but not otherwise defined in this Consent shall have the meanings attributed to them in the Merger Agreement;
WHEREAS, the Merger Agreement provides that upon the consummation of the transactions contemplated thereby (together, the “Transactions”), among other things, Merger Sub I shall, in accordance with the DGCL, be merged with and into the Company (the “First Company Merger”), with the Company surviving the First Company Merger (the “Initial Surviving Corporation”), and pursuant to which each issued and outstanding share of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”) (including the shares of Company Common Stock issued upon conversion of the Company Preferred Stock) and each issued and outstanding share of preferred stock, par value $0.0001 per share, of the Company (the “Company Preferred Stock” and together with the Company Common Stock, the “Company Stock”) shall, in each case, be (except as otherwise provided in the Merger Agreement) converted into the right to receive, without interest, the applicable pro rata portion of (i) the Closing Payment Shares plus (ii) the Company Earnout Shares as set forth in Section 1.18 of the Merger Agreement;
WHEREAS, the Merger Agreement provides that immediately following the First Company Merger, the Initial Surviving Corporation shall, in accordance with the DGCL and the DLLCA, merge with and into Merger Sub II, with Merger Sub II continuing as the Surviving Company (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”), and pursuant to which all of the issued and outstanding capital stock of the Initial Surviving Corporation immediately prior to the Second Effective Time shall no longer be outstanding and shall thereupon be converted into and become one (1) membership interest of the Surviving Company and such membership interest shall constitute the only outstanding equity of the Surviving Company as of immediately following the Second Effective Time;
WHEREAS, the board of directors of the Company (the “Board”) has approved and declared advisable the Merger Agreement and the transactions contemplated thereby, and determined that the execution, delivery and performance of the Merger Agreement in accordance with its terms, and the consummation of the Transactions, including the Company Mergers, in accordance with the Merger Agreement and the DGCL and the DLLCA, as applicable, are fair to and in the best interests of the Company and the Company’s stockholders;
WHEREAS, pursuant to Section 2.3.1 of the Company’s Sixth Amended and Restated Certificate of Incorporation (“COI”), the holders of a majority of the outstanding shares of Company Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) and the holders of at least a majority of the outstanding shares of Company Series D Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) must elect not to consider the Merger Agreement and the Transactions contemplated thereby a “Deemed Liquidation Event” for purposes of Section 2.3.1 of the COI or for any other purposes;
WHEREAS, pursuant to Section 2, Section 3.1, Section 5.1 and Section 6.1 of the COI, the Merger Agreement must be adopted by, respectively (i) the holders of a majority of the issued and outstanding shares of capital stock of the Company voting together as a single class, representing a majority of all votes represented by all outstanding shares of capital stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL, (ii) the holders of a majority of the outstanding shares of Company Series C Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) or the holders of a majority of the outstanding shares of Company Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) and (iii) the holders of a majority of the outstanding shares of Company Series D Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) and the holders of a majority of the outstanding shares of Company Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis);
WHEREAS, the Company and Ascent Funds International Management LLC (“Ascent”) have entered, or will on or about the date hereof enter, into a Conversion Agreement substantially in the form attached hereto as Exhibit B (the “Ascent Conversion Agreement”), pursuant to which, among other things, the Company and Ascent have agreed, on the terms and subject to the conditions set forth in the Ascent Conversion Agreement, that all outstanding options or other rights to acquire securities of the Company held by Ascent prior to the Closing shall be cancelled and Pubco shall issue equivalent warrants in accordance therewith, subject to the terms of the Ascent Conversion Agreement, the Merger Agreement and applicable Law (the “Ascent Pubco Warrant Issuance”);
WHEREAS, Section 3.3.2(b) of the COI requires the consent or waiver of the holders of a majority of the outstanding shares of Company Series D Preferred Stock (voting together as a single class and on an as-converted to Company Common Stock basis) for the issuance of any other security convertible into or exercisable for any equity security of the Company that ranks on a parity with the Company Series D Preferred Stock with respect to rights, preferences or privileges and that is issued and sold for consideration per share that is less than the Series D-1 Original Issue Price (as defined therein);
WHEREAS, as of the date hereof, the Stockholder is the record and beneficial owner of shares of Company Common Stock and Company Preferred Stock representing the aggregate voting power of the issued and outstanding shares of Company Stock (or of a single class Company stockholders, as the case may be) as set forth opposite its name on Schedule 1 attached hereto;
WHEREAS, upon the execution and delivery of this Consent, the Required Company Stockholder Approval shall have been obtained in accordance with Section 251 of the DGCL.
NOW, THEREFORE BE IT:
RESOLVED, that the Stockholder, in its capacity as a stockholder of the Company, a holder of Company Preferred Stock, a holder of Company Series C Preferred Stock and a holder of Company Series D Preferred Stock (in each case, to the extent applicable), hereby votes by written consent all of the shares of Company Stock held by the Stockholder and entitled to vote thereon in favor of the adoption of the Merger Agreement and approval of the Transactions, including the Company Mergers; provided, however, that this Consent shall be of no further force or effect following any termination of the Merger Agreement in accordance with its terms;
RESOLVED, that the Stockholder hereby approves the delivery of this Consent pursuant to the terms of the Merger Agreement, such that, when executed by the other Stockholders listed on Schedule 1 attached hereto, it will constitute the Required Company Stockholder Approval;
RESOLVED, that the Transactions, including the Company Mergers, be, and hereby are, authorized upon the terms and subject to the conditions of the Merger Agreement; and
RESOLVED, that the Transactions, including the Company Mergers, be, and hereby are, elected as not a “Deemed Liquidation Event” for purposes of Section 2.3.1 of the COI and for any other purpose;
RESOLVED, that the Stockholder, in its capacity as a holder of Company Series D Preferred Stock (to the extent applicable), hereby consents to the Ascent Conversion Agreement and the Ascent Pubco Warrant Issuance for purposes of Section 3.3.2(b) of the COI and for any other purpose;
RESOLVED, that the officers of the Company be, and each of them severally and individually hereby is, empowered, authorized and directed in the name of and on behalf of the Company to take such actions as they may deem necessary, appropriate or advisable to carry out the intent of any and all of the resolutions contained herein and the Transactions, provided that in the case of an amendment to the Merger Agreement following the date hereof, any such amendment shall be subject to the terms set forth in the DGCL, including any requirement to obtain the consent of the stockholders of the Company in connection therewith.
The above resolutions and actions taken by this Consent shall have the same force and effect as if taken at a meeting of the stockholders of the issued and outstanding shares of capital stock of the Company entitled to vote thereon (or certain stockholders, as the case may be) duly called and constituted pursuant to the bylaws of the Company and the laws of the State of Delaware.
Any copy, .pdf or other reliable reproduction of this Consent may be submitted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, .pdf or other reproduction be a complete reproduction of the entire original writing.
Execution Version
WARRANT AGREEMENT
This WARRANT AGREEMENT (this “Agreement”) is made as of [__], 2026 between ATII Holdings Inc., a Delaware corporation (the “Company”), and Ascent Funds International Management LLC (the “Holder”).
WHEREAS, the Holder previously had the option or other right to acquire securities of Forge Nano, Inc., a Delaware corporation (“Old Forge Nano”), and/or its affiliates (the “Options”), including those specified in the Amended and Restated Consulting Agreement between the Holder and Old Forge Nano, dated September 1, 2025;
WHEREAS, on April 20, 2026, Old Forge Nano entered into an Agreement and Plan of Merger (the “Merger Agreement”) among (i) Old Forge Nano, (ii) Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (the “Purchaser”), (iii) the Company, (iv) ATII Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser, (v) ATII Merger Sub II LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Purchaser;
WHEREAS, in connection with entry into the Merger Agreement, Old Forge Nano, the Company and the Holder entered into a conversion agreement, dated as of April 20, 2026 (the “Conversion Agreement”), pursuant to which the Company agreed to issue the warrants specified in this Agreement (the “Warrants”) to the Holder; and
WHEREAS, upon exercise of a Holder’s Warrants, such Holder shall be entitled to certain Company Earn-out Shares (as defined in the Merger Agreement).
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company shall act as the warrant agent in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form of Warrant. Each Warrant shall initially be issued in registered form only, and, if a physical certificate issued, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed by, or bear the electronic (including by DocuSign) or facsimile signature of, an authorized officer of the Company. In the event the person whose electronic or facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. All of the Public Warrants shall initially be represented by one or more book-entry certificates (each, a “Book-Entry Warrant Certificate”).
2.2 Uncertificated Warrants. Notwithstanding anything herein to the contrary, any Warrant may be issued in uncertificated or book-entry form on the books and records of the Company. Any Warrant so issued shall have the same terms, force and effect as a certificated Warrant that has been duly countersigned by Company in accordance with the terms of this Agreement.
2.3 Effect of Countersignature. Except with respect to uncertificated Warrants as described above, unless and until countersigned by the Company pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.4 Registration.
2.4.1 Warrant Register. The Company shall maintain books (the “Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Company shall issue and register [__] Warrants in the name of the Holder.
2.4.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company may deem and treat the person in whose name such Warrant is then registered in the Warrant Register (such person, a “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the warrant certificate made by anyone other than the Company), for the purpose of any exercise thereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
3. Terms and Exercise of Warrants.
3.1 Warrant Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of common stock, par value $0.0001 per share (the “Shares”), of the Company, stated therein, at the price of $[__] per share, subject to the adjustments provided in Section 3.2 and Section 4 hereof. The term “Warrant Price” as used in this Agreement refers to the price per share at which the Shares may be purchased at the time a Warrant is exercised.
3.2 Duration of Warrants. [A Warrant may only be exercised prior to December 31, 2028 (“Expiration Date”), unless extended to December 31, 2029 in the sole discretion of the Holder effective upon the Holder’s delivery of written notice to the Company of the Holder’s intent to extend the Expiration Date to December 31, 2029 in exchange for increasing by 25% the Warrant Price per share applicable to the Warrant from $[__] (subject to the adjustments as provided in Section 4 hereof) to $[__] (subject to adjustments as provided in Section 4 hereof) if the Warrant is exercised between January 1, 2029 and December 31, 2029.] / [A Warrant may only be exercised prior to December 31, 2029 (“Expiration Date”)]. The period of time from the date hereof until the expiration of the Warrants shall hereafter be referred to as the “Exercise Period.” Each outstanding Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m., New York City time on the Expiration Date.
3.3 Exercise of Warrants.
3.3.1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by surrendering it, at the office of the Company designated for such purposes, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full the Warrant Price for each Share as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, as follows:
(a) in lawful money of the United States, by wire transfer; or
(b) by surrendering the Warrants for that number of Shares equal to the quotient obtained by dividing (x) the product of the number of Shares underlying the Warrants, multiplied by the difference between the Warrant Price and the Fair Market Value (as defined in this Section 3.3.1(b)) by (y) the Fair Market Value. Solely for purposes of this Section 3.3.1(b), the “Fair Market Value” shall mean the average reported closing price of the Share for the five (5) trading days ending on the third trading day prior to the date of exercise;
(c) in the event the registration statement required by Section 7.4 hereof is not effective and current within sixty (60) days from the date hereof, by surrendering such Warrants for that number of Shares equal to the quotient obtained by dividing (x) the product of the number of Shares underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the Fair Market Value (as defined in this Section 3.3.1(c)) by (y) the Fair Market Value. Solely for purposes of this Section 3.3.1(c), the “Fair Market Value” shall mean the average reported last sale price of the Shares for the five (5) trading days ending on the third trading day prior to the date of exercise.
3.3.2 Issuance of Shares. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if any), the Company shall issue to the Registered Holder of such Warrant a certificate or certificates, or book-entry position, for the number of Shares to which it is entitled, registered in such name or names as may be directed by it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant, or book-entry position, for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, in no event will the Company be required to net cash settle the Warrant exercise. The Company shall not be obligated to issue Shares upon exercise of a Warrant unless the Shares issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the condition in the immediately preceding sentence is not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant for cash. Warrants may not be exercised by, or securities issued to, any Registered Holder in any state in which such exercise or issuance would be unlawful. A Warrant may be fully or partially exercised during the Exercise Period.
3.3.3 Valid Issuance. All Shares issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.
3.3.4 Date of Issuance. Each person in whose name any book-entry position or certificate for Shares is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is not a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City (“Business Day”), such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding Business Day.
3.3.5 Earn-out Shares. Upon exercise of any Warrant, the Registered Holder of such Warrant shall be allocated a number of Company Earn-out Shares by the Escrow Agent (as defined in the Merger Agreement) as if the Shares issued upon exercise of such Warrant pursuant to this Agreement had been issued on the Closing Date (as defined in the Merger Agreement) as Closing Payment Shares; provided that solely for purposes of this calculation, one Share shall be deemed to be issued upon the exercise of each Warrant and no effect shall be given to the adjustments described in Section 4 of this Agreement. Any Company Earn-out Shares shall thereafter be disbursed in accordance with the terms, and subject to the conditions, of the Merger Agreement (or disbursed promptly after the exercise of any such Warrant to the extent any of the milestones described in Sections 1.18(b)(i), (ii) or (iii) of the Merger Agreement have been met prior to or concurrently with such exercise).
3.3.6 Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this Section 3.3.6; however, no holder of a Warrant shall be subject to this Section 3.3.6 unless he, she or it makes such election. If the election is made by a holder, the Company shall not cause the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates) or any “group” of which the holder or its affiliates is a member, would beneficially own in excess of 4.9% or 9.8% (or such other amount as the holder may specify) (the “Maximum Percentage”) of the Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Shares beneficially owned by such person and its affiliates, or any “group” of which such holder and its affiliates is a member, shall include the number of Shares issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Shares that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates, or any “group” of which such holder and its affiliates is a member, and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates, or any “group” of which such holder and its affiliates is a member (including, without limitation, any convertible notes or convertible preference shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the applicable regulations of the SEC. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the SEC, and the percentage held by a holder of a Warrant shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. For purposes of the Warrant, in determining the number of outstanding Shares, the holder may rely on the number of outstanding Shares as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the SEC as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company setting forth the number of Shares outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number of Shares then outstanding. In any case, the number of outstanding Shares shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares of Shares was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Share Dividends; Share Sub-Divisions. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding Shares is increased by a share dividend payable in Shares, or by a sub-division of Shares, or other similar event, then, on the effective date of such share dividend, split up or similar event, the number of Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding Shares. A rights offering made to all or substantially all holders of Shares entitling holders to purchase Shares at a price less than the “Historical Fair Market Value” (as defined below) shall be deemed a share dividend of a number of Shares equal to the product of (i) the number of Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Share paid in such rights offering divided by (y) the Historical Fair Market Value. For purposes of this subsection 4.1, (i) if the rights offering is for securities convertible into or exercisable for Shares, in determining the price payable for Shares, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Historical Fair Market Value” means the volume weighted average price of the Shares during the ten (10) trading day period ending on the trading day prior to the first date on which the Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights. No Shares shall be issued at less than their par value.
4.2 Aggregation of Shares. If after the date hereof, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding Shares.
4.3 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Shares or other shares of the Company’s share capital into which the Warrants are convertible (an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and the fair market value (as determined by the Company’s Board of Directors, in good faith) of any securities or other assets paid in respect of such Extraordinary Dividend divided by all outstanding shares of the Company at such time (whether or not any shareholders waived their right to receive such dividend); provided, however, that none of the following shall be deemed an Extraordinary Dividend for purposes of this provision: (i) any adjustment described in Section 4.1 above, or (ii) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 per share (taking into account all of the outstanding shares of the Company at such time (whether or not any shareholders waived their right to receive such dividend) and as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of Shares issuable on exercise of each Warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50. Solely for purposes of illustration, if the Company, at a time while the Warrants are outstanding and unexpired, pays a cash dividend of $0.35 and previously paid an aggregate of $0.40 of cash dividends and cash distributions on the Shares during the 365-day period ending on the date of declaration of such $0.35 dividend, then the Warrant Price will be decreased, effectively immediately after the effective date of such $0.35 dividend, by $0.25 (the absolute value of the difference between $0.75 (the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period, including such $0.35 dividend) and $0.50 (the greater of (x) $0.50 and (y) the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period prior to such $0.35 dividend)). Furthermore, solely for the purposes of illustration, if there were 100,000,000 shares outstanding and the Company paid a $1.00 dividend to 17,500,000 of such shares (with the remaining 82,500,000 shares waiving their right to receive such dividend), then no adjustment to the Warrant Price would occur as a $17.5 million dividend payment divided by 100,000,000 shares equals $0.175 per share, which is less than $0.50 per share.
4.4 Adjustments in Exercise Price. Whenever the number of Shares purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Shares so purchasable immediately thereafter.
4.5 Replacement of Warrant Shares upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares (other than a change covered by Section 4.1, 4.2 or 4.3 hereof or that solely affects the par value of the Shares), or in the case of any merger or consolidation of the Company with or into another company (other than a consolidation or merger in which the Company is the continuing company and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another company, corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Shares of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised its Warrant(s) immediately prior to such event (the “Alternative Issuance”); provided, however, that if the holders of the Shares were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Shares in such consolidation or merger that affirmatively make such election; provided, further, that if less than seventy percent (70%) of the consideration receivable by the holders of the Shares in the applicable event is payable in the form of Shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a current report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”), as calculated by an accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of the Board, qualified to make such calculation. For purposes of calculating such amount, (1) the price of each Share shall be the 10-Day Average Closing Price as of the effective date of the applicable event, (2) the assumed volatility shall be the ninety (90) day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event, and (3) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration” means (i) if the consideration paid to holders of the Shares consists exclusively of cash, the amount of such cash per Share, and (ii) in all other cases, the average last reported sale price of the Shares as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification also results in a change in the Shares covered by Section 4.1, 4.2 or 4.3, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3, 4.4 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.
4.6 [Reserved.]
4.7 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the holders of the Warrants, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, then, in any such event, the Company shall give written notice to each Warrant holder, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.8 No Fractional Warrants or Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number of Shares to be issued to the Warrant holder.
4.9 Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.10 Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 is strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer. The Company shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures, in the case of certificated Warrants, properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Company.
5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Company, either in certificated form or in book-entry position, together with a written request for exchange or transfer, and thereupon the Company shall issue in exchange therefor one or more new Warrants, or book-entry positions, as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants.
5.3 Fractional Warrants. The Company shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate or book-entry position for a fraction of a Warrant.
5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Legend. The Warrants shall bear the following legend:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
6. [Reserved].
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1 No Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the general meetings of the Company or the appointment of directors of the Company or any other matter.
7.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation of Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Shares that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration of Shares. The Company agrees that as soon as practicable, but in no event later than twenty (20) Business Days after the date hereof, it shall use its best efforts to file with the Securities and Exchange Commission a registration statement for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Shares issuable upon exercise of the Warrants, and it shall use its best efforts to take such action as is necessary to register or qualify for sale, in those states in which the Warrants were initially offered by the Company and in those states where holders of Warrants then reside, the Shares issuable upon exercise of the Warrants, to the extent an exemption is not available. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the 60th business day following the date hereof, holders of the Warrants shall have the right, during the period beginning on the 91st day after the date hereof and ending upon such registration statement being declared effective by the Securities and Exchange Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the Shares issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis” as determined in accordance with Section 3.3.1(c). For the avoidance of any doubt, unless and until all of the Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this Section 7.4.
8. Investment Representations.
8.1 The Holder is acquiring the Warrants and, upon exercise of the Warrants, the Shares issuable upon such exercise (collectively, the “Warrant Shares”), for the Holder’s own account, for investment purposes only and not with a view towards, or for resale in connection with, any public sale or distribution thereof.
8.2 The Holder is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D, and the Holder has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D under the Securities Act.
8.3 The Holder understands that the Warrant Shares are being delivered to it in reliance on specific exemptions from the registration requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations and warranties of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire such Warrant Shares.
8.4 The Holder did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.
8.5 The Holder has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Warrant Shares which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions of the executive officers and directors of the Company. The Holder understands that its investment in the Warrant Shares involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Warrant Shares.
8.6 The Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Warrant Shares or the fairness or suitability of the investment in the Warrant Shares by the Holder nor have such authorities passed upon or endorsed the merits of the offering of the Warrant Shares.
8.7 The Holder understands that: (a) the Warrant Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance on an exemption therefrom; and (b) except expressly described herein, neither the Company nor any other person is under any obligation to register the Warrant Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. While the Holder understands that Rule 144 is not available for the resale of securities initially issued by issuers that have been at any time previously a shell company, the Holder understands that Rule 144 includes an exception to this prohibition if the following conditions are met: (i) the issuer of the securities that was formerly a shell company has ceased to be a shell company; (ii) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (iii) the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and (iv) at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
8.8 The Holder has such knowledge and experience in financial and business matters, knows of the high degree of risk associated with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment in the Warrant Shares and is able to bear the economic risk of an investment in the Warrant Shares in the amount contemplated hereunder for an indefinite period of time. The Holder has adequate means of providing for its current financial needs and contingencies and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Warrant Shares. The Holder can afford a complete loss of its investment in the Warrant Shares.
9. Taxes.
9.1 Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company in respect of the issuance or delivery of Shares upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such Shares.
10. Miscellaneous Provisions.
10.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company shall bind and inure to the benefit of its respective successors and assigns.
10.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed, as follows:
ATII Holdings Inc.
12300 Grant St. #100
Thornton, CO 80241
Attn: Paul Lichty
Email: [*********]
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attn: Benjamin Goodchild
Email: [*********]
10.3 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph are not binding on holders of Warrants and will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 10.3 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
10.4 Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
10.5 Counterparts. This Agreement may be executed in any number of original, electronic or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.
10.6 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
10.7 Amendments. This Agreement may be amended by the Company hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, correcting any mistake, or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent or vote of the Registered Holders of a majority of the then outstanding Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.
10.8 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[signature page follows]
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.
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ASCENT FUNDS INTERNATIONAL MANAGEMENT LLC |
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[Signature Page to Warrant Agreement]
Exhibit A
Form of Warrant
| NUMBER | WARRANTS |
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS WARRANT WILL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION DATE (DEFINED BELOW)
WARRANT
THIS CERTIFIES THAT, ______________________ for value received is the registered holder of a warrant or warrants (the “Warrant(s)”) of ATII HOLDINGS INC., a Delaware corporation (the “Company”), expiring at 5:00 p.m., New York City time, on December 31, [2028]/[2029] to purchase one fully paid and non-assessable Share, par value $0.0001 per share (“Shares”), of the Company for each whole Warrant evidenced by this Warrant Certificate. The Warrant entitles the holder thereof to purchase from the Company such number of Shares of the Company at the Warrant Price (as defined below), upon surrender of this Warrant Certificate and payment of the Warrant Price to the Company, but only subject to the conditions set forth herein and in the Warrant Agreement between the Company and the holder of this Warrant. In no event will the Company be required to net cash settle any warrant exercise. The term “Warrant Price” as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time the Warrant is exercised. The initial Warrant Price per Share is equal to $[__] per Share. The Warrant Agreement provides that upon the occurrence of certain events the Warrant Price and the number of Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted.
No fraction of a Share will be issued upon any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise of a Warrant, the Company shall, upon such exercise, round down to the nearest whole number the number of Shares to be issued to such holder.
Upon any exercise of the Warrant for less than the total number of Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.
Warrant Certificates, when surrendered to the Company by the registered holder in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.
Upon due presentment for registration of transfer of this Warrant Certificate to the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental charge imposed in connection therewith.
The Company may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the registered holder, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles the registered holder to any of the rights of a shareholder of the Company.
Witness the electronic or facsimile signatures of its duly authorized officers.
Chairman of the Board or Chief Executive Officer Secretary
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder irrevocably elects to exercise ______________ Warrants represented by this Warrant Certificate, and to purchase the Shares issuable upon the exercise of such Warrants, and requests that Certificates for such Shares shall be issued in the name of
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below:
| Dated: | |
| (SIGNATURE) | |
| (ADDRESS) | |
| (TAX IDENTIFICATION NUMBER) |
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Warrants
For Value Received, ____________ hereby sell, assign, and transfer unto
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
__________________ of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and appoint _______________ Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
| Dated: | |
| (SIGNATURE) |
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
| By |
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE).
Exhibit 4.1
Final Form
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
[PUBCO]
WARRANT TO PURCHASE SHARES OF COMMON STOCK
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Warrant Shares: [ ] |
Initial Exercise Date: [●], [●] |
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received, [__] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [●], [●]1 (the “Termination Date”) but not thereafter, to subscribe for and purchase from [Pubco], a Delaware corporation (the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of common stock, par value $0.0001 per share, of the Company (“Common Stock”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Schedule A hereto.
1 NTD: Five years after Initial Exercise Date.
Section 2. Exercise.
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(a) |
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency that the Company may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company), as applicable, of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Not later than the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the exercise on a net-issuance basis procedure specified in Section 2(c) below is available and specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. |
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(b) |
Exercise Price. The exercise price per Warrant Share under this Warrant shall be $10.00, subject to adjustment hereunder as set forth in Section 3 (the “Exercise Price”), but in each case can in no event be less than the Par Value. |
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(c) |
Net-Issuance Exercise. This Warrant may also be exercised, in whole or in part, at such time on a “net-issuance” basis (which will entail that the cash payment to be made is limited to the Par Value of each Warrant Share purchased) in which the Holder shall be entitled to receive a number of Warrant Shares determined as follows: |
X = ((A—B) x C) / A
where:
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(X) = |
the number of Warrant Shares to be issued to the Holder on a net-issuance basis; |
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(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day, (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day or (3) executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day), or (ii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) = |
the Exercise Price of this Warrant, as adjusted hereunder, minus the Par Value; and |
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(C) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than on a net-issuance basis. |
The number of Warrant Shares that would be surrendered by the Holder in connection with any exercise on a net-issuance basis would be equal to C-X.
If Warrant Shares are issued on a net-issuance basis, the parties acknowledge and agree that by virtue of the Holder having to make payment to the Company of the Par Value in cash, the exemption from registration provided under Section 3(a)(9) of the Securities Act shall not be available to the Holder, such that the Warrant Shares issued thereby will be “restricted securities” and the holding period of the Warrant Shares being issued may not be tacked on to the holding period of this Warrant.
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised on a net-issuance basis pursuant to this Section 2(c).
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(d) |
Mechanics of Exercise. |
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(i) |
Delivery of Warrant Shares Upon Exercise. The Company shall cause its transfer agent to issue the Warrant Shares and thereupon the Warrant Shares to be transmitted to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system if there is an effective resale registration statement permitting the resale of the Warrant Shares by the Holder and the Holder is contemporaneously reselling such Warrant Shares pursuant to such resale registration statement, and otherwise by physical delivery of a certificate, or reasonable evidence of issuance by book entry of ownership of the Warrant Shares registered on the books of the transfer agent in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the later of (i) the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, and (ii) seven (7) Trading Days after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”); provided, however, in any event, the Company shall not be obligated to deliver Warrant Shares purchased until it has received the aggregate Exercise Price for such Warrant Shares. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. |
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(ii) |
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. |
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(iii) |
Rescission Rights. If the Company fails to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date (subject to receipt of the aggregate Exercise Price for the applicable exercise (or, in the case of exercise on a net-issuance basis, the aggregate Par Value of the Warrant Shares being purchased), then the Holder will have the right to rescind such exercise prior to the delivery of the Warrant Shares. |
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(iv) |
No Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant. As to any fraction of a Warrant Share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. |
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(v) |
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any capital, stamp, issue, financial transaction and registration or transfer tax or other incidental expense payable in the United States, or in any other jurisdiction in which the Company may be domiciled or resident or to whose taxing jurisdiction it may be generally subject, in respect of the issuance, transfer or delivery of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder (“Specified Taxes”); provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares pursuant to the terms of this Warrant. If the Company shall fail to pay any Specified Taxes, the Holder shall be entitled to tender and pay the same and the Company covenants to reimburse and indemnify the Holder in respect of any payment thereof and any penalties payable in respect thereof. |
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(e) |
Entitlement in respect of Warrant Shares. Warrant Shares issued and delivered on exercise of this Warrant will be validly issued, fully paid and non-assessable, and the Holder shall be entitled to all rights, distributions or payments in respect of such Warrant Shares from the record date or other due date for the establishment of entitlement for which falls on or after the relevant Exercise Date, except in any such case for any right excluded by mandatory provisions of applicable law. The Holder shall not be entitled to any rights, distributions or payments in respect of any Warrant Shares the record date or other due date for the establishment of entitlement for which falls prior to the date when the Warrant Shares are issued and delivered to the Holder. |
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(f) |
Holder’s Exercise Limitations. The Holder may notify the Company in writing in the event it elects to be subject to the provisions contained in this Section 2(f); however, the Holder shall not be subject to this Section 2(f) unless he, she or it makes such election. If the election is made, the Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of 4.9%, 9.9%, 19.9% (or such other amount as the Holder may specify) (the “Beneficial Ownership Limitation”) of the outstanding shares of Common Stock. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder, its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein that are beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith (other than as it relates to a Holder relying on the number of shares of Common Stock issued and outstanding as provided by the Company pursuant to this Section). To the extent that the limitation contained in this Section 2(f) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and, of which portion of this Warrant is exercisable up to the Beneficial Ownership Limitation shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s good faith determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case, subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation. For purposes of this Section 2(f), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may from time to time increase or decrease the Beneficial Ownership Limitation applicable to the Holder, provided, however, that any such increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(f) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. |
Section 3. Certain Adjustments.
|
(a) |
Subdivision, consolidation or reclassification. If the Company at any time while this Warrant is outstanding: (i) subdivides outstanding Common Stock into a larger number of shares, (ii) combines (including by way of a reverse share split) outstanding Common Stock into a smaller number of shares or (iii) issues by reclassification of the Common Stock into any capital shares of the Company, then in each case the Exercise Price shall be adjusted by multiplying the Exercise Price by the following fraction: |
(A/B)
where:
|
(A) = |
is the aggregate number of shares of Common Stock issued and outstanding immediately before such subdivision, consolidation, reclassification or such change, as the case may be; and |
|
|
(B) = |
is the aggregate number of shares of Common Stock issued and outstanding immediately after such subdivision, consolidation, reclassification or such change, as the case may be. |
The number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
|
(b) |
[Reserved]. |
|
(c) |
VWAP Reset. If on the twenty-first trading day (the “Reset Termination Date”) following the six-month anniversary of the Closing, the VWAP of the Common Stock for the twenty Trading Day period commencing on the date that is six months after the Closing Date (the “Measurement Price”) is less than the Exercise Price then in effect, then the Exercise Price then in effect shall be reduced to an amount equal to the greater of (i) the Measurement Price and (ii) [$7.28]/[$5.00]. |
|
(d) |
Adjustment Upon Issuance or Deemed Issuance of Common Stock. If and whenever during the period commencing on the execution date of the Subscription Agreement and ending on the Termination Date the Company issues or sells, or in accordance with this Section 3(d) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding the issuance of shares of Common Stock as a stock dividend, which shall adjust the Exercise Price as provided in Section 3(f), and shares of Common Stock issued or sold, or deemed to have been issued or sold, by the Company in connection with any Exempt Issuance) for Proceeds (the “New Issuance Price”) less than the Exercise Price then in effect (each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”), where the aggregate amount of Proceeds received by the Company, together with such all prior issuances and sales (excluding, for the avoidance of doubt, any Exempt Issuance) conducted for the purpose of raising capital by the Company on or after the execution date of the Subscription Agreement that were excluded from this Section 3(d) by this clause, exceeds $500,000, then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. |
For purposes of determining the adjusted Exercise Price under this Section 3(d), the following shall be applicable:
|
(i) |
Options and Convertible Securities. The consideration per share received by the Company for shares of Common Stock deemed to have been issued pursuant to Section 3(d)(ii), relating to Options and Convertible Securities, shall be determined by dividing |
|
(1) |
the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by |
|
(2) |
the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) deemed to be issued pursuant to Section 3(d)(ii) upon the issuance of such Options or Convertible Securities. |
|
(ii) |
Deemed Issuance of Common Stock Subject to Options and Convertible Securities. |
|
(1) |
If the Company at any time or from time to time shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date. |
|
(2) |
If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than (x) proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 3(a) above and (y) automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which are not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price, which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 3(d)(ii)(2), if the terms of any Option or Convertible Security that was outstanding as of the Initial Exercise Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(d)(ii)(2) shall be made if such adjustment would result in an increase of the Exercise Price then in effect. |
|
(iii) |
Calculation of Consideration Received. |
|
(1) |
In case one or more Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value of such Option and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less (II) the Option Value of each such Options; provided, that, no share of Common Stock shall be deemed to have been issued for less than a fraction of the aggregate consideration received (excluding the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of any such Options, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities) equal to (A) one divided by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction (including the number of shares underlying any Options and Convertible Securities). |
|
(2) |
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be the closing sale price of such publicly traded securities on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the holders of a majority in interest of this Warrant and the other common stock purchase warrants with substantially the same terms as this Warrant, with an initial exercise price of $10.00 per share, issued on the Initial Exercise Date, and then outstanding. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the holders of a majority in interest of this Warrant and the other common stock purchase warrants, with an initial exercise price of $10.00 per share, issued on the Initial Exercise Date, and then outstanding. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. |
|
(iv) |
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. |
|
(v) |
Expiration or Termination of Options or Convertible Securities. Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Securities (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Exercise Price pursuant to the terms of Section 3(d), the Exercise Price shall be readjusted to such Exercise Price as would have obtained had such Option or Convertible Securities (or portion thereof) never been issued. |
|
(e) |
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time after the Initial Exercise Date the Company grants, issues or sells pro rata to the record holders of shares of Common Stock any rights, options or warrants entitling them to subscribe for or purchase shares of Common Stock (“Purchase Rights”) at a price per share of Common Stock that is less than the VWAP of the Common Stock for the twenty Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such Purchase Rights, then in each case the Exercise Price shall be adjusted based on the following formula: |
EP1 = EP0 x (OS0 + Y) / (OS0 + X)
where:
|
EP0 |
is the Exercise Price in effect immediately prior to the close of business on the Record Date for the issuance of such Purchase Rights; |
|
|
EP1 |
is the Exercise Price in effect immediately after the close of business on the Record Date for the issuance of such Purchase Rights; |
|
OS0 |
is the aggregate number of shares of Common Stock issued and outstanding immediately prior to the close of business on the Record Date for the issuance of such Purchase Rights; |
|
|
|
||
|
X |
is the aggregate number of shares of Common deliverable pursuant to such Purchase Rights; and |
|
|
|
||
|
Y |
is the number of shares of Common Stock equal to (i) the aggregate price payable to exercise such Purchase Rights, divided by (ii) the VWAP for the Common Stock for the twenty Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such Purchase Rights. |
Any adjustment to the Exercise Price made under this Section 3(e) shall be made successively whenever any such Purchase Rights are issued and shall become effective immediately after the close of business on the Record Date for the issuance of such Purchase Rights. To the extent that shares of Common Stock are not delivered after the expiration of such Purchase Rights, the Exercise Price shall be increased to the Exercise Price that would then be in effect had the decrease with respect to the issuance of such Purchase Rights been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such Purchase Rights are not so issued, the Exercise Price shall be increased to the Exercise Price that would then be in effect if the Record Date for the issuance of such Purchase Rights had not occurred.
For purposes of this Section 3(e), in determining whether any Purchase Rights entitle the holders to subscribe for or purchase shares of Common Stock at a price per share of Common Stock that is less than the VWAP of the Common Stock for the twenty Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such Purchase Rights, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such Purchase Rights and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.
|
(f) |
Adjustment for Dividends. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then in each case the Exercise Price shall be adjusted by multiplying the Exercise Price by the following fraction: |
A - B
A
where:
|
(A) = |
is the VWAP of one Warrant Share on the Ex-Date in respect of such Distribution; and |
|
|
|
||
|
(B) = |
is the portion of the Fair Market Value of the Distribution attributable to one Warrant Share, with such portion being determined by dividing the Fair Market Value of the Distribution by the number of shares of Common Stock entitled to receive the Distribution). |
|
(g) |
Fundamental Transaction. |
|
(i) |
If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions (other than to the Company or a subsidiary of the Company), (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property (other than as a result of a share subdivision, consolidation or reclassification of shares of Common Stock covered by Section 3(a)), or (v) the Company, directly or indirectly, in one or more related transactions consummates a share or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share or share purchase agreement or other business combination) or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Warrant Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For the avoidance of doubt, the Transaction shall be deemed not to be a Fundamental Transaction. |
|
(ii) |
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of shares of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction in which less than seventy percent (70%) of the consideration receivable by the holders of shares of Common Stock in the applicable Fundamental Transaction is payable in the form of common equity of the Company or in the Successor Entity (or any holding company that owns 100% of the common equity interests of the Company or the Successor Entity, as appliable) that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted prior to or immediately following such Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable concurrently with the consummation of the Fundamental Transaction (or, if later, the later of (i) the date of the public announcement of the applicable Fundamental Transaction and (ii) within 30 days of the earlier of (A) the consummation of the Fundamental Transaction and (B) the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, that if holders of shares of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received shares of Common Stock or common stock of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. |
|
(iii) |
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(g) pursuant to written agreements in form and substance reasonably satisfactory to the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of capital shares of such Successor Entity (or its parent entity) equivalent to the Warrant Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, (and solely if the holders of the Common Stock (and Common Stock Equivalents) immediately prior to consummation of the applicable Fundamental Transaction do not beneficially own upon consummation of such Fundamental Transaction, directly or indirectly (including through any one or more holding companies that owns 100% of the common equity interests of the Company or the Successor Entity), at least 50% of the voting power of the common equity of the Company or the Successor Entity, as applicable, with an exercise price which applies the Exercise Price hereunder to the shares of capital stock received by holders of shares of Common Stock in such Fundamental Transaction, but taking into account the relative value of the Warrant Shares and the value of such capital shares and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. |
|
(h) |
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding. |
|
(i) |
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 3, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). |
|
(j) |
Notice to Holder. |
|
(i) |
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment. |
|
(ii) |
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the shares of Common Stock, (B) the Company shall declare a redemption of the shares of Common Stock, (C) the Company shall authorize the granting to all holders of shares of Common Stock rights or warrants to subscribe for or purchase any capital shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the shares of Common Stock, any consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the shares of Common Stock are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the shares of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that, notwithstanding the foregoing, any notice delivery requirement hereunder shall also be deemed satisfied by filing or furnishing such communication with the Commission via the EDGAR system; provided, further, that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided to the Holder in accordance with the terms of this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K, unless determined by the Company that such filing would be harmful to the Company at such time, in which case the Company shall file such Form 8-K as soon as is reasonably practicable in its discretion. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein. |
|
(k) |
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company. |
|
(l) |
Transaction. Notwithstanding the foregoing, no adjustment to the Exercise Price shall be made as a result of the Transaction. |
|
(m) |
Redemption. |
|
(i) |
All but not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time commencing on the two-year anniversary of the Closing and ending on the Termination Date, upon notice to the Holder as provided in clause (ii) below, at the price of $0.01 per Warrant (“Redemption Price”), provided that the closing price of the Common Stock equals or exceeds $35.00 per share (subject to adjustment in accordance with Section 3(a) hereof), on each of twenty (20) Trading Days within any thirty (30) Trading Day period ending on the third Trading Day prior to the date on which notice of redemption is given; provided, that in the event that the Holder elects to exercise its Warrants in connection with any such redemption and such exercise would result in the Holder beneficially owning (as calculated in accordance with Section 2(f) hereof) shares of Common Stock in excess of the Beneficial Ownership Limitation, then any shares of Common Stock issued pursuant to such exercise in excess of the Beneficial Ownership Limitation shall instead be held in reserve by the Company and issued to the Holder as promptly as reasonably practicable following written notice from the Holder that the receipt of such shares will not cause the Holder to beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation. |
|
(ii) |
In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date to the Holders at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder received such notice. |
|
(iii) |
The Warrants may be exercised, for cash at the Company’s discretion, at any time after notice of redemption shall have been given by the Company pursuant to this clause (m) and prior to the Redemption Date. In the event the Company determines to require all Holders to exercise their Warrants on a “cashless basis”, the notice of redemption will contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants. On and after the Redemption Date, the Holder shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price. |
Section 4. Transfer of Warrant.
|
(a) |
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. |
|
(b) |
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto, and if applicable, shall reflect any adjustment to the Exercise Price prior to the date of such transfer or exchange. |
|
(c) |
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. |
|
(d) |
Transfer Restrictions. This Warrant and the Warrant Shares may only be transferred in compliance with U.S. state and federal securities laws and, if the transfer occurs on or prior to the Reset Termination Date, subject to the transferee agreeing to restrictions consistent with Section 14(d) of the Subscription Agreement in form and substance reasonably acceptable to the Company as a condition to such transfer. In connection with any transfer of this Warrant or the Warrant Shares other than pursuant to an effective registration statement, the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of this Warrant or the Warrant Shares under the Securities Act. |
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(e) |
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act. |
Section 5. Miscellaneous.
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(a) |
No Rights as a Holder of Warrant Shares Until Exercise. This Warrant does not entitle the Holder to any rights as a holder of shares of Common Stock prior to the exercise hereof as set forth in Section 2(d)(i). |
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(b) |
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate evidencing ownership of Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate. |
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(c) |
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day. |
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(d) |
Provision for Issuance of Underlying Shares. |
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(i) |
The Company covenants that, during the period the Warrant is outstanding, it will reserved from its authorized but unissued Common Stock a number of shares of Common Stock equal to the number of shares of Common Stock issuable upon the exercise of any purchase rights under this Warrant (without regard to any limitation on exercise set forth herein and assuming an Exercise Price equal to the lower of (i) [$7.28]/[$5.00] and (ii) the Exercise Price then in effect). The Company will take all such reasonable action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). |
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(ii) |
The Company will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. The Company will use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant. |
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(iii) |
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. |
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(e) |
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the Borough of Manhattan in the City of New York, New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the Borough of Manhattan in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of this Warrant, then, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding. |
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(f) |
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws. |
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(g) |
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. |
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(h) |
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email at the e-mail address as set forth on the signature pages attached hereto, or to such other address as the Company or the Holder may indicate by a notice delivered to the other from time to time, at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto, or to such other address as the Company or the Holder may indicate by a notice delivered to the other from time to time. |
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(i) |
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any shares of Common Stock or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. |
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(j) |
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate. |
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(k) |
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares. |
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(l) |
Amendment. This Warrant may be modified, waived or amended or the provisions hereof waived with the written consent of the Company and the Holder. |
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(m) |
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. |
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(n) |
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. |
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(Signature Page Follows)
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to Purchase Common Stock to be duly executed by their respective authorized signatories as of the date first indicated above.
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[PUBCO] |
Address for Notice: |
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By: |
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With a copy to (which shall not constitute notice):
IN WITNESS WHEREOF, the undersigned have caused this Warrant To Purchase Common Stock to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser (if not same as address for notice):
Warrant Shares:
EIN Number:
SCHEDULE A
“Action” means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the applicable party, threatened against or affecting the applicable party or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 3(g), (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) a zero cost of borrow.
“Bloomberg” means Bloomberg L.P.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.
“Closing Date” means the Trading Day on which the Transaction is consummated.
“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preference shares, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock, and any securities of the Company that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, shares of Common Stock.
“Convertible Securities” means any shares or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Company that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, shares of Common Stock.
“Ex Date” means, in relation to any Distribution, the first Trading Day on which the Common Stock is traded ex-the relevant Distribution.
“Exempt Issuance” means the issuance of (a) any securities of the Company to employees, officers or directors, consultants, contractors, vendors or other agents of the Company or its subsidiaries pursuant to any share or option plan duly adopted for such purpose or any other compensatory arrangement with a director, executive officer, employee or agent approved by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company or its subsidiaries, (b) securities pursuant to the Purchase Agreements or the Merger Agreement and securities upon the exercise or exchange of or conversion of any securities issued pursuant to the Purchase Agreements or the Merger Agreement and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Closing Date, provided that such securities have not been amended since the Closing Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with share consolidations, share divisions and automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such securities which are not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein) or to extend the term of such securities, (c) any securities of the Company at or prior to the Closing Date to the investors listed on Schedule B hereto, in each case including any “affiliate” (as defined in Rule 144 under the Securities Act) thereof, for aggregate proceeds not exceeding $60 million, (d) the Underlying Shares, and (e) securities issued pursuant to any merger, acquisition or strategic transaction or partnership, provided that (i) such securities are issued as “restricted securities” (as defined in Rule 144) or are issued pursuant to an effective registration statement pursuant to the Securities Act and (ii) any such issuance shall only be to a Person (or to direct or indirect the equityholders and/or debtholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset that the Company determines in good faith is similar, reasonably related, incidental or ancillary to the then business or operations of the Company and its subsidiaries or their assets or is otherwise to be used or useful in such business or operations, but any such Exempt Issuance shall not include a transaction in which the Company is issuing securities (x) primarily for the purpose of raising capital, including an at-the-market offering, or (y) to an entity whose primary business is investing in securities (excluding, for the avoidance of doubt, any holding company or parent of a Person described above).
“Fair Market Value” means, on any date:
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(a) |
in the case of a cash Distribution, the amount of such cash Distribution; |
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(b) |
the case of a Distribution of Securities (including shares of Common Stock), Spin-Off Securities, options, warrants or other rights or assets that are publicly traded on a Relevant Stock Exchange, the arithmetic mean of the daily VWAP of such Securities; and |
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(c) |
in the case of Securities, Spin-Off Securities, options, warrants or other rights or assets that are not publicly traded on a Relevant Stock Exchange, an amount equal to the fair market value of such Securities, Spin-Off Securities, options, warrants or other rights or assets as determined in good faith by the Board of Directors of the Company, on the basis of a commonly accepted market valuation method and taking account of such factors as it considers appropriate, including the market price per share of Common Stock, the dividend yield of a share of Common Stock, the volatility of such market price, prevailing interest rates and the terms of such Securities, Spin-Off Securities, options, warrants or other rights or assets, and including as to the expiration date and exercise price or the like (if any) thereof. |
“Merger Agreement” means the Agreement and Plan of Merger, dated April 20, 2026 (as may be amended, supplemented or otherwise modified from time to time), by and among the Company and the other parties thereto.
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
“Option Value” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV” function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination, (ii) an expected volatility equal to the greater of 40% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest weighted average price of the shares of Common Stock during the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor, provided, however, in case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction, in no event shall the Option Value exceed a fraction of the aggregate consideration received (excluding the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities) equal to (1) the number of shares of Common Stock underlying such Option divided by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction (including the number of shares underlying such Option).
“Par Value” means the par value of one share of Common Stock at such time.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding” means an action, claim, suit, investigation or proceeding, whether commenced or threatened.
“Proceeds” means, in respect of any Dilutive Issuance:
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(i) |
in the case of an issuance by the Company of new shares of Common Stock (in each case other than upon exercise of rights of conversion into, or exercise or exchange for, or the right to otherwise acquire, any shares of Common Stock issuable pursuant to Options and Convertible Securities), the aggregate amount of the gross proceeds received by the Issuer in respect of such Dilutive Issuance; |
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(ii) |
in the case of an issuance of Options and Convertible Securities, the aggregate amount of consideration received or receivable by the Company determined in accordance with Section 3(d)(i)(1). |
“Purchase Agreements” means the several Subscription Agreements, between the Company and certain original holders of warrants to purchase common stock, with an initial exercise price of $10.00 per share, issued on the Initial Exercise Date, as amended, modified or supplemented from time to time in accordance with its terms.
“Relevant Stock Exchange” means:
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(a) |
in respect of the Common Stock, the Trading Market or, if at the relevant time the Common Stock is not at that time listed or traded on the Trading Market, the principal stock exchange or securities market on which the Common Stock then listed, quoted, traded or dealt in; and |
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(b) |
In respect of any Securities (other than Common Stock), Spin-Off Securities, options, warrants or other rights or assets, the principal stock exchange or securities market on which such Securities, Spin-Off Securities, options, warrants or other rights or assets are then listed, quoted, traded or dealt in. |
“Securities” means any securities including, but not limited to, shares of Common Stock and other capital stock of the Company, restricted share units, or options, warrants or other rights to subscribe for or purchase or acquire shares of Common Stock or any other capital stock of the Company.
“Spin-Off Securities” means equity share capital of an entity other than the Company or options, warrants or other rights to subscribe for or purchase equity share capital of an entity other than the Company.
“Subscription Agreement” means the Subscription Agreement, dated as of the date hereof, between the Company and the initial Holder of this Warrant.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction” means the transactions contemplated by the Merger Agreement.
“Transaction Documents” means this Warrant, the other warrants to purchase common stock, with substantially the same terms as this Warrant, with an initial exercise price of $10.00 per share, issued on the Initial Exercise Date, the Subscription Agreement and all exhibits and schedules thereto.
“Underlying Shares” means the Warrant Shares issuable upon exercise of this Warrant and the other warrants to purchase common stock, with substantially the same terms as this Warrant, with an initial exercise price of $10.00 per share, issued on the Initial Exercise Date.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the 20 Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with each such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not a Trading Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the 20 Trading Days preceding such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, calculated in the same manner as clause (a), (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the average of the highest closing bid price and the lowest closing ask price of the Common Stock for the 20 Trading Days preceding such date, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, the daily volume weighted average price for each individual Trading Day shall be determined by Bloomberg L.P. in accordance with its standard methodology, and the VWAP for the applicable period shall be calculated by summing such daily values and dividing by the number of Trading Days in the measurement period (i.e., 20 Trading Days), such that each Trading Day’s price is given equal weight irrespective of trading volume.
EXHIBIT A
NOTICE OF EXERCISE
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TO: |
[PUBCO] |
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Attn: |
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Email: |
(1) The undersigned hereby elects to purchase _______ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
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☐ |
in lawful money of the United States; or |
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if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the exercise on a net-issuance basis procedure set forth in subsection 2(c). |
(3) Please issue said Warrant Shares in the name of, and deliver any cash payable for any fractional Warrant Shares to, the undersigned or in and to such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account Number:
(4) In connection with the exercise of this Warrant, or the portion hereof above designated, the undersigned acknowledges, represents to and agrees with the Company that the undersigned is not an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company and has not been an “affiliate” (as defined in Rule 144 under the Securities Act) during the three months immediately preceding the date hereof.
(5) The undersigned further acknowledges (and if the undersigned is acting for the account of another person, that person has confirmed that it acknowledges) that the Warrant Shares received upon exercise of this Warrant (or securities represented thereby) have not been registered under the Securities Act and are “restricted securities”.
(6) The undersigned further certifies that either:
(a) The undersigned is, and at the time Warrant Shares are delivered upon exercise of this Warrant will be, the holder of the Warrant Shares, and the undersigned is not a U.S. person (as defined in Regulation S under the Securities Act) and is located outside the United States (within the meaning of Regulation S) and acquired, or have agreed to acquire and will have acquired, the Warrants being exercised and the Warrant Shares and being delivered upon exercise outside the United States.
OR
(b) The undersigned is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) acting for its own account or for the account of one or more qualified institutional buyers and the undersigned is (or such account or accounts are) the sole beneficial owner(s) of the Warrant Shares to be received upon exercise of this Warrant.
The undersigned hereby instructs the Company register the Warrant Shares in the name of:
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Name of Beneficial Owner to receive Warrant Shares: |
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Address of Beneficial Owner to receive Warrant Shares: |
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3. |
Number of Warrant Shares to be issued: |
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4. |
Beneficial Owner’s Tax ID Number: |
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5. |
Contact Name and Tel No/email address: |
For any settlement inquiries, please contact [_]:
[_]
[SIGNATURE OF HOLDER]
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Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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Signature Guarantee |
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Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Warrant Shares are to be issued other than to and in the name of the registered holder. |
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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Name: |
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(Please Print) |
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Address: |
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(Please Print) |
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Phone Number: |
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Email Address: |
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Dated: |
_____________ ______, _______ |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 10.1
PURCHASER SUPPORT AGREEMENT
This PURCHASER SUPPORT AGREEMENT (this “Agreement”) is dated as of April 20, 2026, by and among Archimedes Tech SPAC Sponsors II LLC, a Delaware limited liability company (the “Sponsor” and “Securityholder”), Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (“Purchaser”), and Forge Nano, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, the Securityholder is the holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of the Purchaser Ordinary Shares and Purchaser Private Units set forth on Schedule I attached hereto (all such securities of Purchaser (including securities underlying such securities), or any successor or additional securities of Purchaser of which ownership is hereafter acquired by the Securityholder prior to the termination of this Agreement are referred to herein as the “Subject Securities”);
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Company, Purchaser, ATII Holdings Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Purchaser (“Pubco”), ATII Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Purchaser (“Merger Sub I”), ATII Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Purchaser (“Merger Sub II”), have entered into that certain Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which, upon the satisfaction or waiver of the terms and conditions therein, (a) at least one day prior to the First Effective Time, and subject to receipt of the Required Purchaser Shareholder Approval, the Purchaser shall merge with and into Pubco, following which the separate corporate existence of the Purchaser shall cease and Pubco shall continue as the surviving corporation (the “Reincorporation”); and (b) at least one day after the completion of the Reincorporation, or on a later date as agreed by the Parties, (i) at the First Effective Time, Merger Sub I shall merge with and into the Company, pursuant to which the separate corporate existence of Merger Sub I shall cease and the Company shall continue the surviving corporation (the “Initial Surviving Corporation”) and a wholly-owned subsidiary of Pubco (the “First Company Merger”) and (ii) immediately following the First Company Merger, the Initial Surviving Corporation shall merge with and into Merger Sub II, pursuant to which the separate corporate existence of the Initial Surviving Corporation shall cease and Merger Sub II shall continue as the surviving company (the “Surviving Company”) and a wholly-owned subsidiary of Pubco (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”); and
WHEREAS, as an inducement to Purchaser and the Company to enter into the Merger Agreement and to consummate the transactions contemplated therein, the parties hereto desire to agree to certain matters as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
SUPPORT AGREEMENT; COVENANTS
Section 1.1 Binding Effect of Merger Agreement. The Securityholder hereby acknowledges that it has read the Merger Agreement and this Agreement and has had the opportunity to consult with its tax and legal advisors and the Securityholder desires to approve the Merger Agreement and the transactions contemplated by the Merger Agreement (collectively, the “Transactions”), including the Reincorporation, and the Securityholder desires to vote all Subject Securities that they own in favor of the approval and adoption of the Merger Agreement.
Section 1.2 No Transfer of Subject Securities. During the period commencing on the date hereof and ending on the earliest of (a) the First Effective Time, (b) such date and time as the Merger Agreement shall be validly terminated in accordance with Section 8.1 (Termination) thereof and (c) the liquidation of Purchaser (the earlier of (a), (b) and (c), the “Expiration Time”), the Securityholder shall not, without the prior written consent of the Company, directly or indirectly, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, file (or participate in the filing of) a registration statement with the SEC (other than the Registration Statement) or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, with respect to any Subject Securities owned by the Securityholder, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Securities owned by the Securityholder or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (clauses (i), (ii) and (iii), collectively, a “Transfer”); provided, however, that the foregoing restrictions shall not apply to any Permitted Transfer. A “Permitted Transfer” shall mean any Transfer (A) to any of Purchaser’s officers, directors or consultants, any Affiliate or any family member of any of Purchaser’s officers, directors or consultants; (B) to any Affiliate of such Person or to any member(s) of such Person or any of their Affiliates or any employees or consultants of such Affiliates; or (C) to any other Person, with the consent of Purchaser and the Company; provided, however, that, prior to and as a condition to the effectiveness of any Permitted Transfer described in clauses (A) through (C), the transferee in such Permitted Transfer (a “Permitted Transferee”) shall have executed and delivered to Purchaser and the Company a joinder or counterpart of this Agreement pursuant to which such Permitted Transferee shall be bound by all of the applicable terms and provisions of this Agreement. Purchaser shall not register any sale, assignment or transfer of any Subject Securities on Purchaser’s stock ledger (book entry or otherwise) that is not in compliance with this Section 1.2. Any purported Transfer in violation of this Section 1.2 shall be null and void ab initio and of no force or effect.
Section 1.3 New Shares. In the event that (a) any Purchaser Ordinary Shares, Purchaser Warrants or other equity securities of Purchaser are issued to the Securityholder after the date of this Agreement pursuant to any stock split, reverse stock split, stock dividend or distribution, recapitalization, reclassification, combination, subdivision, exchange of shares or other similar event of Purchaser Ordinary Shares, Purchaser Warrants or other equity securities of Purchaser of, on or affecting the Purchaser Ordinary Shares, Purchaser Warrants or other equity securities of Purchaser owned by the Securityholder or otherwise, (b) the Securityholder purchases or otherwise acquires beneficial ownership of any Purchaser Ordinary Shares, Purchaser Warrants or other equity securities of Purchaser after the date of this Agreement, or (c) the Securityholder acquires the right to vote or share in the voting of any Purchaser Ordinary Shares or other equity securities of Purchaser after the date of this Agreement (such Purchaser Ordinary Shares, Purchaser Warrants or other equity securities of Purchaser, collectively the “New Securities”), then such New Securities acquired or purchased by the Securityholder shall be subject to the terms of this Agreement to the same extent as if they constituted the Subject Securities as of the date hereof.
Section 1.4 Certain Agreements of the Securityholder
(a) At any meeting of the shareholders of Purchaser, however called, or at any adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the shareholders of Purchaser is sought, the Securityholder hereby unconditionally and irrevocably agrees that it shall (i) appear at each such meeting, in person or by proxy, or otherwise cause all of its Purchaser Ordinary Shares to be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be voted), in person or by proxy, or execute and deliver a written consent (or cause a written consent to be executed and delivered) covering, all of its Purchaser Ordinary Shares:
(i) in favor of each Purchaser Shareholder Approval Matter, including, without limitation, the Merger Agreement, the Transactions, and any other consent, waiver, approval is required under Purchaser’s organizational documents or under any agreements between Purchaser and its shareholders, or otherwise sought by Purchaser with respect to the Merger Agreement or the Transactions or the Purchaser Shareholder Approval Matters;
(ii) against any Alternative Transaction or any proposal relating to a business combination transaction (other than the Purchaser Shareholder Approval Matters and the transactions contemplated thereby);
(iii) against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Purchaser (other than the Merger Agreement or the Ancillary Documents and the Transactions);
(iv) against any change in the business, management or Board of Directors of Purchaser (other than in connection with the Purchaser Shareholder Approval Matters and the transactions contemplated thereby);
(v) against any proposal, action or agreement that would (A) impede, interfere with, delay, postpone, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement, the Ancillary Documents or the Transactions, (B) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of Purchaser, Pubco, Merger Sub I or Merger Sub II or the Securityholder under the Merger Agreement or this Agreement, as applicable, (C) result in any of the conditions set forth in Article VII of the Merger Agreement not being fulfilled or (D) change in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Purchaser; and
(vi) in favor of any extension of Purchaser’s deadline to consummate a “Business Combination” as such term is defined in the Purchaser Memorandum and Articles, to the extent permitted under the Purchaser Memorandum and Articles.
The Securityholder hereby agrees that it shall not commit or agree to take any action inconsistent with the foregoing.
(b) The Securityholder shall comply with, and fully perform all of its obligations, covenants and agreements set forth in, that certain Letter Agreement, dated as of February 10, 2025, by and among Purchaser, the Sponsor and the other parties thereto (the “Letter Agreement”), including the obligations of the Securityholder pursuant to Section 1 therein to not redeem, sell or tender, or submit a request to Purchaser’s transfer agent or otherwise exercise any right to redeem, sell or tender, any Purchaser Ordinary Shares owned by the Securityholder in connection with the transactions contemplated by the Merger Agreement. During the period commencing on the date hereof and ending on the Expiration Time, without the prior written consent of the Company, the Securityholder shall not modify or amend any contract between or among the Securityholder or any Affiliate of the Securityholder (other than Purchaser or any of its subsidiaries), on the one hand, and Purchaser or any of Purchaser’s subsidiaries, on the other hand, including, for the avoidance of doubt, the Letter Agreement.
(c) The Securityholder hereby irrevocably appoints as its proxy and attorney-in-fact Long Long (the “Securityholder’s Representative”), and any Person designated in writing by the Securityholder’s Representative from time to time, each of them individually, with full power of substitution and resubstitution, until the termination of this Agreement, to vote the Subject Securities (or grant a consent or approval, as applicable) beneficially owned by the Securityholder in accordance with Section 1.4 in connection with any vote, consent or other approval of stockholders of the Company in respect of any of the matters described in Section 1.4; provided, however, that the Securityholder’s grant of the proxy contemplated by this Section 3.12 shall be effective if, and only if, the Securityholder fails to vote such Subject Securities (or grant a consent or approval, as applicable) in accordance with Section 1.4. This proxy, if it becomes effective, is coupled with an interest, is given as an additional inducement of the Company to enter into the Merger Agreement and shall be irrevocable prior to the First Effective Time, at which time any such proxy shall terminate and be released. Neither the Securityholder’s Representative nor any other Person may exercise this proxy on any matter, or in circumstance, except as provided above. The Securityholder’s Representative may terminate this proxy with respect to the Securityholder at any time at his or her sole election by written notice provided to the Securityholder and the Company.
(d) Purchaser, the Company and the Sponsor have a common interest in entering into and consummating, in each case, prior to or concurrently with the Closing, (a) the Subscription Agreement and the PIPE Investor Warrant Agreement in connection with the PIPE Investment, and/or (b) a financing in connection with the transactions contemplated by the Merger Agreement, including, without limitation, committed equity investments (including any private investments in public equity), convertible debt, debt financing, non-redemption arrangements and/or backstop arrangements (any such financing transaction, a “Financing Transaction”). In furtherance thereof, the Sponsor agrees to contribute up to 3,300,000 Purchaser Ordinary Shares, together with all shares of Pubco Common Stock issued upon conversion thereof, including any securities paid as dividends or distributions with respect to or into which such shares are exchanged or converted (the “Contribution Shares”) to secure one or more Financing Transactions. To the extent the PIPE Investors fund any Financing Transaction of at least $100 million, the Sponsor shall transfer to such PIPE Investors 3,000,000 Contribution Shares to secure such Financing Transaction; and the remaining 300,000 Contribution Shares shall be transferred to investors to secure other Financing Transactions to the extent such Financing Transactions are funded by such investors. Any Contribution Shares not used to secure Financing Transactions shall be retained by the Sponsor.
Section 1.5 Further Assurances. The Securityholder shall execute and deliver, or cause to be executed and delivered, such additional documents, and take, or cause to be taken, all such further actions and do, or cause to be done, all things reasonably necessary or reasonably requested by the Company or Purchaser under applicable Laws to effect the actions and to consummate the Transactions, in each case, on the terms and subject to the conditions set forth therein and herein, as applicable.
Section 1.6 No Inconsistent Agreement. The Securityholder hereby represents and covenants that it has not entered into, shall not enter into, and shall not grant a proxy or power of attorney to enter into, any agreement or undertaking that would restrict, limit, be inconsistent with or interfere with the performance of its obligations hereunder.
Section 1.7 No Challenges. The Securityholder hereby agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Purchaser, Pubco, the Company or any of their respective successors or directors (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement or the Merger Agreement, or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Merger Agreement. The Securityholder hereby irrevocably and unconditionally waives, and agrees not to exercise, any rights of appraisal, dissenter’s rights and any similar rights under applicable Law relating to the Reincorporation, the Company Mergers and the consummation of the Transactions, including any notice requirements.
Section 1.8 Consent to Disclosure. The Securityholder hereby consents to the publication and disclosure in the Registration Statement and the Proxy Statement (and, as and to the extent otherwise required by applicable securities Laws or the SEC or any other applicable securities authorities, any other documents or communications provided by Purchaser or the Company to any Governmental Authority or to securityholders of Purchaser or the Company) of the Securityholder’s identity and beneficial ownership of Subject Securities, and the nature of the Securityholder’s commitments, arrangements and understandings under and relating to this Agreement and, if deemed appropriate or legally required by Purchaser or the Company, a copy of this Agreement. The Securityholder shall promptly provide any information reasonably requested by Purchaser or the Company for any applicable regulatory application or filing made or approval sought in connection with the transactions contemplated by the Merger Agreement (including filings with the SEC).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Securityholder. The Securityholder represents and warrants as of the date hereof to Purchaser and the Company as follows:
(a) Organization; Due Authorization. The Securityholder, if not a natural person, is duly organized and validly existing under the Laws of its jurisdiction of incorporation, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within the Securityholder’s organizational powers, and the Securityholder has been duly authorized by all necessary organizational actions on the part of the Securityholder. This Agreement has been duly executed and delivered by the Securityholder and, assuming due authorization, execution and delivery by the other parties to this Agreement, this Agreement constitutes a legally valid and binding obligation of the Securityholder, enforceable against the Securityholder in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies). If this Agreement is being executed in a representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into this Agreement on behalf of the Securityholder.
(b) Ownership. The Securityholder is the record and beneficial owner (as defined in the Securities Act) of, and has good, valid and marketable title to, all of the Securityholder’s Subject Securities, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Subject Securities (other than transfer restrictions under the Securities Act)) affecting any such Subject Securities, other than Liens pursuant to (i) this Agreement, (ii) Purchaser’s organizational documents, (iii) the Merger Agreement, (iv) the Letter Agreement or (v) any applicable securities Laws. The Securityholder does not own of record or beneficially own on the date of this agreement any equity securities in Purchaser other than the Securityholder’s Subject Securities. The Securityholder has full voting power, full power of disposition and full power to issue instructions with respect to the matters set forth herein whether by ownership or by proxy, in each case, with respect to its Subject Securities, and none of the Securityholder’s Subject Securities are subject to any proxy, voting trust or other agreement or arrangement with respect to the voting of such Subject Securities, except as provided hereunder and under the Letter Agreement. Other than the Purchaser Private Warrants held by the the Securityholder (if any), the Securityholder does not hold or own any rights to acquire (directly or indirectly) any equity securities of Purchaser or any equity securities convertible into, or which can be exchanged for, equity securities of Purchaser.
(c) No Conflicts. The execution and delivery of this Agreement by the Securityholder does not, and the performance by the Securityholder of its obligations hereunder and the consummation of the transactions contemplated hereby, the Reincorporation, the Company Mergers and the other transactions contemplated by the Merger Agreement will not constitute or result in, (i) conflict with or result in a violation of the organizational documents of the Securityholder, (ii) require any consent or approval that has not been given or other action that has not been taken by any Person (including under any Contract binding upon the Securityholder or its Subject Securities), in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by the Securityholder of its obligations under this Agreement, or (iii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Purchaser or any of Purchaser’s Subsidiaries, to the extent the creation of such Lien would prevent, enjoin or materially delay the performance by the Securityholder of its obligations under this Agreement.
(d) Litigation. There are no Actions pending against the Securityholder, or to the knowledge of the Securityholder, threatened against the Securityholder, before (or, in the case of threatened Actions, that would be before) any arbitrator or any Governmental Authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by the Securityholder of its obligations under this Agreement. There is no outstanding Order imposed upon the Securityholder, or, if applicable, any of its Subsidiaries.
(e) Brokers’ Fees. No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by the Merger Agreement based upon arrangements made by the Securityholder, for which Purchaser or any of its Affiliates may become liable.
(f) Affiliate Arrangements. Except as set forth on Schedule II attached hereto, the Securityholder is not party to, nor has any rights with respect to or arising from, any Contract with Purchaser or its Subsidiaries.
(g) Acknowledgment. The Securityholder understands and acknowledges that each of Purchaser and the Company is entering into the Merger Agreement in reliance upon the Securityholder’s execution and delivery of this Agreement and the representations, warranties, covenants and other agreements of the Securityholder contained herein.
(h) Adequate Information. The Securityholder is a sophisticated shareholder and has adequate information concerning the business and financial condition of Purchaser and the Company to make an informed decision regarding this Agreement and the transactions contemplated by the Merger Agreement and has independently and without reliance upon Purchaser or the Company and based on such information as the Securityholder has deemed appropriate, made its own analysis and decision to enter into this Agreement. The Securityholder acknowledges that Purchaser and the Company have not made and do not make any representation or warranty to the Securityholder, whether express or implied, of any kind or character except as expressly set forth in this Agreement. The Securityholder acknowledges that the agreements contained herein with respect to the Subject Securities held by the Securityholder are irrevocable.
ARTICLE III
MISCELLANEOUS
Section 3.1 Termination. This Agreement and all of its provisions shall terminate and be of no further force or effect upon the earliest of (a) the Expiration Time, (b) the liquidation of Purchaser and (c) the written agreement of the Securityholder, Purchaser and the Company. Upon such termination of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party hereto from liability arising in respect of any breach of this Agreement prior to such termination. This Article III shall survive the termination of this Agreement.
Section 3.2 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
Section 3.3 Jurisdiction; Waiver of Jury Trial.
(a) Any proceeding or Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each of the parties hereto irrevocably (i) submits to the exclusive jurisdiction of each such court in any such proceeding or Action, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the proceeding or Action shall be heard and determined only in any such court, and (iv) agrees not to bring any proceeding or Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action, suit or proceeding brought pursuant to this Section 3.3.
(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.4 Assignment. No party hereto shall assign this Agreement or any part hereof without the prior written consent of the other parties and any such transfer without prior written consent shall be void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.
Section 3.5 Enforcement. The parties hereto agree that irreparable damage could occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent any breach, or threatened breach, of this Agreement and to specific enforcement of the terms and provisions of this Agreement, in addition to any other remedy to which any party is entitled at law or in equity. In the event that any Action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
Section 3.6 Amendment. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by Purchaser, the Company and the Securityholder, and which makes reference to this Agreement.
Section 3.7 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties hereto further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
Section 3.8 Notices. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent or given in accordance with the terms of Section 10.2 of the Merger Agreement to the applicable party, with respect to the Company and Purchaser, at the respective addresses set forth in Section 10.2 of the Merger Agreement, and, with respect to the Securityholder, at the Securityholder’s respective address set forth on Schedule I.
Section 3.9 Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 3.10 Entire Agreement. This Agreement and the agreements referenced herein constitute the entire agreement and understanding of the parties hereto relating to the subject matter hereof and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries relating to the subject matter hereof.
Section 3.11 Adjustment for Stock Split. If, and as often as, there are any changes in Purchaser or the Subject Securities by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Sponsor, Purchaser, the Company, or the Subject Securities, as so changed.
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the date first written above.
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SPONSOR: |
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| ARCHIMEDES TECH SPAC SPONSORS II LLC | |||
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By: |
/s/ Long Long |
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Name: Long Long |
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Title: Chief Executive Officer |
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PURCHASER: |
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| ARCHIMEDES TECH SPAC PARTNERS II CO. | |||
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By: |
/s/ Long Long |
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Name: Long Long |
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Title: Chief Executive Officer |
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[Signature Page to Purchaser Support Agreement]
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COMPANY: |
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| FORGE NANO, INC. | |||
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By: |
/s/ Paul Lichty |
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Name: Paul Lichty |
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Title: Chief Executive Officer |
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[Signature Page to Purchaser Support Agreement]
Schedule I
Purchaser Ordinary Shares and Purchaser Private Units
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Sponsor |
Purchaser Ordinary Shares |
Purchaser Private Units |
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Archimedes Tech SPAC Sponsors II LLC 2093 Philadelphia Pike #1968 Claymont, DE 19703 |
5,750,000 Purchaser Ordinary Shares |
530,000 Purchaser Private Units |
Schedule II
Affiliate Agreements
Letter Agreement, dated February 10, 2025, by and among Purchaser, Archimedes Tech SPAC Sponsors II LLC and each of the other parties thereto.
Registration Rights Agreement, dated February 10, 2025, by and among Purchaser, Archimedes Tech SPAC Sponsors II LLC and certain other security holders named therein.
Administrative Services Agreement, dated February 10, 2025, by and between Purchaser and Archimedes Tech SPAC Sponsors II LLC.
Private Units Purchase Agreement, dated February 10, 2025, by and between Purchaser and Archimedes Tech SPAC Sponsors II LLC.
Exhibit 10.2
Execution Version
FORM OF
LOCK-UP AND RELEASE AGREEMENT
April 20, 2026
Forge Nano, Inc.
12300 Grant St. #100
Thornton, CO 80241
Attn: Paul Lichty, CEO
E-mail: [*********]
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Re: |
Lock-Up and Release Agreement (this “Agreement”) |
Reference is made to that certain Agreement and Plan of Merger, dated as of the date hereof, as may be amended, supplemented or otherwise modified from time to time (the “Merger Agreement”), by and among (i) Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (the “Purchaser”), (ii) ATII Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Pubco”), (iii) ATII Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub I”), (iv) ATII Merger Sub II LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Purchaser (“Merger Sub II”) and (v) Forge Nano, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Merger Agreement.
As a material inducement for, and a condition to the willingness of, Pubco to enter into the Merger Agreement and to consummate the transactions contemplated thereby, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the undersigned (together with the undersigned’s affiliated Persons set forth on Schedule A hereto entitled to receive Merger Consideration pursuant to the Merger Agreement, the “Subject Party”) hereby agrees as follows:
1. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
(a) “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, “control,” when used with respect to any specified Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through ownership of voting securities or partnership or other ownership interests or by Contract or otherwise, and the terms “controlling”, “under common control with” and “controlled by” have correlative meanings to the foregoing.
(b) “Beneficially Own” means, with respect to any Subject Shares, having “beneficial ownership” as determined pursuant to Rule 13d‐3 promulgated under the Exchange Act.
(c) “Disability” means (i) the inability of the Subject Party, by reason of bona fide physical or mental injury, illness or other similar cause, to perform the duties and responsibilities of the Subject Party’s provision of services to the Target Companies for a period of at least 180 days or more during any 365-day period and where such injury, illness or other similar cause is reasonably anticipated to continue to prevent the Subject Party from operating or functioning in a similar capacity after such 180-day period, which determination shall be made by a licensed independent physician reasonably agreed in writing by Pubco and the Subject Party (or his or her authorized representative or power-of-attorney), or (ii) if the Subject Party is a participant in a long-term disability plan of Pubco or any of its Subsidiaries or Affiliates, the determination of disability under such plan also will be considered “Disability” for purposes of this Agreement.
(d) “Hedge” means to acquire any option or right or any equivalent contract to, directly or indirectly (including through one or more synthetic transactions), sell or otherwise dispose of the economic interest in Lock-Up Shares, or to enter into any swap, hedge, synthetic arrangement or any other agreement, including any short sales of Lock-Up Shares, purchase of, or entry into, any put or call option, forward, swap or other derivative positions, transactions or instruments, that directly or indirectly Transfers, in whole or in part, the economic interest in Lock-Up Shares, including the establishment or increase of any “put equivalent position” or liquidation or a decrease of a “call equivalent position” in Lock-Up Shares within the meaning of Section 16 of the Exchange Act. When used as a noun, “Hedge” has a correlative meaning.
(e) “Lock-Up Period” means the period commencing on the date hereof and ending at the earlier of (i) 11:59 p.m. (Eastern Time) on the six (6) month anniversary of the Closing Date or (ii)11:59 p.m. (Eastern Time) on the date on which the last reported sale price of the shares of Pubco Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and other similar transactions) for any twenty (20) trading days within any thirty (30) trading day period after the consummation of the First Company Merger pursuant to the Merger Agreement.
(f) “Lock-Up Shares” means, during the Lock-Up Period, one hundred percent (100%) of the Subject Shares.
(g) “Share Certificate” means a certificate evidencing Lock-Up Shares.
(h) “Subject Shares” means the aggregate Merger Consideration, comprised of shares of Pubco Common Stock, received by the Subject Party pursuant to the Merger Agreement, whether such shares of Pubco Common Stock are owned directly or otherwise Beneficially Owned by the Subject Party.
(i) “Transfer” means, with respect to any Subject Shares or a right attributable thereto or interest therein, any direct or indirect sale, exchange, assignment, transfer (including by merger, conversion or operation of law), gift or other disposition of such Subject Shares, whether voluntary, involuntary or by operation of law and including by means of any Hedge, or a charge, mortgage, pledge of or granting of any other form of security interest in any such Subject Shares or interest therein (or such right attributable thereto). For the avoidance of doubt, a Transfer shall include any of the foregoing actions by the Subject Party who is not a natural person or by any equityholder in any such Subject Party that is not a natural person continuing up the ownership chain to and including a natural person.
2. Transfer Restrictions. During the period beginning as of the date hereof and continuing until the expiration of the Lock-Up Period, and subject to the exceptions in Sections 3, 4, 5 and 6, hereof, the Subject Party shall not Transfer, permit or cause the Transfer of, any Lock-Up Shares (whether or not any transaction is to be settled by delivery of Lock-Up Shares or such other securities, in cash or otherwise), or make a public announcement of any intention to effect such a Transfer. Any purported Transfer that does not comply with the terms of this Agreement shall be null and void . For the avoidance of doubt, this Agreement does not purport to restrict any Transfer of shares of Pubco Common Stock (i) acquired in open market transactions by the Subject Party (whether prior to, on or after the Closing Date), or (ii) that are Subject Shares but no longer qualify as Lock-Up Shares.
3. Permitted Transfers. Notwithstanding anything to the contrary in this Agreement, the Subject Party may Transfer the Subject Party’s Lock-Up Shares only in the following circumstances:
(a) to Pubco’s directors or officers or any affiliates or family members of Pubco’s directors or officers;
(b) if the Subject Party is an individual, by gift to a member of the Subject Party’s Immediate Family or to a trust, the beneficiary of which is a member of such Subject Party’s Immediate Family or an affiliate of such person, or to a charitable organization; provided that in the case of an Immediate Family member that is a trust, such trust does not require or permit the distribution of any of the Lock-Up Shares other than to the Subject Party and/or the Subject Party’s Immediate Family members; provided, further, that any such Transfer shall be for bona fide estate planning purposes and does not involve a disposition for value;
(c) if the Subject Party is an individual, by virtue of laws of descent and distribution upon death of Subject Party or otherwise in connection with Transfers by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the Immediate Family of the Subject Party;
(d) if required pursuant to any Applicable Law or a final and non-appealable Governmental Order of any Governmental Authority (including by Transfers by operation of law pursuant to a qualified domestic order, divorce settlement, or divorce decree or separation agreement or wind-up or dissolution of a legal entity);
(e) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (a) through (d) above; and
provided that in the case of any Transfer pursuant to clauses (a)-(d), each transferee shall execute and deliver to Pubco a lock-up letter substantially in the form of this Agreement as a condition to the effectiveness of such Transfer.
4. Termination. This Agreement shall terminate upon the earlier of (i) the expiration of the Lock-Up Period, (ii) the termination of the Merger Agreement in accordance with Section 8.1 of the Merger Agreement, and (iii) to the extent that the Subject Party is employed by the Company as of the date hereof, the termination of such employment of the Subject Party by Pubco (or its Affiliate) without Cause (as defined in the Subject Party’s employment agreement).
5. Pubco Transactions. Notwithstanding anything to the contrary in this Agreement, the Subject Party shall be permitted to Transfer the Lock-Up Shares to a third party pursuant to a tender or exchange offer for shares of Pubco Common Stock or other transaction involving shares of Pubco Common Stock, including, without limitation, a merger, consolidation, stock exchange, reorganization or other business combination or similar transaction, involving a change of control or similar extraordinary transaction of Pubco that, in each case, has been approved by the board of directors of Pubco (including, without limitation, entering into any lock-up, voting or similar agreement pursuant to which the Subject Party may agree to Transfer the Subject Party’s Lock-Up Shares in connection with any such transaction, or vote any of the Subject Party’s Lock-Up Shares in favor of any such transaction); provided that all of the Subject Party’s Lock-Up Shares that are not so Transferred remain subject to this Agreement; and provided, further, that it shall be a condition of the Transfer that if such transaction is not completed, any of the Subject Party’s Lock-Up Shares shall remain subject to the restrictions herein.
6. Stop Transfer Instructions. In furtherance of the foregoing, Pubco and any duly appointed transfer agent for the registration or Transfer of the securities described herein are hereby authorized to decline to make any Transfer of securities if such Transfer would constitute a violation or breach of this Agreement. The Subject Party agrees and hereby consents to the entry of stop transfer instructions with Pubco’s transfer agent and registrar against the Transfer of the applicable portion of the Subject Shares that, at such time during the Lock-Up Period, constitutes Lock-Up Shares except in compliance with and as contemplated by Sections 3, 4 and 5. The Subject Party further understands and acknowledges that this Agreement is irrevocable and shall be binding upon its heirs, legal representatives, successors and assigns.
7. (a) Legends. The Subject Party acknowledges that, to the extent applicable, each Share Certificate shall be endorsed with the legend substantially in the form set forth below, as well as any additional legend imposed or required by Applicable Law.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON SALE OR TRANSFER CONTAINED IN A LOCK-UP AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF PUBCO.
(b) Pubco will take all actions necessary to have the Lock-Up Legend and all stop transfer instructions removed from each applicable portion of the Subject Shares on the date such portion no longer constitutes Lock-Up Shares. In connection with any removal of the Lock-Up Legend and stop transfer instructions pursuant to this paragraph, if required by Pubco’s transfer agent and registrar, Pubco will, at its expense, promptly cause an opinion of counsel to be delivered to and maintained with such transfer agent and registrar, together with any other authorizations, certificates and directions required by such transfer agent and registrar, that authorize and direct the transfer agent and registrar to issue such Subject Shares without a Lock-Up Legend.
8. Representations, Warranties and Acknowledgments.
(a) Each party hereby represents and warrants to the other party that it has full power and authority to enter into this Agreement.
(b) The Subject Party represents and warrants that, when the Lock-Up Shares are issued to the Subject Party, the Subject Party will have, and, except as contemplated by Sections 3, 4 and 5 above, will retain for the duration of the Lock-Up Period good and marketable title to its Subject Shares, free and clear of all liens, encumbrances, and claims whatsoever (other than arising or as expressly permitted under this Agreement or under applicable securities laws).
(c) The Subject Party understands that his, her, their or its entry into this Agreement is a condition to the Subject Party’s entitlement to receive the Subject Shares and that Pubco is relying upon this Agreement in performing its respective obligations that are subject to such condition.
9. Release.
(a) The Subject Party, on behalf of itself and its Affiliates, hereby releases and forever discharges the Pubco (including the Target Companies following the Closing) and their respective officers, managers, directors, employees and representatives (each, solely in their capacity as such, a “Seller Released Person”) from all debts, demands, Proceedings, covenants, torts and damages and all defenses, offsets, judgments and liabilities whatsoever, of every name and nature, both at law and in equity, known or unknown, accrued or unaccrued, that have been or could have been asserted against any Seller Released Person, or which the Subject Party has or has ever had, in the Subject Party’s or its Affiliates’ capacity as an owner of equity interests in the Target Companies prior to the Closing (individually, a “Seller Released Claim” and, collectively, the “Seller Released Claims”). For the avoidance of doubt and by way of example only, nothing contained herein will operate to release, and the term Seller Released Claims shall not include, (A) any obligations of the Target Companies to any employee with respect to accrued and unpaid salary, paid time off, expense reimbursement and other compensation or employee benefits, in each case, arising in the ordinary course prior to the Closing Date, (B) any indemnification obligations of any of the Target Companies to the Subject Party under the Organizational Documents of such Target Company, (C) any rights or claims under this Agreement or any commercial arrangement between the Subject Party or its Affiliates, on the one hand, and any Seller Released Person, on the other hand, (D) any claims that cannot be released as a matter of Applicable Law, or (E) any claims that do not arise out of the Subject Party’s or its Affiliates’ capacity as an owner of equity interests in the Target Companies prior to Closing (clauses (A) – (E), collectively, the “Permitted Claims”).
(b) Subject to the other provisions set forth in this Section 9, the Subject Party: (A) expressly waives and relinquishes all rights and benefits that the Subject Party may have under Applicable Law with respect to the matters released under this Section 9, including any state law or any common law principles limiting waivers of unknown claims; (B) understands that the facts and circumstances under which the Subject Party gives this full and complete release and discharge of the Seller Released Persons may hereafter prove to be different than now known or believed to be true by the Subject Party; and (C) accepts and assumes the risk thereof and agrees that the Subject Party’s full and complete release and discharge of the Seller Released Persons with respect to the matters described in this Section 9 shall remain effective in all respects and not be subject to termination, rescission or modification by reason of any such difference in facts and circumstances.
(c) By executing this Agreement, Pubco acknowledges and agrees that the Subject Party is not releasing or waiving thereunder (or otherwise) any Permitted Claims.
(d) In furtherance and not in limitation of any other provision set forth in this Section 9, except as otherwise set forth herein or as prohibited by law or statute, it is the intention of the Subject Party, on behalf of itself and its Affiliates, to extinguish all Seller Released Claims and consistent with such intention, the Subject Party, on behalf of itself and its Affiliates, hereby expressly waives his, her or its rights to the fullest extent permitted by law, to any benefits of the provisions of Section 1542 of the California Civil Code or any other similar state law, federal law or principle of common law, which may have the effect of limiting the releases set forth herein, which reads in full as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
10. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given; (ii) on the day of transmission if sent via electronic mail transmission to the electronic mail address given below (provided no rejection notice is received by the sender); (iii) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service; or (iv) on the fifth (5th) day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, to the party as follows:
If to Pubco:
Forge Nano, Inc.
12300 Grant St. #100
Thornton, CO 80241
Attn: Paul Lichty, CEO
E-mail: [*********]
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Benjamin M. Goodchild
E-mail: [*********]
If to the Subject Party:
To the address set forth on the signature page attached hereto.
Any party may change its address for the purpose of this Section 10 by giving the other parties written notice of its new address in the manner set forth above.
11. Miscellaneous.
(a) Captions. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.
(b) Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced as a result of any Applicable Law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner material to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, 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.
(c) Entire Agreement; Amendments and Waivers. This Agreement represents the entire understanding and agreement among the parties hereto with respect to the subject matter hereof and, except as explicitly set forth herein, supersedes all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Except as otherwise expressly provided herein, remedies hereunder are cumulative and are not exclusive of any other remedies provided by Applicable Law.
(d) Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties, and any attempt to make any such assignment without such consent shall be null and void. This Agreement shall be binding upon and inure solely to the benefit of Pubco, the Subject Party and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(e) Governing Law. This Agreement, and all proceedings (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of the parties in the negotiation, administration, performance and enforcement hereof, shall be governed by, and construed and enforced in accordance with, the Applicable Laws of the State of Delaware, without regard to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Applicable Laws of any jurisdiction other than the State of Delaware. In addition, each of the parties hereto irrevocably (i) submits to the personal jurisdiction of the Specified Courts (as defined in the Merger Agreement), (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) waives any objection to the laying of venue of any Proceeding relating to this Agreement or the transactions contemplated hereby in such court, (iv) waives and agrees not to plead or claim in any such court that any Proceeding relating to this Agreement or the transactions contemplated hereby brought in any such court has been brought in an inconvenient forum, and (v) agrees that it will not bring any Proceeding relating to this Agreement or the transactions contemplated hereby in any court other than the Specified Courts. Each party agrees that service of process upon such party in any such Proceeding shall be effective if notice is given in accordance with Section 10.
(f) Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11(f).
(g) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.
(h) Electronic Signatures. Each party hereby consents to receipt of this Agreement in electronic form and understands and agrees that this Agreement may be signed electronically. In the event that any signature is delivered by electronic mail, or otherwise by electronic transmission evidencing an intent to sign this Agreement, such electronic mail or other electronic transmission shall create a valid and binding obligation of the applicable party with the same force and effect as if such signature were an original. Execution and delivery of this Agreement by electronic mail or other electronic transmission is legal, valid and binding for all purposes.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.
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ACCEPTED AND AGREED TO:
FORGE NANO, INC.
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12300 Grant St. #100 |
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[Signature Page to Lock-Up and Release Agreement]
Schedule A
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Name |
ATII Holdings Inc. |
Subject Shares |
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[___] |
[___] |
[___] |
Exhibit 10.3
Execution Version
FORM OF
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
by and among
ATII HOLDINGS INC.
and
THE STOCKHOLDERS THAT ARE SIGNATORIES HERETO
Dated as of [__], 2026
TABLE OF CONTENTS
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ARTICLE 1 |
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Certain Definitions |
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Section 1.01. |
Definitions |
1 |
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ARTICLE 2 |
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Registration Rights |
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Section 2.01. |
Demand Registrations |
4 |
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Section 2.02. |
Piggyback Registrations |
7 |
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Section 2.03. |
Allocation of Securities Included in Registration Statement |
8 |
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Section 2.04. |
Registration Procedures |
10 |
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Section 2.05. |
Registration Expenses |
14 |
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Section 2.06. |
Certain Limitations on Registration Rights |
15 |
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Section 2.07. |
Limitations on Sale or Distribution of Other Securities |
15 |
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Section 2.08. |
No Required Sale |
15 |
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Section 2.09. |
Indemnification |
15 |
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Section 2.10. |
No Inconsistent Agreements |
18 |
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ARTICLE 3 |
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Underwritten Offerings |
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Section 3.01. |
Requested Underwritten Offerings |
18 |
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Section 3.02. |
Piggyback Underwritten Offerings |
18 |
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ARTICLE 4 |
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General |
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Section 4.01. |
Adjustments Affecting Registrable Securities |
18 |
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Section 4.02. |
Rule 144 |
19 |
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Section 4.03. |
Nominees for Beneficial Owners |
19 |
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Section 4.04. |
Amendments and Waivers |
19 |
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Section 4.05. |
Notices |
19 |
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Section 4.06. |
Successors and Assigns |
20 |
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Section 4.07. |
Termination |
20 |
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Section 4.08. |
Entire Agreement |
20 |
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Section 4.09. |
Governing Law; Jurisdiction; Waiver of Jury Trial |
20 |
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Section 4.10. |
Interpretation; Construction |
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Section 4.11. |
Counterparts |
21 |
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Section 4.12. |
Severability |
21 |
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Section 4.13. |
Specific Enforcement |
21 |
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Section 4.14. |
Further Assurances |
21 |
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Section 4.15. |
Confidentiality |
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Section 4.16. |
Opt-Out Requests |
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Section 4.17. |
Original Registration Rights Agreement |
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| Exhibit A | Joinder Agreement | |
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of [__], 2026 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is made and entered into by and among (i) ATII Holdings, Inc., a Delaware corporation (the “Company”), (ii) the stockholders of the Company party hereto (the “Stockholders”) and (iii) any person or entity who hereafter becomes a party to this Agreement pursuant to Section 4.06 of this Agreement (each, a “Holder” and collectively with the Stockholders, the “Holders”).
RECITALS:
WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as of April 20, 2026 (as amended from time to time on or prior to the date hereof, the “Merger Agreement”), among (i) the Company, (ii) Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company (the “Purchaser”), (iii) Forge Nano, Inc., a Delaware corporation (“Forge Nano”), (iv) ATII Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub I”), (v) ATII Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Purchaser (“Merger Sub II”), pursuant to which (i) the Purchaser merged with and into the Company, with the Company continuing as the surviving corporation, (ii) Merger Sub I merged with and into Forge Nano, with Forge Nano continuing as the surviving corporation (the “First Company Merger”), and immediately thereafter, Forge Nano merged with and into Merger Sub II, with Merger Sub II continuing as the surviving company (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”);
WHEREAS, the Purchaser, Archimedes Tech SPAC Sponsors II LLC, a Delaware limited liability company and a Stockholder (the “Sponsor”), BTIG, LLC and the other parties thereto are parties to that certain Registration Rights Agreement, dated as of February 10, 2025 (the “Original Registration Rights Agreement”), which shall be amended and restated by this Agreement;
WHEREAS, following the closing of the Company Mergers (the “Closing”), the Sponsor and the other Stockholders own shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) and Common Stock Equivalents (as defined herein);
WHEREAS, in connection with the Company Mergers, the Company has agreed to provide the registration rights set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE 1
Certain Definitions
Section 1.01. Definitions. As used herein, the following terms shall have the following meanings:
“Additional Piggyback Rights” has the meaning ascribed to such term in Section 2.03(a).
“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 Person. For the purposes of this definition “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such specified Person, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, neither the Company nor any Person controlled by the Company shall be deemed to be an Affiliate of any Holder.
“Agreement” has the meaning ascribed to such term in the Preamble.
“Automatic shelf registration statement” has the meaning ascribed to such term in Section 2.04.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
“Claims” has the meaning ascribed to such term in Section 2.09(a).
“Common Stock” has the meaning ascribed to such term in the recitals.
“Common Stock Equivalents” means all options, warrants and other securities convertible into, or exchangeable or exercisable for (at any time or upon the occurrence of any event or contingency and without regard to any vesting or other conditions to which such securities may be subject) shares of Common Stock (including any note or debt security convertible into or exchangeable for shares of Common Stock).
“Company” has the meaning ascribed to such term in the Preamble.
“Demand Exercise Notice” has the meaning ascribed to such term in Section 2.01(b)(i).
“Demand Registration” has the meaning ascribed to such term in Section 2.01(b)(i).
“Demand Registration Period” has the meaning ascribed to such term in Section 2.01(b)(i).
“Demand Registration Request” has the meaning ascribed to such term in Section 2.01(b)(i).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC issued under such Act, as they may from time to time be in effect.
“Expenses” means any and all fees and expenses incident to the Company’s performance of or compliance with Article 2, including: (i) SEC, stock exchange, FINRA and all other registration and filing fees and all listing fees and fees with respect to the inclusion of securities on The Nasdaq Stock Market or on any other U.S. or non-U.S. securities market on which the Registrable Securities are listed or quoted, (ii) fees and expenses of compliance with state securities or “blue sky” laws of any state or jurisdiction of the United States or compliance with the securities laws of foreign jurisdictions and in connection with the preparation of a “blue sky” survey, including reasonable fees and expenses of outside “blue sky” counsel and securities counsel in foreign jurisdictions, (iii) word processing, printing and copying expenses, (iv) messenger and delivery expenses, (v) expenses incurred in connection with any road show, (vi) fees and disbursements of counsel for the Company, (vii) with respect to each registration or underwritten offering, the reasonable fees and disbursements of one counsel for the Participating Holder(s) collectively (selected by the holders of a majority of the Registrable Securities held by such Participating Holder(s)), together in each case with any local counsel, provided that expenses payable by the Company pursuant to this clause (vii) shall not exceed (1) $150,000 for the first registration pursuant to this Agreement and (2) $100,000 for each subsequent registration, (viii) fees and disbursements of all independent public accountants (including the expenses of any opinion and/or audit/review and/or “comfort” letter and updates thereof) and fees and expenses of other Persons, including special experts, retained by the Company, (ix) fees and expenses payable to a Qualified Independent Underwriter (but expressly excluding any underwriting discounts and commissions), (x) fees and expenses of any transfer agent or custodian, (xi) any other fees and disbursements of underwriters, if any, customarily paid by issuers or sellers of securities, including reasonable fees and expenses of counsel for the underwriters in connection with any filing with or review by FINRA (but expressly excluding any underwriting discounts and commissions) and (xii) rating agency fees and expenses.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Initiating Holders” has the meaning ascribed to such term in Section 2.01(b)(i).
“Joinder Agreement” means a writing in the form set forth in Exhibit A hereto whereby a new Holder of Registrable Securities becomes a party to, and agrees to be bound, to the same extent as its transferor, as applicable, by the terms of this Agreement.
“Majority Participating Holders” means Participating Holders holding more than 50% of the Registrable Securities proposed to be included in any offering of Registrable Securities by such Participating Holders pursuant to Section 2.01 or Section 2.02.
“Manager” means the lead managing underwriter of an underwritten offering.
“Minimum Threshold” means $50.0 million.
“Opt-Out Request” has the meaning ascribed to such term in Section 4.16.
“Participating Holders” means all Holders of Registrable Securities which are proposed to be included in any offering of Registrable Securities pursuant to Section 2.01 or Section 2.02.
“Person” means any individual, firm, corporation, company, limited liability company, partnership, trust, joint stock company, business trust, incorporated or unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever.
“Piggyback Notice” has the meaning ascribed to such term in Section 2.02(a).
“Piggyback Shares” has the meaning ascribed to such term in Section 2.03(a)(ii).
“Postponement Period” has the meaning ascribed to such term in Section 2.01(c).
“Qualified Independent Underwriter” means a “qualified independent underwriter” within the meaning of FINRA Rule 5121.
“Registrable Securities” means (a) any shares of Common Stock and Common Stock Equivalents held by the Holders at any time (including those held as a result of, or issuable upon, the conversion or exercise of Common Stock Equivalents), whether now owned or acquired by the Holders at a later time, (b) any shares of Common Stock issued or issuable, directly or indirectly, in exchange for or with respect to the Common Stock referenced in clause (a) above by way of stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, share exchange, consolidation or other reorganization and (c) any securities issued in replacement of or exchange for any securities described in clause (a) or (b) above. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities whenever such Person has the right to acquire, directly or indirectly, such Registrable Securities (including upon conversion, exercise or exchange of any equity interests but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person shall not be required to convert, exercise or exchange such equity interests (or otherwise acquire such Registrable Securities) to participate in any registered offering hereunder until the closing of such offering. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (B) such securities shall have been disposed of in compliance with the requirements of Rule 144, (C) such securities have been sold in a public offering of securities or (D) such securities have ceased to be outstanding.
“Rule 144” have the meaning ascribed to such term in Section 4.02.
“SEC” means the U.S. Securities and Exchange Commission or such other federal agency which at such time administers the Securities Act.
“Section 2.03(a) Sale Number” has the meaning ascribed to such term in Section 2.03(a).
“Section 2.03(b) Sale Number” has the meaning ascribed to such term in Section 2.03(b).
“Section 2.03(c) Sale Number” has the meaning ascribed to such term in Section 2.03(c).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC issued under such Act, as they may from time to time be in effect.
“Shelf Registrable Securities” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Shelf Registration Statement” has the meaning ascribed to such term in Section 2.01(a)(i).
“Shelf Underwriting” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Shelf Underwriting Initiating Holders” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Shelf Underwriting Notice” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Shelf Underwriting Request” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Subsidiary” means any direct or indirect subsidiary of the Company on the date hereof and any direct or indirect subsidiary of the Company organized or acquired after the date hereof.
“Underwritten Block Trade” has the meaning ascribed to such term in Section 2.01(a)(ii).
“Valid Business Reason” has the meaning ascribed to such term in Section 2.01(c).
“WKSI” means a “well-known seasoned issuer” (as defined in Rule 405 of the Securities Act).
ARTICLE 2
Registration Rights
Section 2.01. Demand Registrations. (a) (i) As soon as practicable but no later than thirty (30) calendar days following the closing of the Company Mergers (the “Filing Date”), the Company shall prepare and file with the SEC a shelf registration statement under Rule 415 of the Securities Act (such registration statement, a “Shelf Registration Statement”) covering the resale of all the Registrable Securities (determined as of two business days prior to such filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf Registration Statement declared effective as soon as practicable after the filing thereof and no later than the earlier of (x) sixty (60) calendar days (or ninety (90) calendar days if the SEC notifies the Company that it will “review” the Shelf Registration Statement) following the date hereof and (y) the fifth (5th) business day after the date the Company is notified in writing by the SEC that such Shelf Registration Statement will not be “reviewed” or will not be subject to further review. Such Shelf Registration Statement shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. The Company shall maintain the Shelf Registration Statement in accordance with the terms hereof, and shall prepare and file with the SEC such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf Registration Statement continuously effective, available for use to permit all Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities.
(ii) Subject to Section 2.01(c) and the provisions below with respect to the Minimum Threshold, following the expiration of any applicable lock-up restrictions, each Holder (or Holders) shall have the right at any time and from time to time to elect to sell all or any part of its Registrable Securities pursuant to an underwritten offering pursuant to the Shelf Registration Statement by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration and the intended method of distribution thereof. The Holder or Holders shall make such election by delivering to the Company a written request (a “Shelf Underwriting Request”) for such underwritten offering specifying the number of Registrable Securities that the Holder or Holders desire to sell pursuant to such underwritten offering (the “Shelf Underwriting”). With respect to any Shelf Underwriting Request, the Holder or Holders making such demand shall be referred to as the “Shelf Underwriting Initiating Holders”. As promptly as practicable, but no later than two (2) Business Days after receipt of a Shelf Underwriting Request, the Company shall give written notice (the “Shelf Underwriting Notice”) of such Shelf Underwriting Request to the Holders of record of other Registrable Securities registered on such Shelf Registration Statement (“Shelf Registrable Securities”). The Company, subject to Sections 2.03 and 2.06, shall include in such Shelf Underwriting (x) the Registrable Securities of the Shelf Underwriting Initiating Holders and (y) the Shelf Registrable Securities of any other Holder of Shelf Registrable Securities which shall have made a written request to the Company for inclusion in such Shelf Underwriting (which request shall specify the maximum number of Shelf Registrable Securities intended to be disposed of by such Holder) within five (5) days after the receipt of the Shelf Underwriting Notice. The Company shall, as expeditiously as possible (and in any event within fifteen (15) Business Days after the receipt of a Shelf Underwriting Request), but subject to Section 2.01(b), use its reasonable best efforts to effect such Shelf Underwriting. The Company shall, at the request of any Shelf Underwriting Initiating Holder or any other Holder of Registrable Securities registered on such Shelf Registration Statement, file any prospectus supplement or, if the applicable Shelf Registration Statement is an automatic shelf registration statement, any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by the Shelf Underwriting Initiating Holders or any other Holder of Shelf Registrable Securities to effect such Shelf Underwriting. Notwithstanding anything to the contrary in this Section 2.01(a)(ii), each Shelf Underwriting must include, in the aggregate, Registrable Securities having an aggregate market value of at least the Minimum Threshold (based on the Registrable Securities included in such Shelf Underwriting by all Participating Holders). In connection with any Shelf Underwriting (including an Underwritten Block Trade), the Shelf Underwriting Initiating Holders shall have the right to designate the Manager and each other managing underwriter in connection with any such Shelf Underwriting or Underwritten Block Trade; provided that in each case, each such underwriter is reasonably satisfactory to the Company, which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, if a Shelf Underwriting Initiating Holder wishes to engage in an underwritten block trade or similar transaction or other transaction with a 2-day or less marketing period (collectively, “Underwritten Block Trade”) off of a Shelf Registration Statement, then notwithstanding the foregoing time periods, such Shelf Underwriting Initiating Holder only needs to notify the Company and the Holders of the Underwritten Block Trade five (5) Business Days prior to the day such offering is to commence and the other Holders of record of other Registrable Securities shall not be entitled to notice of such Underwritten Block Trade and shall not be entitled to participate in such Underwritten Block Trade. The Holders shall be entitled to, and shall have one (1) Business Day from receipt of such notice to determine whether to, participate in such Underwritten Block Trade.
(b) (i) If the Shelf Registration Statement required to be filed pursuant to Section 2.01(a) is not available for use by the Holders other than pursuant to Section 2.01(c) (a “Demand Registration Period”), then, at any time and from time to time during such Demand Registration Period, each Holder (or Holders) shall have the right to require the Company to effect one or more registration statements under the Securities Act covering all or any part of its Registrable Securities by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration and the intended method of distribution thereof. Any such request by any Holder or Holders pursuant to this Section 2.01(b)(i) is referred to herein as a “Demand Registration Request,” and the registration so requested is referred to herein as a “Demand Registration” (with respect to any Demand Registration, the Investor(s) making such demand for registration being referred to as the “Initiating Holders”). Subject to Section 2.01(c), each Holder shall be entitled to request (and the Company shall be required to effect) an unlimited number of Demand Registrations pursuant to this Section 2.01(b). The Company shall give written notice (the “Demand Exercise Notice”) of such Demand Registration Request to each of the Holders of record of Registrable Securities in accordance with Section 2.02, and, subject to Sections 2.03 and 2.06, shall include in a Demand Registration (x) the Registrable Securities of the Initiating Holders and (y) the Registrable Securities of any other Holder of Registrable Securities which shall have made a written request to the Company for inclusion in such registration pursuant to Section 2.02. Notwithstanding anything to the contrary in this Section 2.01(b)(i), each Demand Registration must include, in the aggregate, Registrable Securities having an aggregate market value of at least the Minimum Threshold (based on the Registrable Securities included in such Demand Registration by all Holders participating in such Demand Registration). In connection with any Demand Registration, the Initiating Holder shall have the right to designate the Manager and each other managing underwriter in connection with any underwritten offering pursuant to such registration; provided that in each case, each such underwriter is reasonably satisfactory to the Company, which approval shall not be unreasonably withheld or delayed.
(ii) The Company shall, as expeditiously as possible, but subject to Section 2.01(c), use its reasonable best efforts to (x) file or confidentially submit with the SEC (no later than (A) sixty (60) days from the Company’s receipt of the applicable Demand Registration Request if the Demand Registration is on Form S-1 or similar long-form registration or (B) thirty (30) days from the Company’s receipt of the applicable Demand Registration Request if the Demand Registration is on Form S-3 or any similar short-form registration), (y) cause to be declared effective as soon as reasonably practicable such registration statement under the Securities Act that includes the Registrable Securities which the Company has been so requested to register for distribution in accordance with the intended method of distribution, and (z) if requested by the Initiating Holders, obtain acceleration of the effective date of the registration statement relating to such registration.
(c) Notwithstanding anything to the contrary in Section 2.01(a) or Section 2.01(b), the Shelf Underwriting and Demand Registration rights granted in Section 2.01(a) and Section 2.01(b) are subject to the following limitations: (i) the Company shall not be required to file or confidentially submit a registration statement pursuant to Section 2.01(b) or cause a registration statement filed or confidentially submitted pursuant to Section 2.01(b) to be declared effective within a period of ninety (90) days after the effective date of any other registration statement of the Company filed pursuant to the Securities Act (other than a Form S-4, Form S-8 or a comparable form or an equivalent registration form then in effect); (ii) the Company shall not be required to effect more than three (3) Demand Registrations or Shelf Underwritings on Form S-1 or any similar long-form registration statement at the request of the Holders in any twelve-month period; and (iii) if the Chief Executive Officer or Chief Financial Officer of the Company, in his or her good faith judgment, determines that any registration of Registrable Securities or Shelf Underwriting should not be made or continued because it would materially and adversely interfere with any existing or potential financing, acquisition, corporate reorganization, merger, share exchange or other transaction or event involving the Company or any of its subsidiaries or would otherwise result in the public disclosure of information that the Company in good faith has a bona fide business purpose for keeping confidential (a “Valid Business Reason”), then (x) the Company may postpone filing or confidentially submitting a registration statement relating to a Demand Registration Request or a prospectus supplement relating to a Shelf Underwriting Request until five (5) Business Days after such Valid Business Reason no longer exists, but in no event for more than sixty (60) days after the date the Chief Executive Officer or Chief Financial Officer of the Company determines a Valid Business Reason exists or (y) if a registration statement has been filed or confidentially submitted relating to a Demand Registration Request or a prospectus supplement has been filed relating to a Shelf Underwriting Request, if the Valid Business Reason has not resulted in whole or in part from actions taken or omitted to be taken by the Company (other than actions taken or omitted with the consent of the Initiating Holder (not to be unreasonably withheld or delayed)), the Company may, to the extent determined in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company to be reasonably necessary to avoid interference with any of the transactions described above, suspend use of or, if required by the SEC, cause such registration statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such registration statement until five (5) Business Days after such Valid Business Reason no longer exists, but in no event for more than sixty (60) days after the date the Chief Executive Officer or Chief Financial Officer of the Company determines a Valid Business Reason exists (such period of postponement or withdrawal under this clause (iii), the “Postponement Period”). The Company shall give written notice to the Initiating Holders or Shelf Underwriting Initiating Holders and any other Holders that have requested registration pursuant to Section 2.02 of its determination to postpone or suspend use of or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or suspension or withdrawal no longer exists, in each case, promptly after the occurrence thereof; provided, however, that the Company shall not be entitled to more than two (2) Postponement Periods during any twelve (12) month period.
Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company that the Company has determined to suspend use of, withdraw, terminate or postpone amending or supplementing any registration statement pursuant to clause (c)(iii) above, such Holder will discontinue its disposition of Registrable Securities pursuant to such registration statement. If the Company shall have suspended use of, withdrawn or terminated a registration statement filed under Section 2.01(b)(i) (whether pursuant to clause (c)(iii) above or as a result of any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court), the Company shall not be considered to have effected a Demand Registration for the purposes of this Agreement and such request shall not count as a Demand Registration Request under this Agreement until the Company shall have permitted use of such suspended registration statement or filed a new registration statement covering the Registrable Securities covered by the withdrawn or terminated registration statement and such registration statement shall have been declared effective and shall not have been withdrawn. If the Company shall give any notice of suspension, withdrawal or postponement of a registration statement, the Company shall, not later than five (5) Business Days after the Valid Business Reason that caused such suspension, withdrawal or postponement no longer exists (but, with respect to a suspension, withdrawal or postponement pursuant to clause (c)(iii) above, in no event later than sixty (60) days after the date of the suspension, postponement or withdrawal), as applicable, permit use of such suspended registration statement or use its reasonable best efforts to effect the registration under the Securities Act of the Registrable Securities covered by the withdrawn or postponed registration statement in accordance with this Section 2.01 (unless the Initiating Holders or Shelf Underwriting Initiating Holders shall have withdrawn such request, in which case the Company shall not be considered to have effected a Demand Registration for the purposes of this Agreement and such request shall not count as a Demand Registration Request under this Agreement), and following such permission or such effectiveness such registration shall no longer be deemed to be suspended, withdrawn or postponed pursuant to clause (iv) of Section 2.01(c) above.
(d) No Demand Registration shall be deemed to have occurred for purposes of Section 2.01(b) (i) if the registration statement relating thereto (x) does not become effective, (y) is not maintained effective for a period of at least one hundred eighty (180) days after the effective date thereof or such shorter period during which all Registrable Securities included in such Registration Statement have actually been sold (provided, however, that such period shall be extended for a period of time equal to the period any Holder of Registrable Securities refrains from selling any securities included in such Registration Statement at the request of the Company or an underwriter of the Company), or (z) is subject to a stop order, injunction, or similar order or requirement of the SEC during such period, (ii) for each Initiating Holder, if less than seventy five percent (75%) of the Registrable Securities requested by such Initiating Holder to be included in such Demand Registration are not so included pursuant to Section 2.03, (iii) if the method of disposition is a firm commitment underwritten public offering and less than seventy five percent (75%) of the applicable Registrable Securities have not been sold pursuant thereto (excluding any Registrable Securities included for sale in the underwriters’ overallotment option) or (iv) if the conditions to closing specified in any underwriting agreement, purchase agreement or similar agreement entered into in connection with the registration relating to such request are not satisfied (other than as a result of a default or breach thereunder by such Initiating Holder(s) or its Affiliates or are otherwise waived by such Initiating Holder(s)).
(e) Any Initiating Holder may withdraw or revoke a Demand Registration Request delivered by such Initiating Holder at any time prior to the effectiveness of such Demand Registration by giving written notice to the Company of such withdrawal or revocation and such Demand Registration shall have no further force or effect and such request shall not count as a Demand Registration Request under this Agreement.
Section 2.02. Piggyback Registrations. (a) If the Company proposes or is required to register any of its Common Stock for its own account or for the account of any other shareholder under the Securities Act (other than pursuant to registrations on Form S-4 or Form S-8 or any similar successor forms thereto), the Company shall give written notice (the “Piggyback Notice”) of its intention to do so to each of the Holders of record of Registrable Securities, at least five (5) Business Days prior to the filing of any registration statement under the Securities Act. Notwithstanding the foregoing, the Company may delay any Piggyback Notice until after filing a registration statement, so long as all recipients of such notice have five (5) days to determine whether to participate in an offering pursuant to such registration statement. Upon the written request of any such Holder, made within five (5) days following the receipt of any such Piggyback Notice (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder and the intended method of distribution thereof), the Company shall, subject to Sections 2.02(c), 2.03 and 2.06 hereof, use its reasonable best efforts to cause all such Registrable Securities, the Holders of which have so requested the registration thereof, to be registered under the Securities Act with the securities which the Company at the time proposes to register to permit the sale or other disposition by the Holders (in accordance with the intended method of distribution thereof) of the Registrable Securities to be so registered, including, if necessary, by filing with the SEC a post-effective amendment or a supplement to the registration statement filed by the Company or the prospectus related thereto. There is no limitation on the number of such piggyback registrations which the Company is obligated to effect pursuant to the preceding sentence. No registration of Registrable Securities effected under this Section 2.02(a) shall relieve the Company of its obligations to effect Demand Registrations under Section 2.01 hereof. For the avoidance of doubt, this Section 2.02 shall not apply to any Underwritten Block Trade.
(b) Other than in connection with a Demand Registration or a Shelf Underwriting, at any time after giving a Piggyback Notice and prior to the effective date of the registration statement filed in connection with such registration, if the Company shall determine for any reason not to register or to delay registration of such Common Stock, the Company may, at its election, give written notice of such determination to all Holders of record of Registrable Securities and (x) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such abandoned registration, without prejudice, however, to the rights of Holders under Section 2.01, and (y) in the case of a determination to delay such registration of its Common Stock, shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other Common Stock.
(c) Any Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 2.02 by giving written notice to the Company of its request to withdraw; provided, however, that such request must be made in writing prior to the earlier of the execution by such Holder of the underwriting agreement or the execution by such Holder of the custody agreement with respect to such registration or as otherwise required by the underwriters.
Section 2.03. Allocation of Securities Included in Registration Statement. (a) If any requested registration or offering made pursuant to Section 2.01 (including a Shelf Underwriting) involves an underwritten offering and the Manager of such offering shall advise the Company in good faith that, in its view, the number of securities requested to be included in such underwritten offering by the Holders of Registrable Securities, the Company or any other Persons exercising contractual registration rights (“Additional Piggyback Rights”) exceeds the largest number of securities (the “Section 2.03(a) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Initiating Holders and the Majority Participating Holders, the Company shall include in such underwritten offering:
(i) first, all Registrable Securities requested to be included in such underwritten offering by the Holders thereof (including pursuant to the exercise of piggyback rights pursuant to Section 2.02); provided, however, that if the number of such Registrable Securities exceeds the Section 2.03(a) Sale Number, the number of such Registrable Securities (not to exceed the Section 2.03(a) Sale Number) to be included in such underwritten offering shall be allocated on a pro rata basis among all Holders (including each Initiating Holder) requesting that Registrable Securities be included in such underwritten offering (including pursuant to the exercise of piggyback rights pursuant to Section 2.02), based on the number of Registrable Securities then owned by each such Holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all Holders requesting inclusion; and
(ii) second, to the extent that the number of Registrable Securities to be included pursuant to clause (i) of this Section 2.03(a) is less than the Section 2.03(a) Sale Number, any securities that the Company proposes to register for its own account, up to the Section 2.03(a) Sale Number; and
(iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.03(a) is less than the Section 2.03(a) Sale Number, the remaining securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons other than Holders requesting that securities be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights (“Piggyback Shares”), based on the aggregate number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.03(a) Sale Number.
(b) If any registration or offering made pursuant to Section 2.02 involves an underwritten primary offering on behalf of the Company and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such underwritten offering by the Holders of Registrable Securities, the Company or any other Persons exercising Additional Piggyback Rights exceeds the largest number of securities (the “Section 2.03(b) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Company, the Company shall include in such underwritten offering:
(i) first, all equity securities that the Company proposes to register for its own account; and
(ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.03(b) is less than the Section 2.03(b) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such underwritten offering pursuant to the exercise of piggyback rights pursuant to Section 2.02(a), based on the aggregate number of Registrable Securities then owned by each such Holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all Holders requesting inclusion, up to the Section 2.03(b) Sale Number; and (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.03(b) is less than the Section 2.03(b) Sale Number, the remaining securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons requesting that Piggyback Shares be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.03(b) Sale Number.
(c) If any registration pursuant to Section 2.02 involves an underwritten offering that was initially requested by any Person(s) (other than a Holder) to whom the Company has granted registration rights which are not inconsistent with the rights granted in, and do not otherwise conflict with the terms of, this Agreement and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such underwritten offering exceeds the largest number of securities (the “Section 2.03(c) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Company, the Company shall include in such underwritten offering:
(i) first, the shares requested to be included in such underwritten offering shall be allocated on a pro rata basis among such Person(s) requesting the registration and all Holders requesting that Registrable Securities be included in such underwritten offering pursuant to the exercise of piggyback rights pursuant to Section 2.02(a), based on the aggregate number of securities or Registrable Securities, as applicable, then owned by each of the foregoing requesting inclusion in relation to the aggregate number of securities or Registrable Securities, as applicable, owned by all such Persons and Holders requesting inclusion, up to the Section 2.03(c) Sale Number; and
(ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.03(c) is less than the Section 2.03(c) Sale Number, the remaining securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons requesting that Piggyback Shares be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights, based on the aggregate number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.03(c) Sale Number; and (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.03(c) is less than the Section 2.03(c)Sale Number, any equity securities that the Company proposes to register for its own account, up to the Section 2.03(c) Sale Number.
(d) If, as a result of the proration provisions set forth in clauses (a), (b) or (c) of this Section 2.03, any Holder shall not be entitled to include all Registrable Securities in an underwritten offering that such Holder has requested be included, such Holder may elect to withdraw such Holder’s request to include Registrable Securities in the registration to which such underwritten offering relates or may reduce the number requested to be included; provided, however, that (x) such request must be made in writing prior to the earlier of such Holder’s execution of the underwriting agreement or such Holder’s execution of the custody agreement with respect to such registration and (y) such withdrawal or reduction shall be irrevocable and, after making such withdrawal or reduction, such Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal or reduction was made to the extent of the Registrable Securities so withdrawn or reduced.
Section 2.04. Registration Procedures. If and whenever the Company is required by the provisions of this Agreement to effect or cause the registration of and/or participate in any offering or sale of any Registrable Securities under the Securities Act as provided in this Agreement (or use reasonable best efforts to accomplish the same), the Company shall, as expeditiously as possible:
(a) prepare and file all filings with the SEC and FINRA required for the consummation of the offering, including preparing and filing with the SEC a registration statement on an appropriate registration form of the SEC for the disposition of such Registrable Securities in accordance with the intended method of disposition thereof, which registration form (i) shall be selected by the Company (except as provided for in a Demand Registration Request) and (ii) shall, in the case of a shelf registration, be available for the sale of the Registrable Securities by the selling Holders thereof and such registration statement shall comply as to form in all material respects with the requirements of the applicable registration form and include all financial statements required by the SEC to be filed therewith, and the Company shall use its reasonable best efforts to cause such registration statement to become effective and remain continuously effective for such period as required by this Agreement (provided, however, that as far in advance as reasonably practicable before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or state “blue sky” laws of any jurisdiction, or any free writing prospectus related thereto, the Company will furnish to the Holders participating in the planned offering and to the Manager, if any, copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to their reasonable review and reasonable comment and the Company shall not file any registration statement or amendment thereto, any prospectus or supplement thereto or any free writing prospectus related thereto to which the Initiating Holders, the Majority Participating Holders or the underwriters, if any, shall reasonably object); provided, however, that, notwithstanding the foregoing, in no event shall the Company be required to file any document with the SEC which in the view of the Company or its counsel contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make any statement therein not misleading;
(b) (i) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith and such free writing prospectuses and Exchange Act reports as may be necessary to keep such registration statement continuously effective for such period as required by this Agreement and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement, and any prospectus so supplemented to be filed pursuant to Rule 424 under the Securities Act, in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement and (ii) provide notice to such sellers of Registrable Securities and the Manager, if any, of the Company’s reasonable determination that a post-effective amendment to a registration statement would be appropriate;
(c) furnish, without charge, to each Participating Holder and each underwriter, if any, of the securities covered by such registration statement such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, each free writing prospectus utilized in connection therewith, in each case, in conformity with the requirements of the Securities Act, and other documents, as such seller and underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable laws of each such registration statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) or free writing prospectus by each such Participating Holder and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);
(d) use its reasonable best efforts to register or qualify the Registrable Securities covered by such registration statement under such other securities or state “blue sky” laws of such jurisdictions as any sellers of Registrable Securities or any managing underwriter, if any, shall reasonably request in writing, and do any and all other acts and things which may be reasonably necessary or advisable to enable such sellers or underwriter, if any, to consummate the disposition of the Registrable Securities in such jurisdictions (including keeping such registration or qualification in effect for so long as such registration statement remains in effect), except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (d), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;
(e) promptly notify each Participating Holder and each managing underwriter, if any: (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto, any post-effective amendment to the registration statement or any free writing prospectus has been filed with the SEC and, with respect to the registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or state “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose; (v) of the existence of any fact of which the Company becomes aware which results in the registration statement or any amendment thereto, the prospectus related thereto or any supplement thereto, any document incorporated therein by reference, any free writing prospectus or the information conveyed at the time of sale to any purchaser containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading; and (vi) if at any time the representations and warranties contemplated by any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct in all material respects (unless otherwise qualified by materiality in which case such representations and warranties shall cease to be true and correct in all respects); and, if the notification relates to an event described in clause (v), unless the Company has declared that a Postponement Period exists, the Company shall promptly prepare and furnish to each such seller and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading;
(f) comply (and continue to comply) with all applicable rules and regulations of the SEC (including maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) in accordance with the Exchange Act), and make generally available to its security holders (including by way of filings with the SEC), as soon as reasonably practicable after the effective date of the registration statement, an earnings statement (which need not be audited) covering the period of at least twelve (12) consecutive months beginning with the first day of the Company’s first calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) (A) use its reasonable best efforts to cause all such Registrable Securities covered by such registration statement to be listed on the principal securities exchange on which similar securities issued by the Company are then listed, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (B) if no similar securities are then so listed, use its reasonable best efforts to either cause all such Registrable Securities to be listed on a national securities exchange or to secure designation of all such Registrable Securities as a Nasdaq Stock Market “national market system security” within the meaning of Rule 11Aa2-1 of the Exchange Act or, failing that, secure Nasdaq Stock Market authorization for such shares and, without limiting the generality of the foregoing, take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the managing underwriter’s arranging for the registration of at least two market makers as such with respect to such shares with FINRA, and (ii) comply (and continue to comply) with the requirements of any self-regulatory organization applicable to the Company, including all corporate governance requirements;
(h) cause its senior management, officers and employees to participate in, and to otherwise facilitate and cooperate with the preparation of the registration statement and prospectus and any amendments or supplements thereto (including participating in meetings, drafting sessions, due diligence sessions and rating agency presentations) taking into account the Company’s reasonable business needs;
(i) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement and, in the case of any secondary equity offering, provide and enter into any reasonable agreements with a custodian for the Registrable Securities;
(j) enter into such customary agreements (including, if applicable, an underwriting agreement) and take such other actions as the Initiating Holder or the Majority Participating Holders or the underwriters shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (it being understood that the Holders of the Registrable Securities which are to be distributed by any underwriters shall be parties to any such underwriting agreement and may, at their option, require that the Company make for the benefit of such Holders the representations, warranties and covenants of the Company which are being made to and for the benefit of such underwriters);
(k) use its reasonable best efforts (i) to obtain opinions from the Company’s counsel, including local and/or regulatory counsel, and a “comfort” letter and updates thereof from the independent public accountants who have certified the financial statements of the Company (and/or any other financial statements) included or incorporated by reference in such registration statement, in each case, in customary form and covering such matters as are customarily covered by such opinions and “comfort” letters (including, in the case of such “comfort” letter, events subsequent to the date of such financial statements) delivered to underwriters in underwritten public offerings, which opinions and letters shall be dated the dates such opinions and “comfort” letters are customarily dated and otherwise reasonably satisfactory to the underwriters, if any, and (ii) furnish to each Participating Holder and to each underwriter, if any, a copy of such opinions and letters addressed to such underwriter;
(l) deliver promptly to counsel for the Majority Participating Holders and to each managing underwriter, if any, copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by counsel for the Majority Participating Holders, by counsel for any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by the Majority Participating Holders or any such underwriter, during regular business hours, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such counsel for the Majority Participating Holders, counsel for an underwriter, attorney, accountant or agent in connection with such registration statement;
(m) use its reasonable best efforts to prevent the issuance or obtain the prompt withdrawal of any order suspending the effectiveness of the registration statement, or the prompt lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, in each case, as promptly as reasonably practicable;
(n) provide a CUSIP number for all Registrable Securities, not later than the effective date of the registration statement;
(o) use its reasonable best efforts to make available its senior management for participation in “road shows” and other marketing efforts and otherwise provide reasonable assistance to the underwriters (taking into account the Company’s reasonable business needs and the requirements of the marketing process) in the marketing of Registrable Securities in any underwritten offering;
(p) promptly prior to the filing of any document which is to be incorporated by reference into the registration statement or the prospectus (after the initial filing or confidential submission of such registration statement), and prior to the filing or use of any free writing prospectus, provide copies of such document to counsel for the Majority Participating Holders and to each managing underwriter, if any, and make the Company’s representatives reasonably available for discussion of such document and make such changes in such document concerning the information regarding the Participating Holders contained therein prior to the filing thereof as counsel for the Majority Participating Holders or underwriters may reasonably request (provided, however, that, notwithstanding the foregoing, in no event shall the Company be required to file or confidentially submit any document with the SEC which in the view of the Company or its counsel contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make any statement therein not misleading);
(q) furnish to counsel for the Majority Participating Holders and to each managing underwriter, without charge, upon request, at least one conformed copy of the registration statement and any post-effective amendments or supplements thereto, including financial statements and schedules, all documents incorporated therein by reference, the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus), any other prospectus and prospectus supplement filed under Rule 424 under the Securities Act and all exhibits (including those incorporated by reference) and any free writing prospectus utilized in connection therewith;
(r) cooperate with the Participating Holders and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement upon any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the Participating Holders and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof (and, in the case of Registrable Securities registered on a Shelf Registration Statement, at the request of any Holder, prepare and deliver certificates representing such Registrable Securities not bearing any restrictive legends and deliver or cause to be delivered an opinion or instructions to the transfer agent in order to allow such Registrable Securities to be sold from time to time);
(s) include in any prospectus or prospectus supplement if requested by any managing underwriter updated financial or business information for the Company’s most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter;
(t) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Company, the Company will use its reasonable best efforts to make any such prohibition inapplicable;
(u) use its reasonable best efforts to cause the Registrable Securities covered by the applicable registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Participating Holders or the underwriters, if any, to consummate the disposition of such Registrable Securities;
(v) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities;
(w) take all reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by Section 2.01 or 2.02 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(x) in connection with any underwritten offering, if at any time the information conveyed to a purchaser at the time of sale includes any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, promptly file with the SEC such amendments or supplements to such information as may be necessary so that the statements as so amended or supplemented will not, in the light of the circumstances, be misleading;
(y) to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter; and
(z) use reasonable best efforts to cooperate with the managing underwriters, Participating Holders, any indemnitee of the Company and their respective counsel in connection with the preparation and filing of any applications, notices, registrations and responses to requests for additional information with FINRA, Nasdaq Global Market, or any other national securities exchange on which the shares of Common Stock are listed.
To the extent the Company is a WKSI at the time any Demand Registration Request is submitted to the Company, the Company shall file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “automatic shelf registration statement”) on Form S-3 which covers those Registrable Securities which are requested to be registered. If the Company does not pay the filing fee covering the Registrable Securities at the time the automatic shelf registration statement is filed, the Company agrees to pay such fee at such time or times as the Registrable Securities are to be sold in compliance with the SEC rules. If at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its reasonable best efforts to refile the shelf registration statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period which such registration statement is required to be kept effective.
If the Company files any shelf registration statement for the benefit of the holders of any of its securities other than the Holders, and the Holders do not request that their Registrable Securities be included in such Shelf Registration Statement, the Company agrees that it shall include in such registration statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such shelf registration statement at a later time through the filing of a prospectus supplement rather than a post-effective amendment.
The Company may require as a condition precedent to the Company’s obligations under this Section 2.04 that each Participating Holder as to which any registration is being effected (i) furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request (including as required under state securities laws), provided that such information is necessary for the Company to consummate such registration and shall be used only in connection with such registration and (ii) provide any underwriters participating in the distribution of such securities such information as the underwriters may request and execute and deliver any agreements, certificates or other documents as the underwriters may request.
Each Holder of Registrable Securities agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of this Section 2.04, such Holder will discontinue such Holder’s disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.04 and, if so directed by the Company, will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice. In the event the Company shall give any such notice, the applicable period mentioned in paragraph (b) of this Section 2.04 shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each Participating Holder covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.04.
The Company agrees not to file or make any amendment to any registration statement with respect to any Registrable Securities, or any amendment of or supplement to the prospectus, or any free writing prospectus, which amendment refers to any Holder covered thereby by name, or otherwise identifies such Holder, without the consent of such Holder, such consent not to be unreasonably withheld or delayed, unless such disclosure is required by law, in which case the Company shall provide written notice to such Holders no less than five (5) Business Days prior to the filing.
Section 2.05. Registration Expenses. (a) The Company shall pay all Expenses with respect to any registration or offering of Registrable Securities pursuant to Article 2, whether or not a registration statement becomes effective or the offering is consummated.
(b) Notwithstanding the foregoing, (x) the provisions of this Section 2.05 shall be deemed amended to the extent necessary to cause these expense provisions to comply with state “blue sky” laws of each state in which the offering is made and (y) in connection with any underwritten offering hereunder, each Participating Holder shall pay all underwriting discounts and commissions and any transfer taxes, if any, attributable to the sale of such Registrable Securities, pro rata with respect to payments of discounts and commissions in accordance with the number of shares sold in the offering by such Participating Holder.
Section 2.06. Certain Limitations on Registration Rights. In the case of any registration under Section 2.01 involving an underwritten offering, or, in the case of a registration under Section 2.02, if the Company has determined to enter into an underwriting agreement in connection therewith, all securities to be included in such underwritten offering shall be subject to such underwriting agreement and no Person may participate in such underwritten offering unless such Person (i) agrees to sell such Person’s securities on the basis provided therein and completes and executes all reasonable questionnaires, and other documents (including custody agreements and powers of attorney) which must be executed in connection therewith; provided, however, that all such documents shall be consistent with the provisions hereof and (ii) provides such other information to the Company or the underwriter as may be necessary to register such Person’s securities.
Section 2.07. Limitations on Sale or Distribution of Other Securities. (a) Each Holder agrees, to the extent requested by the Manager of any underwritten public offering pursuant to a registration or offering effected pursuant to Section 2.01 (including any Shelf Underwriting pursuant to Section 2.01) or Section 2.02 (including any offering effected by the Company for its own account ), not to sell, transfer or otherwise dispose of, including any sale pursuant to Rule 144, any Common Stock or Common Stock Equivalents (other than as part of such underwritten public offering) during the time period reasonably requested by the Manager, not to exceed the period from seven days prior to the pricing date of such offering until ninety (90) days after the pricing date of such offering or such shorter period as the Manager, the Company or any executive officer or director of the Company shall agree to and subject to customary carve-outs and exceptions.
(b) The Company hereby agrees that, in connection with an offering pursuant to Section 2.01 (including any Shelf Underwriting pursuant to Section 2.01(e)) or 2.02, the Company shall not sell, transfer, or otherwise dispose of, any Common Stock or Common Stock Equivalent (other than as part of such underwritten public offering, a registration on Form S-4 or Form S-8 or any successor or similar form which is (x) then in effect or (y) shall become effective upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent), until a period from seven days prior to the pricing date of such offering until ninety (90) days after the pricing date of such offering or such shorter period as the Manager, the Company or any executive officer or director of the Company shall agree to and subject to customary carve-outs and exceptions.
Section 2.08. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement. A Holder is not required to include any of its Registrable Securities in any registration statement, is not required to sell any of its Registrable Securities which are included in any effective registration statement, and may sell any of its Registrable Securities in any manner in compliance with applicable law (subject to applicable lock-up restrictions) even if such shares are already included on an effective registration statement.
Section 2.09. Indemnification. (a) In the event of any registration or offer and sale of any securities of the Company under the Securities Act pursuant to this Article 2, the Company will (without limitation as to time), and hereby agrees to, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Participating Holder, its directors, officers, employees, stockholders, members, general and limited partners, agents, affiliates, representatives, successors and assigns (and the directors, officers, employees, stockholders, members, general and limited partners, agents, affiliates, representatives, successors and assigns thereof), each other Person who participates as a seller (and its directors, officers, employees, stockholders, members, general and limited partners, agents, affiliates, representatives, successors and assigns), underwriter or Qualified Independent Underwriter, if any, in the offering or sale of such securities, each officer, director, employee, stockholder, managing director, agent, affiliate, representative, successor, assign or partner of such underwriter or Qualified Independent Underwriter, and each other Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such seller or any such underwriter or Qualified Independent Underwriter and each director, officer, employee, stockholder, managing director, agent, affiliate, representative, successor, assign or partner of such controlling Person, from and against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company’s consent) to which each such indemnified party may become subject under the Securities Act or otherwise in respect thereof (collectively, “Claims”), insofar as such Claims arise out of, are based upon, relate to or are in connection with (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such securities were registered under the Securities Act or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any untrue statement or alleged untrue statement of a material fact in the information conveyed by the Company or any underwriter to any purchaser at the time of the sale to such purchaser, or the omission or alleged omission to state therein a material fact required to be stated therein, and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in such registration statement or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus or free writing prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use therein. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such seller.
(b) Each Participating Holder shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of this Section 2.09) to the extent permitted by law the Company, its officers and its directors, each Person controlling the Company within the meaning of the Securities Act and all other prospective sellers and their directors, officers, stockholders, fiduciaries, managing directors, agents, affiliates, representatives, successors, assigns or general and limited partners and respective controlling Persons with respect to any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact from, such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus utilized in connection therewith, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company or its representatives by or on behalf of such Participating Holder specifically for use therein, and each such Participating Holder shall reimburse such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the aggregate amount which any such Participating Holder shall be required to pay pursuant to this Section 2.09 (including pursuant to indemnity, contribution or otherwise) shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of the Registrable Securities pursuant to the registration statement giving rise to such Claim; provided, further, that such Participating Holder shall not be liable in any such case to the extent that prior to the filing or confidential submission of any such registration statement or prospectus or amendment thereof or supplement thereto, or any free writing prospectus utilized in connection therewith, such Participating Holder has furnished in writing to the Company information expressly for use in such registration statement or prospectus or any amendment thereof or supplement thereto or free writing prospectus which corrected or made not misleading information previously furnished to the Company. The Company and each Participating Holder hereby acknowledge and agree that, unless otherwise expressly agreed to in writing by such Participating Holders to the contrary, for all purposes of this Agreement, the only information furnished or to be furnished to the Company for use in any such registration statement, preliminary, final or summary prospectus or amendment or supplement thereto, or any free writing prospectus, are statements specifically relating to (i) the beneficial ownership of shares of Common Stock by such Participating Holder and its Affiliates and (ii) the name and address of such Participating Holder. If any additional information about such Holder or the plan of distribution (other than for an underwritten offering) is required by law to be disclosed in any such document, then such Holder shall not unreasonably withhold its agreement referred to in the immediately preceding sentence. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding paragraphs (a) and (b) of this Section 2.09 (with appropriate modifications) shall be given by the Company and each Participating Holder with respect to any required registration or other qualification of securities under any applicable securities and state “blue sky” laws.
(d) Any Person entitled to indemnification under this Agreement shall notify promptly the indemnifying party in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 2.09, but the failure of any indemnified party to provide such notice shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 2.09, except to the extent the indemnifying party is materially and actually prejudiced thereby and shall not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under this Section 2.09. In case any action or proceeding is brought against an indemnified party and such indemnified party shall have notified the indemnifying party of the commencement thereof (as required above), the indemnifying party shall be entitled to participate therein and, unless in the reasonable opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties exists in respect of such Claim, to assume the defense thereof jointly with any other indemnifying party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party that it so chooses, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within twenty (20) days after receiving notice from such indemnified party that the indemnified party believes it has failed to do so; or (ii) if such indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal or equitable defenses available to such indemnified party which are not available to the indemnifying party or which may conflict with or be different from those available to another indemnified party with respect to such Claim; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have made a conclusion described in clause (ii) or (iii) above) and the indemnifying party shall be liable for any expenses therefor. No indemnifying party shall be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, such indemnifying party agrees to indemnify each indemnified party from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault or culpability, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable, unenforceable or is insufficient to hold harmless an indemnified party under Sections 2.09(a), (b) or (c), then each applicable indemnifying party shall contribute to the amount paid or payable to such indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to such Claim. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. If, however, the allocation provided in the second preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if any contribution pursuant to this Section 2.09(e) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentences of this Section 2.09(e). The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything in this Section 2.09(e) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this Section 2.09(e) to contribute any amount greater than the amount of the net proceeds received by such indemnifying party from the sale of Registrable Securities pursuant to the registration statement giving rise to such Claim, less the amount of any indemnification payment made by such indemnifying party pursuant to Sections 2.09(b) and (c). In addition, no Holder of Registrable Securities or any Affiliate thereof shall be required to pay any amount under this Section 2.09(e) unless such Person or entity would have been required to pay an amount pursuant to Section 2.09(b) if it had been applicable in accordance with its terms.
(f) The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party.
(g) The indemnification and contribution required by this Section 2.09 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.
ARTICLE 3
Underwritten Offerings
Section 3.01. Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 2.01, the Company shall enter into a customary underwriting agreement with the underwriters. Such underwriting agreement shall (i) be satisfactory in form and substance to the Initiating Holders and the Majority Participating Holders, (ii) contain terms not inconsistent with the provisions of this Agreement and (iii) contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of that type, including indemnities and contribution agreements on substantially the same terms as those contained herein or as otherwise customary for the lead underwriter. Every Participating Holder shall be a party to such underwriting agreement. Each Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than customary representations of a selling shareholder, including representations, warranties or agreements regarding its ownership of and title to the Registrable Securities, any written information specifically provided by such Participating Holder for inclusion in the registration statement and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement for indemnity, contribution or otherwise shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of Registrable Securities pursuant to such registration statement and in no event shall relate to anything other than information about such Holder specifically provided by such Holder for use in the registration statement and prospectus.
Section 3.02. Piggyback Underwritten Offerings. In the case of a registration pursuant to Section 2.02, if the Company shall have determined to enter into an underwriting agreement in connection therewith, all of the Participating Holders’ Registrable Securities to be included in such registration shall be subject to such underwriting agreement. Each such Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than customary representations of a selling shareholder, including representations, warranties or agreements regarding its ownership of and title to the Registrable Securities, any written information specifically provided by such Participating Holder for inclusion in the registration statement and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of Registrable Securities pursuant to such registration statement and in no event shall relate to anything other than information about such Holder specifically provided by such Holder for use in the registration statement and prospectus.
ARTICLE 4
General
Section 4.01. Adjustments Affecting Registrable Securities. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Registrable Securities, to any and all shares of capital stock of the Company, any successor or assign of the Company (whether by merger, share exchange, consolidation, sale of assets or otherwise) or any Subsidiary or parent company of the Company which may be issued in respect of, in exchange for or in substitution of, Registrable Securities and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.
Section 4.02. Rule 144. The Company covenants that (i) so long as it remains subject to the reporting provisions of the Exchange Act, it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1)(i) of Rule 144 under the Securities Act, as such Rule may be amended (“Rule 144”)) or, if the Company is not required to file such reports, it will, upon the request of any Holder, make publicly available other information so long as necessary to permit sales by such Holder under Rule 144, or any similar rules or regulations hereafter adopted by the SEC, and (ii) it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144, or any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will promptly deliver to such Holder a written statement as to whether it has complied with such requirements.
Section 4.03. Nominees for Beneficial Owners. If Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders of Registrable Securities pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Securities held by any Holder or Holders of Registrable Securities contemplated by this Agreement); provided, however, that the Company shall have received evidence reasonably satisfactory to it of such beneficial ownership.
Section 4.04. Amendments and Waivers. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or any Holder unless such modification, amendment or waiver is approved in writing by the Company and the Holders holding a majority of the Registrable Securities then held by all Holders; provided that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a Holder of Registrable Securities, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No failure or delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof or of any other or future exercise of any such right, power or privilege.
Section 4.05. Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) if personally delivered, on the date of delivery, (ii) if delivered by express courier service of national standing (with charges prepaid), on the Business Day following the date of delivery to such courier service, (iii) if deposited in the United States mail, first-class postage prepaid, on the fifth (5th) Business Day following the date of such deposit, (iv) if delivered by facsimile transmission, upon confirmation of successful transmission, (x) on the date of such transmission, if such transmission is completed at or prior to 5:00 p.m., local time of the recipient party on a Business Day, and (y) on the next Business Day following the date of transmission, if such transmission is completed after 5:00 p.m., local time of the recipient party, or is transmitted on a day that is not a Business Day, or (v) if via e-mail communication, on the date of delivery. All notices, demands and other communications hereunder shall be delivered as set forth below and to any subsequent holder of Stock subject to this Agreement at such address as indicated by the Company’s records, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
if to the Company, to:
ATII Holdings Inc.
12300 Grant St. #100
Thornton, CO 80241
Attn: Paul Lichty, CEO
E-mail: [*********] with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Benjamin M. Goodchild
E-mail: [*********]
if to any Holder, to the address set forth opposite the name of such Holder on the signature pages hereto or such other address indicated in the records of the Company.
Section 4.06. Successors and Assigns. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors, permitted assigns, heirs and personal representatives of the parties hereto, whether so expressed or not. This Agreement may not be assigned by the Company without the prior written consent of the Holders. No Holder shall have the right to assign all or part of its or his rights and obligations under this Agreement to any Person without the consent of the Company (not to be unreasonably withheld or delayed) unless such Person duly executes and delivers to the Company a Joinder Agreement. Upon any such assignment, such assignee shall have and be able to exercise and enforce all rights of the assigning Holder which are assigned to it and, to the extent such rights are assigned, any reference to the assigning Holder shall be treated as a reference to the assignee. If any Holder shall acquire additional Registrable Securities, such Registrable Securities shall be subject to all of the terms, and entitled to all the benefits, of this Agreement. Additional Persons may become parties to this Agreement as Holders with the consent of the Company (not to be unreasonably withheld or delayed), by executing and delivering to the Company the Joinder Agreement.
Section 4.07. Termination. (a) The obligations of the Company and a Holder under this Agreement, in each case solely with respect to such Holder, will terminate upon the earlier of:
(i) the first date on which such Holder no longer holds any Registrable Securities; or
(ii) the first date on which such the Holder is eligible to sell its Registrable Securities pursuant to Rule 144 (without limitation as to volume or manner of sale).
(b) Notwithstanding clause (a) above, Section 2.05, Section 2.09, Section 4.09 and Section 4.13 shall survive termination of this Agreement.
Section 4.08. Entire Agreement. This Agreement and the other documents referred to herein or delivered pursuant hereto which form part hereof constitute the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.
Section 4.09. Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.
(b) Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement may be brought against any of the parties in the United States District Court for the Southern District of New York or any New York state court located in New York, New York, and each of the parties hereby consents to the exclusive jurisdiction of such court (and of the appropriate appellate courts) in any such suit, action or proceeding and waives any objection to venue laid therein. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
Section 4.10. Interpretation; Construction. (a) The table of contents and headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
(b) The parties have participated jointly in negotiating and drafting this Agreement. In the event that 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.
Section 4.11. Counterparts. This Agreement may be executed and delivered in any number of separate counterparts (including by facsimile or electronic mail), each of which shall be an original, but all of which together shall constitute one and the same agreement.
Section 4.12. 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 hereof. If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such 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 such provision, or the application thereof, in any other jurisdiction.
Section 4.13. Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party hereto and, accordingly, that this Agreement shall be specifically enforceable, in addition to any other remedy to which such injured party is entitled at law or in equity, and that any breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach or an award of specific performance is not an appropriate remedy for any reason at law or equity and agrees that a party’s rights would be materially and adversely affected if the obligations of the other parties under this Agreement were not carried out in accordance with the terms and conditions hereof. Each party further agrees that no party shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtain any remedy referred to in this Section 4.13, and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
Section 4.14. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 4.15. Opt-Out Requests. Each Holder shall have the right, at any time and from time to time (including after receiving information regarding any potential public offering), to elect to not receive any notice that the Company or any other Holders otherwise are required to deliver pursuant to this Agreement by delivering to the Company a written statement signed by such Holder that it does not want to receive any notices hereunder (an “Opt-Out Request”); in which case and notwithstanding anything to the contrary in this Agreement the Company and other Holders shall not be required to, and shall not, deliver any notice or other information required to be provided to Holders hereunder to the extent that the Company or such other Holders reasonably expect would result in a Holder acquiring material non-public information within the meaning of Regulation FD promulgated under the Exchange Act. An Opt-Out Request may state a date on which it expires or, if no such date is specified, shall remain in effect indefinitely. A Holder who previously has given the Company an Opt-Out Request may revoke such request at any time, and there shall be no limit on the ability of a Holder to issue and revoke subsequent Opt-Out Requests; provided that each Holder shall use commercially reasonable efforts to minimize the administrative burden on the Company arising in connection with any such Opt-Out Requests.
Section 4.16. Original Registration Rights Agreement. The Sponsor hereby agrees that upon effectiveness of this Agreement by the Sponsor, the Original Registration Rights Agreement shall be automatically terminated and superseded in its entirety by this Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
| THE COMPANY: | |||
| ATII HOLDINGS INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
[Signature Page to Amended and Restated Registration Rights Agreement]
| HOLDERS | |||
| [__] | |||
| By: | |||
| Name: | |||
| Title: | |||
| Name: | |||
| Name: | |||
[Signature Page to Amended and Restated Registration Rights Agreement]
Exhibit A
JOINDER AGREEMENT
This Joinder Agreement (this “Joinder Agreement”) is made as of [__], by [and among [__] (the “Transferring Holder”) and] [__] (the “New Holder”), in accordance with that certain Amended and Restated Registration Rights Agreement, dated as of [__], 2026 (as amended from time to time, the “Agreement”), by and among ATII HOLDINGS INC. (the “Company”) and the other Holders party thereto.
WHEREAS, the Agreement requires the New Holder to become a party to the Agreement by executing this Joinder Agreement, and upon the New Holder signing this Joinder Agreement, the Agreement will be deemed to be amended to include the New Holder as a Holder thereunder;
NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Party to the Agreement. By execution of this Joinder Agreement, as of the date hereof the New Holder is hereby made a party to the Agreement as a Holder. The New Holder hereby agrees to become a party to the Agreement and to be bound by, and subject to, all of the representations, covenants, terms and conditions of the Agreement in the same manner as if the New Holder were an original signatory to the Agreement. Execution and delivery of this Joinder Agreement by the New Holder shall also constitute execution and delivery by the New Holder of the Agreement, without further action of any party.
Section 2. Defined Terms. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement unless otherwise noted.
Section 3. Representations and Warranties of the New Holder.
3.1. Authorization. The New Holder has all requisite power and authority and has taken all action necessary in order to duly and validly approve the New Holder’s execution and delivery of, and performance of its obligations under, this Joinder Agreement. This Joinder Agreement has been duly executed and delivered by the New Holder and constitutes a legal, valid and binding agreement of the New Holder, enforceable against the New Holder in accordance with its terms.
3.2. No Conflict. The New Holder is not under any obligation or restriction, nor shall it assume any such obligation or restriction, that does or would materially interfere or conflict with the performance of its obligations under this Joinder Agreement.
Section 4. Further Assurances. The parties agree to execute and deliver any further instruments or perform any acts which are or may become necessary to effectuate the purposes of this Joinder Agreement.
Section 5. Governing Law. This Joinder Agreement will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.
Section 6. Counterparts. This Joinder Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument.
Section 7. Entire Agreement. This Joinder Agreement and the Agreement contain the entire understanding, whether oral or written, of the parties hereto with respect to the matters covered hereby. Any amendment or change in this Joinder Agreement shall not be valid unless made in writing and signed by each of the parties hereto.
[Signature pages follow]
IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned parties have executed this Joinder Agreement as of the date first above written.
| [TRANSFERRING HOLDER] | |||
| [_____] | |||
| By: | |||
| Name: | |||
| Title: | |||
| NEW HOLDER | |||
| [_____] | |||
| By: | |||
| Name: | |||
| Title: | |||
| NEW HOLDER | |||
| [_____] | |||
| By: | |||
| Name: | |||
| Title: | |||
| Notice Address: [_____________________] | |||
| [_____] | |||
| [_____] | |||
| Attn: [ ] | |||
| Facsimile: [ ] | |||
Accepted and Agreed to as of
the date first written above:
COMPANY
[ATII HOLDINGS INC.]
| By: | ||
| Name: | ||
| Title: |
Exhibit 10.4
Execution Version
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Subscription Agreement”) is being entered into as of the date set forth on the signature page to this Subscription Agreement, by and among ATII Holdings Inc., a Delaware corporation (the “Issuer”), Forge Nano, Inc., Delaware corporation (“Forge Nano”), Archimedes Tech SPAC Partners II Co., a Cayman Islands exempted company limited by shares (the “SPAC”) (solely with respect to Sections 12 and 14 hereof), and the undersigned (the “Investor”). The Subscription Agreement is entered into in connection with the Agreement and Plan of Merger, dated April 20, 2026 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Issuer, the SPAC, Forge Nano and the other parties thereto. The transactions contemplated by the Merger Agreement are referred to in this Subscription Agreement as the “Transaction” and the purchase and sale of the Securities (as defined below) pursuant to this Subscription Agreement are referred to in this Subscription Agreement as the “Subscription Transaction.” The Issuer may enter into one or more subscription agreements (the “Other Subscription Agreements” and together with this Subscription Agreement, the “Subscription Agreements”) with certain other investors (the “Other Investors,” and together with the Investor, the “Investors”).
As set forth on the signature page to this Subscription Agreement, the aggregate purchase price to be paid by the Investor for the subscribed shares of Common Stock (which means Pubco Common Stock, as defined in the Merger Agreement) and Warrants (as defined below) is referred to in this Subscription Agreement as the “Subscription Amount.”
In consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, set forth in this Subscription Agreement, and intending to be legally bound under this Subscription Agreement, each of the Investor, the Issuer and Forge Nano acknowledges and agrees as follows:
1. Subscription.
(a) Subject to Section 13, the Investor irrevocably subscribes for and agrees to purchase from the Issuer the number of shares of Common Stock and Warrants set forth on the signature page to this Subscription Agreement, and the Issuer irrevocably agrees to issue and sell to the Investor such shares of Common Stock and such Warrants, in each case, on the terms and subject to the conditions provided for in this Subscription Agreement.
(b) If on the 24th month anniversary of the Closing Date (as defined below) the Investor certifies in writing to the Issuer that it beneficially owns at least 5,000,000 shares of Common Stock and provides any information reasonably requested by the Issuer with respect to such beneficial ownership, the Issuer shall issue to the Investor additional warrants (the “Additional Warrants”) entitling the Investor to receive from the Issuer additional 5,000,000 shares of Common Stock (giving effect to any reclassification, recapitalization, share division or consolidation, exchange or readjustment of the Common Stock that may have occurred during the period from the Closing to and prior to the issuance of the Additional Warrants), such Additional Warrants to have the same termination date as the Termination Date of, and to contain substantially the same terms and conditions as, the Warrants as set forth in the Warrant Certificate, provided that if the Exercise Price of the Warrants has been adjusted in accordance with Section 3(c) of the Warrant Certificate, the initial exercise price of the Additional Warrants shall be the same as the Exercise Price after giving effect to such adjustment.
(c) [Reserved].
(d) In the event that on the 21st Trading Day following the six-month anniversary of the Closing (the “Reset Termination Date”), the VWAP of the Common Stock is less than the Exercise Price then in effect, the Investor shall receive, a number of additional warrants equal to (i) the product of (x) 10,000,000 times (y) the Exercise Price then in effect divided by the Reset Price minus (ii) 10,000,000 (such warrants, the “Reset Warrants”). The Reset Warrants shall have the same termination date as the Termination Date of, and contain substantially the same terms and conditions as, the Warrants as set forth in the Warrant Certificate, provided that the Reset Warrants shall be issued with an initial exercise price equal to the Reset Price, where “Reset Price” means the greater of (x) the VWAP of the Common Stock on the 21st Trading Day following the six-month anniversary of the Closing or (y) the Reset Floor, and where “Reset Floor” means (A) if, as of the Closing, the Issuer or any of its subsidiaries, including Forge Nano or any of its subsidiaries, is party to a binding agreement with a financing source reasonably acceptable to the Investor pursuant to which such financing source has committed to provide debt financing in amount at least equal to $200,000,000, subject only to customary funding conditions (as determined in good faith by the Issuer), and such debt financing has been publicly disclosed prior to or in connection with the Closing, $7.28 or (B) otherwise, $5.00.
2. Closing.
(a) The closing of the Subscription Transaction (the “Closing”) is contingent upon the substantially concurrent consummation of the Transaction. The Closing shall occur on the date of, and substantially concurrently with and conditioned upon the effectiveness of, the Transaction upon (a) satisfaction or waiver of the conditions set forth in this Section 2 and in Section 3 below and (b) delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”) that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on a date that is not less than five Business Days from the date on which the Closing Notice is delivered to the Investor.
(b) At least three Business Days prior to the closing date specified in the Closing Notice (the “Closing Date”), the Investor shall deliver to the Issuer: (i) the Subscription Amount by wire transfer of United States dollars in immediately available funds to the account(s) specified by the Issuer in the Closing Notice, thereby subscribing for the shares of Common Stock and Warrants, to be held in escrow until the Closing; and (ii) any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue to the Investor the shares of Common Stock and Warrants. Without limiting the generality of the foregoing, such information shall include the legal name of the person in whose name such shares of Common Stock and Warrants are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable.
(c) On the Closing Date:
(i) the Issuer shall cause its transfer agent to register the shares of Common Stock set forth on the signature page to this Subscription Agreement in book-entry form, free and clear of any liens, encumbrances or other restrictions (other than those arising under this Subscription Agreement or applicable securities laws) in the name of the Investor; and
(ii) the Issuer shall issue to the Investor Warrants registered in the name of the Investor to purchase up to 15,000,000 shares of Common Stock with an exercise price equal to $10.00 per share, subject to adjustment as set forth therein.
The Issuer shall use commercially reasonable efforts to provide a copy of its transfer agent’s records showing the Investor as the owner of such shares of Common Stock as soon as practically possible following the Closing Date.
(d) Notwithstanding the foregoing, the Issuer’s obligation to issue the shares of Common Stock and Warrants to the Investor is contingent upon the Issuer having received the Subscription Amount in full in accordance with this Section 2. If the Closing does not occur within three (3) Business Days following the Closing Date specified in the Closing Notice, the Issuer shall promptly (but not later than one (1) Business Day thereafter) return the Subscription Amount in full to the Investor by wire transfer of U.S. dollars in immediately available funds to the account specified by the Investor.
3. Closing Conditions.
(a) The parties’ obligation to consummate the Subscription Transaction pursuant to this Subscription Agreement is subject to the following conditions:
(i) no suspension of the offering or sale of the Common Stock or Warrants shall have been initiated or, to the Issuer’s knowledge, threatened by the U.S. Securities and Exchange Commission (the “SEC”);
(ii) no applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect making the consummation of the transactions contemplated under this Subscription Agreement illegal or otherwise restraining or prohibiting consummation of the transactions contemplated under this Subscription Agreement and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition; and
(iii) as determined by the parties to the Merger Agreement and other than those conditions under the Merger Agreement which, by their nature, are to be fulfilled at the closing of the Transaction, including to the extent that any such condition is dependent upon the consummation of the Subscription Transaction pursuant to this Subscription Agreement, all conditions precedent to the closing of the Transaction contained in the Merger Agreement shall have been satisfied or waived and the closing of the Transaction shall be scheduled to occur concurrently with or on the same date as the Closing Date.
(b) The Issuer’s obligation to consummate the Subscription Transaction pursuant to this Subscription Agreement shall be subject to the conditions that:
(i) all representations and warranties of the Investor contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date;
(ii) consummation of the Closing shall constitute a reaffirmation by the Investor of each of the representations and warranties of the Investor contained in this Subscription Agreement as of the Closing Date or such earlier date, as applicable; and
(iii) all obligations, covenants and agreements of the Investor required to be performed by it at or prior to the Closing Date shall have been performed in all material respects.
(c) The Investor’s obligation to consummate the Subscription Transaction pursuant to this Subscription Agreement shall be subject to the conditions that:
(i) all representations and warranties made by the Issuer and Forge Nano in Section 5 hereof shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Issuer Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects) at and as of the Closing Date;
(ii) consummation of the Closing shall constitute a reaffirmation by the Issuer and Forge Nano of each of the representations and warranties of the Issuer and Forge Nano contained in this Subscription Agreement as of the Closing Date;
(iii) all obligations, conditions, covenants and agreements required by this Subscription Agreement to be performed by the Issuer and Forge Nano at or prior to the Closing Date shall have been performed, satisfied or complied with in all material respects;
(iv) no suspension of the qualification of the Common Stock for offering or trading in any jurisdiction, or initiation or written threats of any proceedings for any of such purposes, shall have occurred and be continuing;
(v) no amendment, modification or waiver of the Merger Agreement from and after the date of this Subscription Agreement shall have occurred that reasonably would be expected to materially and adversely affect the economic benefits that the Investor reasonably would expect to receive under this Subscription Agreement without having received the Investor’s prior written consent;
(vi) the Issuer shall have filed with applicable national stock exchange (as defined in Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (the “Stock Exchange”) an application or supplemental listing application for the listing of the Warrant-Related Shares (as defined below) and Common Stock and such Warrant-Related Shares and Common Stock shall have been approved for listing, subject to official notice of issuance; and
(vii) there shall have been no amendment, waiver or modification to the Other Subscription Agreements that gives rise to benefits to the Other Investors unless the Investor has been offered the same benefits.
4. Further Assurances. At or prior to the Closing Date, the parties shall execute and deliver, or cause to be executed and delivered, such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the subscription as contemplated by this Subscription Agreement.
5. The Issuer’s and Forge Nano’s Representations and Warranties.
5.1 The Issuer represents and warrants to the Investor that as of the date of this Subscription Agreement and as of the Closing Date:
(a) The Issuer is a Delaware corporation, duly formed, validly existing and in good standing under the Laws of the State of Delaware, with the requisite corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.
(b) As of the Closing Date, the Securities have been duly authorized and the shares of Common Stock, when issued and delivered to the Investor against full payment for the shares of Common Stock in accordance with the terms of this Subscription Agreement, and registered with the Issuer’s transfer agent, will be validly issued, fully paid, non-assessable and free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws or as set forth herein), and will not be issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents or any agreement or other instrument to which the Issuer is a party or by which it is otherwise bound.
(c) As of the Closing Date, the Warrant-Related Shares issuable upon exercise of Warrants have been duly authorized and provision has been made for the issuance of the Warrant-Related Shares upon exercise of Warrants. When issued and delivered against payment of the exercise price pursuant to the terms of Warrants and the Warrant Agreement, the Warrant-Related Shares will be validly issued, fully paid and non-assessable, and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents (as adopted on the Closing Date) or any agreement or other instrument to which the Issuer is a party or by which it is otherwise bound.
(d) This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and is a valid and binding obligation of the Issuer, enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(e) The execution, delivery and performance of this Subscription Agreement (including compliance by the Issuer with all of the provisions hereof), the issuance and sale of the Securities and the consummation of the certain other transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations, financial condition, prospects, stockholders’ equity or results of operations of the Issuer or materially and adversely affect the validity of the Securities or the legal authority or ability of the Issuer to comply in all material respects with the terms of this Subscription Agreement (an “Issuer Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of the Issuer in any material respect; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any Authority having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.
(f) Neither the Issuer, nor any person acting on its behalf has, directly or indirectly, made any offers or sales of any Issuer security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Issuer on Section 4(a)(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration of the issuance or sale of the Securities under the Securities Act.
(g) Neither the Issuer nor any person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities and neither the Issuer, nor any person acting on its behalf has offered any of the Securities in a manner involving any public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.
(h) The Issuer has not taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation, administration or winding up or failed to pay its debts when due, nor does the Issuer have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or seek to commence an administration.
(i) As of the date hereof, except as set forth in the SEC Documents (as defined below), the Other Subscription Agreements, the Merger Agreement and any promissory notes issued by the SPAC’s sponsor or its affiliate to the SPAC for working capital purposes as described in the SEC Documents (“Sponsor Loans”), there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Issuer any Common Stock or other equity interests in the Issuer, or securities convertible into or exchangeable or exercisable for such equity interests. As of the date hereof, other than any subsidiary created for purposes of the Transaction, the Issuer has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Issuer is a party or by which it is bound relating to the voting of any securities of the Issuer, other than (A) as set forth in the SPAC’s filings with the SEC, together with any amendments, restatements or supplements thereto (the “SEC Documents”) and (B) as contemplated by the Merger Agreement. Except as disclosed in the SEC Documents, the Issuer has no outstanding indebtedness and will not have any outstanding long-term indebtedness as of immediately prior to the Closing (excluding any Sponsor Loans).
(j) Assuming the accuracy of Investor’s representations and warranties set forth in this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Securities by the Issuer to the Investor and the Securities are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.
(k) Except as disclosed in the SEC Documents, the SPAC has made all filings required to be filed by it with the SEC and, as of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that the Issuer makes no such representation or warranty with respect to any information relating to Forge Nano or any of its affiliates included in any SEC Document or filed as an exhibit thereto. Each of the financial statements of the SPAC included in the SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the SPAC as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. As of the date hereof, there are no outstanding or unresolved comments in comment letters from the SEC Staff with respect to any of the SEC Documents.
(l) Other than the Other Subscription Agreements, the Merger Agreement and any other agreement expressly contemplated by the Merger Agreement, neither the Issuer nor the SPAC has entered into any side letter or similar agreement with any Other Investor or any other investor in connection with such Other Investor’s or investor’s investment in the Issuer. No Other Subscription Agreement includes a price per Security different from this Subscription Agreement or other terms, rights or conditions that are more advantageous (economically or otherwise) in any material respect to any such Other Investor than Investor hereunder, and such Other Subscription Agreements have not been amended or modified in any material respect following the date of this Subscription Agreement in any manner that materially benefits the Other Investor thereunder unless Investor has been granted the same benefits.
(m) The Issuer is not, and immediately after receipt of payment for the Securities will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(n) As of the date of this Subscription Agreement, the Issuer has not received any written communication from a governmental entity that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably expected to have an Issuer Material Adverse Effect.
(o) Except for such matters as have not had and would not be reasonably expected to have, individually or in the aggregate, an Issuer Material Adverse Effect, as of the date of this Subscription Agreement, there is no (i) action, claim, inquiry, arbitration, investigation, litigation or other proceeding pending, or, to the knowledge of the Issuer, threatened against the Issuer or (ii) judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Issuer.
(p) Except for discussions specifically regarding the offer and sale of the Securities and the investor presentation, the Issuer confirms that neither it nor any other person acting on its behalf has provided the Investor or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning the Issuer, the SPAC or any of their subsidiaries, other than with respect to the Transaction and the transactions contemplated by this Subscription Agreement, the Other Subscription Agreements or the Merger Agreement. Except with respect to the Transaction and the transactions contemplated by this Subscription Agreement, the Other Subscription Agreements and the Merger Agreement, no event or circumstance has occurred which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Issuer but which has not been so publicly disclosed.
(q) With respect to the distribution of information to the Investor (if a Foreign Purchaser (as defined below)) or any Other Investor that are Foreign Purchasers, the Issuer has and will comply with the regulations associated with the CFIUS. Without limiting the foregoing, the Issuer represents, warrants and agrees that it has not provided and does not intend to provide and will take measure to prevent the provision to any Foreign Purchasers any (i) access to any material non-public technical information (as defined in 31 C.F.R. §801.208) in the possession of the Issuer, or (ii) involvement, other than through the voting of shares, in substantive decision-making of the Issuer regarding the use, development, acquisition or release of critical technology (as defined in 31 C.F.R §801.204).
5.2 Forge Nano represents and warrants to the Investor that as of the date of this Subscription Agreement and as of the Closing Date:
(a) Forge Nano is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Forge Nano Material Adverse Effect (as defined below).
(b) This Subscription Agreement has been duly authorized, executed and delivered by Forge Nano and is a valid and binding obligation of Forge Nano, enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(c) The execution, delivery and performance of this Subscription Agreement (including compliance by Forge Nano with all of the provisions hereof), the issuance and sale of the Securities and the consummation of certain other transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Forge Nano pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Forge Nano is a party or by which Forge Nano is bound or to which any of the property or assets of Forge Nano is subject, which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations, financial condition, prospects, stockholders’ equity or results of operations of Forge Nano or materially and adversely affect the validity of the Securities or the legal authority or ability of Forge Nano to comply in all material respects with the terms of this Subscription Agreement (a “Forge Nano Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of Forge Nano which would, individually or in the aggregate, reasonably be expected to have a Forge Nano Material Adverse Effect; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any governmental agency or body having jurisdiction over Forge Nano or any of its properties that would reasonably be expected to have, individually or in the aggregate, a Forge Nano Material Adverse Effect.
(d) Neither Forge Nano, nor any person acting on its behalf has, directly or indirectly, made any offers or sales of any Issuer security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by Forge Nano on Section 4(a)(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration of the issuance or sale of the Securities under the Securities Act.
(e) Neither Forge Nano nor any person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities and neither Forge Nano, nor any person acting on its behalf has offered any of the Securities in a manner involving any public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.
(f) Forge Nano has not taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation, administration or winding up or failed to pay its debts when due, nor does Forge Nano have any knowledge or reason to believe that any of its respective creditors intend to initiate involuntary bankruptcy proceedings or seek to commence an administration.
(g) Assuming the accuracy of Investor’s representations and warranties set forth in this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Securities and the Securities are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.
(h) Other than the Other Subscription Agreements, the Merger Agreement and any other agreement expressly contemplated by the Merger Agreement, Forge Nano has not entered into any side letter or similar agreement with any Other Investor or any other investor in connection with such Other Investor’s or investor’s investment in Forge Nano (in each case for investments that will occur on or about the time of the Investor’s investment). No Other Subscription Agreement includes a price per Security different from this Subscription Agreement or other terms, rights or conditions that are more advantageous (economically or otherwise) in any material respect to any such Other Investor than Investor hereunder, and such Other Subscription Agreements have not been amended or modified in any material respect following the date of this Subscription Agreement in any manner that materially benefits the Other Investor thereunder unless Investor has been granted the same benefits.
(i) Forge Nano is not, and immediately after receipt of payment for the Securities will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(j) As of the date of this Subscription Agreement, Forge Nano has not received any written communication from a governmental entity that alleges that Forge Nano is not in compliance with or is in default or violation of any applicable law, except where such non- compliance, default or violation would not, individually or in the aggregate, be reasonably expected to have a Forge Nano Material Adverse Effect.
(k) Except for such matters as have not had and would not be reasonably expected to have, individually or in the aggregate, a Forge Nano Material Adverse Effect, as of the date of this Subscription Agreement, there is no (i) action, claim, inquiry, arbitration, investigation, litigation or other proceeding pending, or, to the knowledge of Forge Nano, threatened against Forge Nano or (ii) judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against Forge Nano.
(l) Except for discussions specifically regarding the offer and sale of the Securities and the investor presentation by the Issuer and Forge Nano, Forge Nano confirms that neither it nor any other person acting on its behalf has provided Investor or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning Forge Nano or any of its subsidiaries, other than with respect to the Transaction and the transactions contemplated by this Subscription Agreement or the Other Subscription Agreements. Except with respect to the Transaction and the transactions contemplated by this Subscription Agreement and the Other Subscription Agreements, no event or circumstance has occurred which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by Forge Nano but which has not been so publicly disclosed.
(m) With respect to the distribution of information to Investor, if Investor is not a United States person as defined by Section 7701(a)(30)) of the Internal Revenue Code of 1986, as amended (any such Investor, a “Foreign Purchaser”) or any Other Investor that are Foreign Purchasers, Forge Nano has and will comply with the regulations associated with the U.S. Committee on Foreign Investment in the United States. Without limiting the foregoing, Forge Nano represents, warrants and agrees that it has not provided and does not intend to provide and will take measures to prevent the provision to any Foreign Purchasers any (i) access to any material non-public technical information (as defined in 31 C.F.R. §801.208) in the possession of Forge Nano, or (ii) involvement, other than through the voting of shares, in substantive decision-making of Forge Nano regarding the use, development, acquisition or release of critical technology (as defined in 31 C.F.R §801.204).
6. Investor Representations and Warranties. The Investor represents and warrants to the Issuer, Forge Nano, the SPAC and the Placement Agents that as of the date of this Subscription Agreement and as of the Closing Date:
(a) The Investor: (i) has been duly formed or incorporated and is validly existing and in good standing under the laws of its jurisdiction of formation or incorporation; and (ii) has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement.
(b) This Subscription Agreement has been duly authorized, executed and delivered by the Investor. Assuming the due authorization, execution and delivery of the same by the Issuer, this Subscription Agreement shall constitute the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The execution, delivery and performance of this Subscription Agreement, the purchase of the Securities, the compliance by the Investor with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated in this Subscription Agreement will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Investor pursuant to the terms of: (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Investor is a party or by which the Investor is bound or to which any of the property or assets of the Investor is subject; (ii) the organizational documents of the Investor; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Investor or any of its properties that in the case of clauses (i) and (iii), would reasonably be expected to have a material adverse effect on the Investor’s ability to consummate the transactions contemplated in this Subscription Agreement, including the purchase of the Securities.
(d) The Investor, or each of the funds managed by or affiliated with the Investor for which the Investor is acting as nominee is, and on each date on which it exercises any Warrants will be: (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), or an institutional “accredited investor” (within the meaning of Rule 501(a) (1), (2), (3) or (7) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A; (ii) acquiring the Securities only for his, her or its own account and not for the account of others, or if the Investor is subscribing for the Securities as a fiduciary or agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, warranties and agreements in this Subscription Agreement on behalf of each owner of each such account; and (iii) not acquiring the Securities with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information set forth on Schedule A). The Investor is not an entity formed for the specific purpose of acquiring the Securities. The Investor understands that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J). The Investor has completed Schedule A following the signature page to this Subscription Agreement and the information contained on Schedule A is, and on each date on which the Investor exercises any Warrants will be, accurate and complete.
(e) The Investor, or each of the funds managed by or affiliated with the Investor for which the Investor is acting as nominee on the date hereof and on each date on which it exercises any Warrants: (i) is and will be an institutional account as defined in FINRA Rule 4512(c); (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; and (iii) has and will have exercised independent judgment in evaluating our participation in the purchase of the Securities. Accordingly, it is understood that the offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
(f) The Investor acknowledges and agrees: (i) that the Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act; (ii) the Securities have not been registered under the Securities Act; and (iii) that the Issuer is not required to register the Securities except as set forth in Section 7 of this Subscription Agreement or as set forth in the Warrants. The Investor acknowledges and agrees that the Securities may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act except: (i) to the Issuer or one of its subsidiaries; (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S; or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act. With respect to any transactions falling within clauses (i) and (iii) of the preceding sentence, any such transaction must also be in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and any book entry records or certificates representing the Securities shall contain a restrictive legend to such effect. The Investor acknowledges and agrees that: (i) the Securities will be subject to transfer restrictions; (ii) as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Securities; and (iii) as a consequence, Investor may be required to bear the financial risk of an investment in the Securities for an indefinite period of time. The Investor acknowledges and agrees that the Securities will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the date that the Issuer furnishes a Current Report on Form 8-K following the Closing Date that includes the “Form 10” information required under applicable SEC rules and regulations. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Securities.
(g) The Investor acknowledges and agrees that the Investor is purchasing the Securities directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of the Issuer, the SPAC, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication. Investor explicitly disclaims reliance on any of the foregoing other than those representations, warranties, covenants and agreements of the Issuer and the SPAC expressly set forth in this Subscription Agreement.
(h) The Investor’s acquisition and holding of the Securities will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
(i) The Investor acknowledges and agrees that the Investor has received, and has had the opportunity to review and understand such financials and other information as the Investor deems necessary in order to make an investment decision with respect to the Securities, including, with respect to the business of the Issuer and its subsidiaries, the SPAC and the Transaction. Without limiting the generality of the foregoing, the Investor acknowledges that he, she or it has had the opportunity to review SPAC’s reports previously filed with the SEC under the Exchange Act. The Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the opportunity to ask such questions, receive such answers and obtain such information as the Investor and such Investor’s professional advisor(s) have deemed necessary to make an investment decision with respect to the Securities. The Investor has received, and has had the opportunity to review and understand the materials made available to it in connection with the Transaction, has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Securities. The Investor acknowledges that as part of the Transaction, the Issuer will file a registration statement under the Securities Act, including a proxy statement of SPAC and prospectus of the Issuer, which will contain additional information about the Transaction, the Issuer and SPAC and prepare and deliver to its shareholders an information statement setting forth information concerning the issuance of the shares of Common Stock, Warrants, Additional Warrants and Warrant-Related Shares, subject to the terms and conditions set forth herein and in the Warrants, to be approved at the general meeting. The Investor acknowledges and agrees that any changes to such information, including, without limitation, any changes based on updated information or changes in terms of the Transaction, shall in no way affect the Investor’s obligation to purchase the Securities under this Subscription Agreement. The Investor acknowledges that the Investor will not rely on any such registration statement, proxy statement/prospectus or information statement in making any investment decision. The Investor acknowledges that the Issuer and the SPAC offered to make certain non-public information available to the Investor subject to customary trading restrictions and non-disclosure requirements.
(j) The Investor acknowledges that certain information provided to it was based on forecasts. The Investor understands and agrees that such forecasts were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties many of which are outside of the Issuer’s control. Consequently, Investor acknowledges and agrees that actual results may differ materially from those contained in the forecasts and that the Issuer does not guarantee the accuracy of any such forecasts. The Investor acknowledges that all forward-looking information and forecasts were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or forecasts.
(k) The Investor became aware of this offering of the Securities solely by means of direct contact between the Investor and the Issuer, the SPAC or a representative of the Issuer or the SPAC. Investor acknowledges that the Securities were offered to the Investor solely by direct contact between the Investor and the Issuer, the SPAC or a representative of the Issuer or the SPAC. The Investor did not become aware of this offering of the Securities, nor were the Securities offered to the Investor, by any other means. The Investor acknowledges that the Securities: (i) were not offered to it by any advertising or, to its knowledge, general solicitation; and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. In making its investment or decision to invest in the Issuer, the Investor acknowledges that it is not relying upon, and has not relied and disclaims reliance upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, the SPAC, the Placement Agents, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer and the SPAC contained in this Subscription Agreement. Neither the Investor, nor to its knowledge any of its directors, officers, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder, (i) to its knowledge, engaged in any general solicitation, or (ii) published any advertisement in connection with the offering of the Securities.
(l) The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Securities. The Investor is: (i) able to fend for itself in the Transaction contemplated in this Subscription Agreement; (ii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. The Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision. Investor acknowledges and agrees that it has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Securities. The Investor agrees that Cohen & Company Securities, LLC, acting through its Cohen & Company Capital Markets division, or any of their affiliates, in their capacity as placement agents (the “Placement Agents”), shall not be liable to any Investor for any action heretofore or hereafter taken or omitted to be taken by any of them or have any liability or obligation (including, without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by the Investor, the Issuer or any other person or entity), whether in contract, tort or otherwise, to any Investor, or to any person claiming through such Investor, in respect of the Transaction. Investor represents that: (i) it is able to sustain a complete loss on its investment in the Securities; (ii) has no need for liquidity with respect to its investment in the Securities; and (iii) has no reason to anticipate any change in circumstances, financial or otherwise, which may cause or require any sale or distribution of all or any part of the Securities.
(m) Alone, or together with any professional advisor(s), the Investor acknowledges that it has adequately analyzed and fully considered the risks of an investment in the Securities and determined that the Securities are a suitable investment for the Investor. Investor represents that it is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Issuer. The Investor acknowledges specifically that a possibility of total loss exists.
(n) In making its decision to purchase the Securities, the Investor has relied solely upon its own independent investigation and that of its advisors, if any. Without limiting the generality of the foregoing, the Investor has not relied (and disclaims reliance) on any statements or other information provided by or on behalf of the Placement Agents or any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing concerning the Issuer, the SPAC, the Transaction, the Merger Agreement, this Subscription Agreement or the transactions contemplated under this Subscription Agreement or the Merger Agreement, the Securities or the offer and sale of the Securities.
(o) The Investor acknowledges and agrees that the Placement Agents and their respective directors, officers, employees, representatives and controlling persons: (i) have not provided the Investor with any information or advice with respect to the Securities; (ii) have not made or make any representation, express or implied as to the Issuer, the SPAC, the Issuer’s credit quality, the Securities or the Investor’s purchase of the Securities; (iii) have not acted as the Investor’s financial advisor or fiduciary in connection with the issue and purchase of Securities; (iv) may have acquired, or during the term of the Securities may acquire, non-public information with respect to the Issuer, which, subject to the requirements of applicable law, the Investor agrees need not be provided to it; (v) may have existing or future business relationships with the Issuer and the SPAC (including, but not limited to, lending, depository, risk management, advisory and banking relationships); (vi) will pursue actions and take steps that it deems or they deem necessary or appropriate to protect its or their interests arising therefrom without regard to the consequences for a holder of Securities, and that certain of these actions may have material and adverse consequences for a holder of Securities.
(p) The Investor acknowledges and agrees that it has not relied on the Placement Agents in connection with its determination as to the legality of its acquisition of the Securities or as to the other matters referred to in this Subscription Agreement. Investor also acknowledges that it has not relied on any investigation that the Placement Agents, any of their affiliates or any person acting on their behalf have conducted with respect to the Securities, the Issuer or the SPAC. The Investor further acknowledges and agrees that it has not relied on any information contained in any research reports prepared by the Placement Agents or any of their affiliates.
(q) The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Securities or made any findings or determination as to the fairness of this investment.
(r) The execution, delivery and performance by the Investor of this Subscription Agreement are within the Investor’s powers, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound that would reasonably be expected to have a material adverse effect on the legal authority of the Investor to enter into and perform its obligation under this Subscription Agreement. If the Investor is not an individual, the execution, delivery and performance by the Investor of this Subscription Agreement will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine. If the Investor is an individual, the signatory has legal competence and Investor has the capacity to execute this Subscription Agreement. If the Investor is not an individual, the signatory has been duly authorized to execute this Subscription Agreement. Assuming that this Subscription Agreement constitutes the valid and binding obligation of the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.
(s) The Investor is not: (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program; (ii) owned, directly or indirectly, or controlled by, or acting on behalf of, one or more persons that are named on the OFAC List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People Republic or any other country or territory embargoed or subject to substantial trade restrictions by the United States; (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each of the foregoing, a “Prohibited Investor”). If requested, the Investor agrees and is permitted to provide law enforcement agencies such records as required by applicable law. If the Investor is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), to the extent required, the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, the Investor maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Securities were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.
(t) No disclosure or offering document has been prepared by the Placement Agents in connection with the offer and sale of the Securities.
(u) None of the Placement Agents, nor any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing, have made any independent investigation with respect to the Issuer or its subsidiaries or any of their respective businesses, the SPAC or the Securities or the accuracy, completeness or adequacy of any information supplied to the Investor by the Issuer or the SPAC.
(v) In connection with the issue and purchase of the Securities, the Placement Agents have not acted as the Investor’s financial advisor or fiduciary.
(w) The Investor, when required to deliver payment to the Issuer pursuant to Section 2 above, will have sufficient immediately available funds to pay the Subscription Amount and consummate the purchase and sale of the Securities pursuant to this Subscription Agreement.
(x) As of the date of this Subscription Agreement, the Investor does not have, and during the 30 day period immediately prior to the date of this Subscription Agreement, the Investor has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or short sale positions with respect to the securities of the Issuer or the SPAC. Notwithstanding the foregoing, the Investor makes no such representation with respect to any assets of the Investor managed by an external investment manager pursuant to a separately managed account arrangement.
(y) The Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) acting for the purpose of acquiring, holding, voting or disposing of equity securities of the Issuer or the SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than a group consisting solely of the Investor and its affiliates.
(z) If the Investor is or is acting on behalf of: (i) an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (ii) a plan, an individual retirement account or other arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”); (iii) an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement described in clauses (i) and (ii) (each, an “ERISA Plan”); or (iv) an employee benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA), a church plan (as defined in Section 3(33) of ERISA), a non-U.S. plan (as described in Section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing clauses (i), (ii) or (iii) but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws,” and together with ERISA Plans, “Plans”), the Investor represents and warrants that (A) none of the Issuer, the SPAC or any of their respective affiliates has provided investment advice or has otherwise acted as the Plan’s fiduciary, with respect to its decision to acquire and hold the Securities; (B) none of the parties to the Transaction is or shall at any time be the Plan’s fiduciary with respect to any decision in connection with the Investor’s investment in the Securities; and (C) its purchase of the Securities will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any applicable Similar Law.
7. Registration Rights.
(a) On or prior to the Closing Date, and in no event later than 30 calendar days after the Closing Date (such deadline, the “Filing Deadline”), the Issuer will endeavor to file with the SEC (at its sole cost and expense) a registration statement on Form S-1 registering the resale of the Registrable Securities (the “Registration Statement”). If the Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Issuer will make pro rata payments to the Investor, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant to this Subscription Agreement by the Investor for such Registrable Securities then held by the Investor for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities. Such payments shall constitute the Investor’s exclusive monetary remedy for such events, but shall not affect the right of the Investor to seek injunctive relief. Such payments shall be made to the Investor in cash no later than ten (10) Business Days after the end of each such 30-day period (the “Payment Date”). Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Payment Date until such amount is paid in full. The Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty (60) calendar days after the filing thereof (or ninety (90) calendar days after the filing thereof if the SEC notifies the Issuer that it will “review” the Registration Statement) and (ii) five (5) Business Days after the Issuer is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”). The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form S-3 at such time after the Issuer becomes eligible to use such Form S-3. The Issuer will use its commercially reasonable efforts to provide a draft of the Registration Statement to the Investor for review at least two (2) Business Days in advance of filing the Registration Statement. In no event shall the Investor be identified as a statutory underwriter in the Registration Statement. Notwithstanding the foregoing, if the SEC requires that the Investor be identified as a statutory underwriter in the Registration Statement, the Investor will have the option, in its sole and absolute discretion, to either (i) have the opportunity to cause the Issuer to withdraw from the Registration Statement upon its prompt written request to the Issuer, in which case the Issuer’s obligation to register the Shares will be deemed satisfied or (ii) be included as such in the Registration Statement. The Issuer’s obligations to include the Shares issued pursuant to this Subscription Agreement (or shares issued in exchange therefor) for resale in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor and the intended method of disposition of such Shares, which shall be limited to non-underwritten public offerings, as shall be reasonably requested by the Issuer to effect the registration of such Shares. Investor shall also execute documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations. Notwithstanding anything to the contrary in this Subscription Agreement, in connection with the obligations of the Issuer under this Section 7, the Investor shall not be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Shares. Upon notification by the SEC that any Registration Statement has been declared effective by the SEC, within one (1) Business Day thereafter, the Issuer shall file the final prospectus under Rule 424 of the Securities Act. The Issuer agrees to cause such Registration Statement, or another shelf registration statement that includes the Shares to be sold pursuant to this Subscription Agreement, to remain effective until the earliest of: (i) the second anniversary of the Effectiveness Date of the Registration Statement registering all Shares for resale by the Investor; (ii) the date on which the Investor ceases to hold any Shares issued pursuant to this Subscription Agreement; or (iii) the first date on which the Investor is able to sell all of its Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 of the Securities Act without volume or manner of sale limitations. For purposes of clarification, any failure by the Issuer to file the Registration Statement by the Filing Deadline or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve the Issuer of its obligations to file or effect the Registration Statement set forth in this Section 7. Notwithstanding the foregoing, if the SEC prevents the Issuer from including any or all of the shares proposed to be registered under a Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Shares pursuant to this Section 7 by the applicable shareholders or otherwise, such Registration Statement shall register for resale the number of Shares which is equal to the maximum number of Shares as is permitted to be registered by the SEC. In such event, the number of Shares to be registered for each selling shareholder named in such Registration Statement shall be reduced pro rata among all such selling shareholders. In the event the Issuer amends the Registration Statement in accordance with the foregoing, the Issuer will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC, one or more registration statements to register the resale of those Shares that were not registered on the initial Registration Statement, as so amended.
(b) For as long as the Investor holds Warrants or Warrant-Related Shares or, if shorter, through the date of expiration, or redemption or termination of the Warrants in accordance with the provisions of the Warrants and the Warrant Agreement, the Issuer will use commercially reasonable efforts to (1) qualify the Warrant-Related Shares for listing on a Stock Exchange, which shall be the stock exchange on which the Issuer’s Common Stock is then listed, and (2) update or amend the Registration Statement as necessary to include the Warrant-Related Shares. For as long as the Investor holds Warrants or Warrant-Related Shares or, if shorter, through the date of expiration, or redemption or termination of the Warrants in accordance with the provisions of the Warrants and the Warrant Agreement, the Issuer will use commercially reasonable efforts to (A) make and keep public information available, as those terms are understood and defined in Rule 144, (B) file in a timely manner all reports and other documents with the SEC required under the Exchange Act and (C) provide all customary and reasonable cooperation necessary, in each case, to enable the Investor to resell the Warrant-Related Shares pursuant to the Registration Statement or Rule 144 of the Securities Act (when Rule 144 of the Securities Act becomes available to the Investor), as applicable.
(c) The Issuer may suspend the use of any such Registration Statement if the board of directors of the Issuer determines in good faith that either in order for such Registration Statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly or annual report under the Exchange Act (a “Suspension Event”). Notwithstanding the foregoing, (I) the Issuer shall not so delay filing or so suspend the use of the Registration Statement for a period of more than sixty (60) consecutive days, not more than twice or more than a total of ninety (90) calendar days, in each case in any three hundred sixty (360) day period and (II) the Issuer shall use commercially reasonable efforts to make such Registration Statement available for the sale by the Investor of such securities as soon as practicable thereafter. The Issuer shall use commercially reasonable efforts to cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in connection with any sale of Shares pursuant to the effective Registration Statement or pursuant to Rule 144 where, following such sale, subsequent public distribution of such Shares shall not require registration under the Securities Act.
(d) The Issuer shall remove any restrictive legend included on the certificates (or, in the case of book-entry shares, any other instrument or record) representing the Investor’s ownership of Shares, and the Issuer shall issue a certificate (or evidence of the issuance of such securities in book-entry form) without such restrictive legend or any other restrictive legend to the Investor, if: (i) such Shares are sold or transferred pursuant to the effective Registration Statement or pursuant to Rule 144 where, following such, subsequent public distribution of such shares shall not require registration under the Securities Act; or (ii) such Shares are eligible for sale pursuant to Section 4(a)(1) of the Securities Act or Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(2) (or Rule 144(i)(2), if applicable). Following Rule 144 becoming available for the resale of such Shares without volume or manner-of-sale restrictions and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(2) (or Rule 144(i)(2), if applicable), the Issuer, upon the written request of Investor and after providing the Issuer and its transfer agent with all customary documentation, shall instruct the Issuer’s transfer agent to remove the legend from such Shares (in whatever form) and shall use commercially reasonable efforts to cause the Issuer’s counsel to issue any legend removal opinion required by the transfer agent. Notwithstanding the foregoing, once the Registration Statement registering the Shares for resale becomes effective under the Securities Act, and subject to receipt from the Investor by the Issuer and its transfer agent, as applicable, of customary documentation in connection therewith, the Issuer shall use commercially reasonable efforts to cause the Issuer’s counsel to issue to the transfer agent a “blanket” legal opinion to allow sales without restriction pursuant to the effective Registration Statement and in connection with the removal of legends in connection with such sales pursuant to the effective Registration Statement, in each case to the extent required by the transfer agent.
(e) At its expense, the Issuer shall use commercially reasonable efforts to advise the Investor within five (5) Business Days: (i) when a Registration Statement or any post-effective amendment thereto has been filed with the SEC and when such Registration Statement or post-effective amendment thereto has become effective; (ii) after it shall receive notice or obtain knowledge thereof, of any request by the SEC for amendments or supplements to any Registration Statement or the prospectus included in such Registration Statement or for additional information; (iii) after it shall have received notice or obtained knowledge thereof, of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose; (iv) of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Shares included in such Registration Statement for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) subject to the provisions in this Subscription Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein do not include any untrue statements of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading. The Issuer shall use commercially reasonable efforts to promptly provide written notice of the happening of any of the foregoing or of a Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading. The notice sent by the Issuer pursuant to the preceding sentence shall not contain any material non-public information other than the description of such event, which the parties agree may constitute material non-public information. Upon the occurrence of any event contemplated in clauses (i) through (v) above, except for such times as the Issuer is permitted under this Subscription Agreement to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Issuer shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Shares included in such Registration Statement, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) For purposes of this Section 7:
(i) “Shares” shall mean, as of any date of determination, the shares of Common Stock and the Warrant-Related Shares.
(ii) “Warrant-Related Shares” shall mean, as of any date of determination, the Warrant Shares and the shares of Common Stock issued or issuable with respect to the Additional Warrants and the Reset Warrants (assuming on such date the Warrants, the Additional Warrants and the Reset Warrants are able to be exercised in full without regard to any exercise limitations therein).
(iii) “Investor” shall include any person or entity to which the rights under this Section 7 shall have been duly assigned.
(iv) “Registrable Securities” means (i) the Shares, (ii) all Warrant-Related Shares, and (iii) any other shares of Common Stock issued as a dividend or other distribution with respect to, in exchange for or in replacement of the Shares, whether by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement, amendment of the articles of association or otherwise; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Issuer shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) upon the first to occur of (A) a Registration Statement with respect to the sale of such Registrable Securities being declared effective by the SEC under the Securities Act and such Registrable Securities having been disposed of by the holder thereof in accordance with such effective Registration Statement, (B) such Registrable Securities having been sold in accordance with Rule 144 (or another exemption from the registration requirements of the Securities Act) resulting in the transferee of the Shares holding unrestricted securities and (C) such Registrable Securities becoming eligible for resale without volume or manner-of-sale restrictions and without current public information requirements pursuant to Rule 144.
(g) Notwithstanding any termination of this Subscription Agreement, the Issuer shall, to the extent permitted by applicable law, indemnify, defend and hold harmless the Investor, the officers, directors, partners, members, managers, stockholders, and employees of the Investor, each person who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, and employees of each such controlling person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, reasonable and documented costs (including, without limitation, reasonable and documented out-of-pocket attorneys’ fees) and reasonable and documented expenses (collectively, “Losses”), as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained (or incorporated by reference) in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading. The indemnity obligation set forth in this Section 7(g) shall not apply, however, to the extent that any untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Investor furnished in writing to the Issuer by the Investor expressly for use in any of the SEC filings referenced in this Section 7(g). The Issuer shall notify the Investor promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 7 of which the Issuer is aware. Notwithstanding the foregoing, the Issuer’s indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of the Issuer.
(h) The Investor shall, severally and not jointly with any Other Investor, indemnify and hold harmless the Issuer, its directors, officers, partners, members, managers, shareholders, agents and employees, each person who controls the Issuer (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, partners, members, managers, shareholders, or employees of such controlling persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Investor furnished in writing to the Issuer by the Investor expressly for use therein. Notwithstanding the foregoing, the Investor’s indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of the Investor.
(i) Any person or entity entitled to indemnification pursuant to this Subscription Agreement shall (A) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (B) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification under this Subscription Agreement to the extent such failure has not prejudiced the indemnifying party. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. Without the consent of the indemnified party, no indemnifying party shall consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which does not include an unconditional release of the indemnified party from all liability in respect to such claim or litigation.
(j) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of securities.
(k) If the indemnification provided under this Section 7 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses referred to in this Section 7, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. Notwithstanding the foregoing, the liability of the Investor shall be limited to the net proceeds received by such Investor from the sale of Shares giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. Subject to the limitations set forth in this Section 7, the amount paid or payable by a party as a result of the Losses shall be deemed to include any reasonable and documented out-of-pocket legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 7(k) from any person or entity who was not guilty of such fraudulent misrepresentation.
8. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties to this Subscription Agreement shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms; (b) upon the mutual written agreement of each of the parties to terminate this Subscription Agreement; (c) the Outside Date (as defined in the Merger Agreement as in effect on the date of this Subscription Agreement); or (d) if any of the conditions to Closing set forth in Section 3 of this Subscription Agreement are (i) not satisfied or waived prior to the Closing or (ii) not capable of being satisfied on the Closing and, in each case of (i) and (ii), as a result thereof, the transactions contemplated by this Subscription Agreement will not be and are not consummated at the Closing (the termination events described in clauses (a)-(d) above, collectively, the “Termination Events”). Nothing in this Subscription Agreement will relieve, however, any party from liability for any willful breach of this Subscription Agreement prior to the time of termination. Each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Merger Agreement promptly after the termination of the Merger Agreement. Upon the occurrence of any Termination Event, this Subscription Agreement shall be void and of no further effect (except that the provisions of Section 7(g) through (k), this Section 8, Sections 10 through 12 and Section 14 of this Subscription Agreement will survive any termination of the Subscription Agreement and continue indefinitely). Following the Termination Event, any monies paid by the Investor to the Issuer in connection with this Subscription Agreement shall promptly (and in any event within one Business Day) be returned to the Investor without any deduction for or on account of any tax, withholding, charges, or set-off.
9. [Intentionally Omitted.]
10. Miscellaneous.
(a) Neither this Subscription Agreement nor any rights that may accrue to the parties hereunder (other than the Securities acquired under this Subscription Agreement, if any, to the extent permitted by their terms) may be transferred or assigned without the prior written consent of each of the other parties. Notwithstanding the foregoing, this Subscription Agreement and the Investor’s rights and obligations hereunder may be assigned to one or more fund or account managed by the same investment manager as the Investor or by or to an affiliate (as defined in Rule 12b-2 of the Exchange Act) of such investment manager without the prior consent of the Issuer. Prior to such assignment being valid, any such assignee shall agree in writing to be bound by the terms of this Subscription Agreement. Notwithstanding the foregoing, no assignment pursuant to clause (i) of this Section 10 shall relieve the Investor of its obligations under this Subscription Agreement.
(b) The Issuer may request from the Investor such additional information as the Issuer deems reasonably necessary to register the resale of the Securities and evaluate the eligibility of the Investor to acquire the Securities. Investor agrees to promptly provide such information as may reasonably be requested to the extent readily available. The Issuer agrees to keep any such information provided by Investor confidential except: (i) as necessary to include in any registration statement the Issuer is required to file under this Subscription Agreement; (ii) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities; or (iii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which the Issuer’s securities are listed for trading. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 8. In such event, Investor also agrees that, without any liability under this Subscription Agreement, the Issuer may reject the Investor’s Subscription Amount prior to the Closing Date in the event the Investor fails to provide such additional information requested by the Issuer to evaluate the Investor’s eligibility or the Issuer’s determines that the Investor is not eligible. The Investor acknowledges that the Issuer and/or the SPAC may file a form of this Subscription Agreement with the SEC as an exhibit to a Current Report on Form 8-K or a registration statement of SPAC.
(c) The Investor acknowledges that the Issuer, Forge Nano and the Placement Agents will rely on the acknowledgments, understandings, agreements, representations and warranties of the Investor contained in this Subscription Agreement, including Schedule A. Prior to the Closing, the Investor agrees to promptly notify the Issuer and Forge Nano if any of the acknowledgments, understandings, agreements, representations and warranties set forth in Section 7 above are no longer accurate in any material respect (other than those acknowledgments, understandings, agreements, representations and warranties qualified by materiality, in which case the Investor shall notify the Issuer and Forge Nano if they are no longer accurate in any respect). If the Issuer receives such notice from Investor, the Issuer will use commercially reasonable efforts to promptly notify the Placement Agents. The Investor acknowledges and agrees that each purchase by the Investor of Securities from the Issuer will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties in this Subscription Agreement (as modified by any such notice) by the Investor as of the time of such purchase contained in this Subscription Agreement. Prior to the Closing, the Issuer agrees to promptly notify the Investor if any of the acknowledgments, understandings, agreements, representations and warranties set forth in Section 5 above are no longer accurate in any material respect (other than those acknowledgments, understandings, agreements, representations and warranties qualified by materiality or Issuer Material Adverse Effect, in which case the Issuer shall notify the Investor if they are no longer accurate in any respect). The Issuer acknowledges and agrees that each sale by the Issuer of the Securities to the Investor will constitute a reaffirmation of their respective acknowledgments, understandings, agreements, representations and warranties in this Subscription Agreement (as modified by any such notice) as of the time of such purchase.
(d) The Issuer, the Investor, Forge Nano and the Placement Agents are each entitled to rely upon this Subscription Agreement and each is irrevocably authorized to produce this Subscription Agreement or a copy of this Subscription Agreement to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered under this Subscription Agreement. The foregoing clause of this Section 11(d) shall not, however, give the Placement Agents any rights other than those expressly set forth in this Subscription Agreement.
(e) All of the agreements, representations and warranties made by each party in this Subscription Agreement shall survive the Closing.
(f) This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 8 above) except by an instrument in writing, signed by each of the parties. No failure or delay of either party in exercising any right or remedy under this Subscription Agreement shall operate as a waiver of such right or remedy. Nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties under this Subscription Agreement are cumulative and are not exclusive of any rights or remedies that the parties would otherwise have.
(g) This Subscription Agreement (including Schedule A) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter of the Subscription Agreement. Except as set forth in Section 7 with respect to any indemnified person, Section 8, Section 10(c), Section 10(d), Section 10(f), this Section 10(g), the last sentence of Section 10(k) and Section 11 with respect to the persons specifically referenced in that Section, and Section 6 and Section 10(c) with respect to the Placement Agents, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties, and their respective successors and assigns. The parties acknowledge and agree that only those persons specifically referenced in the preceding sentence are third party beneficiaries of this Subscription Agreement with right of enforcement for the purposes of, and to the extent of, the rights granted to them, if any, pursuant to the applicable provisions.
(h) Except as otherwise provided in this Subscription Agreement, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns. The agreements, representations, warranties, covenants and acknowledgments contained in this Subscription Agreement shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
(i) If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired by such court and shall continue in full force and effect so long as this Subscription Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Subscription Agreement and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(j) This Subscription Agreement may be executed and delivered in one or more counterparts (including by facsimile or any other form of electronic delivery (including.pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or other transmission method)) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(k) The parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. Consequently, the parties acknowledge and agree that a party shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement. The parties also acknowledge and agree that the foregoing equitable remedies shall be in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
(l) If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), other than as contemplated by the Merger Agreement, or any agreement contemplated by the Transaction, shall occur between the date of this Subscription Agreement and immediately prior to the Closing by reason of reclassification, recapitalization, share division or consolidation, exchange or readjustment of shares, or any share dividend, the number of Shares issued to the Investor and per share purchase price shall be appropriately adjusted to reflect such change.
(m) This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York as to all matters (including any action, suit, litigation, arbitration, mediation, claim, charge, complaint, inquiry, proceeding, hearing, audit, investigation or reviews by or before any governmental entity related), including matters of validity, construction, effect, performance and remedies.
(n) Each party under this Subscription Agreement, and any person asserting rights as a third party beneficiary in accordance with Section 10(g) may do so only if he, she or it, irrevocably agrees that any action, suit or proceeding between or among the parties, whether arising in contract, tort or otherwise, arising in connection with any disagreement, dispute, controversy or claim arising out of or relating to this Subscription Agreement or any related document or any of the transactions contemplated under this Subscription Agreement or any related document (“Legal Dispute”) shall be brought exclusively in the federal and state courts sitting in the Borough of Manhattan in the City of New York within the State of New York (collectively the “Chosen Courts”). Each party under this Subscription Agreement consents to the jurisdiction of the Chosen Courts in any such suit, action or proceeding. To the fullest extent permitted by law, each party irrevocably waives, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in the Chosen Courts or that any such suit, action or proceeding that is brought in the Chosen Courts has been brought in an inconvenient forum. During the period a Legal Dispute that is filed in accordance with this Section 10(n) is pending before the Chosen Courts, all actions, suits or proceedings with respect to such Legal Dispute or any other Legal Dispute, including any counterclaim, cross-claim or interpleader, shall be subject to the exclusive jurisdiction of the Chosen Courts. Each party and any person asserting rights as a third party beneficiary may do so only if he, she or it waives, and shall not assert as a defense in any Legal Dispute, that: (a) such party is not personally subject to the jurisdiction of the Chosen Courts for any reason; (b) such action, suit or proceeding may not be brought or is not maintainable in the Chosen Courts; (c) such party’s property is exempt or immune from execution; (d) such action, suit or proceeding is brought in an inconvenient forum; or (e) the venue of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section 10(n) following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable laws. EACH OF THE PARTIES AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY MAY DO SO ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THIS SUBSCRIPTION AGREEMENT AND FOR ANY COUNTERCLAIM RELATING THERETO. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY NOR ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THIS SUBSCRIPTION AGREEMENT. FURTHERMORE, NO PARTY NOR ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED.
(o) The Issuer acknowledges and agrees that, notwithstanding anything herein to the contrary, the Securities may be pledged by Investor in connection with a bona fide margin agreement, which shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and Investor effecting a pledge of Securities shall not be required to provide the Issuer with any notice thereof or otherwise make any delivery to the Issuer pursuant to this Subscription Agreement. The Issuer hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by Investor.
(p) Any notice or communication required or permitted under this Subscription Agreement to any Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page. Any such communication or notice shall be deemed to be given and received: (i) when so delivered personally; (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email; or (iii) three Business Days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to SPAC.
If to the Issuer, to:
Archimedes Tech SPAC Partners II Co.
2093 Philadelphia Pike #1968
Claymont, DE 19703
Attn: Long Long, CEO
E-mail: [*********]
If to Forge Nano, to:
Forge Nano, Inc.
12300 Grant St. #100
Thornton, CO 80241
Attn: Paul Lichty, CEO
E-mail: [*********]
11. Non-Reliance and Exculpation. The Investor acknowledges that it is not relying upon, and has not relied upon, and is expressly disclaiming reliance on any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Placement Agents, nor any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the statements, representations and warranties of the Issuer expressly contained in this Subscription Agreement, in making its investment or decision to invest in the Issuer. The Investor acknowledges and agrees that none of (i) any Other Investor pursuant to any Other Subscription Agreements related to the private placement of the Securities (including such Other Investor’s respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), (ii) the Placement Agents, their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing, or (iii) any party to the Merger Agreement or any Non-Party Affiliate (as defined below) other than the Issuer and the SPAC as expressly provided for in this Subscription Agreement, shall have any liability to the Investor, or to any Other Investor, pursuant to, arising out of or relating to: (x) this Subscription Agreement or any Other Subscription Agreements related to the private placement of the Securities or other Equity Interests; (y) the negotiation of this Subscription Agreement, its subject matter or the private placement of the Securities; or (z) the transactions contemplated under this Subscription Agreement or under any Other Subscription Agreements related to the private placement of the Securities or other Equity Interests. Without limiting the generality of the foregoing, the prohibition on liability set forth in the preceding sentence shall apply only to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with: (i) the purchase of the Securities or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement; (ii) any written or oral representations made or alleged to be made in connection with this Subscription Agreement, as expressly provided in this Subscription Agreement; or (iii) any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Issuer, the Placement Agents or any Non-Party Affiliate concerning the Issuer, the Placement Agents, any of their respective controlled affiliates, this Subscription Agreement or the transactions contemplated under this Subscription Agreement. “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equity holder or affiliate of the Issuer, the Placement Agents or any of the Issuer’s or the Placement Agents’ controlled affiliates or any family member of the foregoing.
12. Disclosure. The Investor agrees to treat all information received in connection with the Transaction as confidential until a Current Report on Form 8-K announcing, among other things, the execution of the Merger Agreement (the “Disclosure Document”) is publicly filed by the Issuer with the SEC (the “Disclosure Time”), which, to the extent not previously disclosed, shall disclose all material terms of the transactions contemplated under this Subscription Agreement and by the Other Subscription Agreements and the Merger Agreement, the Transaction and any other material, nonpublic information that the Issuer, the SPAC or any of their respective officers, directors, affiliates, employees or agents, including, without limitation, the Placement Agents have provided to the Investor at any time prior to the filing of the Disclosure Document. Upon the issuance of the Disclosure Document, to the knowledge of the Issuer, the Investor shall not be in possession of any material, non-public information received from the Issuer, the SPAC or any of their respective officers, directors, affiliates, employees or agents, including, without limitation, the Placement Agents. Upon the Disclosure Time, the Investor shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with the Issuer, the SPAC or any of their respective affiliates, officers, directors, employees or agents, including, without limitation, the Placement Agents, relating to the transactions contemplated by this Subscription Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, neither the Issuer nor the SPAC shall publicly disclose the name of the Investor or any of its affiliates or advisers, or include the name of the Investor or any of its affiliates or advisers in any press release or in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of the Investor, except: (i) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities; (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which the SPAC’s securities are listed for trading; or (iii) to the extent such announcements or other communications contain only information previously disclosed in a public statement, press release or other communication previously approved in accordance with this Section 12. Prior to any disclosure permitted under the preceding sentence, to the extent permitted under law, each of the Issuer and the SPAC shall use commercially reasonable efforts to provide the Investor with prior written notice of such disclosure and shall reasonably consult with the Investor regarding such disclosure.
13. Open-Market Purchases. At the Investor’s election, 10,000,000 shares of Common Stock subscribed hereby may be reduced on a one-for-one share basis (the “Reduction Right”) by up to an aggregate of Open-Market Purchase Shares and Currently Owned Shares, as applicable. For the avoidance of doubt, any such exercise of the Reduction Right shall neither reduce the number of Warrants to be issued by the Issuer to the Investor as set forth on the Investor’s signature page hereto, nor impair the Investor’s eligibility to receive the Additional Warrants or Reset Warrants, as described in Sections 1(b) or 1(d) of this Subscription Agreement. For the purposes of this Section 13: (i) “Open-Market Purchase Shares” means any Purchaser Ordinary Shares (as defined in the Merger Agreement) purchased by the Investor for its own account pursuant to open-market transactions with third parties prior to the Record Date and held through the Closing Date; and (ii) “Currently Owned Shares” means any Purchaser Ordinary Shares the Investor beneficially owns as of the date of this Subscription Agreement that are held through the Closing Date; and (iii) “Record Date” means the record date established for voting at the extraordinary general meeting of the SPAC held to approve the Transaction.
14. Additional Agreements.
(a) Subject to Section 12, none of the Issuer, the SPAC nor any of their respective controlled affiliates and subsidiaries (if any) (collectively, the “Company Group”) shall identify, or permit any of its employees, agents or representatives to identify, the Investor (whether in connection with the Issuer or the SPAC or in the Investor’s capacity as an investor in Issuer and/or the SPAC) in any written or oral public communications or issue any press release or other disclosure of the Investor’s name or the name of any of its affiliates, or any derivative of any of the foregoing names (collectively, the “Investor Names”), in each case except: (i) as authorized in writing by the Investor in each such instance (electronic mail to suffice); or (ii) as required by applicable law, legal process or regulatory request (“Applicable Law”). Subject to Section 12, if disclosure is required pursuant the preceding sentence, the disclosing member of the Company Group will, as soon as practicable, notify the Investor of such requirement (except where prohibited by Applicable Law) so that the Investor (or its applicable affiliate) may seek a protective order or other appropriate remedy prior to such disclosure. Notwithstanding the foregoing, the Issuer and the SPAC may make disclosures to an auditor or governmental or regulatory authority pursuant to any routine investigation, inspection, examination or inquiry without providing the Investor with any notification thereof, unless the Investor is the subject of any such investigation, inspection, examination or inquiry (in which case the preceding sentence shall govern).
(b) The Issuer, on behalf of itself and the other Company Parties (as defined below), acknowledges and agrees that the acquisition of the Securities and the execution and adoption of this Subscription Agreement are not intended to establish, and shall not establish, an investment advisory relationship by and among, (i) on the one hand, the Investor or any affiliate, or any of its or their members, owners, partners, officers, directors, employees, agents or representatives (each, an “Investor Party”), and (ii) on the other hand, any member of the Company Group or any of their respective officers, directors, shareholders, partners, members, employees, agents or representatives (each, a “Company Party”), whereby any Investor Party serves as an investment adviser to any Company Party or that would otherwise result in any Investor Party meeting the definition of an investment adviser in Section 202(a)(11) of the Investment Advisers Act of 1940, as amended, with respect to any Company Party. Further, the Issuer, on behalf of itself and the other Company Parties, acknowledges and agrees that the Company Parties are not relying upon any Investor Party for investment advice, analysis or recommendations regarding any investment or potential investment.
(c) From the date hereof until the Standstill Termination Date, the Issuer shall not, without the prior written consent of the Investors who purchased at least a majority of the shares of Common Stock under the Subscription Agreements, issue, enter into any agreement to issue or announce the issuance of any shares of Common Stock, or Common Stock Equivalents, in each case other than an Exempt Issuance. For the avoidance of doubt, prior to the Closing Date, Forge Nano shall be permitted to issue (and any such issuance shall be an “Exempt Issuance” for the purpose of this clause (c)), Series D preferred convertible equity, par value $0.0001 per share, of Forge Nano, Inc., and any equity securities issued in conversion thereof (which shall automatically, directly or indirectly, be exchanged for securities of the Company pursuant to the Merger Agreement).
(d) The Investor hereby acknowledges and agrees that it will not, and will cause each affiliate and each person acting at the Investor’s or its affiliates’ direction or pursuant to any understanding with the Investor or its affiliates to not, directly or indirectly offer, sell, pledge, contract to sell or sell any option to purchase, or engage in hedging activities or execute any “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act, in each case that result in the Investor having a net short cash position in respect of the Securities or any securities of the SPAC from the date hereof until the Reset Termination Date (or such earlier termination of this Subscription Agreement in accordance with its terms). For the avoidance of doubt, nothing contained herein shall prohibit the Investor from (i) any purchase of securities by the Investor, its affiliates or any person or entity acting on behalf of the Investor or any of its affiliates in an open market transaction after the execution of this Subscription Agreement, or (ii) any sale (including the exercise of any redemption right) of securities of the SPAC or the Issuer (A) held by the Investor, its affiliates or any person or entity acting on behalf of the Investor or any of its affiliates prior to the execution of this Subscription Agreement or (B) purchased by the Investor, its affiliates or any person or entity acting on behalf of the Investor or any of its affiliates in an open market transaction after the execution of this Subscription Agreement. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with the Investor that have no knowledge of this Subscription Agreement or of the Investor’s participation in the Transaction (including the Investor’s affiliates, as applicable) from entering into any “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and (ii) in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such the Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such the Investor’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Subscription Agreement and/or makes investments decisions with respect to the Securities held by the Investor.
15. Definitions. In addition to the terms defined elsewhere in this Subscription Agreement: (a) capitalized terms that are not otherwise defined in this Subscription Agreement have the meanings given to such terms in the Warrant Certificate and (b) the following terms have the meanings set forth in this Section 15:
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities” means shares of Common Stock, the Warrants, the Warrant-Related Shares, the Additional Warrants (and any shares of Common Stock issuable upon exercise thereof) and the Reset Warrants (and any shares of Common Stock issuable upon exercise thereof).
“Standstill Termination Date” shall mean the date that is six months from the effective date of the Registration Statement.
“Warrant Certificate” means the warrant certificate evidencing the Warrants subscribed hereby in the form set forth in Exhibit A to this Subscription Agreement.
“Warrants” means, collectively, the warrants (each, a “Warrant”) delivered to the Investor at the Closing in accordance with the terms of this Subscription Agreement, each such Warrant exercisable for the purchase of one shares of Common Stock at an exercise price of $10.00 per share, which Warrants shall be exercisable immediately and have a term of exercise equal to five years, in the form of the Warrant Certificate and subject to adjustment and reset as set forth therein.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.
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Number of shares of Common Stock Subscribed: 10,000,000
Number of Warrants Subscribed: 15,000,000
Aggregate Subscription Amount: $100,000,000
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If at any time the Investor would beneficially own shares of Common Stock representing in excess of 9.9% of the outstanding shares of Common Stock, Investor elects to be subject to the “Beneficial Ownership Limitation” set forth in Sections 2(f) and 3(m) of the Warrant Certificate. |
You must pay the Subscription Amount by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.
[Signature Page to Subscription Agreement]
IN WITNESS WHEREOF, each of the Issuer, Forge Nano and the SPAC has accepted this Subscription Agreement as of April , 2026.
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FORGE NANO, INC. |
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ARCHIMEDES TECH SPAC PARTNERS II CO. |
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[Signature Page to Subscription Agreement]
SCHEDULE A
ELIGIBILITY REPRESENTATIONS OF THE INVESTOR
This Schedule must be completed by the Investor and forms a part of the Subscription Agreement to which it is attached. Capitalized terms used and not otherwise defined in this Schedule have the meanings given to them in the Subscription Agreement. The Investor must check the applicable box in either Section A, Section B or Section C below.
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QUALIFIED INSTITUTIONAL BUYER STATUS |
(Please check the applicable subparagraphs):
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We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)). |
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We are subscribing for the Securities as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
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INSTITUTIONAL ACCREDITED INVESTOR STATUS |
(Please check the applicable subparagraphs):
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We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) (1), (2), (3) or (7) under the Securities Act), and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.” |
| 2. | ☐ | We are not a natural person. |
Rule 501(a) under the Securities Act, in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. The Investor has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to the Investor and under which the Investor accordingly qualifies as an “accredited investor.”
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Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company; |
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Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of USD 5,000,000; |
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Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of USD 5,000,000; |
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Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of USD 5,000,000; or |
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Any trust with assets in excess of USD 5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person. |
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QUALIFIED PURCHASER STATUS |
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A corporation, partnership, limited liability company, trust or other organization that: (i)was not organized or reorganized and is not operated for the specific purpose of acquiring the interest or any other interest in the Issuer, and less than 40% of the assets of which will consist of interests in the Issuer (calculated as of the time of the Investor’s execution of this Subscription Agreement); (ii) owns not less than USD 5,000,000 in investments; and (iii)is owned directly or indirectly solely by or for two or more natural persons who are related as siblings or spouses (including former spouses), or direct lineal descendants by birth or adoption, spouses of such persons, the estates of such persons, or foundations, charitable organizations, or trusts established by or for the benefit of such persons. |
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A trust: (i) that is not described in paragraph (3) of this Section C; (ii) that was not organized or reorganized and is not operated for the specific purpose of acquiring the interest or any other interest in SPAC, and less than 40% of the assets of which will consist of interests in SPAC (calculated as of the time of the Investor’s execution of this Subscription Agreement); and (iii) with respect to which each of the settlors and other contributors of assets, trustees, and other authorized decision makers is a person described in paragraph (1), (2) or (3) of this Section C. |
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3. |
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An entity that: (i) was not organized or reorganized and is not operated for the specific purpose of acquiring the interest or any other interest in the Issuer, and less than 40% of the assets of which will consist of interests in the Issuer (calculated as of the time of the Investor’s execution of this Subscription Agreement); and (ii) has discretionary investment authority with regard to at least USD 25,000,000 of investments, whether for its own account or for the account of other persons that are themselves accurately described by one or more other paragraphs of this Section C. |
This page should be completed by the Investor
and constitutes a part of the Subscription Agreement.
Exhibit 99.1
