CGRO 8-K
CoreValues Alpha Greater China Growth ETF (CGRO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 10, 2020
COLLECTIVE GROWTH CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-39276 | 84-3954038 |
| (State or Other Jurisdiction | (Commission | (IRS Employer |
| of Incorporation) | File Number) | Identification No.) |
1805 West Avenue
Austin, TX 78701
(Address of Principal Executive Offices) (Zip Code)
(512) 358-9085
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant | CGROU | The Nasdaq Stock Market LLC | ||
| Class A common stock, par value $0.0001 per share | CGRO | The Nasdaq Stock Market LLC | ||
| Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $11.50 per share | CGROW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
Business Combination Agreement
On December 10, 2020, Collective Growth Corporation, a Delaware corporation (“Collective Growth”), entered into a Business Combination Agreement (“Business Combination Agreement”) by and among Collective Growth, Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company” or “Innoviz”), Hatzata Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), Perception Capital Partners LLC, a Delaware limited liability company (“Perception”) (solely for purposes of Sections 2.2(d), 2.3(a), 2.8, 2.9, 5.2, 5.5, 7.2 and Article VIII) and Antara Capital LP, a Delaware limited partnership (“Antara”) (solely for purposes of Sections 5.2, 5.5, 7.2 and Article VIII).
Pursuant to the Business Combination Agreement, Merger Sub will merge with and into Collective Growth, with Collective Growth surviving the merger (the “Merger”). As a result of the Merger, and upon consummation of the Merger and the other transactions contemplated by the Business Combination Agreement (“Transactions”) Collective Growth will become a wholly-owned subsidiary of the Company, with the stockholders of Collective Growth becoming securityholders of the Company.
The pro forma valuation of the Company upon consummation of the Transactions is $1,375,000,000. We estimate that, upon consummation of the Transactions (the “Effective Time”), without giving effect to the issuance of Earnout Shares (defined below) and assuming none of Collective Growth’s public stockholders demand redemption (“SPAC Redemptions”) pursuant to Collective Growth’s amended and restated certificate of incorporation, the securityholders of the Company and certain members of the Company’s management receiving shares in the Transactions (“Company Management”) will own more than 75% of the outstanding ordinary shares of the Company (“Company Ordinary Shares”) and the securityholders of Collective Growth, Perception, Antara, and the Investors purchasing PIPE Shares will own the remaining Company Ordinary Shares.
The following securities issuances will be made by the Company to Collective Growth securityholders at the Effective Time and in each case assume the Stock Split (as defined below) has occurred: (i) each share of Class B common stock of Collective Growth after taking into account the forfeiture of 1,875,000 shares pursuant to the Forfeiture Agreement, will be exchanged for one Company Ordinary Share, (ii) each outstanding share of Class A common stock of Collective Growth will be exchanged for one Company Ordinary Share, and (iii) each outstanding warrant of Collective Growth will be assumed by the Company and will become a warrant of the company (“Company Warrant”) (with the number of Company Ordinary Shares underlying the Company Warrant and the exercise price of such Company Warrants subject to adjustment in accordance with the terms of the Merger Agreement).
The following securities issuances will be made by the Company to Company Management, the Company’s securityholders, and Perception at the Effective Time and in each case assume the Stock Split (as defined below): (i) each outstanding preferred share of the Company will be converted into one Company Ordinary Share, (ii) Company Management will be issued an aggregate of 2,847,436 Company Ordinary Shares and 3,986,410 Company Warrants, and (iii) Perception will be issued an aggregate of 3,448,526 Company Warrants.
Additionally, the Company will issue securities pursuant to the Subscription Agreement and the Antara Put Option Agreement, each as described in more detail below.
The Company Ordinary Shares and Company Warrants to be received by the Sponsors, Company Management, Perception, and Antara in connection with the Transactions, including the Earnout Shares, will be subject to the transfer restrictions described below under the heading “Lockup Agreement”.
Earnout
Pursuant to the Business Combination Agreement, if the last sale price of the Company Ordinary Shares on the Nasdaq Capital Market (“Nasdaq”) is greater than $10.97 for any ten (10) trading days out of a twenty (20) consecutive trading-day period at any time during the four years after the consummation of the Transactions, Perception, Antara and certain members of the Company’s management may be issued additional Company Ordinary Shares as follows:
(1) to Perception as additional consideration for services provided by Perception to the Company (x) 2,477,269 Company Ordinary Shares if the Initial Transaction Proceeds is equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference of (A) 2,477,269 and (B) the product of (i) 0.3866 and (ii) an earnout calculation (“Perception Earnout Calculation”) set forth in the Business Combination Agreement if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Perception, the “Perception Earnout Shares”); and
(2) to the Company Management, 1,423,718 Company Ordinary Shares (such shares, the “Management Earnout Shares”)
Pursuant to the Put Option Agreement, concurrently with the issuance of the Perception Earnout Shares, if any, Antara will be issued (x) 370,167 Company Ordinary Shares if the Initial Transaction Proceeds is equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference of (A) 370,167 and (B) the product of (i) 0.577 and (ii) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Perception, the “Antara Earnout Shares”, and together with the Perception Earnout Shares and Management Earnout Shares, the “Earnout Shares”).
Adjustments to Consideration
Prior to the Effective Time, the Company intends to effect a reverse stock split to cause the value of the outstanding Company Ordinary Shares immediately prior to the Effective Time to equal $10.00 per share (the “Stock Split”). Upon consummation of the Stock Split, the consideration to be issued to securityholders of Collective Growth, Company Management, Antara, and Perception shall be adjusted appropriately to reflect the effect of the Stock Split.
The Transactions are targeted to be consummated in the first quarter of 2021, after the required approval by the stockholders of Collective Growth (“Collective Growth Stockholder Approval”), ordinary shareholders of the Company (“Company Shareholder Approval”), and preferred shareholders of the Company (“Company Preferred Shareholder Approval”) and the fulfillment of certain other conditions.
Governance
After the consummation of the Transactions, the current officers of the Company will remain officers of the Company. The size of the board of directors of the Company will be increased and one director will be designated by Perception.
The following summaries of the Business Combination Agreement and the other agreements to be entered into by the parties are qualified in their entirety by reference to the text of the Business Combination Agreement and agreements entered into in connection therewith. The Business Combination Agreement is attached as an exhibit hereto and incorporated herein by reference.
Representations and Warranties
The Business Combination Agreement contains representations and warranties of the Company and its subsidiaries, including Merger Sub, relating, among other things, to proper organization and qualification; capitalization; the authorization, performance and enforceability against the Company of the Business Combination Agreement; financial statements; absence of undisclosed liabilities; governmental actions and filings; permits; material contracts; absence of certain changes; litigation; compliance with laws; benefit plans; environmental matters; intellectual property; labor matters; insurance; tax matters; brokers’ fees; real and personal property; transactions with affiliates; compliance with international trade and anti-corruption laws; the Company’s major customers and suppliers; product warranties and product liability; and the execution of the Subscription Agreements.
The Business Combination Agreement contains representations and warranties of Collective Growth relating, among other things, to proper organization and qualification; the authorization, performance and enforceability against Collective Growth of the Business Combination Agreement; governmental actions and filings; brokers’ fees; capitalization; reports filed with the Securities and Exchange Commission (“SEC”), financial statements, and compliance with the Sarbanes-Oxley Act; Collective Growth’s trust account; indebtedness; transactions with affiliates; litigation; compliance with laws; restrictions on business activities; Collective Growth’s internal controls, financial statements, and Nasdaq listing; absence of undisclosed liabilities; tax matters; absence of changes; employment matters; the execution of the Sponsor Support Agreement; status under the Investment Company Act; the absence of poison pill or similar anti-takeover matters; compliance with international trade and anti-corruption laws; the execution of the Sponsor Forfeiture Agreement; and non-Israeli residence.
Covenants
The Business Combination Agreement includes customary covenants of the parties with respect to business operations prior to consummation of the Transactions and efforts to satisfy conditions to the consummation of the Transactions. The Business Combination Agreement also contains additional covenants of the parties, including, among others, covenants providing for Collective Growth and the Company to cooperate in the preparation of the Registration Statement on Form F-4 required to be prepared in connection with the Merger (the “Registration Statement”), for the Company to terminate certain existing investor rights agreements with its securityholders (collectively, the “Company Investor Agreements”), and to enter into a consulting agreement with Wilson Kello, an officer of Collective Growth, with respect to transition and public company consulting services.
Additionally, prior to the Effective Time, Collective Growth will transfer the intellectual property rights relating to its name, trading symbols, and internet domain name, and certain material relating to its evaluation of alternative business combinations, to a third party.
Conditions to Closing
General Conditions
In addition, the consummation of the Transactions is conditioned upon, among other things:
| • | all specified waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended shall have expired; |
| • | no order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority or statute, rule or regulation that is in effect and prohibits or enjoins the consummation of the Transactions; |
| • | the Registration Statement shall have become effective in accordance with the provisions of the Securities Act of 1933, as amended (“Securities Act”), no stop order shall have been issued by the SEC that remains in effect with respect to the Registration Statement, and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC which remains pending; |
| • | the Company Shareholder Approval and Company Preferred Shareholder Approval shall have been obtained; |
| • | the Collective Growth Stockholder Approval shall have been obtained; |
| • | Collective Growth having at least $5,000,001 of net tangible assets remaining prior to the Transactions after taking into account the SPAC Redemptions; |
| • | no proceeding is pending or threatened that is reasonably likely to prevent consummation of the Transactions or cause the Transactions to be rescinded following consummation; |
| • | the Company’s application to list the Company Ordinary Shares (including the Company Ordinary Shares to be issued pursuant to the Merger) shall have been approved by Nasdaq, subject to official notice thereof and public holder requirements; and |
| • | the Sponsor Support Agreement, Sponsor Forfeiture Agreement, Company Transaction Support Agreement, Registration Rights Agreement, Lockup Agreement and an amendment to the Company’s warrant agreement shall have been executed and delivered by the parties thereto and shall be in full force and effect. |
Other Conditions to Collective Growth’s Obligations
The obligations of Collective Growth to consummate the Transactions are also conditioned upon, among other things:
| • | the accuracy of the representations and warranties of the Company and Merger Sub (subject to certain bring-down standards); |
| • | performance in all material respects of the covenants of the Company required by the Business Combination Agreement to be performed on or prior to the closing; |
| • | no material adverse effect with respect to the Company shall have occurred between the date of the Business Combination Agreement and the closing of the Transactions; |
| • | the Company having delivered certain customary officer’s and secretary’s certificates; |
| • | the Company’s board consisting of certain agreed persons; and |
| • | the Company having terminated the Company Investor Agreements. |
Other Conditions to the Company’s and Merger Sub’s Obligations
The obligations of the Company and Merger Sub to consummate the Transactions are also conditioned upon, among other things:
| • | the accuracy of the representations and warranties of Collective Growth (subject to certain bring-down standards); |
| • | performance in all material respects of the covenants of Collective Growth required by the Business Combination Agreement to be performed on or prior to the closing; |
| • | the aggregate amount remaining in Collective Growth’s trust account after taking into account the SPAC Redemptions, plus the aggregate amount raised in the PIPE, plus the aggregate purchase price of additional Company Ordinary Shares (the “Antara Top Up Shares”) subscribed for by Antara following any SPAC Redemptions (such amount, the “Initial Transaction Proceeds”), shall be equal to or greater than $200,000,000; |
| • | Collective Growth having delivered certain customary officer’s and secretary’s certificates; |
| • | each officer and director of Collective Growth having resigned as of the closing date; |
| • | the existing liabilities and expenses of Collective Growth shall not exceed $9,700,000; and |
| • | the Forfeiture shall have occurred and each other covenant pursuant to the Sponsor Forfeiture Agreement shall have been performed in all material respects. |
Waivers
Either Collective Growth or the Company may waive any inaccuracies in the representations and warranties made to such party contained in the Business Combination Agreement or in any document delivered pursuant to the Business Combination Agreement and waive compliance with any agreements or conditions for the benefit of itself or such party contained in the Business Combination Agreement or in any document delivered pursuant to the Business Combination Agreement. Notwithstanding the foregoing, pursuant to Collective Growth’s amended and restated certificate of incorporation, Collective Growth cannot consummate the proposed business combination if it has less than $5,000,001 of net tangible assets remaining upon consummation of the Transactions after taking into account the holders of public shares that properly demanded that Collective Growth redeem their public shares for their pro rata share of the trust account.
Termination
The Business Combination Agreement may be terminated:
| • | by mutual written consent of Collective Growth and the Company; | ||
| • | by Collective Growth if the Company or Merger Sub has breached any of its covenants or representations and warranties in any material respect and has not cured by the Termination Date, provided that Collective Growth is itself not in material breach; | ||
| • | by the Company if Collective Growth has breached any of its covenants or representations and warranties in any material respect and has not cured by the Termination Date, provided that the Company or Merger Sub is itself not in material breach; |
| • | by either Collective Growth or the Company if the Transactions are not consummated on or before May 30, 2021 (“Termination Date”), provided that the right to terminate the Business Combination Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of the Business Combination Agreement; |
| • | by either Collective Growth or the Company if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, judgment, ruling or other action is final and non-appealable, provided that the right to terminate the Business Combination Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of the Business Combination Agreement; | ||
| • | by ether Collective Growth or the Company if the Collective Growth shareholder meeting has been held, has concluded, Collective Growth’s stockholders have duly voted and the Collective Growth Stockholder Approval was not obtained; | ||
| • | by ether Collective Growth or the Company if the Company shareholder meeting has been held, has concluded, the Company’s shareholders have duly voted and the Company Shareholder Approval or the Company Preferred Shareholder Approval were not obtained; | ||
| • | by Collective Growth if, prior to obtaining the Company Shareholder Approval and the Company Preferred Shareholder Approval the Company board of directors changes its recommendation with respect to the Merger as permitted by the Business Combination Agreement; and | ||
| • | by the Company if, prior to obtaining the Collective Growth Stockholder Approval, the Collective Growth board of directors changes its recommendation with respect to the Merger as permitted by the Business Combination Agreement or fails to include a recommendation to vote in favor of the Merger in the Registration Statement. |
In the event that the Business Combination Agreement is terminated because the Company board of directors has changed its recommendation with respect to the Merger, the Company shall pay Collective Growth a termination fee in an amount equal to $14,625,000 as liquidated damages.
Incentive Equity Plan
Prior to the effectiveness of the Registration Statement, the Company will adopt an incentive equity plan, the form and terms of which shall be prepared by the Company and be reasonably acceptable to Collective Growth, reserving a number of Company Ordinary Shares for grant thereunder equal to seven percent (7%) of the fully-diluted issued and outstanding Company Ordinary Shares immediately after the Effective Time.
Lockup Agreement
Concurrently with the execution of the Business Combination Agreement, the Sponsors, Company Management, Perception, Antara, and certain securityholders of the Company entered into a Confidentiality and Lockup Agreement with the Company (“Lockup Agreement”), pursuant to which such persons agreed (i) to keep confidential certain Company information furnished to them and (ii) not to transfer certain Company Ordinary Shares and Company Warrants and any equity or derivative securities of the Company, except to certain permitted transferees, beginning at the Effective Time and continuing a period of one hundred eighty (180) days.
In connection with the Lockup Agreement, at the Effective Time, the transfer restrictions set forth in certain letter agreements among Collective Growth and the Sponsors will terminate.
Registration Rights Agreement
Concurrently with the execution of the Business Combination Agreement, the Company, Sponsors, Perception, Antara, and certain securityholders of the Company entered into a registration rights agreement (“Registration Rights Agreement”) pursuant to which the Company agreed to file a registration statement with respect to the registrable securities under the Registration Rights Agreement within sixty (60) days of the Effective Time to register the resale under the Securities Act of Company Ordinary Shares, including Company Ordinary Shares issuable upon the exercise of Company Warrants and any earned Earnout Shares, and the Company Warrants to be held by such securityholders, subject to certain conditions set forth therein. The Company also agreed to provide customary “piggyback” registration rights. The Registration Rights Agreement also provides that the Company will pay certain expenses relating to such registrations and indemnify the securityholders against certain liabilities. The rights granted under the Registration Rights Agreement supersede any prior registration, qualification, or similar rights of the parties with respect to their Company Securities, and all such prior agreements shall be terminated.
Sponsor Forfeiture Agreement
Concurrently with the execution of the Business Combination Agreement, the Sponsors entered into a letter agreement (“Sponsor Forfeiture Agreement”) in favor of the Company and Collective Growth, pursuant to which they have agreed to forfeit an aggregate of 1,875,000 shares of Collective Growth Class B common stock and 1,875,000 Collective Growth warrants for cancellation in exchange for no consideration at the Effective Time (the “Forfeiture”).
Sponsor Support Agreement
Concurrently with the execution of the Business Combination Agreement, the Sponsors entered into a letter agreement (“Sponsor Support Agreement”) in favor of the Company and Collective Growth, pursuant to which they have agreed to (i) vote all shares of Class B common stock and Class A common stock of Collective Growth beneficially owned by them in favor of the Merger and each other proposal related to the Merger on the agenda at the meeting of Collective Growth shareholders called to approve the Merger, (ii) appear at such shareholder meeting for the purpose of establishing a quorum, (iii) vote all such shares against any action that would reasonably be expected to materially impede, interfere with, delay, postpone, or adversely affect the Merger or any of the other transactions contemplated by the Business Combination Agreement, and (iv) not to transfer, assign, or sell such shares, except to certain permitted transferees, prior to the consummation of the Transactions.
Company Transaction Support Agreement
Concurrently with the execution of the Business Combination Agreement, Collective Growth, the Company, holders of Company Ordinary Shares who hold a majority of the then-outstanding Company Ordinary Shares, holders of at least sixty percent (60%) of the issued and outstanding Company preferred shares voting together as a single class on an as-converted basis, and holders of a majority of the then-outstanding series C convertible preferred shares of the Company and the series C-1 convertible preferred shares of the Company, entered into agreements (“Transaction Support Agreement”) pursuant to which they agreed to (i) appear at a shareholder meeting called by the Company for the purpose of approving the Business Combination, Merger, and other transactions contemplated by the Business Combination, for the purpose of establishing a quorum, (ii) execute a written consent in favor of the Merger, the adoption of the Business Combination, a proposal to increase the size of the Company’s board of directors, the termination of the Company Investor Agreements, and, with respect to the Company preferred shares, proposals to adopt amended and restated articles of association and waive certain preemptive rights as set forth in the Company’s charter documents, (iii) vote all such shares against any action that would reasonably be expected to materially impede, interfere with, delay, postpone, or adversely affect the Merger or any of the other transactions contemplated by the Business Combination Agreement, (iv) not to solicit, initiate, encourage, or facilitate certain alternate business combinations, and (v) not to transfer, assign, or sell such covered shares, except to certain permitted transferees, prior to the consummation of the Transactions.
PIPE Subscription Agreements
In connection with the Transactions, the Company engaged Goldman Sachs & Co. LLC as placement agent of a private placement of not less than $200,000,000 of Company Ordinary Shares (the “PIPE”).
Concurrently with the execution of the Business Combination Agreement, the Company and certain accredited investors (“Investors”) entered into a series of subscription agreements (“Subscription Agreements”) providing for the purchase by the Investors at the Effective Time of an aggregate of 20,000,000 Company Ordinary Shares (“PIPE Shares”) at a price per share of $10.00, for gross proceeds to the Company of $200,000,000. Each Investor agreed to fund the purchase price for its PIPE Shares within two (2) business days after receiving notice from the Company of the expected closing date of the Transactions. The price per share to be paid by the Investors pursuant to the Subscription Agreements assumes that the Company has effected the Stock Split. The closing of the PIPE is conditioned upon the consummation of the Transactions and other transactions contemplated by the Business Combination Agreement.
The Company agreed to file a registration statement registering the resale of the PIPE Shares within forty-five (45) days after the consummation of the Transactions.
The Company Ordinary Shares were offered and sold to the Investors in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, based on the fact that the sale will have been made without any general solicitation or advertising and based on representations from each Investor, among other things, that (a) it was a qualified institutional buyer or an accredited investor (to the extent applicable), (b) it was purchasing the shares for its own account investment, and not with a view to distribution, (c) it had been given access to full and complete access to information regarding Collective Growth, the Company, and the Merger, and (d) it understood that the offer and sale of the shares was not registered and the shares may not be publicly sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.
Antara Put Option Agreement
Concurrently with the execution of the Business Combination Agreement, the Company and Antara, on behalf of the funds it manages and/or its designees, entered into a put option agreement (“Put Option Agreement”) pursuant to which the Company caused Antara to subscribe for a number of Company Ordinary Shares in the PIPE with an aggregate equity value equal to $70,000,000. Additionally, Antara will receive at the Effective Time an additional 4,310,736 Company Warrants and up to 3,559,294 Company Ordinary Shares, as follows: (x) 3,559,294 Company Ordinary Shares if the Initial Transaction Proceeds is equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference of (A) 3,559,294 and (B) the product of (i) 0.5556 and (ii) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Antara, the “Antara Additional Shares”). Antara may also receive the Antara Earnout Shares, as described above under the section titled “Earnout”. The number of Company Shares and Company Warrants issuable pursuant to the Put Option Agreement assumes that the Company has effected the Stock Split.
The foregoing descriptions of the Lockup Agreement, Registration Rights Agreement, Sponsor Forfeiture Agreement, Sponsor Support Agreement, Company Transaction Support Agreement, Subscription Agreements, and Put Option Agreement are qualified in their entirety by the text of the Registration Rights Agreement, Sponsor Forfeiture Agreement, Sponsor Support Agreement, Company Transaction Support Agreement, Subscription Agreements, and Put Option Agreement, respectively. The forms of such agreements are attached as exhibits hereto and are incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
Press Release
Attached as Exhibit 99.1 to this Report is the press release jointly issued by the parties announcing the Transactions.
Investor Meetings
Attached as Exhibits 99.2 and 99.3 to this Report are the form of investor presentation to be used by Collective Growth and the Company in presentations to certain of their securityholders and other persons regarding the proposed Merger and a transcript of the investor presentation that was made in connection with the announcement of the execution of the Business Combination Agreement.
The information set forth below under this Item 7.01, including the exhibits attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Forward Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction between Innoviz and Collective Growth, including statements regarding the benefits of the transaction, the anticipated timing of the transaction, the services offered by Innoviz and the markets in which it operates, and Innoviz’s projected future results. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of Collective Growth’s securities, (ii) the risk that the transaction may not be completed by Collective Growth’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by Collective Growth, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the business combination agreement by the shareholders of Collective Growth and Innoviz, the satisfaction of the minimum trust account amount following redemptions by Collective Growth’s public shareholders and the receipt of certain governmental and regulatory approvals, (iv) the lack of a third party valuation in determining whether or not to pursue the proposed transaction, (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement, (vi) the effect of the announcement or pendency of the transaction on Innoviz’s business relationships, performance, and business generally, (vii) risks that the proposed transaction disrupts current plans of Innoviz and potential difficulties in Innoviz employee retention as a result of the proposed transaction, (viii) the outcome of any legal proceedings that may be instituted against Innoviz or against Collective Growth related to the business combination agreement or the proposed transaction, (ix) the ability of Innoviz to list its ordinary shares on the Nasdaq, (x) the price of Innoviz’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which Innoviz plans to operate, variations in performance across competitors, changes in laws and regulations affecting Innoviz’s business and changes in the combined capital structure, and (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Collective Growth’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other documents filed by Collective Growth from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and the registration statement on Form F-4 and proxy statement/prospectus discussed below. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Innoviz and Collective Growth assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither Innoviz nor Collective Growth gives any assurance that either Innoviz or Collective Growth will achieve its expectations.
Additional Information
COMMENCING SHORTLY AFTER THE FILING OF THIS CURRENT REPORT ON FORM 8-K, COLLECTIVE GROWTH INTENDS TO HOLD PRESENTATIONS FOR CERTAIN OF ITS STOCKHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING COLLECTIVE GROWTH’S SECURITIES, IN CONNECTION WITH THE PROPOSED TRANSACTIONS WITH INNOVIZ, AS DESCRIBED IN THIS CURRENT REPORT ON FORM 8-K. THIS CURRENT REPORT ON FORM 8-K, INCLUDING SOME OR ALL OF THE EXHIBITS HERETO, MAY BE DISTRIBUTED TO PARTICIPANTS AT SUCH PRESENTATIONS.
COLLECTIVE GROWTH AND INNOVIZ AND THEIR RESPECTIVE DIRECTORS AND EXECUTIVE OFFICERS, UNDER SEC RULES, MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES OF COLLECTIVE GROWTH’S STOCKHOLDERS IN CONNECTION WITH THE PROPOSED TRANSACTIONS. INVESTORS AND SECURITY HOLDERS MAY OBTAIN MORE DETAILED INFORMATION REGARDING THE NAMES AND INTERESTS IN THE PROPOSED TRANSACTIONS OF COLLECTIVE GROWTH’S DIRECTORS AND OFFICERS IN COLLECTIVE GROWTH’S FILINGS WITH THE SEC. INFORMATION REGARDING THE PERSONS WHO MAY, UNDER SEC RULES, BE DEEMED PARTICIPANTS IN THE SOLICITATION OF PROXIES TO COLLECTIVE GROWTH’S STOCKHOLDERS IN CONNECTION WITH THE PROPOSED TRANSACTIONS WILL BE SET FORTH IN THE REGISTRATION STATEMENT FOR THE PROPOSED TRANSACTIONS THAT INNOVIZ INTENDS TO FILE WITH THE SEC, WHICH WILL INCLUDE A PROXY STATEMENT AND PROSPECTUS FOR THE TRANSACTIONS. ADDITIONAL INFORMATION REGARDING THE INTERESTS OF PARTICIPANTS IN THE SOLICITATION OF PROXIES IN CONNECTION WITH THE PROPOSED TRANSACTIONS WILL BE INCLUDED IN THE REGISTRATION STATEMENT.
INVESTORS AND SECURITY HOLDERS OF COLLECTIVE GROWTH AND INNOVIZ ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS CONTAINING IMPORTANT INFORMATION ABOUT COLLECTIVE GROWTH AND INNOVIZ ONCE SUCH DOCUMENTS ARE FILED WITH THE SEC, THROUGH THE WEBSITE MAINTAINED BY THE SEC AT WWW.SEC.GOV. COPIES OF THE DOCUMENTS FILED WITH THE SEC BY COLLECTIVE GROWTH WHEN AND IF AVAILABLE, CAN BE OBTAINED FREE OF CHARGE ON COLLECTIVE GROWTH’S WEBSITE AT WWW.COLLECTIVE GROWTHCORP.COM OR BY DIRECTING A WRITTEN REQUEST TO COLLECTIVE GROWTH CORPORATION 1805 WEST AVENUE, AUSTIN, TX 78701.
SOME OF INNOVIZ’S FINANCIAL INFORMATION AND DATA CONTAINED HEREIN AND IN THE EXHIBITS HERETO DOES NOT CONFORM TO SEC REGULATION S-X IN THAT IT INCLUDES CERTAIN FINANCIAL INFORMATION NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”). ACCORDINGLY, SUCH INFORMATION AND DATA WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN THE REGISTRATION STATEMENT FILED WITH THE SEC. COLLECTIVE GROWTH AND INNOVIZ BELIEVE THAT THE PRESENTATION OF NON-GAAP MEASURES PROVIDES INFORMATION THAT IS USEFUL TO INVESTORS AS IT INDICATES MORE CLEARLY THE ABILITY OF INNOVIZ TO MEET CAPITAL EXPENDITURES AND WORKING CAPITAL REQUIREMENTS AND OTHERWISE MEET ITS OBLIGATIONS AS THEY BECOME DUE.
THE FINANCIAL PROJECTIONS INCLUDED IN THIS CURRENT REPORT AND THE EXHIBITS HERETO ARE FORWARD-LOOKING STATEMENTS THAT ARE BASED ON ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND COLLECTIVE GROWTH’S AND INNOVIZ’S CONTROL. WHILE ALL PROJECTIONS ARE NECESSARILY SPECULATIVE, COLLECTIVE GROWTH AND INNOVIZ BELIEVE THAT THE PROSPECTIVE FINANCIAL INFORMATION COVERING PERIODS BEYOND TWELVE MONTHS FROM ITS DATE OF PREPARATION CARRIES INCREASINGLY HIGHER LEVELS OF UNCERTAINTY AND SHOULD BE READ IN THAT CONTEXT. THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR MATERIALLY LESS THAN THOSE CONTAINED IN THE PROJECTIONS. THE INCLUSION OF PROJECTIONS IN THIS REPORT AND THE EXHIBITS HERETO SHOULD NOT BE REGARDED AS AN INDICATION THAT COLLECTIVE GROWTH AND INNOVIZ, OR THEIR REPRESENTATIVES, CONSIDERED OR CONSIDER THE PROJECTIONS TO BE A RELIABLE PREDICTION OF FUTURE EVENTS.
THIS CURRENT REPORT AND THE EXHIBITS HERETO ARE NOT A PROXY STATEMENT OR SOLICITATION OF A PROXY, CONSENT OR AUTHORIZATION WITH RESPECT TO ANY SECURITIES OR IN RESPECT OF THE PROPOSED TRANSACTIONS AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OF COLLECTIVE GROWTH OR INNOVIZ, NOR SHALL THERE BE ANY SALE OF ANY SUCH SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE OR JURISDICTION.
THIS REPORT AND THE EXHIBITS HERETO ARE NOT INTENDED TO BE ALL-INCLUSIVE OR TO CONTAIN ALL THE INFORMATION THAT A PERSON MAY DESIRE IN CONSIDERING AN INVESTMENT IN COLLECTIVE GROWTH AND IS NOT INTENDED TO FORM THE BASIS OF ANY INVESTMENT DECISION IN COLLECTIVE GROWTH OR INNOVIZ.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| * | Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). Collective Growth agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: December 14, 2020 | COLLECTIVE GROWTH CORPORATION | |||||
| By: |
/s/ Bruce Linton | |||||
| Bruce Linton | ||||||
| Chairman and Chief Executive Officer | ||||||
Exhibit 2.1
BUSINESS COMBINATION AGREEMENT
BY AND AMONG
COLLECTIVE GROWTH CORPORATION
HATZATA MERGER SUB, INC.
INNOVIZ TECHNOLOGIES LTD.
PERCEPTION CAPITAL PARTNERS LLC
(solely for purposes of Sections 2.2(d), 2.3(a), 2.8, 2.9, 5.2, 5.5, 7.2 and Article VIII)
AND
ANTARA CAPITAL LP
(solely for purposes of Sections 5.2, 5.5, 7.2 and Article VIII)
DATED AS OF DECEMBER 10, 2020
TABLE OF CONTENTS
| Page | |
| Article I. CERTAIN DEFINITIONS | 4 |
| Section 1.1 Definitions | 4 |
| Article II. MERGER | 22 |
| Section 2.1 The Merger; Company Preferred Shares. | 22 |
| Section 2.2 Merger Consideration | 23 |
| Section 2.3 Earnout | 24 |
| Section 2.4 No Fractional Company Ordinary Shares. | 25 |
| Section 2.5 Closing of the Transactions Contemplated by this Agreement. | 26 |
| Section 2.6 Deliverables | 26 |
| Section 2.7 Withholding | 28 |
| Section 2.8 Lockup Agreement and Registration Rights Agreement | 28 |
| Section 2.9 Adjustments. | 29 |
| Article III. REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP COMPANIES AND MERGER SUB | 29 |
| Section 3.1 Organization and Qualification | 29 |
| Section 3.2 Capitalization of the Group Companies | 30 |
| Section 3.3 Authority | 32 |
| Section 3.4 Financial Statements; Undisclosed Liabilities | 32 |
| Section 3.5 Consents and Requisite Governmental Approvals; No Violations | 33 |
| Section 3.6 Permits | 34 |
| Section 3.7 Material Contracts; No Defaults | 34 |
| Section 3.8 Absence of Changes | 36 |
| Section 3.9 Litigation | 36 |
| Section 3.10 Compliance with Applicable Law | 36 |
| Section 3.11 Employee Plans | 36 |
| Section 3.12 Environmental Matters | 38 |
| Section 3.13 Intellectual Property | 39 |
| Section 3.14 Labor Matters | 43 |
| Section 3.15 Insurance | 44 |
| Section 3.16 Tax Matters | 44 |
| Section 3.17 Brokers | 47 |
| Section 3.18 Real and Personal Property | 47 |
| Section 3.19 Transactions with Affiliates | 48 |
| Section 3.20 Compliance with International Trade & Anti-Corruption Laws | 48 |
| Section 3.21 Customers and Suppliers | 49 |
| Section 3.22 Product Warranties; Product Liability | 50 |
| Section 3.23 PIPE Financing | 50 |
| Section 3.24 Information Supplied | 51 |
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| Section 3.25 Investigation; No Other Representations | 51 |
| Section 3.26 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 51 |
| Article IV. REPRESENTATIONS AND WARRANTIES RELATING TO SPAC | 52 |
| Section 4.1 Organization and Qualification | 52 |
| Section 4.2 Authority | 52 |
| Section 4.3 Consents and Requisite Governmental Approvals; No Violations | 53 |
| Section 4.4 Brokers | 54 |
| Section 4.5 Information Supplied | 54 |
| Section 4.6 Capitalization of SPAC | 54 |
| Section 4.7 SEC Filings | 55 |
| Section 4.8 Trust Account | 56 |
| Section 4.9 Indebtedness | 56 |
| Section 4.10 Transactions with Affiliates | 57 |
| Section 4.11 Litigation | 57 |
| Section 4.12 Compliance with Applicable Law | 57 |
| Section 4.13 Business Activities | 57 |
| Section 4.14 Internal Controls; Listing; Financial Statements | 58 |
| Section 4.15 No Undisclosed Liabilities | 59 |
| Section 4.16 Tax Matters | 60 |
| Section 4.17 Material Contracts; No Defaults | 61 |
| Section 4.18 Absence of Changes | 62 |
| Section 4.19 Employee Benefit Plans | 62 |
| Section 4.20 Sponsor Letter Agreement | 63 |
| Section 4.21 Investment Company Act | 63 |
| Section 4.22 Charter Provisions | 63 |
| Section 4.23 Compliance with International Trade & Anti-Corruption Laws | 63 |
| Section 4.24 Forfeiture Agreement | 64 |
| Section 4.25 Investigation; No Other Representations | 64 |
| Section 4.26 Residency | 64 |
| Section 4.27 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 65 |
| Article V. COVENANTS | 65 |
| Section 5.1 Conduct of Business of the Company | 65 |
| Section 5.2 Efforts to Consummate; Litigation | 69 |
| Section 5.3 Confidentiality and Access to Information | 71 |
| Section 5.4 Public Announcements | 72 |
| Section 5.5 Tax Matters | 73 |
| Section 5.6 Exclusive Dealing | 74 |
| Section 5.7 Preparation of Registration Statement / Proxy Statement | 76 |
| Section 5.8 SPAC Stockholder Approval | 77 |
| Section 5.9 Merger Sub Shareholder Approval | 78 |
| Section 5.10 Conduct of Business of SPAC | 78 |
| Section 5.11 Nasdaq Listing | 80 |
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| Section 5.12 Trust Account | 80 |
| Section 5.13 Transaction Support Agreements; Company Preferred Approval and Company Shareholder Approval; Subscription Agreements | 81 |
| Section 5.14 Indemnification; Directors’ and Officers’ Insurance | 82 |
| Section 5.15 Post-Closing Officers | 83 |
| Section 5.16 PCAOB Financials | 83 |
| Section 5.17 Certain Financial Information | 83 |
| Section 5.18 Company Incentive Equity Plan | 84 |
| Section 5.19 SPAC Transfer of Certain Intellectual Property | 84 |
| Section 5.20 Company Warrant Agreement | 84 |
| Section 5.21 Termination of Company Investor Agreements. | 84 |
| Section 5.22 No SPAC Securities Transactions. | 85 |
| Section 5.23 Section 16 of the Exchange Act | 85 |
| Section 5.24 Consulting Agreement | 85 |
| Article VI. CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT | 85 |
| Section 6.1 Conditions to the Obligations of the Parties | 85 |
| Section 6.2 Other Conditions to the Obligations of SPAC | 86 |
| Section 6.3 Other Conditions to the Obligations of the Company Parties | 87 |
| Section 6.4 Frustration of Closing Conditions | 88 |
| Article VII. TERMINATION | 88 |
| Section 7.1 Termination | 88 |
| Section 7.2 Effect of Termination | 90 |
| Article VIII. MISCELLANEOUS | 90 |
| Section 8.1 Non-Survival | 90 |
| Section 8.2 Entire Agreement; Assignment | 91 |
| Section 8.3 Amendment | 91 |
| Section 8.4 Notices | 91 |
| Section 8.5 Governing Law | 93 |
| Section 8.6 Fees and Expenses | 94 |
| Section 8.7 Construction; Interpretation | 94 |
| Section 8.8 Exhibits and Schedules | 95 |
| Section 8.9 Parties in Interest | 95 |
| Section 8.10 Severability | 95 |
| Section 8.11 Counterparts; Electronic Signatures | 95 |
| Section 8.12 Knowledge of Company; Knowledge of SPAC | 96 |
| Section 8.13 No Recourse | 96 |
| Section 8.14 Extension; Waiver | 96 |
| Section 8.15 Waiver of Jury Trial | 97 |
| Section 8.16 Submission to Jurisdiction | 97 |
| Section 8.17 Remedies | 98 |
| Section 8.18 Trust Account Waiver | 98 |
| Section 8.19 Conflicts; Privilege | 99 |
EXHIBITS
| Exhibit A | Form of Subscription Agreement |
| Exhibit B | Form of Forfeiture Agreement |
| Exhibit C | Form of Sponsor Letter Agreement |
| Exhibit D | Form of Transaction Support Agreements |
| Exhibit E | Form of Registration Rights Agreement |
| Exhibit F | Form of Lockup Agreement |
| Exhibit G | Form of Company Warrant Agreement |
| Exhibit H | Form of Company A&R Articles of Association |
iii
BUSINESS COMBINATION AGREEMENT
This BUSINESS COMBINATION AGREEMENT (this “Agreement”), dated as of December 10, 2020, is entered into by and among Collective Growth Corporation, a Delaware corporation (“SPAC”), Hatzata Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company”), solely for purposes of Sections 2.2(d), 2.3, 2.8, 2.9, 5.2, 5.5, 7.2 and Article VIII (collectively with the definitions in Section 1.1 of any terms used but not defined in such Sections, the “Perception Provisions”), Perception Capital Partners LLC, a Delaware limited liability company (“Perception”), and solely for purposes of Sections 5.2, 5.5, 7.2 and Article VIII (collectively with the definitions in Section 1.1 of any terms used but not defined in such Sections, the “Antara Provisions”), Antara Capital LP (“Antara”). SPAC, Merger Sub and the Company shall be referred to herein from time to time collectively as the “Parties.” Capitalized terms used but not otherwise defined herein have the meanings set forth in Section 1.1.
WHEREAS, SPAC is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities;
WHEREAS, Merger Sub is a newly formed, wholly owned, direct Subsidiary of the Company that was formed for purposes of consummating the transactions contemplated by this Agreement and the Ancillary Documents (the “Transactions”);
WHEREAS, subject to the terms and conditions hereof, on the Closing Date, (a) Merger Sub will merge with and into SPAC (the “Merger”), with SPAC surviving the Merger as a wholly owned Subsidiary of the Company, (b) each SPAC Share will be automatically converted as of the Effective Time into the right to receive the Per Share Consideration, (c) each of the 1,875,000 Sponsor Shares (which number excludes the Sponsor Shares to be forfeited pursuant to the Forfeiture Agreement) will be automatically converted as of the Effective Time into the right to receive the Per Share Consideration, (d) Perception will be issued 3,448,526 Perception Company Warrants, (e) certain members of Company Management will receive 2,847,436 Management Shares and 3,986,410 Management Warrants, (f) all of the Company Preferred Shares will be converted into Company Ordinary Shares, and (g) each of the 1,687,500 SPAC Warrants (which number excludes the SPAC Warrants to be forfeited pursuant to the Forfeiture Agreement) will automatically become a Company Warrant and all rights with respect to SPAC Shares underlying the SPAC Warrants will be automatically converted into rights with respect to Company Ordinary Shares and thereupon assumed by the Company;
WHEREAS, the SPAC Board has (a) approved this Agreement, the Ancillary Documents to which SPAC is or will be a party and the transactions contemplated hereby and thereby (including the Merger) and (b) recommended, among other things, approval of this Agreement and the Transactions (including the Merger) by the holders of SPAC Shares entitled to vote thereon;
WHEREAS, the board of directors of Merger Sub has approved this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger);
WHEREAS, the Company, acting in its capacity as the sole shareholder of Merger Sub, has approved this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger);
WHEREAS, the board of directors of the Company (the “Company Board”) has (a) approved this Agreement, the Ancillary Documents to which the Company is or will be a party and the transactions contemplated hereby and thereby (including the Merger) and (b) recommended, among other things, the approval of the Company Preferred Shareholder Proposals and the Company Shareholder Proposals, by the holders of Company Shares entitled to vote thereon at the Company Shareholder Meeting;
WHEREAS, concurrently with the execution of this Agreement, the Company and each of the parties (the “Subscribers”) subscribing for Company Ordinary Shares have entered into certain subscription agreements, dated as of the date hereof (as amended or modified from time to time, collectively, the “Subscription Agreements”), in substantially the form attached hereto as Exhibit A, pursuant to which, among other things, each Subscriber has agreed to subscribe for and purchase on the Closing Date immediately following the Closing, and the Company has agreed to issue and sell to each such Subscriber on the Closing Date immediately following the Closing, the number of Company Ordinary Shares set forth in the applicable Subscription Agreement in exchange for the purchase price set forth therein (the aggregate purchase price under all Subscription Agreements, collectively, the “PIPE Financing Amount”, and the equity financing under all Subscription Agreements, collectively, hereinafter referred to as, the “PIPE Financing”), on the terms and subject to the conditions set forth in the applicable Subscription Agreement;
WHEREAS, as of the date of this Agreement, the initial stockholders of SPAC (collectively, the “Sponsor”) own an aggregate of 3,750,000 Sponsor Shares and 1,875,000 SPAC Warrants;
WHEREAS, concurrently with the execution of this Agreement, Sponsor and SPAC are entering into the forfeiture agreement in substantially the form attached hereto as Exhibit B (the “Forfeiture Agreement”), pursuant to which, among other things, immediately prior to the Effective Time, Sponsor will forfeit to SPAC for cancellation in exchange for no consideration 1,875,000 Sponsor Shares and 187,500 SPAC Warrants (the “Forfeiture”);
WHEREAS, subject to the terms and conditions of Section 2.3, certain members of the Company Management may receive up to an additional 1,423,718 Company Ordinary Shares;
WHEREAS, subject to the terms and conditions of Section 2.3, Perception may receive up to 2,477,269 Company Ordinary Shares;
WHEREAS, subject to the terms and conditions of the Put Option Agreement, Antara, on behalf of the funds it manages and/or its designees, will receive 4,310,736 Company Warrants on the Closing Date and may receive up to 3,929,461 Company Ordinary Shares;
WHEREAS, concurrently with the execution of this Agreement, Sponsor, SPAC and the Company are entering into the sponsor letter agreement in substantially the form attached hereto as Exhibit C (the “Sponsor Letter Agreement”), pursuant to which, among other things, Sponsor has agreed to vote in favor of this Agreement and the transactions contemplated hereby (including the Merger) on the terms and subject to the conditions set forth in the Sponsor Letter Agreement;
2
WHEREAS, concurrently with the execution of this Agreement, certain Company Shareholders (collectively, the “Supporting Company Shareholders”) are entering into a transaction support agreement, substantially in the form attached hereto as Exhibit D (collectively, the “Transaction Support Agreements”), pursuant to which, among other things, each such Supporting Company Shareholder will agree to vote in favor of the approval of the Company Preferred Shareholder Proposals and the Company Shareholder Proposals, as applicable, at the Company Shareholder Meeting;
WHEREAS, pursuant to the Governing Documents of SPAC, SPAC is required to provide an opportunity for its public shareholders to have their outstanding SPAC Shares redeemed for the consideration, and on the terms and subject to the conditions and limitations, set forth in the Governing Documents of SPAC and the Trust Agreement (the “Offer”);
WHEREAS, concurrently with the execution of this Agreement, in connection with the Merger, the Company, certain Company Shareholders, the Sponsor and certain SPAC Stockholders who will receive Company Ordinary Shares pursuant to Article II of this Agreement will enter into that certain Registration Rights Agreement (the “Registration Rights Agreement”), substantially in the form set forth on Exhibit E to be effective upon the Closing;
WHEREAS, concurrently with the execution of this Agreement, in connection with the Merger, the Company, certain Company Shareholders, Sponsor and certain SPAC Stockholders who will receive Company Ordinary Shares pursuant to Article II of this Agreement have entered into those certain Lockup Agreements (collectively, the “Lockup Agreement”) substantially in the form set forth on Exhibit F, each to be effective upon the Closing;
WHEREAS, at the Closing, in connection with the Merger, the Company and Continental will enter into that certain Amendment to the Company Warrant Agreement (the “Company Warrant Agreement”), substantially in the form set forth on Exhibit G to be effective upon the Closing;
WHEREAS, the Company shall, subject to obtaining the Company Preferred Shareholder Approval, the Company Shareholder Approval, and the SPAC Stockholder Approval, adopt the amended and restated articles of association of the Company (the “Company A&R Articles of Association”) substantially in the form attached hereto as Exhibit H, effective immediately following the Effective Time; and
WHEREAS, immediately prior to the Effective Time, the Company shall, subject to obtaining the Company Preferred Shareholder Approval, the Company Shareholder Approval, and the SPAC Stockholder Approval, adopt the Company Incentive Equity Plan.
NOW, THEREFORE, in consideration of the premises and the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, Perception, with respect to the Perception Provisions, and Antara, with respect to the Antara Provisions, each intending to be legally bound, hereby agree as follows:
3
Article
I.
CERTAIN DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms have the respective meanings set forth below.
“Affiliate” means, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto.
“Aggregate Transaction Proceeds” means an amount equal to (a) the aggregate cash proceeds available for release to SPAC from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the SPAC Stockholder Redemptions but before release of any other funds) plus (b) the PIPE Financing Amount plus (c) the Antara Top-Up Amount, if any.
“Aggregate Transaction Share Consideration” means an aggregate number of Company Ordinary Shares equal to (a) Equity Value divided by (b) the Company Share Value.
“Agreement” has the meaning set forth in the introductory paragraph to this Agreement.
“Ancillary Documents” means the Sponsor Letter Agreement, the Subscription Agreements, the Forfeiture Agreement, the Transaction Support Agreements, the Registration Rights Agreement, the Lockup Agreement, the Company Warrant Agreement, and each other agreement, document, instrument and/or certificate contemplated by this Agreement executed or to be executed in connection with the transactions contemplated hereby.
“Antara” means Antara Capital LP, a Delaware limited partnership.
“Antara Top-up Amount” means the aggregate purchase price of the additional Company Ordinary Shares subscribed for by Antara, at a price per Company Ordinary Share equal to the Put Share Price (as defined in the Put Option Agreement), following the SPAC Stockholders Meeting, if any, to replace the cash released from the Trust Account in satisfaction of SPAC Stockholder Redemptions, if any.
“Anti-Corruption Laws” means, collectively, the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act 2010, the Israeli Penal Law (Bribery Transactions), 1977; the Israeli Prohibition on Money Laundering Law (Bribery Transactions), 2000, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the UN Convention against Corruption, United States Currency, Foreign Transactions Reporting Act of 1970, as amended, and any other applicable anti-bribery or anti-corruption Laws related to combatting bribery, corruption and money laundering.
4
“Business Combination Proposal” has the meaning set forth in Section 5.8.
“Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York and Tel-Aviv, Israel are open for the general transaction of business.
“Certificate of Merger” has the meaning set forth in Section 2.1(b).
“Change of Control Consideration” means the amount per Company Share to be received by Company Shareholders in connection with a Change of Control Transaction, with any non-cash consideration valued as determined by the value ascribed to such consideration by the parties to such transaction.
“Change of Control Transaction” means any transaction or series of related transactions (a) under which any Person(s), directly or indirectly, acquires or otherwise purchases (i) another Person or any of its Affiliates or (ii) all or a material portion of assets, businesses or Equity Securities of another Person, (b) that results, directly or indirectly, in the shareholders of a Person as of immediately prior to such transaction holding, in the aggregate, less than fifty percent (50%) of the voting shares of such Person (or any successor or parent company of such Person) immediately after the consummation thereof (in the case of each of clause (a) and (b), whether by merger, consolidation, tender offer, recapitalization, purchase or issuance of Equity Securities, tender offer or otherwise), or (c) under which any Persons(s) makes any equity or similar investment in another Person.
“Closing” has the meaning set forth in Section 2.5.
“Closing Company Audited Financial Statements” has the meaning set forth in Section 5.16.
“Closing Date” has the meaning set forth in Section 2.5.
“Closing Filing” has the meaning set forth in Section 5.4(b).
“Closing Press Release” has the meaning set forth in Section 5.4(b).
“COBRA” means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code and any similar state Law.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the introductory paragraph to this Agreement.
“Company A&R Articles of Association” has the meaning set forth in the recitals to this Agreement.
5
“Company Acquisition Proposal” means (a) any transaction or series of related transactions under which any Person(s), directly or indirectly, (i) acquires or otherwise purchases control of the Company or any of its controlled Affiliates or (ii) all or a material portion of assets or businesses of the Company or any of its controlled Affiliates (in the case of each of clause (i) and (ii), whether by merger, consolidation, recapitalization, purchase or issuance of Equity Securities, tender offer or otherwise), or (b) any equity or similar investment in the Company or any of its controlled Affiliates. Notwithstanding the foregoing or anything to the contrary herein, none of this Agreement, the Ancillary Documents nor the Transactions shall constitute a Company Acquisition Proposal.
“Company Board” has the meaning set forth in the recitals to this Agreement.
“Company Board Recommendation” has the meaning set forth in Section 5.13(c).
“Company Change in Recommendation” means a change to, withdrawal of, withholding of, qualification of or modification of, or public proposal to change, withdraw, withhold, qualify or modify, the Company Board Recommendation, in each case by the Company Board or a committee thereof.
“Company Disclosure Schedules” means the disclosure schedules to this Agreement delivered to SPAC by the Company on the date of this Agreement.
“Company Equity Award” means, as of any determination time, each Company Option and each other award to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company of rights of any kind to receive any Equity Security of any Group Company under any Company Equity Plan or otherwise that is outstanding.
“Company Equity Plan” means the (a) Company’s Share Option Plan and (b) each other plan that provides for the award to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company of rights of any kind to receive Equity Securities of any Group Company or benefits measured in whole or in part by reference to Equity Securities of any Group Company.
“Company Expenses” means, as of any determination time, the aggregate amount of fees, expense, commissions or other amounts incurred by or on behalf of, or otherwise payable by, whether or not due, any Group Company or Merger Sub in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions, including (a) the fees and expenses of outside legal counsel, accountants, advisors, brokers, investment bankers, consultants, or other agents or service providers of any Group Company or Merger Sub, and (b) any other fees, expenses, commissions or other amounts that are expressly allocated to any Group Company or Merger Sub pursuant to this Agreement or any Ancillary Document, including all fees for registering the Company Securities on the Registration Statement, all fees for the application for listing the Company Securities on Nasdaq, and fifty percent (50%) of the fees due in connection with the HSR Act filing (it being understood that the remainder of such fees will be paid by Perception and Antara and not by SPAC). Notwithstanding the foregoing or anything to the contrary herein, Company Expenses shall not include any SPAC Expenses.
6
“Company Fundamental Representations” means the representations and warranties set forth in Section 3.1(a) and Section 3.1(b) (Organization and Qualification), Section 3.2(a) and Section 3.2(c) (Capitalization of the Group Companies), Section 3.3 (Authority), Section 3.8 (Absence of Changes), and Section 3.17 (Brokers).
“Company Incentive Equity Plan” has the meaning set forth in Section 5.17.
“Company Investor Agreements” has the meaning set forth in Section 3.19.
“Company Licensed Intellectual Property” means Intellectual Property Rights owned by any Person (other than a Group Company) that is licensed to any Group Company.
“Company Management” means the employees of the Company listed in the first column in the chart on Schedule 2.2(e) of the Company Disclosure Schedules.
“Company Material Adverse Effect” means any change, event, effect or occurrence that, individually or in the aggregate with any other change, event, effect or occurrence, has had or would reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of the Group Companies, taken as a whole; provided, however, that none of the following shall be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably likely to occur: any adverse change, event, effect or occurrence arising after the date of this Agreement from or related to (i) general business or economic conditions in or affecting the United States or Israel, or changes therein, or the global economy generally, (ii) acts of war, sabotage, or terrorism (including cyberterrorism) in the United States, Israel, or other territories in which a material portion of the business of the Group Companies is located, (iii) changes in conditions of the financial, banking, capital or securities markets generally in the United States or Israel, including changes in interest rates in the United States or Israel and changes in exchange rates for the currencies of such countries, (iv) changes in any applicable Laws or GAAP or any official interpretation thereof, (v) any change, event, effect or occurrence that is generally applicable to the industries or markets in which any Group Company operates, (vi) the execution or public announcement of this Agreement or the pendency or consummation of the transactions contemplated by this Agreement, including the impact thereof on the relationships, contractual or otherwise, of any Group Company with employees, customers, investors, contractors, lenders, suppliers, vendors, partners, licensors, licensees, payors or other third-parties related thereto (provided that the exception in this clause (vi) shall not apply to the representations and warranties set forth in Section 3.5(b) to the extent that its purpose is to address the consequences resulting from the public announcement or pendency or consummation of the transactions contemplated by this Agreement or the condition set forth in Section 6.2(a) to the extent it relates to such representations and warranties), (vii) any failure by any Group Company to meet, or changes to, any internal or published budgets, projections, forecasts, estimates or predictions (it being understood that the underlying facts giving rise or contributing to such failure or change may be taken into account in determining whether there has been a Material Adverse Effect if otherwise contemplated by, and not otherwise excluded from, this definition), or (viii) any hurricane, tornado, flood, earthquake, tsunami, natural disaster, mudslides, wild fires, epidemics, pandemics (including COVID-19 or SARS-CoV-2 virus or any mutation or variation thereof) or acts of God or other natural disasters or comparable events in the United States or Israel, or any escalation of the foregoing; provided, however, that any change, event, effect or occurrence resulting from a matter described in any of the foregoing clauses (i) through (v) or (vii)-(viii) may be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably likely to occur to the extent such change, event, effect or occurrence has a disproportionate adverse effect on the Group Companies, taken as a whole, relative to other participants operating in the industries or markets in which the Group Companies operate.
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“Company Non-Party Affiliates” means, collectively, each Company Related Party and each former, current or future Affiliates, Representatives, successors or permitted assigns of any Company Related Party (other than, for the avoidance of doubt, the Company Parties).
“Company Option” means, as of any determination time, each option to purchase Company Ordinary Shares that is outstanding and unexercised, whether granted under a Company Equity Plan or otherwise.
“Company Ordinary Shares” means ordinary shares of no par value of the Company.
“Company Owned Intellectual Property” means all Intellectual Property Rights that are owned by the Group Companies, including the Company Registered Intellectual Property.
“Company Parties” means, together, the Company and Merger Sub.
“Company Preferred A Shares” means the series A convertible preferred shares of the Company, no par value.
“Company Preferred B Shares” means the series B convertible preferred shares of the Company, no par value.
“Company Preferred B-1 Shares” means the series B-1 convertible preferred shares of the Company, no par value.
“Company Preferred C Shares” means the series C convertible preferred shares of the Company, no par value.
“Company Preferred C-1 Shares” means the series C-1 convertible preferred shares of the Company, no par value.
“Company Preferred Shareholder Approval” means the affirmative vote of the Preferred Majority, voting as a single class, at the Company Shareholder Meeting, including the affirmative vote of the Preferred C Majority, approving the Company Preferred Shareholder Proposals.
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“Company Preferred Shareholder Proposals” means (i) the adoption and approval of the proposal to convert the Company Preferred Shares into Company Ordinary Shares, (ii) the proposal to increase the size of the Company Board, (iii) the adoption and approval of a proposal to terminate each Company Investor Agreement requiring consent of the Company Preferred Shareholders, (iv) the adoption of the Company A&R Articles of Association, (v) the waiver of preemptive rights set forth in the Company’s Charter Documents, and (vi) the adoption and approval of each other proposal reasonably agreed to by the Company and SPAC as necessary or appropriate in connection with the consummation of the Transactions that would require the approval of all or certain holders of Company Preferred Shares.
“Company Preferred Shares” means, collectively, the Company Preferred A Shares, the Company Preferred B Shares, the Company Preferred B-1 Shares, the Company Preferred C Shares and the Company Preferred C-1 Shares.
“Company Product” means each product of the Group Companies that is sold or distributed to customers or end-users on a commercial basis.
“Company Registered Intellectual Property” means all Registered Intellectual Property owned by any Group Company.
“Company Related Party” has the meaning set forth in Section 3.19.
“Company Related Party Transactions” has the meaning set forth in Section 3.19.
“Company Share Value” means $8.779827.
“Company Shareholder Meeting” has the meaning set forth in Section 5.13(b).
“Company Shareholder Proposals” means (i) the proposal to increase the size of the Company Board, (ii) the adoption and approval of a proposal to terminate each Company Investor Agreement requiring consent of the Company Shareholders, (iii) the adoption and approval of each other proposal reasonably agreed to by the Company and SPAC as necessary or appropriate in connection with the consummation of the Transactions that would require the approval of all or certain holders of Company Shares, and (iv) the adoption of the Company A&R Articles of Association.
“Company Shareholder Approval” means the affirmative vote of the holders of Company Shares holding more than fifty percent (50%) of the then issued and outstanding Company Shares, on an as-converted basis, at the Company Shareholder Meeting, approving the Company Shareholder Proposals.
“Company Shareholders” means, collectively, the holders of Company Shares as of any determination time prior to the Effective Time.
“Company Shares” means, collectively, the Company Preferred Shares and the Company Ordinary Shares.
“Company Warrant Agreement” has the meaning set forth in the recitals to this Agreement.
“Company Warrants” means warrants to purchase Company Ordinary Shares on the terms set forth in the Company Warrant Agreement.
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“Confidentiality Agreement” means, that certain Non-Disclosure Agreement, dated as of October 1, 2020, by and between the Company and SPAC.
“Consent” means any notice, authorization, qualification, registration, filing, notification, waiver, Order, consent, clearance or approval to be obtained from, filed with or delivered to, a Governmental Entity or other Person.
“Continental” means Continental Stock Transfer & Trust Company.
“Contract” or “Contracts” means any written agreement, contract, license, lease, obligation, undertaking or other commitment or arrangement that is legally binding upon a Person or any of his, her or its properties or assets.
“Copyrights” has the meaning set forth in the definition of Intellectual Property Rights.
“COVID-19” means SARS-CoV-2, coronavirus or COVID-19, and any evolutions thereof or related or associated epidemics, pandemic or disease outbreaks.
“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, mask wearing, temperature taking, personal declaration, “purple badge standard”, shut down, closure, sequester or any other Law, decree, judgment, injunction or other Order, directive, guidelines or recommendations by any Governmental Entity or industry group in connection with or in response to COVID-19 pandemic, including, the Coronavirus Aid, Relief, and Economic Security Act (CARES).
“Creator” has the meaning set forth in Section 3.13(d).
“DGCL” means the Delaware General Corporation Law.
“D&O Persons” has the meaning set forth in Section 5.15(a).
“Earnout Period” has the meaning set forth in Section 2.3(a).
“Earnout Shares” has the meaning set forth in Section 2.3(b).
“Effective Time” has the meaning set forth in Section 2.1(b).
“Employee Benefit Plan” means (i) each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA, whether or not subject to ERISA), (ii) a stock bonus, stock purchase, stock option, restricted stock, or similar equity-based plan, program, agreement or arrangement, (iii) any loan to an employee or service provider or (iv) any other written or oral employment, consulting, independent contractor, pension, severance, relocation, repatriation, expatriation, deferred-compensation, retirement, health or welfare, social and fringe benefits, savings (including advanced study fund), retention, change-in-control compensation, bonus, profit sharing, commission, premium or other incentive, deferred compensation, and each other benefit or compensatory plan, program, custom, agreement, arrangement (including collective bargaining agreements and extension orders that are not generally applicable to all employees in Israel, or any other Contract with any labor union, labor organization or other representative of employees or any Contracts with any professional employer organization), policy or Contract that any Group Company maintains, enters into, sponsors or contributes to, or under or with respect to which any Group Company has any Liability for the benefit of any current or former employee, independent contractor, officer or director, other than any plan sponsored or maintained by a Governmental Entity.
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“Environmental Laws” means all Laws and Orders concerning pollution, protection of the environment, or human health or safety (to the extent relating to exposure to Hazardous Substances), and includes but is not limited to (i) applicable United States federal statutes such as the Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation and Liability Act, Emergency Planning and Community Right-to-Know Act, Endangered Species Act, Hazardous Materials Transportation Act, Migratory Bird Treaty Act, National Environmental Policy Act, Occupational Safety and Health Act (to the extent relating to exposure to Hazardous Substances), Oil Pollution Act of 1990, Resource Conservation and Recovery Act, Safe Drinking Water Act, Toxic Substances Control Act, (ii) Israeli statutes known as the Hazardous Substances Law, 1993, the Clean Air Act, 2008, the Water Act, 1959, the Packaging Law, 2011, the Environmental Treatment of Electrical and Electronic Equipment and Batteries Law, 2012, the Abatement of Nuisances Law, 1961, the Licensing of Business Law, 1968, and (iii) any similar Law in any jurisdiction in which a Group Company conducts business.
“Equity Securities” means any share, share capital, capital stock, partnership, membership, joint venture or similar interest in any Person (including any stock appreciation, phantom stock, profit participation or similar rights), and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor.
“Equity Value” means the amount equal to (a) $171,375,000 minus (b) the amounts payable to the SPAC Stockholders pursuant to the SPAC Stockholder Redemptions that result from the Offer.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Exchange Agent” has the meaning set forth in Section 2.6(a).
“Exchange Fund” has the meaning set forth in Section 2.6(b).
“Federal Securities Laws” means the Exchange Act, the Securities Act and the other U.S. federal securities laws and the rules and regulations of the SEC promulgated thereunder or otherwise.
“Financial Statements” has the meaning set forth in Section 3.4(a).
“Foreign Benefit Plan” means each Employee Benefit Plan maintained by any of the Group Companies for its current or former employees, officers, directors or other individual service providers located outside of the United States.
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“Forfeiture” has the meaning set forth in the recitals to this Agreement.
“Forfeiture Agreement” has the meaning set forth in the recitals to this Agreement.
“GAAP” means United States generally accepted accounting principles.
“Governing Documents” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the “Governing Documents” of a U.S. corporation are its certificate or articles of incorporation and by-laws, the “Governing Documents” of a U.S. limited partnership are its limited partnership agreement and certificate of limited partnership, the “Governing Documents” of a U.S. limited liability company are its operating or limited liability company agreement and certificate of formation and the “Governing Documents” of an Israeli limited company are its incorporation certificate and articles of association.
“Governmental Entity” means any United States, Israeli, or other foreign or supranational (a) federal, state, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal (public or private), or (d) the Israel Innovation Authority (previously the Office of the Chief Scientist at the Israeli Ministry of Economy) or any other body operating under the Israeli Ministry of the Economy or the Israeli Ministry of Finance.
“Group Company” and “Group Companies” means, collectively, the Company and its Subsidiaries (other than Merger Sub).
“Hazardous Substance” means any hazardous, toxic, explosive or radioactive material, substance, waste or other pollutant that is regulated by, or may give rise to Liability pursuant to, any Environmental Law, including any petroleum products or byproducts, natural gas, synthetic gas, and any mixtures thereof, asbestos, lead, polychlorinated biphenyls, per- and poly-fluoroakyl substances, or radon, in each case, to the extent regulated by any Environmental Law.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder.
“Indebtedness” means, as of any time, without duplication, with respect to any Person, the outstanding principal amount of, accrued and unpaid interest on, fees and expenses arising under or in respect of (a) indebtedness for borrowed money, (b) other obligations evidenced by any note, bond, debenture or other debt security, (c) obligations for the deferred purchase price of property or assets, including “earn-outs” and “seller notes” (but excluding any trade payables arising in the ordinary course of business), (d) reimbursement and other obligations with respect to letters of credit, bank guarantees, bankers’ acceptances or other similar instruments, in each case, solely to the extent drawn, (e) leases required to be capitalized under GAAP, (f) derivative, hedging, swap, foreign exchange or similar arrangements, including swaps, caps, collars, hedges or similar arrangements, and (g) any of the obligations of any other Person of the type referred to in clauses (a) through (f) above directly or indirectly guaranteed by such Person or secured by any assets of such Person, whether or not such Indebtedness has been assumed by such Person.
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“Information Privacy and Security Laws” means all applicable Laws concerning the privacy, data protection, transfer or security of Personal Confidential Information, including, to the extent applicable, the Fair Credit Reporting Act, Section 5 of the Federal Trade Commission Act, the CAN-SPAM Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, Children’s Online Privacy Protection Act, other local, state, federal, and foreign data security laws, data breach notification laws, and consumer protection laws.
“Initial Transaction Proceeds” means an amount equal to the aggregate cash proceeds available for release to SPAC from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the SPAC Stockholder Redemptions but before release of any other funds).
“Intellectual Property Rights” means all intellectual property rights and related priority rights protected, created or arising under the laws of the United States or any other jurisdiction or under any international convention, including all (a) patents and patent applications, industrial designs and design patent rights, including any continuations, divisionals, continuations-in-part and provisional applications and statutory invention registrations, and any patents issuing on any of the foregoing and any reissues, reexaminations, substitutes, supplementary protection certificates, extensions of any of the foregoing (collectively, “Patents”); (b) trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, corporate names and other source or business identifiers, together with the goodwill associated with any of the foregoing, and all applications, registrations, extensions and renewals of any of the foregoing (collectively, “Marks”); (c) Internet domain names, (d) copyrights and works of authorship, database and design rights, and mask work rights, whether or not registered or published, and all registrations, applications, renewals, extensions and reversions of any of any of the foregoing (collectively, “Copyrights”); (e) trade secrets, and other intellectual property rights in know-how and confidential and proprietary information, including invention disclosures, inventions and formulae, whether patentable or not; (f) intellectual property rights in or to Software or other technology, and (g) all rights to obtain renewals, continuations, divisions, or other extensions of legal protections pertaining thereto.
“Intervening Event” means an event, fact, development, circumstance or occurrence (but specifically excluding any Company Acquisition Proposal, any changes in capital markets or any declines or improvements in financial markets, or any COVID-19 Measures in effect as of the date hereof) that materially affects the business, assets, operations or prospects of the Group Companies, taken as a whole; and that was not known and was not reasonably foreseeable to the Company or the Company Board as of the date hereof (or the consequences of which were not known or reasonably foreseeable to the Company or the Company Board as of the date hereof), and that becomes known to the Company or the Company Board after the date of this Agreement.
“Intervening Event Notice” has the meaning set forth in Section 5.06(c).
“Intervening Event Notice Period” has the meaning set forth in Section 5.06(c).
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“Investment Company Act” means the Investment Company Act of 1940.
“Investor Rights Agreement” means that certain Investor Rights Agreement, dated as of February 24, 2019, by and among the Company, the founders party thereto and the investors party thereto.
“IPO” has the meaning set forth in Section 8.18.
“Israeli Income Tax Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961.
“IT Assets” means any and all computers, Software, hardware, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology assets owned or under the control of any Group Company and used in the conduct of the business of any Group Company.
“JOBS Act” means the Jumpstart Our Business Startups Act of 2012.
“Latest Balance Sheet” has the meaning set forth in Section 3.4(a).
“Law” means any federal, state, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance, treaty, rule, code, regulation, or other binding directive or guidance issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter. Unless explicitly stated herein, “Law” does not include COVID-19 Measures.
“Leased Real Property” has the meaning set forth in Section 3.18(b).
“Liability” or “liability” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown, matured or unmatured or determined or determinable, including those arising under any Law (including any Environmental Law), Proceeding or Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien, license or sub-license, charge, or other similar encumbrance or interest (including, in the case of any Equity Securities, any voting, transfer or similar restrictions).
“Management Earnout Shares” means 1,250,000 Company Ordinary Shares.
“Marks” has the meaning set forth in the definition of Intellectual Property Rights.
“Material Contracts” has the meaning set forth in Section 3.7(a).
“Material Permits” has the meaning set forth in Section 3.6.
“Merger” has the meaning set forth in the recitals to this Agreement.
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“Merger Sub” has the meaning set forth in the introductory paragraph to this Agreement.
“Multiemployer Plan” has the meaning set forth in Section (3)37 or Section 4001(a)(3) of ERISA.
“Nasdaq” means the Nasdaq Capital Market.
“Non-Party Affiliate” has the meaning set forth in Section 8.13.
“Off-the-Shelf Software” means any shrink-wrap or click-wrap Software or any other Software that is made generally and widely available to the public and is licensed to any of the Group Companies on a non-exclusive basis with one-time or annual license fees of less than $100,000.
“Offer” has the meaning set forth in the recitals to this Agreement.
“Order” means any writ, order (including extension orders), judgment, injunction, decision, determination, award, ruling, verdict or decree entered, issued or rendered by any Governmental Entity.
“ordinary course of business,” “ordinary course,” “ordinary course of business consistent with past practice,” and similar phrases when referring to a Group Company means actions taken by a Group Company that are consistent with the past usual day-to-day customs and practices of such Group Company in the ordinary course of operations of the business (excluding COVID-19 Measures).
“Parties” has the meaning set forth in the introductory paragraph to this Agreement.
“Patents” has the meaning set forth in the definition of Intellectual Property Rights.
“PCAOB” means the Public Company Accounting Oversight Board.
“Per Share Consideration” means (a) the Aggregate Transaction Share Consideration, divided by (b) the sum of (i) the number of issued and outstanding SPAC Shares immediately prior to the Effective Time, after taking into account SPAC Stockholder Redemptions and (ii) the number of issued and outstanding Sponsor Shares immediately prior to the Effective Time following the Forfeiture.
“Perception” means Perception Capital Partners LLC, a Delaware limited liability company.
“Perception Company Warrants” means 3,448,526 Company Warrants.
“Perception Earnout Calculation” means the difference of (i) 4,271,153 and (ii) the product of (x) 4,271,153 and (y) the quotient of the sum of the Initial Transaction Proceeds and the Antara Top-up Amount divided by 150,000,000.
“Perception Earnout Shares” has the meaning set forth in Section 2.3(a).
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“Permits” means any approvals, authorizations, clearances, licenses, registrations, permits or certificates of a Governmental Entity.
“Permitted Liens” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and other similar statutory Liens arising or incurred in the ordinary course of business for amounts that are not yet delinquent or are being contested in good faith by appropriate proceedings and for which sufficient reserves have been established in accordance with GAAP, (b) Liens for Taxes, assessments or other governmental charges not yet due and payable as of the Closing Date or which are being contested in good faith by appropriate proceedings and for which sufficient reserves have been established in accordance with GAAP, (c) encumbrances and restrictions on real property (including easements, covenants, conditions, rights of way and similar restrictions) that do not prohibit or materially interfere with any of the Group Companies’ use or occupancy of such real property, (d) zoning, building codes and other land use Laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by any Governmental Entity having jurisdiction over such real property and which are not violated by the use or occupancy of such real property or the operation of the businesses of the Group Company and do not prohibit or materially interfere with any of the Group Companies’ use or occupancy of such real property, (e) cash deposits or cash pledges to secure the payment of workers’ compensation, unemployment insurance, social security benefits or obligations arising under similar Laws or to secure the performance of public or statutory obligations, surety or appeal bonds, and other obligations of a like nature, in each case in the ordinary course of business and which are not yet due and payable, (f) grants by any Group Company of non-exclusive rights in Intellectual Property Rights in the ordinary course of business and (g) de minimis Liens that do not materially and adversely affect the value, use or operation of the asset subject thereto.
“Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, union, or other similar entity, whether or not a legal entity or Governmental Entity.
“Personal Confidential Information” means (a) information relating to an identified or identifiable natural person, the use, aggregation, holding or management of which is restricted under any applicable Law, including, but not limited to, a natural person’s name, address, telephone number, email address, financial account number, government-issued identifier, and any other data used to identify, contact or precisely locate a person that is governed, regulated, or protected by one or more Information Privacy and Security Laws; (b) any static Internet Protocol address or other persistent identifier, in each case that links to a natural person; and (c) “information” as defined by the Israeli Privacy Protection Law and whether or not such “information” constitutes “sensitive information” as defined thereunder.
“PIPE Financing” has the meaning set forth in the recitals to this Agreement.
“PIPE Financing Amount” has the meaning set forth in the recitals to this Agreement.
“Preferred C Majority” means the holders of Company Preferred C Shares and Company Preferred C-1 Shares holding more than fifty percent (50%) of the then issued and outstanding Company Preferred C Shares and Company Preferred C-1 Shares, collectively.
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“Preferred Majority” means the holders of at least sixty percent (60%) of the issued and outstanding Company Preferred Shares, voting together as a single class, on an as converted to Company Ordinary Shares basis.
“Proceeding” means any lawsuit, litigation, action, audit, examination, claim, complaint, charge, proceeding, suit or arbitration (in each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise involving any Governmental Entity (other than office actions and similar proceedings in connection with the prosecution of applications for registration or issuance of Intellectual Property Rights).
“Proxy Statement” has the meaning set forth in Section 5.7.
“Public Shareholders” has the meaning set forth in Section 8.18.
“Public Software” means any Software application that contains, includes, or incorporates, any Software that is distributed as free Software, open source Software (e.g., Linux) or similar licensing or distribution models, including under any terms or conditions that impose any requirement that any Software using, linked with, incorporating, distributed with or derived from such Public Software (a) be made available or distributed in source code form; (b) be licensed for purposes of making derivative works; or (c) be redistributable at no, or a nominal, charge.
“Put Option Agreement” means that certain Put Option Agreement between Antara, on behalf of the funds it manages and/or its designees, and the Company, dated as of December 10, 2020, pursuant to which the Company caused Antara to subscribe for a number of Company Ordinary Shares in the PIPE Financing in consideration for up to 3,929,461 Company Ordinary Shares and 4,310,736 Company Warrants.
“Real Property Leases” means all leases, sub-leases, licenses or other agreements, in each case, pursuant to which any Group Company leases or sub-leases any real property.
“Registered Intellectual Property” means all issued Patents, pending Patent applications, registered Marks, pending applications for registration of Marks, registered Copyrights, and Internet domain name registrations.
“Registration Rights Agreement” has the meaning set forth in the recitals to this Agreement.
“Registration Statement / Proxy Statement” has the meaning set forth in Section 5.7.
“Representatives” means with respect to any Person, such Person’s Affiliates and its and such Affiliates’ respective directors, managers, officers, employees, accountants, consultants, advisors, attorneys, agents and other representatives.
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“Sanctions and Export Control Laws” means any applicable Law related to (a) import and export controls, including the U.S. Export Administration Regulations, 15 C.F.R. Parts 730-774), and the Export Controls Act of 2018, 22 U.S.C. 2751 et seq., the Israeli Control of Products and Services Declaration (Engagement in Encryption), 1974, the Israeli Control of Products and Services Order (Export of Warfare Equipment and Defense Information), 1991, the Israeli Defense Export Control Order (Combat Equipment), 2008, the Israeli Defense Export Control Law, 2007, and Israeli Ministry of Economy List of Source Items and Dual Use Items, and all other export control laws administered by the Israeli Ministry of Defense, including the Israeli Trading With the Enemy Ordinance, 1939, (b) economic or financial sanctions imposed, administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the European Union, any European Union Member State, the United Nations, Her Majesty’s Treasury of the United Kingdom, or the State of Israel, or (c) anti-boycott measures.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
“Schedules” means, collectively, the Company Disclosure Schedules and the SPAC Disclosure Schedules.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Securities Laws” means Federal Securities Laws and other applicable foreign and domestic securities or similar Laws.
“Signing Filing” has the meaning set forth in Section 5.4(b).
“Signing Press Release” has the meaning set forth in Section 5.4(b).
“Software” shall mean any and all (a) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (c) descriptions, flowcharts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons; and (d) all documentation, including user manuals and other training documentation, related to any of the foregoing.
“SPAC Acquisition Proposal” means (a) any transaction or series of related transactions under which SPAC or any of its controlled Affiliates, directly or indirectly, (i) acquires or otherwise purchases, or is acquired by or otherwise purchased by, any other Person(s), (ii) engages in a business combination with any other Person(s) or (iii) acquires or otherwise purchases all or a material portion of the assets or businesses of any other Persons(s) (in the case of each of clause (i), (ii) and (iii), whether by merger, consolidation, recapitalization, purchase or issuance of Equity Securities, tender offer or otherwise) or (b) any equity, debt or similar investment in SPAC or any of its controlled Affiliates. Notwithstanding the foregoing or anything to the contrary herein, none of this Agreement, the Ancillary Documents nor the Transactions shall constitute a SPAC Acquisition Proposal.
“SPAC Benefit Plans” has the meaning set forth in Section 4.19.
“SPAC Board” has the meaning set forth in the recitals to this Agreement.
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“SPAC Board Recommendation” has the meaning set forth in Section 5.8.
“SPAC Change in Recommendation” has the meaning set forth in Section 5.8.
“SPAC Disclosure Schedules” means the disclosure schedules to this Agreement delivered to the Company by SPAC on the date of this Agreement.
“SPAC Expenses” means, as of any determination time, the aggregate amount of fees, expense, commissions or other amounts incurred by or on behalf of, or otherwise payable by, whether or not due, SPAC in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions, including (a) the fees and expenses of outside legal counsel, accountants, advisors, brokers, investment bankers, consultants, or other agents or service providers of SPAC and (b) any other fees, expenses, commissions or other amounts that are expressly allocated to SPAC pursuant to this Agreement or any Ancillary Document. Notwithstanding the foregoing or anything to the contrary herein, SPAC Expenses shall not include any Company Expenses.
“SPAC Financial Statements” means all of the financial statements of SPAC included in the SPAC SEC Reports.
“SPAC Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization and Qualification), Section 4.2 (Authority), Section 4.4 (Brokers), Section 4.6 (Capitalization of SPAC) and Section 4.18 (Absence of Changes).
“SPAC Liabilities” means, as of any determination time, the aggregate amount of Liabilities of SPAC that would be accrued on a balance sheet in accordance with GAAP, whether or not such Liabilities are due and payable as of such time. Notwithstanding the foregoing or anything to the contrary herein, SPAC Liabilities shall not include any SPAC Expenses.
“SPAC Non-Party Affiliates” means, collectively, each SPAC Related Party and each of the former, current or future Affiliates, Representatives, successors or permitted assigns of any SPAC Related Party (other than, for the avoidance of doubt, SPAC).
“SPAC Prospectus” has the meaning set forth in Section 8.18.
“SPAC Related Party” has the meaning set forth in Section 4.10.
“SPAC Related Party Transactions” has the meaning set forth in Section 4.10.
“SPAC SEC Reports” has the meaning set forth in Section 4.7.
“SPAC Share” means a share of Class A common stock of SPAC, par value $0.0001 per share.
“SPAC Stockholder Approval” means approval of the Transaction Proposals by the affirmative vote of the holders of the requisite number of SPAC Shares and Sponsor Shares entitled to vote thereon, whether in person or by proxy at the SPAC Stockholders Meeting (or any adjournment thereof), in accordance with the Governing Documents of SPAC and applicable Law.
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“SPAC Stockholder Redemption” means the right of the holders of SPAC Shares to redeem all or a portion of their SPAC Shares (in connection with the transactions contemplated by this Agreement or otherwise) as set forth in Governing Documents of SPAC and the Trust Agreement.
“SPAC Stockholders” means, collectively, holders of SPAC Shares, Sponsor and holders of SPAC Warrants.
“SPAC Stockholders Meeting” has the meaning set forth in Section 5.8.
“SPAC Unit” means a unit of SPAC, par value $0.0001 per unit, consisting of (a) one (1) SPAC Share and (b) one half of one (0.5) SPAC Warrant.
“SPAC Warrants” means a warrant entitling the holder to purchase one SPAC Share per warrant at a price of $11.50 per share, subject to adjustment in accordance with the Warrant Agreement (including, for the avoidance of doubt, each such warrant held by Sponsor).
“Sponsor” has the meaning set forth in the recitals to this Agreement.
“Sponsor Letter Agreement” has the meaning set forth in the recitals to this Agreement.
“Sponsor Share” means a share of Class B common stock of SPAC, par value $0.0001 per share.
“Subscribers” has the meaning set forth in the recitals to this Agreement.
“Subscription Agreements” has the meaning set forth in the recitals to this Agreement.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other legal entity of which (a) 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 such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be a, or control any, managing director or general partner of such business entity (other than a corporation). The term “Subsidiary” shall include all Subsidiaries of such Subsidiary.
“Supporting Company Shareholders” has the meaning set forth in the recitals to this Agreement.
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“Surviving Company” has the meaning set forth in Section 2.1(a).
“Target” has the meaning set forth in Section 2.3(a).
“Tax” means any federal, state, local or non-United States income, gross receipts, franchise, estimated, alternative minimum, sales, use, transfer, value added, excise, stamp, customs, duties, ad valorem, real property, personal property (tangible and intangible), capital stock, social security, national health insurance, unemployment, payroll, wage, employment, severance, occupation, registration, environmental, communication, mortgage, profits, license, lease, service, goods and services, withholding, premium, turnover, windfall profits or other taxes of any kind whatever, whether computed on a separate or combined, unitary or consolidated basis or in any other manner, together with any interest, indexation, deficiencies, penalties, additions to tax, or additional amounts imposed by any Governmental Entity with respect thereto, whether as a primary obligor or as a result of being a transferee or successor of another Person or a member of an affiliated, consolidated, unitary, combined or other group.
“Tax Authority” means any Governmental Entity responsible for the collection or administration of Taxes or Tax Returns.
“Tax Return” means returns, information returns, statements, declarations, claims for refund, schedules, attachments and reports relating to Taxes required to be filed with any Governmental Entity, including any schedule or attachment thereto and including any amendments thereof.
“Termination Date” has the meaning set forth in Section 7.1(d).
“Trading Day” means, prior to the Closing Date, any day on which the SPAC Units, SPAC Shares and SPAC Warrants are actually traded on Nasdaq and, following the Closing Date, any day on which the Company Ordinary Shares are actually traded on Nasdaq.
“Transactions” has the meaning set forth in the recitals to this Agreement.
“Transaction Litigation” has the meaning set forth in Section 5.2(d).
“Transaction Proposals” has the meaning set forth in Section 5.8.
“Transaction Support Agreements” has the meaning set forth in the recitals to this Agreement.
“Transaction Support Agreement Deadline” has the meaning set forth in Section 5.13(a).
“Trust Account” has the meaning set forth in Section 8.18.
“Trust Account Released Claims” has the meaning set forth in Section 8.18.
“Trust Agreement” has the meaning set forth in Section 4.8(a).
“Trustee” has the meaning set forth in Section 4.8(a).
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“Unpaid Company Expenses” means the Company Expenses that are unpaid as of immediately prior to the Closing.
“Unpaid SPAC Expenses” means the SPAC Expenses that are unpaid as of immediately prior to the Closing.
“Unpaid SPAC Liabilities” means the SPAC Liabilities as of immediately prior to the Closing.
“Warrant Agreement” means the Warrant Agreement, dated as of April 30, 2020, by and between SPAC and Continental.
“Willful Breach” means a material breach that is a consequence of an act undertaken or a failure to act by the breaching party with the knowledge that the taking of such act or such failure to act would, or would reasonably be expected to, constitute or result in a breach of this Agreement.
Article
II.
MERGER
Section 2.1 The Merger; Company Preferred Shares.
(a) On the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the DGCL, on the Closing Date, Merger Sub shall merge with and into SPAC (the “Merger”) at the Effective Time. Following the Effective Time, the separate existence of Merger Sub shall cease and SPAC shall continue as the surviving company of the Merger (the “Surviving Company”).
(b) At the Closing, the Merger shall be consummated in accordance with this Agreement and the DGCL and evidenced by a certificate of merger between Merger Sub and SPAC (the “Certificate of Merger”), such Merger to be consummated immediately upon filing of the Certificate of Merger or at such later time as may be agreed by SPAC and the Company in writing and specified in the Certificate of Merger (the “Effective Time”).
(c) At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property of every description, rights, business, undertakings, goodwill, benefits, immunities and privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of Merger Sub and SPAC shall become the property, rights, business, undertakings, goodwill, benefits, immunities and privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Surviving Company (including all rights and obligations with respect to the Trust Account), which shall include the assumption by the Surviving Company of any and all agreements, covenants, duties and obligations of Merger Sub and SPAC set forth in this Agreement to be performed after the Effective Time.
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(d) If, at any time after the 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 interest in, to and under, and/or possession of, all assets, property, rights, privileges, powers and franchises of the Merger Sub and SPAC, the officers and directors of the Merger Sub and SPAC 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.
(e) At the Effective Time, the Governing Documents of the Surviving Company shall be amended and restated to be in the form of the Governing Documents of Merger Sub in effect immediately prior to the Effective Time, until thereafter changed or amended as provided therein or by applicable Law.
(f) At the Effective Time, the directors and officers of Merger Sub immediately prior to the Effective Time shall be the initial directors and officers of the Surviving Company, each to hold office in accordance with the Governing Documents of the Surviving Company until such director’s or officer’s successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal.
(g) Each Company Preferred Share issued and outstanding at the end of the date immediately prior to the Closing Date shall be converted into and become one Company Ordinary Share effective as of the end of such date immediately prior to the Closing Date. Each certificate previously evidencing Company Preferred Shares shall be exchanged for a certificate (if requested) representing the same number of Company Ordinary Shares upon the surrender of such certificate. Each certificate formerly representing Company Preferred Shares shall thereafter represent only the right to receive the same number of Company Ordinary Shares upon the surrender of such certificate.
Section 2.2 Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of the securities of SPAC, holders of the securities of the Company or holders of the securities of Merger Sub:
(a) Each SPAC Unit issued and outstanding immediately prior to the Effective Time shall be automatically detached and the holder thereof shall be deemed to hold one (1) SPAC Share and one-half of one (0.5) SPAC Warrant, which underlying securities shall be converted in accordance with the applicable terms of this Section 2.2.
(b) Each SPAC Share issued and outstanding immediately prior to the Effective Time shall be converted automatically into the Per Share Consideration, following which all SPAC Shares shall automatically be canceled and shall cease to exist by virtue of the Merger. The holders of SPAC Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares, except as provided herein or under applicable Law.
(c) 1,875,000 of the Sponsor Shares issued and outstanding immediately prior to the Effective Time shall be automatically converted into the Per Share Consideration, following which all Sponsor Shares shall automatically be canceled and shall cease to exist by virtue of the Merger. Sponsor shall cease to have any rights with respect to such shares, except as provided herein or under applicable Law.
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(d) The Company shall issue to Perception at the Effective Time the Perception Company Warrants as additional consideration for services provided by Perception to the Company.
(e) The Company shall issue 2,847,436 Company Ordinary Shares (“Management Shares”) and 3,986,410 Company Warrants (“Management Warrants”) to Company Management. The Management Shares will bear the restrictive legends and stop transfer instructions as set forth in the Lockup Agreement.
(f) All rights with respect to SPAC Shares underlying SPAC Warrants shall be converted into rights with respect to Company Ordinary Shares and thereupon assumed by the Company. Accordingly, from and after the Effective Time: (i) each SPAC Warrant assumed by the Company may be exercised solely for Company Ordinary Shares; (ii) the number of Company Ordinary Shares subject to each SPAC Warrant assumed by the Company shall be determined by multiplying (x) the number of SPAC Shares that were subject to such SPAC Warrant, as in effect immediately prior to the Effective Time, by (y) the Per Share Consideration, and rounding the resulting number up to the nearest whole number of Company Ordinary Shares; (iii) the per share exercise price for the Company Ordinary Shares issuable upon exercise of each SPAC Warrant assumed by the Company shall be determined by dividing (x) the exercise price per SPAC Share subject to such SPAC Warrant, as in effect immediately prior to the Effective Time, by (y) the Per Share Consideration, and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any SPAC Warrant assumed by the Company shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such SPAC Warrant shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a SPAC Warrant, such SPAC Warrant assumed by the Company in accordance with this Section 2.2(f) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Company Ordinary Shares subsequent to the Effective Time; and (B) the Company Board or a committee thereof shall succeed the authority and responsibility, if any, of the SPAC Board or any committee thereof with respect to each SPAC Warrant assumed by the Company.
(g) Each issued and outstanding share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $0.0001 per share, of the Surviving Company, which shall constitute the only outstanding share of capital stock of the Surviving Company.
Section 2.3 Earnout.
(a) If the trading price of the Company Ordinary Shares on Nasdaq is greater than 125% of the Company Share Value (such share price, the “Target”) for any period of 10 Trading Days out of 20 consecutive Trading Days at any time after the Closing until the fourth anniversary of the Closing Date (such period, the “Earnout Period”), the Company shall promptly (but in any event within five (5) Business Days thereafter) issue:
(1) to Perception as additional consideration for services provided by Perception to the Company (x) 2,477,269 Company Ordinary Shares if the Initial Transaction Proceeds are equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference of (A) 2,477,269 and (B) the product of (i) 0.3866 and (ii) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Perception pursuant to this Section 2.3(a), the “Perception Earnout Shares”); and
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(2) to Company Management the Management Earnout Shares.
The Perception Earnout Shares and Management Earnout Shares are collectively referred to as “Earnout Shares.” The Company Ordinary Shares that may be issued pursuant to this Section 2.3(a) shall be fully paid and free and clear of all Liens other than applicable securities Laws restrictions. The Earnout Shares will bear the restrictive legends and stop transfer instructions as set forth in the Lockup Agreement to the extent the restrictions in the Lockup Agreement are still in effect at the time Earnout Shares are issued.
(b) In the event a Company Change of Control Transaction occurs during the Earnout Period prior to the payment of any Earnout Shares pursuant to Section 2.3(a) and the Change of Control Consideration paid or payable to the holders of Company Ordinary Shares in connection with such Change of Control Transaction is equal to or greater than the Target, the Company shall promptly (but in any event within five (5) Business Days thereafter) issue (1) to Perception the Perception Earnout Shares as additional consideration for services provided by Perception to the Company and (2) to Company Management the Management Earnout Shares. The Company Ordinary Shares that may be issued pursuant to this Section 2.3(b) shall be fully paid and free and clear of all Liens other than applicable securities Laws restrictions. For the avoidance of doubt, if the Change of Control Consideration paid or payable to the holders of Company Shares in connection with the first Company Change of Control to occur during the Earnout Period is less than the Target, then no Earnout Shares shall be issuable pursuant to this Section 2.3(b).
(c) In the event that a definitive agreement with respect to a Change of Control Transaction is executed by the Company prior to and remains pending at the end of the Earnout Period, for purposes of Section 2.3(b), the Earnout Period shall be deemed extended until the earlier of the consummation of such Company Change of Control Transaction or the termination of such Company Change of Control Transaction.
Section 2.4 No Fractional Company Ordinary Shares. No certificates for Company Ordinary Shares representing fractional Company Ordinary Shares or book entry credit of the same will be issued upon the conversion of SPAC Shares or Sponsor Shares, or the issuance of Perception Company Ordinary Shares or Management Shares, or the issuance of Earnout Shares (if issuable pursuant to Section 2.3) in accordance with Section 2.2 and Section 2.3, and such fractional interests will not entitle the owner thereof to vote or to have any rights as a holder of any Company Ordinary Shares. Notwithstanding any other provision of this Agreement, in lieu of receiving any fraction of a Company Ordinary Share, all fractions of Company Ordinary Shares that otherwise would be issued hereunder shall be aggregated and the resulting fraction of a Company Ordinary Share will be rounded up to a whole Company Ordinary Share.
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Section 2.5 Closing of the Transactions Contemplated by this Agreement. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place electronically by exchange of the closing deliverables by the means provided in Section 8.11 as promptly as reasonably practicable, but in no event later than the third (3rd) Business Day, following the satisfaction (or, to the extent permitted by applicable Law, waiver) of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) (the “Closing Date”) or at such other place, date and/or time as SPAC and the Company may agree in writing.
Section 2.6 Deliverables.
(a) As promptly as reasonably practicable following the date of this Agreement, but in no event later than ten (10) Business Days prior to the Closing Date, SPAC and the Company shall appoint Continental (or its applicable Affiliate) as an exchange agent (the “Exchange Agent”) and enter into an exchange agent agreement with the Exchange Agent for the purpose of (i) exchanging each SPAC Share and Sponsor Share on the stock transfer books of SPAC immediately prior to the Effective Time for the Per Share Consideration issuable in respect of such SPAC Shares or Sponsor Shares, as applicable, pursuant to Section 2.2(b) and Section 2.2(c) (after giving effect to any required Tax withholding as provided under Section 2.7) and on the terms and subject to the other conditions set forth in this Agreement and (ii) exchanging each SPAC Warrant on the stock transfer books of SPAC immediately prior to the Effective Time for the Company Warrants issuable in respect of such SPAC Warrants pursuant to Section 2.2(f) and on the terms and subject to the other conditions set forth in this Agreement. Notwithstanding the foregoing or anything to the contrary herein, in the event that Continental is unable or unwilling to serve as the Exchange Agent, then SPAC and the Company shall, as promptly as reasonably practicable thereafter, but in no event later than the Closing Date, mutually agree upon an exchange agent (in either case, such agreement not to be unreasonably withheld, conditioned or delayed), SPAC and the Company shall appoint and enter into an exchange agent agreement with such exchange agent, who shall for all purposes under this Agreement constitute the Exchange Agent.
(b) At the Effective Time, the Company shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit of the holders of SPAC Shares, Sponsor Shares and SPAC Warrants, and for exchange in accordance with this Section 2.6 through the Exchange Agent, (i) evidence of Company Ordinary Shares in book-entry form representing the Aggregate Transaction Share Consideration issuable pursuant to Section 2.2(b) and Section 2.2(c) in exchange for the SPAC Shares and Sponsor Shares outstanding immediately prior to the Effective Time and (ii) evidence of Company Warrants in book-entry form representing the Company Warrants issuable pursuant to Section 2.2(f) in exchange for the SPAC Warrants, in each case after giving effect to any required Tax withholding as provided under Section 2.7. All (i) shares in book-entry form representing the Aggregate Transaction Share Consideration issuable pursuant to Section 2.2(b) and Section 2.2(c) deposited with the Exchange Agent and (ii) warrants in book-entry form representing the Company Warrants issuable pursuant to Section 2.2(f) deposited with the Exchange Agent shall be collectively referred to in this Agreement as the “Exchange Fund”.
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(c) Each SPAC Stockholder whose SPAC Shares have been converted into the right to receive the Per Share Consideration pursuant to Section 2.2(b) shall be entitled to receive the Per Share Consideration to which he, she or it is entitled on the date provided in Section 2.6(f).
(d) Sponsor whose Sponsor Shares have been converted into the right to receive Per Share Consideration pursuant to Section 2.2(c) shall be entitled to receive the Per Share Consideration to which it is entitled on the date provided in Section 2.6(f).
(e) Each SPAC Stockholder and Sponsor whose SPAC Warrants have been converted into the right to receive Company Warrants pursuant to Section 2.2(f) shall be entitled to receive Company Warrants to which he, she or it is entitled on the date provided in Section 2.6(f).
(f) The Company and SPAC shall take all necessary actions to cause the Per Share Consideration and the Company Warrants to be issued in book-entry form within three (3) Business Days after the Effective Time.
(g) If the Per Share Consideration is to be issued to a Person other than the SPAC Stockholder or Sponsor in whose name the transferred SPAC Share or Sponsor Share in book-entry form is registered, it shall be a condition to the issuance of the Per Share Consideration that (i) such SPAC Share or Sponsor Share, as applicable, in book-entry form shall be properly transferred and (ii) the Person requesting such consideration pay to the Exchange Agent any transfer Taxes required as a result of such consideration being issued to a Person other than the registered holder of such SPAC Share or Sponsor Share, as applicable, in book-entry form or establish to the satisfaction of the Exchange Agent that such transfer Taxes have been paid or are not payable.
(h) If the Company Warrants to be issued to a Person other than the SPAC Stockholder in whose name the transferred SPAC Warrant in book-entry form is registered, it shall be a condition to the issuance of the Company Warrants that (i) such SPAC Warrant in book-entry form shall be properly transferred and (ii) the Person requesting such consideration pay to the Exchange Agent any transfer Taxes required as a result of such consideration being issued to a Person other than the registered holder of such SPAC Warrant in book-entry form or establish to the satisfaction of the Exchange Agent that such transfer Taxes have been paid or are not payable.
(i) No interest will be paid or accrued on the Aggregate Transaction Share Consideration or the Company Warrants to be issued pursuant to this Article II (or any portion thereof). From and after the Effective Time, until surrendered or transferred, as applicable, in accordance with this Section 2.6, each SPAC Share and Sponsor Share shall solely represent the right to receive the Per Share Consideration to which such Company Share or Sponsor Share, as applicable, is entitled to receive pursuant to Section 2.2(b) or Section 2.2(c), as applicable, and each SPAC Warrant shall solely represent the right to receive the Company Warrants to which such SPAC Warrant is entitled to receive pursuant to Section 2.2(f).
(j) At the Effective Time, the stock transfer books of SPAC shall be closed and there shall be no transfers of SPAC Shares, Sponsor Shares or SPAC Warrants that were outstanding immediately prior to the Effective Time.
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(k) Any portion of the Exchange Fund that remains unclaimed by the SPAC Stockholders twelve (12) months following the Closing Date shall be delivered to the Company or as otherwise instructed by the Company, and any SPAC Stockholder who has not exchanged his, her or its SPAC Shares, Sponsor Shares or SPAC Warrants, as applicable, for the Per Share Consideration or the Company Warrants, as applicable, in accordance with this Section 2.6 prior to that time shall thereafter look only to the Company for the issuance of the Per Share Consideration or the Company Warrants, as applicable, without any interest thereon. None of the Company, the Surviving Company or any of their respective Affiliates shall be liable to any Person in respect of any consideration delivered to a public official pursuant to any applicable abandoned property, unclaimed property, escheat, or similar Law. Any Aggregate Transaction Share Consideration or Company Warrants remaining unclaimed by the SPAC Stockholders immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Entity shall become, to the extent permitted by applicable Law, the property of the Company free and clear of any claims or interest of any Person previously entitled thereto.
Section 2.7 Withholding. Each of SPAC, the Company, Merger Sub, the Exchange Agent and each of their respective Affiliates shall be entitled to deduct and withhold (or cause to be deducted and withheld) from any amount payable pursuant to this Agreement such amounts as are required to be deducted and withheld under applicable Tax Law, including, for the avoidance of doubt, any compensatory withholding, if any, required in respect of the issuance of Company Ordinary Shares and Company Warrants to Perception and Company Management. To the extent that amounts are so withheld and timely remitted to the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. The Parties shall cooperate in good faith to eliminate or reduce any such deduction or withholding (including through the request and provision of any statements, forms or other documents to reduce or eliminate any such deduction or withholding).
Section 2.8 Lockup Agreement and Registration Rights Agreement. The Sponsor, certain initial stockholders of SPAC, Perception, Company Management who will receive Management Shares hereunder, and each Company Shareholder holding greater than five percent (5%) of the outstanding Company Ordinary Shares as of the Closing have each entered into the Lockup Agreement with the Company, pursuant to which such Persons have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Company Ordinary Shares or Company Warrants held by them for a period of 180 days after the Closing Date. The Company has entered into the Registration Rights Agreement with certain Company Shareholders, the Sponsor and certain SPAC Stockholders who will receive Company Ordinary Shares pursuant to Article II of this Agreement, pursuant to which, among other things, the Company will agree to register for resale under the Securities Act (i) the Company Ordinary Shares and Company Warrants issued or issuable pursuant to this Agreement (including the Company Ordinary Shares underlying the Company Warrants, any and all earned Earnout Shares, and the Company Ordinary Shares issued pursuant to the Subscription Agreements) and (ii) certain Company Ordinary Shares held by Company Shareholders which were subject to registration rights pursuant to the Company Governing Documents, Investor Rights Agreement, or other registration rights agreement in existence prior to the date hereof.
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Section 2.9 Adjustments.
The Per Share Consideration, the number of Perception Company Warrants to be issued to Perception pursuant to Section 2.2(d), the number of Management Shares and Management Warrants to be issued to Company Management pursuant to Section 2.2(e), the number of Perception Earnout Shares that may be issued to Perception pursuant to Section 2.3, the number of Management Earnout Shares that may be issued to Company Management pursuant to Section 2.3, and other dependent items shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, including a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00, stock dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of Company Ordinary Shares or Company Preferred Shares outstanding after the date hereof and prior to the Effective Time, so as to provide the holders of SPAC Shares, Sponsor Shares and Sponsor Warrants and the recipients of the Per Share Consideration, the Perception Company Ordinary Shares, the Perception Company Warrants, the Management Shares and the Management Warrants with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Per Share Consideration, the number of Perception Company Warrants to be issued to Perception pursuant to Section 2.2(d), the number of Management Shares and Management Warrants to be issued to Company Management pursuant to Section 2.2(e), the number of Perception Earnout Shares that may be issued to Perception pursuant to Section 2.3, the number of Management Earnout Shares that may be issued to Company Management pursuant to Section 2.3 and other dependent items; provided, that the Parties agree that the conversion of each Company Preferred Share into one Company Ordinary Share pursuant to Section 2.1(g) shall not require, or result in, any adjustments pursuant to this Section 2.9.
Article
III.
REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP COMPANIES AND MERGER SUB
Subject to Section 8.8, except as set forth in the Company Disclosure Schedules, the Company, and Merger Sub hereby represent and warrant to SPAC as follows:
Section 3.1 Organization and Qualification.
(a) Each Group Company and Merger Sub is a corporation, limited liability company or other applicable business entity duly organized or formed, as applicable, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the laws of its jurisdiction of formation or organization (as applicable). Section 3.1(a) of the Company Disclosure Schedules sets forth the jurisdiction of formation or organization (as applicable) for each Group Company and Merger Sub. Each Group Company and Merger Sub has the requisite corporate, limited liability company or other applicable business entity power and authority to own, lease and operate its properties and to carry on its businesses as presently conducted.
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(b) True and complete copies of the Governing Documents of each Group Company and the Company Investor Agreements have been made available to SPAC, in each case, as amended and in effect as of the date of this Agreement. The Governing Documents of the Company and the Company Investor Agreements are in full force and effect, and the Company is not in breach or violation in any material respect of any provision set forth in its Governing Documents or the Company Investor Agreements.
(c) Each Group Company is duly qualified or licensed to transact business and is in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) in each jurisdiction in which the property and assets owned, leased or operated by it, or the nature of the business conducted by it, makes such qualification or licensing necessary. Each jurisdiction in which a Group Company is so qualified or licensed is listed in Section 3.1(c) of the Company Disclosure Schedules. True and complete copies of the certificate of foreign qualification, or the equivalent thereof, in each such jurisdiction for each such Group Company have been made available to SPAC.
(d) The Company has no direct or indirect Subsidiaries other than those listed in Section 3.1(d) of the Company Disclosure Schedules. Except as set forth in Section 3.1(d) of the Company Disclosure Schedules, the Company owns all of the outstanding equity securities of the Subsidiaries, free and clear of all Liens other than Permitted Liens, either directly or indirectly through one or more other Subsidiaries. Except with respect to the Subsidiaries, the Company does not own, directly or indirectly, any equity or voting interest in any Person and, except with respect to the Subsidiaries or as provided by this Agreement, the Company does not have any agreement or commitment to purchase any such interest, and has not agreed and is not obligated to make nor is bound by any Contract under which it may become obligated to make any future investment in or capital contribution to any other entity.
(e) From its incorporation on November 25, 2020, Merger Sub has not conducted any business activities other than as contemplated by this Agreement. Merger Sub has no assets or liabilities.
Section 3.2 Capitalization of the Group Companies.
(a) Section 3.2(a) of the Company Disclosure Schedules sets forth a true and complete statement as of the date of this Agreement of the number and class or series (as applicable) of all of the Equity Securities of the Company issued and outstanding and the holders of such Equity Securities. All of the Equity Securities of the Company have been duly authorized and validly issued. All of the outstanding Company Shares are fully paid and non-assessable. The issuance of Company Shares upon the exercise or conversion, as applicable, of Equity Securities that are derivative securities, will, upon exercise or conversion in accordance with the terms of such Equity Securities against payment therefor, be duly authorized, validly issued, fully paid, and non-assessable. The Equity Securities of the Company (1) were not issued in violation of the Governing Documents of the Company, the Investor Rights Agreement or any other Contract to which the Company is party or bound, (2) are not subject to any preemptive rights, call option, right of first refusal, subscription rights, transfer restrictions or similar rights of (other than transfer restrictions under applicable Securities Laws or under the Governing Documents of the Company or the Investor Rights Agreement) and were not issued in violation of any preemptive rights, call option, right of first refusal or first offer, subscription rights, transfer restrictions or similar rights of any Person and (3) have been offered, sold and issued in compliance with applicable Law, including Securities Laws. Except for the Company Equity Awards set forth on Section 3.2(a) of the Company Disclosure Schedules, the Company has no outstanding options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require the Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into or exchangeable for Equity Securities of the Company.
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(b) The Equity Securities of the Company are free and clear of all Liens (other than transfer restrictions under applicable Securities Law, the Investor Rights Agreement or Permitted Liens). Except for the Governing Documents of the Company and the Investor Rights Agreement, there are no voting trusts, proxies or other Contracts to which the Company is a party with respect to the voting or transfer of the Company’s Equity Securities. Except for the Governing Documents of the Company and the Investor Rights Agreement, the Company has not granted any preemptive rights, board nomination, or board observer rights. There is no rights plan or anti-takeover plan to which the Company is a party or by which the Company is bound.
(c) Section 3.2(c) of the Company Disclosure Schedules sets forth a true and complete statement of the number and class or series (as applicable) of all of the Equity Securities of each Subsidiary of the Company issued and outstanding and the holders of such Equity Securities. Except as set forth in Section 3.2(c) of the Company Disclosure Schedules, none of the Group Companies owns or controls and has never owned or controlled, directly or indirectly, any Equity Interests in any, or has or has had any commitment or obligation to invest in, purchase any securities or obligations of, fund, guarantee, contribute or maintain the capital of or otherwise financially support any, Person. There are no outstanding (A) equity appreciation, phantom equity, or profit participation rights or (B) options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require any Subsidiary of the Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into or exchangeable for Equity Securities of the Subsidiaries of the Company. Except for their respective Governing Documents, the Investor Rights Agreement, and each and every Side Letter and Management Rights Letter with shareholders, copies of which have been provided to SPAC, there are no voting trusts, proxies or other Contracts with respect to the voting or transfer of any Equity Securities of any Subsidiary of the Company.
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Section 3.3 Authority.
(a) Each of the Company Parties has the requisite corporate, limited liability or other similar power and authority to execute and deliver this Agreement and each Ancillary Document to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. Subject to the receipt of the Company Preferred Shareholder Approval, and the Company Shareholder Approval, the execution and delivery of this Agreement, the Ancillary Documents to which any Company Party is or will be a party and the consummation of the transactions contemplated hereby and thereby have been (or, in the case of any Ancillary Document entered into after the date of this Agreement, will be upon execution thereof) duly authorized by all necessary corporate, limited liability company (or other similar) action on the part of the applicable Company Party. The Company Preferred Shareholder Approval and Company Shareholder Approval are the only approvals of holders of Company Equity Securities necessary to approve the Transactions. The affirmative vote of the Supporting Company Shareholders will be sufficient to obtain the Company Preferred Shareholder Approval and Company Shareholder Approval. This Agreement and each Ancillary Document to which either Company Party is or will be a party has been or will be, upon execution thereof, as applicable, duly and validly executed and delivered by the applicable Company Party, and constitutes or will constitute, upon execution and delivery thereof, as applicable, a valid, legal and binding agreement of the applicable Company Party (assuming that this Agreement and the Ancillary Documents to which either Company Party is or will be a party are or will be upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto), enforceable against the applicable Company Party in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
(b) At a meeting duly called and held, the Company Board has unanimously: (i) determined that this Agreement and the Transactions are advisable and in the best interests of the Company and the Company Shareholders, (ii) approved the Transactions, and (iii) resolved to recommend to the Company Shareholders each of the matters set forth in the Company Shareholder Proposals and Company Preferred Shareholder Proposals.
Section 3.4 Financial Statements; Undisclosed Liabilities.
(a) The Company has made available to SPAC a true and complete copy of (i) the audited consolidated balance sheets of the Group Companies as of December 31, 2018 and December 31, 2019 and the related audited statements of operations, changes in shareholders’ equity and cash flows of the Group Companies for each of the periods then ended and (ii) the unaudited consolidated balance sheets of the Group Companies as of September 30, 2019 and September 30, 2020 (the “Latest Balance Sheet”) and the related unaudited statements of operations, changes in shareholders’ equity and cash flows of the Group Companies for the nine-month period then ended (clauses (i) and (ii), collectively, the “Financial Statements”), each of which are attached as Section 3.4(a) of the Company Disclosure Schedules. Each of the Financial Statements (including the notes thereto) (A) was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and (B) fairly presents, in all material respects, the financial position, results of operations and cash flows of the Group Companies as at the date thereof and for the period indicated therein, except as otherwise specifically noted therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments (none of which is expected to be material) and the absence of footnotes).
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(b) Except (i) as set forth on the face of the Latest Balance Sheet, (ii) for Liabilities incurred in the ordinary course of business since the date of the Latest Balance Sheet (none of which is a Liability for breach of contract, breach of warranty, tort, infringement or violation of Law (whether civil or criminal) and none of which are material to the Group Companies, taken as a whole), (iii) for Liabilities that would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole, and (iv) for Liabilities incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of their respective covenants or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions, none of the Group Companies nor Merger Sub has any Liabilities of the type required to be set forth on a balance sheet in accordance with GAAP.
(c) The Group Companies have established and maintain systems of internal accounting controls that are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP and to maintain accountability for the Group Companies’ assets. The Group Companies maintain and, for all periods covered by the Financial Statements, have maintained books and records of the Group Companies in the ordinary course of business that are accurate and complete and reflect the revenues, expenses, assets and liabilities of the Group Companies in all material respects.
(d) Except as set forth in Section 3.4(d) of the Company Disclosure Schedules, no Group Company has received any written complaint, or, to the knowledge of the Company, any allegation, assertion or claim that there is (i) a “significant deficiency” in the internal controls over financial reporting of the Group Companies, (ii) a “material weakness” in the internal controls over financial reporting of the Group Companies or (iii) fraud, whether or not material, that involves management or other employees of the Group Companies who have a significant role in the internal controls over financial reporting of the Group Companies.
(e) No Group Company has received any stimulus or other funds under the CARES Act.
(f) The Group Companies have not entered into any material off-balance sheet transactions.
Section 3.5 Consents and Requisite Governmental Approvals; No Violations.
(a) No Consent, Permit, approval or authorization of, or designation, declaration or filing with or notification to, any Governmental Entity is required on the part of either Company Party with respect to the applicable Company Party’s execution, delivery or performance of its obligations under this Agreement or the Ancillary Documents to which the applicable Company Party is or will be party or the consummation of the transactions contemplated by this Agreement or by the Ancillary Documents, except for (i) compliance with and filings, notifications, Consents or Permits under any applicable United States or foreign competition, antitrust, merger control or foreign investment Laws, as set forth in Section 3.5(a) of the Company Disclosure Schedules, including the pre-merger notification requirements of the HSR Act, (ii) the filing with the SEC of (A) the Registration Statement / Proxy Statement and the declaration of the effectiveness thereof by the SEC and (B) any other documents or information required pursuant to applicable requirements, if any, of the Federal Securities Laws, (iii) compliance with and filings or notifications required to be filed with state securities regulators pursuant to “blue sky” Laws and state takeover Laws as may be required in connection with this Agreement, the Ancillary Documents or the Transactions, (iv) filing of the Certificate of Merger, (v) the Company Shareholder Approval and Company Preferred Shareholder Approval, (vi) any other consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole, or (vii) as otherwise set forth in Section 3.5(a) of the Company Disclosure Schedules.
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(b) Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 3.5(a), neither the execution, delivery or performance by either Company Party of this Agreement nor the Ancillary Documents to which the applicable Company Party is or will be a party nor the consummation of the transactions contemplated hereby or thereby will, directly or indirectly (with or without due notice or lapse of time or both) (i) result in any breach of any provision of any Company Party’s or Group Company’s Governing Documents, (ii) result in a violation or breach of, or constitute a default or give rise to any right of termination, Consent, cancellation, amendment, modification, suspension, revocation or acceleration under, any of the terms, conditions or provisions of (A) any Contract to which any Group Company or Merger Sub is a party or (B) any Material Permits, (iii) violate, or constitute a breach under, any Order or applicable Law to which any Group Company or Merger Sub or any of their respective properties or assets are bound (iv) result in the creation of any Lien upon any of the assets or properties (other than any Permitted Liens) or Equity Securities of any Group Company or Merger Sub, except, in the case of any clauses (ii) through (iv) above, as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole, or (v) result in the triggering, acceleration, or increase of payment to any Person or accelerated vesting of any Company Option.
Section 3.6 Permits. Each of the Group Companies has all Permits that are required to own, lease or operate its properties and assets and to conduct its business as currently conducted (the “Material Permits”), except where the failure to hold the same would not result in a Company Material Adverse Effect. Except as is not and would not reasonably be expected to be material to the Group Companies, taken as a whole, (i) each Material Permit is in full force and effect in accordance with its terms and (ii) no written notice of revocation, cancellation or termination of any Material Permit (or proposed revocation, cancellation or termination thereof) has been received by any of the Group Companies.
Section 3.7 Material Contracts; No Defaults.
(a) Section 3.7(a) of the Company Disclosure Schedules sets forth a list of all Contracts (whether written or oral): (i) for the sale of Company Products or for the purchase of products or services of at least $5,000,000 per year or $5,000,000 in the aggregate, (ii) that purports to limit either the type of business in which a Group Company may engage, the geographic area in which they may engage in business or the ability to sell or purchase from any Person, (iii) containing any indemnification, warranty, support, maintenance, or service that represents a material obligation of a Group Company other than in the ordinary course of business, (iv) under which a Group Company has permitted any material asset to become subject to a Lien (including Permitted Liens) other than in the ordinary course of business, (v) that evidences indebtedness, whether incurred, assumed, guaranteed, or secured by any asset of a Group Company having an outstanding principal amount in excess of $5,000,000, (vi) involving the acquisition or disposition, directly or indirectly, by merger or otherwise, of assets with an aggregate value in excess of $5,000,000, or the shares or Equity Interests of any other Person, or (viii) that are a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC) to the Group Companies as a whole (each Contract required to be set forth on Section 3.7(a) or Section 3.13(d) of the Company Disclosure Schedules, together with each of the Contracts entered into after the date of this Agreement that would be required to be set forth on Section 3.7(a) or Section 3.13(d) of the Company Disclosure Schedules if entered into prior to the execution and delivery of this Agreement, collectively, the “Material Contracts”).
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(b) Each Contract of a type required to be listed in Section 3.7(a) of the Company Disclosure Schedules, whether or not so listed, was entered into at arm’s length. Except for any Material Contract that has terminated, or will terminate, upon the expiration of the stated term thereof prior to the Closing Date, and except as would not reasonably be expected to be material to the Group Companies, taken as a whole, (i) each Material Contract is in full force and effect and represents the legal, valid and binding obligation of the applicable Group Company and, to the knowledge of the Company, the counterparty thereto, and is enforceable by such Group Company to the extent a party thereto in accordance with its terms, subject in all respects to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a Proceeding in equity or at law), (ii) the applicable Group Company and, to the knowledge of the Company, the counterparties thereto are not in material breach of, or default under, any Material Contract and no event has occurred which, with notice or lapse of time or both, would become a breach or default under any Material Contract, and (iii) the applicable Group Company has not received written notice from any other party to any such Contract that such party intends to terminate or not renew any such Contract.
(c) Except as set forth in Section 3.7(c) of the Company Disclosure Schedules, all Material Contracts are being performed without any party thereto relying on any force majeure provisions to excuse non-performance or performance delays arising out of the COVID-19 pandemic or COVID-19 Measures.
(d) None of the Group Companies has ever been suspended or disbarred from bidding on Contracts or subcontracts for or with any Governmental Entity (“Government Contracts”) and no suspension or debarment actions have been commenced or, to the knowledge of the Company, threatened against any of the Group Companies or any of such Group Company’s directors, officers or employees. None of the Group Companies has received any notice that they are being audited or investigated by any Governmental Entity with respect to any Government Contracts. Each of the Group Companies has conducted their operations in compliance with the requirements of all applicable Laws and regulations pertaining to all Government Contracts and bids for Government Contracts. The Group Companies do not have in effect, nor are they required to have in effect, and have never had or been required to have in effect, any security clearances in connection with the operation of their business.
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Section 3.8 Absence of Changes. During the period beginning on December 31, 2019, and ending on the date of this Agreement, (a) no Company Material Adverse Effect has occurred, and (b) except for commercially reasonable actions and omissions taken as a result of COVID-19 and COVID-19 Measures as previously disclosed in writing to SPAC, or as expressly contemplated by this Agreement, any Ancillary Document or in connection with the Transactions, (i) the Company has conducted its business in the ordinary course of business in all material respects and (ii) no Group Company has taken any action that would require the consent of SPAC if taken during the period from the date of this Agreement until the Closing pursuant to Section 5.1(b).
Section 3.9 Litigation. As of the date of this Agreement, there is (and since January 1, 2018 there has been) no Proceeding pending or, to the Company’s knowledge, threatened against any Group Company or Merger Sub that, if adversely decided or resolved, has had or would reasonably be expected to have a Company Material Adverse Effect. None of the Group Companies, nor Merger Sub nor any of their respective properties or assets is subject to any Order which has or could reasonably be expected to have the effect of prohibiting or impairing any business practice of a Group Company or Merger Sub, any acquisition of property by a Group Company or Merger Sub, or the conduct of business by a Group Company as is currently conducted. As of the date of this Agreement, there are no Proceedings by a Group Company or Merger Sub pending against any other Person. No allegations of sexual harassment have been made against any officer, manager, director, executive employee, or managing member of the Company or any Subsidiary which could reasonably be expected to have a Company Material Adverse Effect. There is no unsatisfied judgment or any open injunction binding upon a Group Company which could have a material effect on the ability of the Company to enter into, perform its obligations under this Agreement and consummate the Transactions.
Section 3.10 Compliance with Applicable Law. Each Group Company and Merger Sub conducts, and since January 1, 2018 and has conducted, its business in accordance with all Laws and Orders applicable to such Group Company or Merger Sub and is not in violation of any such Law or Order, except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole. No written communication from a Governmental Entity that alleges that a Group Company or Merger Sub is not in compliance with any Law or Order has been received by any Group Company or Merger Sub and the Company has no knowledge of any such written communication being received by any other Person, except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole.
Section 3.11 Employee Plans.
(a) Except as set forth on Section 3.11(a) of the Company Disclosure Schedules, all employees of the Group Companies and service providers have signed employment agreements or service agreements that contain confidentiality and inventions assignment covenants in the form delivered or made available to SPAC and the Company has no knowledge of any breach of a confidentiality, non-competition and non-solicitation, inventions assignment covenants by any current or former employee of the Group Companies.
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(b) Section 3.11(b) of the Company Disclosure Schedules sets forth a true and complete list of all material Employee Benefit Plans (including, for each such Employee Benefit Plan, its jurisdiction). With respect to each material Employee Benefit Plan, the Group Companies have provided SPAC with true and complete copies of the material documents pursuant to which the plan is maintained, funded and administered.
(c) No Group Company has any Liability with respect to or under: (i) a Multiemployer Plan; (ii) a “defined benefit plan” (as defined in Section 3(35) of ERISA, whether or not subject to ERISA) or a plan that is or was subject to Title IV of ERISA or Section 412 of the Code; (iii) a “multiple employer plan” within the meaning of Section of 413(c) of the Code or Section 210 of ERISA; or (iv) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA. No Group Company has any material Liabilities to provide any retiree or post-termination health or life insurance or other welfare-type benefits to any Person other than health continuation coverage pursuant to Law or the terms of any severance arrangements or for which the recipient pays the full cost of coverage. No Group Company has any material Liabilities by reason of at any time being considered a single employer under Section 414 of the Code with any other Person.
(d) Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and has timely received a favorable determination or opinion or advisory letter from the Internal Revenue Service. None of the Group Companies has incurred (whether or not assessed) any material penalty or Tax under Section 4980H, 4980B, 4980D, 6721 or 6722 of the Code.
(e) As of the date of this Agreement, there are no pending or, to the Company’s knowledge, threatened claims or Proceedings with respect to any Employee Benefit Plan (other than routine claims for benefits). With respect to each Employee Benefit Plan, all contributions, distributions, reimbursements and premium payments that are due have been timely made, except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole. The Group Companies have timely contributed all material required payments towards pension arrangement (including severance) according to the applicable Laws and the Employee Benefit Plans. The Employee Benefit Plans have been administered and operated in all material respects in compliance with their terms and all applicable Laws.
(f) The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement will not materially (alone or in combination with any other event) (i) result in any payment or benefit becoming due to or result in the forgiveness of any Indebtedness of any current or former director, manager, officer, employee, individual independent contractor or other service providers of any of the Group Companies, (ii) increase the amount or value of any compensation or benefits payable to any current or former director, manager, officer, employee, individual independent contractor or other service providers of any of the Group Companies, (iii) result in the acceleration of the time of payment or vesting, or trigger any payment or funding of any compensation or benefits to any current or former director, manager, officer, employee, individual independent contractor or other service providers of any of the Group Companies, or (iv) create or otherwise result in Liability with respect to any Company Employee Plan.
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(g) No amount that could be received (whether in cash or property or the vesting of property) by any “disqualified individual” of any of the Group Companies under any Employee Benefit Plan or otherwise as a result of the consummation of the transactions contemplated by this Agreement could, separately or in the aggregate, be nondeductible under Section 280G of the Code or subjected to an excise Tax under Section 4999 of the Code.
(h) The Group Companies have no material obligation to make a “gross-up” or similar payment in respect of any Taxes that may become payable under Section 4999 or 409A of the Code.
(i) Each Foreign Benefit Plan that is required to be registered or intended to be Tax exempt has been registered (and, where applicable, accepted for registration) and is Tax exempt and has been maintained in good standing, to the extent applicable, with each Governmental Entity. No Foreign Benefit Plan is a “defined benefit plan” (as defined in ERISA, whether or not subject to ERISA) or has any material unfunded or underfunded Liabilities. All material contributions required to have been made by or on behalf of the Group Companies with respect to plans or arrangements maintained or sponsored a Governmental Entity (including severance, termination indemnities or other similar benefits maintained for employees outside of the U.S.) have been timely made or fully accrued.
(j) Except as set forth in Section 3.11(j) of the Company Disclosure Schedules, the Group Companies have not made, and there are no facts that would give rise to, any material changes to the Employee Benefit Plans resulting from disruptions caused by the COVID-19 pandemic or COVID-19 Matters, nor are any such changes currently contemplated.
Section 3.12 Environmental Matters.
(a) None of the Group Companies have received any written notice from any Governmental Entity or any other Person regarding any actual, alleged, or potential violation in any material respect of, or a failure to comply in all material respects with, any Environmental Laws.
(b) There is no material Proceeding pending or, to the Company’s knowledge, threatened in writing against any Group Company pursuant to Environmental Laws.
(c) There has been no manufacture, release, treatment, storage, disposal, arrangement for disposal, transport or handling of, contamination by, or exposure of any Person to, any Hazardous Substances, other than in compliance in all material respects with Environmental Laws.
(d) The Group Companies have made available to SPAC copies of all material environmental, health and safety reports and documents that are in any Group Company’s possession or control relating to the current or former operations, properties or facilities of the Group Companies.
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Section 3.13 Intellectual Property.
(a) Section 3.13(a) of the Company Disclosure Schedules sets forth a true and complete list of all currently issued, registered or pending Company Registered Intellectual Property as of the date of this Agreement. Section 3.13(a) of the Company Disclosure Schedules lists, for each item of Company Registered Intellectual Property as of the date of this Agreement (A) the record owner of such item, (B) the jurisdictions in which such item has been issued or registered or filed, (C) the issuance, registration or application date, as applicable, for such item, (D) the issuance, registration or application number, as applicable, for such item.
(b) As of the date of this Agreement, all necessary fees and filings with respect to any issuances or registrations of Company Registered Intellectual Property required to be listed on Section 3.13(a) of the Company Disclosure Schedules have been timely submitted to the relevant intellectual property office or Governmental Entity and Internet domain name registrars to maintain such issuances or registrations of Company Registered Intellectual Property (taking into account any applicable grace periods). As of the date of this Agreement, no issuance or registration obtained and no application filed by the Group Companies for any Company Registered Intellectual Property required to be listed on Section 3.13(a) of the Company Disclosure Schedules has been cancelled, abandoned, allowed to lapse or not renewed, except where such Group Company has, in its reasonable business judgment, decided to cancel, abandon, allow to lapse or not renew such issuance, registration or application and where such decision would not have a Company Material Adverse Effect.
(c) The Group Companies solely and exclusively own all right, title and interest in and to all Company Owned Intellectual Property free and clear of all Liens (other than Permitted Liens), in each case, except as would not have a Company Material Adverse Effect.
(d) Section 3.13(d) of the Company Disclosure Schedules sets forth a list of all current Contracts for Company Licensed Intellectual Property that, as of the date of this Agreement, are material to the business of the Group Companies, taken as a whole, other than, for the avoidance of doubt, (A) licenses to Off-the-Shelf Software, (B) licenses to Public Software and (C) non-disclosure agreements and licenses granted by employees, individual consultants or individual contractors of any Group Company pursuant to Contracts with employees, individual consultants or individual contractors that do not materially differ from the Group Companies’ form therefor that has been made available to SPAC. The applicable Group Company has valid rights (subject in all respects to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a Proceeding in equity or at law) under all Contracts for Company Licensed Intellectual Property to use, sell, license and otherwise exploit, as the case may be, all Company Licensed Intellectual Property licensed pursuant to such Contracts as the same is currently used, sold, licensed and otherwise exploited by such Group Company, except as would not have a Company Material Adverse Effect.
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(e) Each Group Company’s employees, consultants, advisors and independent contractors who independently or jointly contributed to or otherwise participated in the authorship, invention, creation, improvement, modification or development of any material Company Owned Intellectual Property since December 31, 2018 (each such person, a “Creator”) have (i) agreed to maintain and protect the trade secrets and confidential information of the applicable Group Company and (ii) assigned or have agreed to a present assignment to such Group Company of all such Intellectual Property Rights authored, invented, created, improved, modified or developed by such person on behalf of a Group Company in the course of such Creator’s employment or other engagement with such Group Company. Each Group Company’s employees have expressly waived any and all rights to royalties or other consideration or non-assignable rights in respect of all such Intellectual Property Rights, including an express and irrevocable waiver of the right to receive compensation in connection with “Service Inventions” and an express and irrevocable waiver or agreement not to assert any “moral rights”, in each case, to the extent such rights can be waived under applicable Law. There are no current or, to the Company’s knowledge, threatened, disputes with any Creator regarding the scope of any assignment of Intellectual Property rights to a Group Company by any Creator, or performance under such assignment agreement, including with respect to any payments to be made or received by a Group Company thereunder.
(f) Each Group Company has taken commercially reasonable steps to safeguard and maintain the secrecy of any material trade secrets, know-how and other confidential information owned by each Group Company. Without limiting the foregoing, to the Company’s knowledge, no Group Company has disclosed any trade secrets, know-how or confidential information to any other Person unless such disclosure was in connection with such Person’s employment with a Group Company or under an appropriate written non-disclosure agreement containing appropriate limitations on use, reproduction and disclosure. To the Company’s knowledge, there has been no violation or unauthorized access to or disclosure of any material trade secrets, know-how or confidential information of or in the possession each Group Company.
(g) None of the Company Owned Intellectual Property is subject to any outstanding Order that restricts in any material manner the use, sale, transfer, licensing or exploitation thereof by the Group Companies or adversely affects the validity, or enforceability of any such Company Owned Intellectual Property in any material respect.
(h) No (i) government funding or governmental grants or other incentives from any Governmental Entity or (ii) facilities of a university, college, other educational institution or research center was used in the development of the Company Intellectual Property. Except as set forth in Section 3.13(h) of the Company Disclosure Schedules, to the knowledge of the Company, no employee, consultant or independent contractor of the Company who was involved in, or who contributed to, the creation or development of any Company Intellectual Property Rights, has performed services for or otherwise was under restrictions resulting from his/her relations with any government, university, college or other educational institution or research center during a period of time during which any Company Intellectual Property Rights were created or during such time that such employee, consultant or independent contractor was also performing services for or for the benefit of the Company, nor has any such person created or developed any Company Intellectual Property Rights with any governmental grant.
(i) To the Company’s knowledge, neither the conduct of the business of the Group Companies nor nor the manufacturing, reproduction, use, marketing, offer for sale, sale, importation, exportation, distribution, maintenance or other exploitation of any Company Product by the Group Companies, nor the use, practice, or other exploitation of the Company Owned Intellectual Property and Company Licensed Intellectual Property by the Group Companies, infringes, constitutes or results from an unauthorized use or misappropriation of, or otherwise violates any Intellectual Property Rights of any other Person in any material respect.
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(j) There is no material Proceeding pending, or to the Company’s knowledge, threatened (i) alleging that a Group Company has infringed, misappropriated or otherwise violated any Intellectual Property Rights of any other Person, or (ii) challenging the validity, enforceability, use or exclusive ownership of any Company Owned Intellectual Property.
(k) To the Company’s knowledge, no Person is infringing, misappropriating, diluting or violating any Company Owned Intellectual Property in any material respect. Except as set forth in Section 3.13(k) of the Company Disclosure Schedules, since December 31, 2018, no Group Company has made any written claim against any Person alleging any infringement, misappropriation or other violation of any Company Owned Intellectual Property in any material respect.
(l) No Group Company has disclosed or delivered to any escrow agent or any other Person, other than employees or contractors who are subject to confidentiality obligations, any of the material source code that is Company Owned Intellectual Property, and no other Person has the right, contingent or otherwise, to obtain access to or use any such source code, and to the Company’s knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) would reasonably be expected to, result in the delivery, license or disclosure of any material source code that constitutes Company Owned Intellectual Property to any Person who is not, as of the date the event occurs or circumstance or condition comes into existence, a current employee or contractor of a Group Company subject to confidentiality obligations with respect thereto.
(m) No Group Company has accessed, used, modified, linked to, or created derivative works from any Public Software in a manner which would subject any material proprietary Software included in the Company Owned Intellectual Property that constitutes a Company Product and that is distributed outside of the Group Companies to any obligations set forth in the license for such Public Software, that (i) requires any material Company Owned Intellectual Property to be licensed, sold, disclosed, distributed, hosted or otherwise made available, including in source code form and/or for the purpose of making derivative works, for any reason, (ii) grants, or requires any Group Company to grant, the right to decompile, disassemble, reverse engineer or otherwise derive the source code or underlying structure of any material Company Owned Intellectual Property, (iii) limits in any manner the ability to charge license fees or otherwise seek compensation in connection with marketing, licensing or distribution of any material Company Owned Intellectual Property or (iv) otherwise imposes any limitation, restriction or condition on the right or ability of any Group Company to use, hold for use, license, host, distribute or otherwise dispose of any material Company Owned Intellectual Property, other than compliance with notice and attribution requirements.
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(n) Each Group Company has developed, implemented, and maintained a commercially reasonable written data protection and data privacy compliance and information security program (“Data Processing Program”) that contains appropriate administrative, technical, and physical safeguards designed to protect the data collected, generated, or received in connection with the marketing, delivery or use of any Company Product, and any third party data howsoever obtained or collected by or for the Group Companies, including Personal Confidential Information and other customer data processed in connection with the purchase, sale, or use of any Company Product. Since December 31, 2018, each Group Company has complied in all material respects with (i) all applicable Laws relating to data privacy, data protection, security breach notification and the collection, storage and use of Personal Confidential Information and user information gathered in the course of their operations, (ii) the applicable Data Processing Programs, including all rules, policies and procedures on data privacy, protection, collection, storage and use established by the Group Companies from time to time, and (iii) all restrictions and requirements with respect to such Group Company’s use, storage and collection of data and Personal Confidential Information contained in any written agreement to which such Group Company is bound.
(o) To the Company’s knowledge, since December 31, 2018, there has not been a material data security breach or material unauthorized access, use, loss, disclosure, or publication of any Personal Confidential Information owned, or in the possession or control of a Group Company, including any unauthorized access, use, disclosure, or publication of Personal Confidential Information that would constitute a breach for which notification to individuals and/or Governmental Entities is required under any applicable Information Privacy and Security Laws to which the Group Company is subject. Since December 31. 2019, the collection, maintenance, transmission, transfer, use, disclosure, storage, disposal, and security of Personal Confidential Information by the Group Companies has complied in all material respects with (i) applicable Information Privacy and Security Laws, (ii) Contracts that govern Personal Confidential Information, and (iii) the Data Processing Program and other applicable privacy policies of the Group Companies. No material Proceeding is pending or, to the Company’s knowledge threatened in writing against a Group Company relating to the processing or security of Personal Confidential Information. The consummation of the transactions contemplated by this Agreement will not breach or violate in any material respect any such Laws, agreements, or any Data Processing Program.
(p) The IT Assets operate and perform in a manner that permits the Group Companies and Merger Sub to conduct their businesses as currently conducted in all material respects. Each Group Company has taken commercially reasonable actions to protect the confidentiality, integrity, operation and security of the IT Assets (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized, use, access, interruption, malfunction, modification, or corruption. To the Company’s knowledge, since December 31, 2018, there has been no material malfunction of any IT Assets, or any unauthorized use, access, interruption, modification, or corruption of any material information or transactions stored or contained therein or transmitted thereby.
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Section 3.14 Labor Matters.
(a) None of the Group Companies (A) has any material Liability for any arrears of wages or other compensation for services (including salaries, wage premiums, commissions, fees or bonuses), or any penalty or other sums for failure to comply with any of the foregoing, or (B) has any material Liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity with respect to unemployment compensation benefits, social security, social insurances or other benefits or obligations for any employees of any Group Company (other than routine payments to be made in the normal course of business and consistent with past practice). No officer of a Group Company is under notice of termination and there are no proposals for such termination or to materially change any terms of employment of any such officer. The Group Companies have withheld all amounts required by applicable Law or by agreement to be withheld from wages, salaries and other payments to employees or independent contractors or other service providers of each Group Company, except as has not and would not reasonably be expected to result in, individually or in the aggregate, material Liability to the Group Companies or Merger Sub. The Group Companies are in compliance in all material respects with all Laws respecting hiring, employment, termination of employment, employment practices, terms and conditions of employment, employment discrimination, harassment, retaliation, reasonable accommodation, wages and hours, and employee health and safety. There are no pending, or to the Company’s knowledge, threatened in writing, material Proceedings against a Group Company by any employee in connection with such employee’s employment or termination of employment by such Group Company.
(b) No Group Company is or has been a party to or bound by any collective bargaining agreements or other agreements with any labor organization, labor union, works council or other employee representative or any other Contract with a labor union, labor organization, works council, employee delegate, representative or other employee collective group nor is there any duty on the part of any Group Company to bargain with any labor union, labor organization, works council, employee delegate, representative or other employee collective group. No extension order applies to any Group Company other than the general extension orders that apply to all employers in Israel. Except as set forth in Section 3.14(b) of the Company Disclosure Schedules, there has been no actual or, to the Company’s knowledge, threatened unfair labor practice charges, material grievances, arbitrations, strikes, lockouts, work stoppages, slowdowns, picketing, hand billing or other material labor disputes against or affecting any Group Company. To the Company’s knowledge, there have been no labor organizing activities with respect to any employees of any Group Company.
(c) The Group Companies have not experienced any material employment-related Liability with respect to or arising out of COVID-19 or any Law, Order, directive, guidelines or recommendations by any Governmental Entity in connection with or in response to COVID-19. Except as set forth on Section 3.14(c), there have been no furloughs, layoffs, or salary reductions affecting any employee of any Group Company as a result of or in response to COVID-19. The Group Companies are in material compliance with COVID-19 Measures with respect to their employees, service providers and workplaces.
(d) To the Company’s knowledge, no officer of any Group Company presently intends to terminate his or her employment with such Group Company, whether as a result of the Transactions or otherwise.
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Section 3.15 Insurance. Section 3.15 of the Company Disclosure Schedules sets forth a list of all material policies of fire, liability, workers’ compensation, property, casualty, umbrella, crime and fiduciary, employment practices, directors and officers, cyber, and other forms of insurance owned or held by any Group Company as of the date of this Agreement. Such list includes for each such policy, the type of policy, form of coverage, the policy number and the name of the insurer, premium or retention, effective date, and expiration date. All such policies are legal, valid, binding, enforceable in accordance with their terms, in full force and effect, all premiums due and payable thereon as of the date of this Agreement have been paid in full as of the date of this Agreement, and true and complete copies of all such policies have been made available to SPAC. No written notice of cancellation, non-renewal, disallowance, or reduction in coverage or claim or termination of any such policy has been received by any Group Company. To the knowledge of the Company, as of the date of this Agreement, no claim by any Group Company is pending under any such policies as to which coverage has been denied or disputed, or rights reserved to do so, by the underwriters thereof. To the knowledge of the Company, the Group Companies are not required by Law or Material Contract to obtain any insurance not already obtained.
Section 3.16 Tax Matters.
(a) Each Group Company has prepared and filed all income and other material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Orders, and each Group Company has paid all material Taxes required to have been paid by it regardless of whether shown on a Tax Return. The Financial Statements accrue, in accordance with GAAP, all material liabilities for Taxes with respect to all periods through the date thereof.
(b) Each Group Company has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.
(c) No Group Company is currently the subject of a Tax audit or examination with respect to Taxes. No Group Company has been informed of the commencement or anticipated commencement of any Tax audit or examination that has not been resolved or completed in each case with respect to Taxes.
(d) No Group Company is party to any agreement to extend or waive the time in which any Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business.
(e) No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any Tax Authority with respect to a Group Company which agreement or ruling would be effective after the Closing Date.
(f) No Group Company is or has been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4.
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(g) There are no Liens for Taxes on any assets of the Group Companies other than Permitted Liens.
(h) During the two (2)-year period ending on the date of this Agreement, no Group Company was a “distributing corporation” or a “controlled corporation” in a transaction to be governed by Section 355 of the Code.
(i) No Group Company (i) has been a member of an affiliated group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which was a Group Company or any of its current Affiliates) or (ii) has any Liability for the Taxes of any Person (other than a Group Company or any of its current Affiliates) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-United States Law), as a transferee or successor or by Contract (other than any Contract the principal purpose of which does not relate to Taxes).
(j) No claims have ever been made by any Tax Authority in a jurisdiction where a Group Company does not file Tax Returns that such Group Company is or may be subject to taxation by that jurisdiction, which claims have not been resolved or withdrawn.
(k) No Group Company is a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes).
(l) Each Group Company is Tax resident only in its jurisdiction of formation.
(m) No Group Company 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.
(n) No Group Company organized or formed under the laws of a jurisdiction outside of the United States (i) is a “surrogate foreign corporation” or “expatriated entity” within the meaning of Section 7874 of the Code or is treated as a U.S. corporation for U.S. federal Tax purposes by reason of the application of Sections 269B or 7874(b) of the Code or (ii) was created or organized in the United States such that such entity would be taxable in the United States as a domestic entity pursuant to the dual charter provision of Treasury Regulation Section 301.7701-5(a).
(o) The Company does not have knowledge of any fact or any reason that (when taken together with the Company’s understanding of other relevant facts) would reasonably be expected to cause the Company to be treated, following the completion of the Transactions, as a Tax resident of a country other than Israel.
(p) All payments by, to or among the Group Companies comply with all applicable transfer pricing requirements imposed by any Governmental Entity and the Company complies, and has always been compliant, with the requirements of Section 85A of the Israeli Income Tax Ordinance and the regulations promulgated thereunder and Section 482 of the Code and the Treasury Regulations thereunder, where applicable.
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(q) Each Group Company is in compliance in all material respects with all terms and conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or order of a Governmental Entity, and the consummation of the transactions contemplated by this Agreement will not have any material adverse effect on the continued validity and effectiveness of any such Tax exemption, Tax holiday or other Tax reduction agreement or order.
(r) No Group Company applied for any tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959.
(s) The Group Companies do not and no Group Company has ever participated or engaged in any transaction listed in Section 131(g) of the Israeli Income Tax Ordinance and the Israeli Income Tax Regulations (Reportable Tax Planning), 2006, promulgated thereunder. The Group Companies do not and have never taken a tax position that is subject to reporting under Section 131E of the Israeli Income Tax Ordinance. No Group Company has ever obtained a legal or tax opinion that is subject to reporting under Section 131D of the Israeli Income Tax Ordinance. The Group Companies do not and no Group Company has ever performed and was not part of any action or transaction that is classified as a “reportable opinion” under Section 67C of the Israeli Value Added Tax Law, 1975 (the “Israeli VAT Law”) or a “reportable position” under Section 67D of the Israeli VAT Law.
(t) The Company is duly registered for the purposes of Israeli value added tax and has complied in all respects with all requirements concerning VAT. The Company (i) has not made any exempt transactions (as defined in the Israeli VAT Law) and there are no circumstances by reason of which there might not be an entitlement to full credit of all VAT chargeable or paid on inputs, supplies and other transactions and imports made by it or them, (ii) has collected and remitted in a timely manner to the Israel Tax Authority (the “ITA”) all output VAT which it is required to collect and remit under any applicable Law and (iii) has not received a refund for input VAT for which it is not entitled under any applicable Law. Except for the Company, no Group Company has ever been, and no Group Company currently is, required to effect Israeli VAT registration.
(u) Each of the Company Equity Plans that is intended to qualify as a capital gains route plan under Section 102 of the Israeli Income Tax Ordinance has received a favorable determination or approval letter from, or is otherwise approved by or deemed approved by passage of time without objection by, the ITA. All awards granted under the Company Equity Plans that were intended to qualify with the capital gains route under Section 102 of the Israeli Income Tax Ordinance have been granted in compliance with the applicable requirements of Section 102 and the written requirements and guidance of the ITA, including the filing of the necessary documents with the ITA, the appointment of an authorized trustee, and the due deposit of such securities with such trustee pursuant to the terms of Section 102 of the Israeli Income Tax Ordinance, the guidance published by the ITA on July 24, 2012, and the clarification dated November 6, 2012.
(v) The Company is not and has never been a real property corporation (Igud Mekarke’in) within the meaning of this term under Section 1 of the Israeli Land Taxation Law (Appreciation and Acquisition), 1963.
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(w) Neither the Company nor any holder of Company Equity Securities is subject to any restrictions or limitations pursuant to Part E2 of the Israeli Income Tax Ordinance or pursuant to any Tax ruling made with reference to the provisions of Part E2.
Section 3.17 Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on Section 3.17 of the Company Disclosure Schedules (which fees shall be the sole responsibility of the Company, except as otherwise provided in Section 8.6), 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 this Agreement based upon arrangements made by or on behalf of the Company or any of its Affiliates for which any of the Group Companies or any of their Affiliates has any obligation.
Section 3.18 Real and Personal Property.
(a) Owned Real Property. No Group Company owns any real property.
(b) Leased Real Property. Section 3.18(b) of the Company Disclosure Schedules sets forth a true and complete list (including street addresses) of all real property leased by any of the Group Companies (the “Leased Real Property”) and all Real Property Leases pursuant to which any Group Company is a tenant or landlord as of the date of this Agreement. True and complete copies of all such Real Property Leases have been made available to SPAC. Except as set forth in Section 3.18(b) of the Company Disclosure Schedules, each Real Property Lease is in full force and effect and is a valid, legal and binding obligation of the applicable Group Company party thereto, enforceable in accordance with its terms against such Group Company and, to the Company’s knowledge, each other party thereto (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity). There is no material breach or default by any Group Company or, to the Company’s knowledge, any third-party under any Real Property Lease, and, to the Company’s knowledge, no event has occurred which (with or without notice or lapse of time or both) would constitute a material breach or default or would permit termination of, or a material modification or acceleration thereof by any party to such Real Property Leases. There are no options or other contracts under which any Group Company has a right or obligation to acquire or lease any interest in real property. All Real Property Leases are shown or reflected on the Latest Balance Sheet to the extent required by GAAP, other than those entered into or acquired on or after the Latest Balance Sheet Date.
(c) All material personal property and other material property and assets of the Group Companies owned, used or held for use in connection with the business of the Group Companies (the “Personal Property”), are shown or reflected on the Latest Balance Sheet, to the extent required by GAAP applied on a consistent basis in accordance with past practice, other than those entered into or acquired on or after the date of the Latest Balance Sheet in the ordinary course of business. The Group Companies have good and marketable title to the Personal Property owned by them, and all such Personal Property is in each case held free and clear of all Liens, except for Permitted Liens.
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Section 3.19 Transactions with Affiliates. Section 3.19 of the Company Disclosure Schedules sets forth all Contracts (a) between any Group Company, on the one hand, and any officer, director, employee, partner, member, manager, direct or indirect equityholder or Affiliate of any Group Company (other than, for the avoidance of doubt, any other Group Company) or any family member of the foregoing Persons, on the other hand (each Person identified in this clause (a), a “Company Related Party”), and (b) the Investor Rights Agreement, each and every Side Letter and Management Rights Letter with shareholders, each shareholders’ agreement, voting agreement, registration rights agreement, co-sale agreement or other similar Contract of any Group Company, including any Contract granting any shareholder of the Company investor rights, rights of first refusal, rights of first offer, registration rights, director designation rights or similar rights (collectively, the “Company Investor Agreements”), in each case other than (i) Contracts with respect to a Company Related Party’s employment or other engagement with (including benefit plans and other ordinary course of business compensation from) any of the Group Companies entered into in the ordinary course of business, (ii) Contracts with respect to a Company Shareholder’s or a holder of Company Equity Awards’ status as a holder of Equity Securities of the Company and (iii) Contracts entered into after the date of this Agreement that are either permitted pursuant to Section 5.1(b) or entered into in accordance with Section 5.1(b). All Contracts, arrangements, understandings, interests and other matters that are required to be disclosed pursuant to this Section 3.19 are referred to herein as “Company Related Party Transactions”. All material transactions since the incorporation of the Company between the Company and interested parties that require approvals pursuant to Sections 268 to 284 of the Israeli Companies Law, 1999, or pursuant to the Governing Documents of the Company have been duly approved.
Section 3.20 Compliance with International Trade & Anti-Corruption Laws.
(a) Since January 1, 2016, and except where the failure to be, or to have been, in compliance with such Laws has not been or would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole, neither the Group Companies nor, to the Company’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing, is or has been (i) a Person named on any Sanctions and Export Control Laws-related list of designated Persons maintained by a Governmental Entity; (ii) located, organized or resident in a country or territory which is itself the subject of or target of any Sanctions and Export Control Laws; (iii) an entity 50-percent or more owned, directly or indirectly, by one or more Persons described in clause (i) or (ii); or (iv) otherwise engaging in dealings with or for the benefit of any Person described in clauses (i) through (iii).
(b) No Group Company, or to the knowledge of Company, any of the Group Company’s directors, officers or personnel in their capacity as such, is in violation of, or since January 1, 2016, has been, in violation of, has been threatened to be charged with or given notice of any violation of or, to the knowledge of Company is under investigation with respect to and has not been threatened to be charged with or given notice of any violation of, applicable Sanctions and Export Control Laws.
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(c) No Group Company is, or is required to be, registered with the Israeli Ministry of Defense as a security exporter. The business of the Group Companies and Merger Sub does not involve the use or development of, or engagement in, encryption technology, or other technology whose development, commercialization, marketing or export is restricted under Israeli Law, and the business of the Group Companies does not require any Group Company to obtain a license from the Israeli Ministry of Economy and/or the Israeli Ministry of Defense or an authorized body thereof pursuant to Section 2(a) of the Israeli Control of Products and Services Declaration (Engagement in Encryption), 1974 or other legislation regulating the development, commercialization, marketing or export of technology. There is no Order outstanding against any Group Company that is or would reasonably be expected to be, material to the Group Companies or that in any manner seeks to prevent, enjoin, alter or materially delay the consummation of the transactions contemplated by this Agreement.
(d) Neither the Group Companies, their directors or officers, nor, to the Company’s knowledge, any of their employees, agents, or any other Persons acting for or on behalf of any of the Group Companies has, directly or knowingly indirectly (i) made, offered, promised, authorized, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person, (ii) made, offered, promised, authorized or paid any unlawful contributions to a domestic or foreign political party or candidate or (iii) otherwise made, offered, promised, authorized, paid or received any improper payment in violation of any Anti-Corruption Laws.
(e) The Group Companies have implemented and maintained policies and procedures reasonably designed to promote compliance with, and prevent violation of, Anti-Corruption Laws, Sanctions and Export Control Laws.
(f) The Group Companies have not received and has not applied for any grant or other support or benefits (including, without limitation, Tax benefits) from any United States, Israeli or foreign Governmental Entity.
Section 3.21 Customers and Suppliers.
(a) A list of the top ten (10) customers (by revenue) of the Group Companies, as a whole, (i) for the year ended December 31, 2019 and (ii) as of September 30, 2020 (collectively, the “Material Customers”) and the aggregate amount of consideration paid to the Group Companies by each Material Customer during such periods has been provided to SPAC. Except as set forth in Section 3.21(a) of the Company Disclosure Schedules, no such Material Customer has expressed to any Group Company in writing, and the Company has no knowledge of, any Material Customer’s intention to cancel or otherwise terminate, or materially reduce or adversely modify, its relationship with a Group Company or of a material breach of the terms of any Contract with such Material Customer. No Material Customer has asserted or threatened to assert a force majeure event or anticipated inability to perform, in whole or in part, arising out of the COVID-19 pandemic.
(b) A list of the top ten (10) vendors to and/or suppliers of (by spend) of the Group Companies (i) for the year ended December 31, 2019 and (ii) as of September 30, 2020 (collectively, the “Material Suppliers”) and the amount of consideration paid to each Material Supplier by the Group Companies during such periods has been provided to SPAC. Except as set forth in Section 3.21(b) of the Company Disclosure Schedules, no Material Supplier is the sole source of the goods or services supplied by such Material Supplier.
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Section 3.22 Product Warranties; Product Liability.
(a) No Group Company, nor, to the Company’s knowledge, any licensee, partner, collaborator or joint venture of a Group Company has developed, manufactured, commercialized, produced, formulated, propagated, modified, customized, processed, distributed or sold any Company Product that did not comply with any express or implied warranty regarding such Company Product or that contained any unintended Hazardous Substance or that was otherwise adulterated, contaminated, mislabeled, defective, off-specification or improperly packaged or transported.
(b) To the extent any warranties are implied or imposed by any Law, no Company Product sold, distributed, delivered or licensed by the Group Companies, or any their licensees, partners, collaborators or joint venturers is subject to any guaranty or warranty from or on behalf of the Group Companies. No claim has been made, or to the knowledge of the Company, threatened against the Group Companies by a customer or any other Person alleging that (i) such Company Product (A) did not comply with any express or implied warranty regarding such Company Product, (B) contained an unintended Hazardous Substance, or (C) was otherwise contaminated, adulterated, mislabeled, defective or improperly packaged or transported, or (ii) the Group Company, or any licensee, partner, collaborator, joint venturer, supplier, warehouse, distributor or seller of any Company Product breached any duty to warn, test, inspect or instruct of the risks, limitations, precautions or dangers related to the use, application, or transport of any such Company Product.
(c) Except as set forth in Section 3.22(c) of the Company Disclosure Schedules, there have been no recalls, market withdrawals or replacements (voluntary or involuntary) with respect to any Company Product or any similar actions, investigations, notices or threatened recalls by any Governmental Entity with respect to any Company Product and, to the knowledge of the Company, no facts or circumstances exist that are reasonably likely to (i) result in the recall, market withdrawal or replacement of any Company Product sold or intended to be sold, or (ii) cause, as a result of any regulatory action by any Governmental Entity, a termination or suspension of the marketing, distribution or sale of any Company Product.
(d) Except as set forth in Section 3.22(d) of the Company Disclosure Schedules, no Person has claimed that any Group Company has committed any act, or failed to commit any act, which would result in, and there has been no occurrence which would reasonably give rise to, or form the basis of, whether or not covered by insurance, any (i) product liability, (ii) liability for injuries or damage to individuals or property (including without limitation any crops, animals or livestock) or (iii) liability for economic damages or losses.
Section 3.23 PIPE Financing. The Company has entered into Subscription Agreements with Subscribers for the sale of Company Ordinary Shares upon Closing for aggregate gross proceeds of not less than $200,000,000. Each Subscriber has completed an accredited investor questionnaire customary for financings of the type and size of the PIPE Financing, and the Company has received representations and warranties from each Subscriber that such Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act.
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Section 3.24 Information Supplied. None of the information relating to the Group Companies supplied or to be supplied by or on behalf of the Group Companies or Merger Sub expressly for inclusion or incorporation by reference prior to the Closing in the Registration Statement / Proxy Statement will, when the Registration Statement / Proxy Statement is declared effective or when the Registration Statement / Proxy Statement is mailed to the SPAC Stockholders or at the time of the SPAC Stockholders Meeting, and in the case of any amendment thereto, at the time of such amendment, 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.
Section 3.25 Investigation; No Other Representations.
(a) The Company, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i) it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets, condition, operations and prospects of, SPAC and (ii) it has been furnished with or given access to such documents and information about SPAC and its businesses and operations as it and its Representatives have deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary Documents and the Transactions.
(b) In entering into this Agreement and the Ancillary Documents to which it is or will be a party, the Company has relied solely on its own investigation and analysis and the representations and warranties expressly set forth in Article IV and in the Ancillary Documents to which it is or will be a party and no other representations or warranties of SPAC, any SPAC Non-Party Affiliate or any other Person, either express or implied, and the Company, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article IV and in the Ancillary Documents to which it is or will be a party, none of SPAC, any SPAC Non-Party Affiliate nor any other Person makes or has made any representation or warranty, either express or implied, in connection with or related to this Agreement, the Ancillary Documents or the Transactions.
Section 3.26 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SPAC OR ANY OF ITS REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE III OR THE ANCILLARY DOCUMENTS, NONE OF THE COMPANY, MERGER SUB, ANY COMPANY NON-PARTY AFFILIATE OR ANY OTHER PERSON MAKES, AND THE COMPANY AND MERGER SUB EACH EXPRESSLY DISCLAIM, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING AS TO THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF THE GROUP COMPANIES OR MERGER SUB THAT HAVE BEEN MADE AVAILABLE TO SPAC OR ANY OF ITS REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF THE GROUP COMPANIES OR MERGER SUB BY THE MANAGEMENT OF THE COMPANY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY SPAC OR ANY SPAC NON-PARTY AFFILIATE IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE III OR THE ANCILLARY DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING ANY OFFERING MEMORANDUM OR SIMILAR MATERIALS MADE AVAILABLE BY ANY GROUP COMPANY OR MERGER SUB ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF THE COMPANY, MERGER SUB ANY COMPANY NON-PARTY AFFILIATE OR ANY OTHER PERSON, AND ARE NOT AND SHALL NOT BE DEEMED TO BE RELIED UPON BY SPAC OR ANY SPAC NON-PARTY AFFILIATE IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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Article
IV.
REPRESENTATIONS AND WARRANTIES RELATING TO SPAC
Subject to Section 8.8, except as set forth in the SPAC Disclosure Schedules, or except as set forth in any SPAC SEC Reports (excluding any disclosures in any “risk factors” section that do not constitute statements of fact, disclosures in any forward-looking statements disclaimers and other disclosures that are generally cautionary, predictive or forward-looking in nature), SPAC hereby represents and warrants to the Company as follows:
Section 4.1 Organization and Qualification. SPAC is duly incorporated and is validly existing as a corporation in good standing under the Laws of Delaware. The copies of the Governing Documents of SPAC previously delivered by SPAC to the Company are true, correct and complete and are in effect as of the date of this Agreement. SPAC is, and at all times has been, in compliance in all material respects with all restrictions, covenants, terms and provisions set forth in its Governing Documents.
Section 4.2 Authority.
(a) SPAC has the requisite corporate power and authority to execute and deliver this Agreement and each of the Ancillary Documents to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. Subject to the receipt of the SPAC Stockholder Approval, the execution and delivery of this Agreement, the Ancillary Documents to which SPAC is or will be a party and the consummation of the transactions contemplated hereby and thereby have been (or, in the case of any Ancillary Document entered into after the date of this Agreement, will be upon execution thereof) duly authorized by all necessary corporate action on the part of SPAC. This Agreement has been and each Ancillary Document to which SPAC is or will be a party will be, upon execution and delivery thereof, duly and validly executed and delivered by SPAC and constitutes or will constitute, upon execution thereof, as applicable, a valid, legal and binding agreement of SPAC (assuming this Agreement has been and the Ancillary Documents to which SPAC is or will be a party are or will be, upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party hereto or thereto, as applicable), enforceable against SPAC in accordance with their terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
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(b) At a meeting duly called and held, the SPAC Board has unanimously: (i) determined that this Agreement and the Transactions are fair and in the best interests of the SPAC Stockholders, (ii) determined that the fair market value of the Company is equal to at least eighty percent (80%) of the amount held in the Trust Account (less any deferred underwriting commissions and Taxes payable on interest earned) as of the date hereof, (iii) approved the Transactions as a business combination and (iv) resolved to recommend to the shareholders of SPAC approval of each of the matters requiring SPAC Stockholder Approval.
Section 4.3 Consents and Requisite Governmental Approvals; No Violations.
(a) No Consent, Permit, approval or authorization of, or designation, declaration or filing with, any Governmental Entity is required on the part of SPAC with respect to SPAC’s execution, delivery or performance of its obligations under this Agreement or the Ancillary Documents to which it is or will be party or the consummation of the transactions contemplated by this Agreement or by the Ancillary Documents, except for (i) compliance with and filings under the HSR Act, (ii) the filing with the SEC of (A) the Registration Statement / Proxy Statement and the declaration of the effectiveness thereof by the SEC, (B) any other documents or information required pursuant to applicable requirements, if any, of the Federal Securities Laws, and (C) such reports under Section 13(a) or 15(d) of the Exchange Act as may be required in connection with this Agreement, the Ancillary Documents or the Transactions, (iii) compliance with and filings or notifications required to be filed with state securities regulators pursuant to “blue sky” Laws and state takeover Laws as may be required in connection with this Agreement, the Ancillary Documents, or the Transactions, (iv) filing of the Certificate of Merger or (v) the SPAC Stockholder Approval.
(b) Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 4.3(a), neither the execution, delivery or performance by SPAC of this Agreement nor the Ancillary Documents to which SPAC is or will be a party nor the consummation by SPAC of the transactions contemplated hereby or thereby will, directly or indirectly (with or without due notice or lapse of time or both) (i) result in any breach of any provision of the Governing Documents of SPAC, (ii) result in a violation or breach of, or constitute a default or give rise to any right of termination, cancellation, amendment, modification, suspension, revocation or acceleration under, any of the terms, conditions or provisions of any Contract to which SPAC is a party, (iii) violate, or constitute a breach under, any Order or applicable Law to which SPAC or any of its properties or assets are bound or (iv) result in the creation of any Lien upon any of the assets or properties (other than any Permitted Liens) of SPAC.
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Section 4.4 Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on Section 4.4 of the SPAC Disclosure Schedules (which fees shall be the sole responsibility of SPAC, except as otherwise provided in Section 8.6), 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 this Agreement based upon arrangements made by or on behalf of SPAC for which SPAC or any of its Affiliates, including Sponsor, has any obligation.
Section 4.5 Information Supplied. None of the information supplied or to be supplied by or on behalf of SPAC expressly for inclusion or incorporation by reference prior to the Closing in the Registration Statement / Proxy Statement will, when the Registration Statement / Proxy Statement is declared effective or when the Registration Statement / Proxy Statement is mailed to the SPAC Stockholders or at the time of the SPAC Stockholders Meeting, and in the case of any amendment thereto, at the time of such amendment, 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.
Section 4.6 Capitalization of SPAC.
(a) Section 4.6(a) of the SPAC Disclosure Schedules sets forth a true and complete statement as of the date of this Agreement of the number and class or series (as applicable) of the issued and outstanding SPAC Shares, Sponsor Shares and SPAC Warrants. All outstanding Equity Securities of SPAC have been duly authorized and validly issued. All SPAC Shares and Sponsor Shares are fully paid and non-assessable. The issuance of SPAC Shares upon the exercise or conversion, as applicable, of Equity Securities that are derivative securities, will, upon exercise or conversion in accordance with the terms of such Equity Securities against payment therefor, be duly authorized, validly issued, fully paid, and non-assessable. Except as set forth in Section 4.6(a) of the SPAC Disclosure Schedules, such Equity Securities (i) were not issued in violation of the Governing Documents of SPAC or any applicable Law and (ii) are not subject to any preemptive rights, call option, right of first refusal, subscription rights, transfer restrictions or similar rights (other than transfer restrictions under applicable Securities Laws or under the Governing Documents of SPAC) and were not issued in violation of any preemptive rights, call option, right of first refusal, subscription rights, transfer restrictions or similar rights of any Person. Except for the SPAC Shares, Sponsor Shares, SPAC Warrants, and SPAC Convertible Notes set forth in Section 4.6(a) of the SPAC Disclosure Schedules (subject to any SPAC Stockholder Redemptions), any SPAC Units which have not been split into their component securities, immediately prior to Closing, there shall be no other outstanding Equity Securities of SPAC.
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(b) Except as disclosed in the SPAC SEC Reports, in Section 4.6(b) of the SPAC Disclosure Schedules, or as expressly contemplated by this Agreement, the Ancillary Documents or the Transactions or as otherwise mutually agreed to by the Company and SPAC, there are no outstanding (A) equity appreciation, phantom equity or profit participation rights or (B) options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require SPAC, and, except as expressly contemplated by this Agreement, the Ancillary Documents or the Transactions or as otherwise mutually agreed in writing by the Company and SPAC, there is no obligation of SPAC, to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into or exchangeable for Equity Securities of SPAC. Except as disclosed in the SPAC SEC Reports or SPAC’s Governing Documents, there are no outstanding contractual obligations of SPAC to repurchase, redeem or otherwise acquire any securities or Equity Securities of SPAC. Except as disclosed in the SPAC SEC Reports or in Section 4.6(b) of the SPAC Disclosure Schedules, there are no outstanding bonds, debentures, notes or other Indebtedness of SPAC having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which SPAC Stockholders may vote. Except as disclosed in the SPAC SEC Reports or in Section 4.6(b) of the SPAC Disclosure Schedules, SPAC is not a party to any shareholders agreement, voting agreement or registration rights agreement relating to SPAC Shares or any other Equity Securities of SPAC. SPAC does not own any Equity Securities in any other Person or have any right, option, warrant, conversion right, stock appreciation right, redemption right, repurchase right, agreement, arrangement or commitment of any character under which a Person is or may become obligated to issue or sell, or give any right to subscribe for or acquire, or in any way dispose of, any Equity Securities, or any securities or obligations exercisable or exchangeable for or convertible into any Equity Securities, of such Person.
Section 4.7 SEC Filings. SPAC has timely filed or furnished all statements, forms, reports and documents required to be filed or furnished by it prior to the date of this Agreement with the SEC pursuant to Federal Securities Laws since its IPO (collectively, and together with any exhibits and schedules thereto and other information incorporated therein, and as they have been supplemented, modified or amended since the time of filing, the “SPAC SEC Reports”). Each of the SPAC SEC Reports, as of their respective dates of filing, and as of the date of any amendment or filing that superseded the initial filing, complied in all material respects with the applicable requirements of the Federal Securities Laws (including, as applicable, the Sarbanes-Oxley Act and any rules and regulations promulgated thereunder) applicable to the SPAC SEC Reports. As of their respective dates of filing, the SPAC SEC Reports did not contain any 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 light of the circumstances under which they were made or will be made, as applicable, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the SPAC SEC Reports.
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Section 4.8 Trust Account.
(a) As of the date of this Agreement, SPAC has an amount in cash in the Trust Account equal to at least $150,000,000. The funds held in the Trust Account are (a) invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations and (b) held in trust pursuant to that certain Investment Management Trust Agreement, dated as of April 30, 2020 (the “Trust Agreement”), between SPAC and Continental, as trustee (the “Trustee”). There are no separate agreements, side letters or other agreements or understandings (whether written or unwritten, express or implied) that would cause the description of the Trust Agreement in the SPAC SEC Reports to be inaccurate in any material respect or, to SPAC’s knowledge, that would entitle any Person to any portion of the funds in the Trust Account (other than (i) in respect of deferred underwriting commissions or Taxes, (ii) the SPAC Stockholders who shall have elected to redeem their SPAC Shares pursuant to the Governing Documents of SPAC or (iii) if SPAC fails to complete a business combination within the allotted time period set forth in the Governing Documents of SPAC and liquidates the Trust Account, subject to the terms of the Trust Agreement, SPAC (in limited amounts to permit SPAC to pay the expenses of the Trust Account’s liquidation, dissolution and winding up of SPAC) and then the SPAC Stockholders). Prior to the Closing, none of the funds held in the Trust Account are permitted to be released, except in the circumstances described in the Governing Documents of SPAC and the Trust Agreement. SPAC has performed all material obligations required to be performed by it to date under, and is not in material default, breach or delinquent in performance or any other respect (claimed or actual) in connection with the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach thereunder. There are no claims or Proceedings pending with respect to the Trust Account. Since April 30, 2020, SPAC has not released any money from the Trust Account (other than interest income earned on the funds held in the Trust Account as permitted by the Trust Agreement). Upon the consummation of the transactions contemplated hereby, including the distribution of assets from the Trust Account (A) in respect of deferred underwriting commissions or Taxes or (B) to the SPAC Stockholders who have elected to redeem their SPAC Shares pursuant to the Governing Documents of SPAC, each in accordance with the terms of and as set forth in the Trust Agreement, SPAC shall have no further obligation under either the Trust Agreement or the Governing Documents of SPAC to liquidate or distribute any assets held in the Trust Account, and the Trust Agreement shall terminate in accordance with its terms.
(b) Assuming the accuracy of the representations and warranties of the Company contained herein and the compliance by the Company with its respective obligations hereunder, SPAC has no reason to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to SPAC on the Closing Date (after disbursements in respect of deferred underwriting commissions, Taxes, and to the SPAC Stockholders who shall have elected to redeem their SPAC Shares pursuant to the Governing Documents of SPAC).
Section 4.9 Indebtedness. Except as set forth in Section 4.9 of the SPAC Disclosure Schedules, as of the date hereof, SPAC does not have, or have any Contract requiring it to enter into or incur, any obligations with respect to or under any Indebtedness.
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Section 4.10 Transactions with Affiliates. Section 4.10 of the SPAC Disclosure Schedules sets forth all Contracts between (a) SPAC, on the one hand, and (b) any officer, director, employee, partner, member, manager, direct or indirect equityholder (including Sponsor) or Affiliate of either SPAC or Sponsor, on the other hand (each Person identified in this clause (b), an “SPAC Related Party”). Except as set forth in Section 4.10 of the SPAC Disclosure Schedules, no SPAC Related Party (A) owns any interest in any material asset used in the business of SPAC, (B) possesses, directly or indirectly, any material financial interest in, or is a director or executive officer of, any Person which is a material client, supplier, customer, lessor or lessee of SPAC or (C) owes any material amount to, or is owed material any amount by, SPAC. All Contracts, arrangements, understandings, interests and other matters that are required to be disclosed pursuant to this Section 4.10 are referred to herein as “SPAC Related Party Transactions”.
Section 4.11 Litigation. As of the date of this Agreement, there is (and since its incorporation, there has been) no Proceeding pending or, to SPAC’s knowledge, threatened against or involving or otherwise affecting SPAC or its assets, including any condemnation or similar proceedings. Neither SPAC nor any of its properties or assets is subject to any Order. As of the date of this Agreement, there are no Proceedings by SPAC pending against any other Person. There is no unsatisfied judgment or any open injunction binding upon SPAC which could have a material effect on the ability of SPAC to enter into, perform its obligations under this Agreement and consummate the Transactions.
Section 4.12 Compliance with Applicable Law. SPAC is and since its incorporation, has been in compliance with all applicable Laws, except as would not have a material adverse effect. SPAC has not received any written notice from any Governmental Entity of a violation of any applicable Law by SPAC at any time since its formation, which violation would reasonably be expected to have a material effect on the ability of SPAC to enter into, perform its obligations under this Agreement and consummate the Transactions.
Section 4.13 Business Activities.
(a) Since its incorporation, SPAC has not conducted any business activities other than activities (i) in connection with or incident or related to its incorporation or continuing corporate existence, (ii) directed toward the accomplishment of a business combination, including those incident or related to or incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions or (iii) those that are administrative, ministerial or otherwise immaterial in nature. Except as set forth in SPAC’s Governing Documents, there is no Contract binding upon SPAC or to which SPAC is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of it, any acquisition of property by it or the conduct of business by it (including, in each case, following the Closing).
(b) SPAC does not own or have a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity. Except for this Agreement and the Transactions, SPAC has no interests, rights, obligations or liabilities with respect to, or is party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or could reasonably be interpreted as constituting, a business combination.
(c) Except for this Agreement and the agreements expressly contemplated hereby or as set forth in Section 4.13(c) of the SPAC Disclosure Schedules, SPAC is and at no time has been, party to any Contract with any other Person that would require payments by SPAC in excess of $100,000 in the aggregate with respect to any individual Contract or more than $500,000 in the aggregate when taken together with all other Contracts (other than this Agreement and the agreements expressly contemplated hereby and Contracts set forth Section 4.13(c) of the SPAC Disclosure Schedules).
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(d) There is no liability, debt or obligation against SPAC, except for liabilities and obligations (i) reflected or reserved for on SPAC’s consolidated balance sheet as of June 30, 2020 or disclosed in the notes thereto, (ii) that have arisen since the date of SPAC’s consolidated balance sheet as of June 30, 2020 in the ordinary course of the operation of business of SPAC or that are set forth in Section 4.13(d) of the SPAC Disclosure Schedules or (iii) incurred in connection with or contemplated by this Agreement and/or the Transactions or (iv) that would not reasonably be expected to be, individually or in the aggregate, material to SPAC.
Section 4.14 Internal Controls; Listing; Financial Statements.
(a) Except as is not required in reliance on exemptions from various reporting requirements by virtue of SPAC’s status as an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, or “smaller reporting company” within the meaning of the Exchange Act, since its IPO, (i) SPAC has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of SPAC’s financial reporting and the preparation of SPAC’s financial statements for external purposes in accordance with GAAP and (ii) SPAC has established and maintained disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) designed to ensure that material information relating to SPAC is made known to SPAC’s principal executive officer and principal financial officer by others within SPAC. Such disclosure controls and procedures are effective in timely alerting SPAC’s principal executive officer and principal financial officer to material information required to be included in SPAC’s financial statements included in SPAC’s periodic reports required under the Exchange Act.
(b) SPAC has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act. There are no outstanding loans or other extensions of credit made by SPAC to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of SPAC.
(c) Since its IPO, SPAC has complied in all material respects with all applicable listing and corporate governance rules and regulations of Nasdaq. The issued and outstanding SPAC Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CGROU”. The issued and outstanding SPAC Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CGRO”. The issued and outstanding SPAC Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CGROW”. As of the date of this Agreement, there is no Proceeding pending or, to the knowledge of SPAC, threatened against SPAC by Nasdaq or the SEC with respect to any intention by such entity to deregister the SPAC Units, SPAC Shares or SPAC Warrants or prohibit or terminate the listing of the SPAC Units, SPAC Shares or SPAC Warrants on Nasdaq. Neither SPAC nor any of its Affiliates has taken any action that is designed to terminate the registration of the SPAC Units, SPAC Shares or SPAC Warrants under the Exchange Act except as contemplated by this Agreement. SPAC has not received any notice from Nasdaq or the SEC regarding the revocation of such listing or otherwise regarding the delisting of the SPAC Units, SPAC Shares or SPAC Warrants from Nasdaq or the SEC.
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(d) The SPAC SEC Reports contain true and complete copies of the applicable SPAC Financial Statements. The SPAC Financial Statements (i) fairly present in all material respects the financial position of SPAC as at the respective dates thereof, and the results of its operations, shareholders’ equity and cash flows for the respective periods then ended (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments (none of which is expected to be material) and the absence of footnotes), (ii) were prepared in conformity with GAAP applied on a consistent basis during the periods involved (except, in the case of any audited financial statements, as may be indicated in the notes thereto and subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is expected to be material) and the absence of footnotes), (iii) in the case of the audited SPAC Financial Statements, were audited in accordance with the standards of the PCAOB and (iv) comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act in effect as of the respective dates thereof (including Regulation S-X or Regulation S-K, as applicable).
(e) SPAC has established and maintains systems of internal accounting controls that are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP and to maintain accountability for SPAC’s assets. SPAC maintains and, for all periods covered by the SPAC Financial Statements, has maintained books and records of SPAC in the ordinary course of business that are accurate and complete and reflect the revenues, expenses, assets and liabilities of SPAC in all material respects.
(f) Since its incorporation, SPAC has not received any written complaint, allegation, assertion or claim that there is (i) a “significant deficiency” in the internal controls over financial reporting of SPAC to SPAC’s knowledge, (ii) a “material weakness” in the internal controls over financial reporting of SPAC to SPAC’s knowledge or (iii) fraud, whether or not material, that involves management or other employees of SPAC who have a significant role in the internal controls over financial reporting of SPAC.
(g) As of the date hereof, there are no outstanding SEC comments from the SEC with respect to the SPAC SEC Reports. None of the SPAC SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
Section 4.15 No Undisclosed Liabilities. Except for the Liabilities (a) set forth in Section 4.15 of the SPAC Disclosure Schedules, (b) incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the Transactions (it being understood and agreed that the expected third-parties that are, as of the date hereof, entitled to fees, expenses or other payments in connection with the matters described in this clause (b) shall be set forth on Section 4.15 of the SPAC Disclosure Schedules), (c) that are incurred in connection with or incident or related to SPAC’s incorporation or continuing corporate existence, which are immaterial in nature, (d) that are incurred in connection with activities that are administrative or ministerial, in each case, which are immaterial in nature, (e) that are either permitted pursuant to Section 5.10(e) or incurred in accordance with Section 5.10(e) (for the avoidance of doubt, in each case, with the written consent of the Company) or (f) set forth or disclosed in the SPAC Financial Statements included in the SPAC SEC Reports, SPAC has no Liabilities of the type required to be set forth on a balance sheet in accordance with GAAP.
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Section 4.16 Tax Matters.
(a) SPAC has prepared and filed all income and other material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Orders, and SPAC has paid all material Taxes required to have been paid or deposited by it regardless of whether shown on a Tax Return.
(b) SPAC has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.
(c) SPAC is not currently the subject of a Tax audit or examination with respect to Taxes. SPAC has not been informed of the commencement or anticipated commencement of any Tax audit or examination that has not been resolved or completed, in each case with respect to Taxes.
(d) SPAC is not party to any agreements to extend or waive the time in which any Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business, in each case with respect to Taxes.
(e) No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any Tax Authority with respect to SPAC which agreement or ruling would be effective after the Closing Date.
(f) SPAC is not and has not been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4.
(g) There are no Liens for Taxes on any assets of SPAC other than Permitted Liens.
(h) During the two (2)-year period ending on the date of this Agreement, SPAC was not a “distributing corporation” or a “controlled corporation” in a transaction governed by Section 355 of the Code.
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(i) SPAC (i) has not been a member of an affiliated group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which was a Group Company or any of its current Affiliates) or (ii) has no any Liability for the Taxes of any Person (other than a Group Company or any of its current Affiliates) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-United States Law), as a transferee or successor or by Contract (other than any Contract the principal purpose of which does not relate to Taxes).
(j) No claims have ever been made by any Tax Authority in a jurisdiction where SPAC does not file Tax Returns that SPAC is or may be subject to taxation by that jurisdiction, which claims have not been resolved or withdrawn.
(k) SPAC is not a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes).
(l) SPAC is Tax resident only in its jurisdiction of incorporation.
(m) SPAC does not have 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.
(n) SPAC is not and has not been during the last five (5) years a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.
(o) SPAC (i) is not a “surrogate foreign corporation” or “expatriated entity” within the meaning of Section 7874 of the Code or is treated as a U.S. corporation for U.S. federal Tax purposes by reason of the application of Section 269B or Section 7874(b) of the Code or (ii) was not created or organized in the United States such that such entity would be taxable in the United States as a domestic entity pursuant to the dual charter provision of Treasury Regulation Section 301.7701-5(a).
(p) SPAC does not have knowledge of any facts or any reason that (when taken together with SPAC’s understanding of the relevant facts) would reasonably be expected to cause the Company to be treated, following the completion of the Transactions, as a Tax resident of a country other than Israeli.
Section 4.17 Material Contracts; No Defaults.
(a) The SPAC has filed as an exhibit to the SPAC SEC Reports all Contracts, including every “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (other than confidentiality and non-disclosure agreements and this Agreement) to which, as of the date of this Agreement, SPAC is a party or by which any of its respective assets are bound.
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(b) Each Contract of a type required to be filed as an exhibit to the SPAC SEC Reports, whether or not filed, was entered into at arm’s length. Except for any Contract that has terminated or will terminate upon the expiration of the stated term thereof prior to the Closing Date, with respect to any Contract of the type required to be filed as an exhibit to the SPAC SEC Reports, whether or not filed, (i) such Contracts are in full force and effect and represent the legal, valid and binding obligations of SPAC, and, to the knowledge of the SPAC, the other parties thereto, and are enforceable by SPAC to the extent a party thereto in accordance with their terms, subject in all respects to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a Proceeding in equity or at law), (ii) the SPAC and, to the knowledge of the SPAC, the counterparties thereto, are not in material breach of or material default (or would be in material breach, violation or default but for the existence of a cure period) under any such Contract, (iii) SPAC has not received any written or oral claim or notice of material breach of or material default under any such Contract, (iv) no event has occurred which, individually or together with other events, would reasonably be expected to result in a material breach of or a material default under any such Contract by SPAC or any other party thereto (in each case, with or without notice or lapse of time or both) and (v) SPAC has not received written notice from any other party to any such Contract that such party intends to terminate or not renew any such Contract.
Section 4.18 Absence of Changes. Since the date of SPAC’s incorporation, (a) no change, event, effect or occurrence that, individually or in the aggregate with any other change, event, effect or occurrence, has had or would reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of SPAC or the ability of SPAC to enter into, perform its obligations under this Agreement or consummate the Transactions and (b) except for commercially reasonable actions and omissions taken as a result of COVID-19 and COVID-19 Measures, or as expressly contemplated by this Agreement, any Ancillary Document or in connection with the Transactions, (i) SPAC has conducted its business in the ordinary course in all material respects and (ii) SPAC has not taken any action that would require the consent of the Company if taken during the period from the date of this Agreement until the Closing pursuant to Section 5.10.
Section 4.19 Employee Benefit Plans. SPAC does not maintain, contribute to or have any obligation or liability, nor could reasonably be expected to have any obligation or liability, under, any “employee benefit plan” as defined in Section 3(3) of ERISA or any other material, written plan, policy, program, arrangement or agreement (other than standard employment agreements that can be terminated at any time without severance or termination pay and upon notice of not more than 60 days or such longer period as may be required by applicable Law) providing compensation or benefits to any current or former director, officer, employee, independent contractor or other service provider, including, without limitation, all incentive, bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock-based compensation plans, policies, programs, practices or arrangements, but not including any plan, policy, program, arrangement or agreement that covers only former directors, officers, employees, independent contractors and service providers and with respect to which SPAC has no remaining obligations or liabilities (collectively, the “SPAC Benefit Plans”) and neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement (either alone or in combination with another event) will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any shareholder, director, officer or employee of SPAC or (ii) result in the acceleration, vesting or creation of any rights of any shareholder, director, officer or employee of SPAC to payments or benefits or increases in any existing payments or benefits or any loan forgiveness.
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Section 4.20 Sponsor Letter Agreement. SPAC has delivered to the Company a true, correct and complete copy of the Sponsor Letter Agreement. The Sponsor Letter Agreement is in full force and effect and has not been withdrawn or terminated, or otherwise amended or modified, in any respect, and no withdrawal, termination, amendment or modification is contemplated by SPAC. The Sponsor Letter Agreement is a legal, valid and binding obligation of SPAC and, to the knowledge of SPAC, each other party thereto and neither the execution or delivery by any party thereto, nor the performance of any party’s obligations under, the Sponsor Letter Agreement violates any provision of, or results in the breach of or default under, or require any filing, registration or qualification under, any applicable Law. No event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of SPAC under any material term or condition of the Sponsor Letter Agreement.
Section 4.21 Investment Company Act. SPAC is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 4.22 Charter Provisions. As of the date of this Agreement, there is no shareholder rights plan, “poison pill” or similar anti-takeover agreement or plan in effect to which SPAC is subject, party or otherwise bound.
Section 4.23 Compliance with International Trade & Anti-Corruption Laws.
(a) Since SPAC’s incorporation, neither SPAC nor, to SPAC’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing, is or has been, (i) a Person named on any Sanctions and Export Control Laws-related list of designated Persons maintained by a Governmental Entity; (ii) located, organized or resident in a country or territory which is itself the subject of or target of any Sanctions and Export Control Laws (as of the date of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine); (iii) an entity 50-percent or more owned, directly or indirectly, by one or more Persons described in clause (i) or (ii); or (iv) otherwise engaging in dealings with or for the benefit of any Person described in clauses (i) through (iii).
(b) Since SPAC’s incorporation, neither SPAC, its directors or officers, nor, to SPAC’s knowledge, any of its employees, agents or any other Persons acting for or on behalf of any of SPAC has, directly or knowingly indirectly (i) made, offered, promised, authorized, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person, (ii) made, offered, promised, authorized or paid any unlawful contributions to a domestic or foreign political party or candidate or (iii) otherwise made, offered, promised, authorized, paid or received any improper payment in violation of any Anti-Corruption Laws. SPAC has implemented and maintained policies and procedures reasonably designed to promote compliance with, and prevent violation of, Anti-Corruption Laws.
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Section 4.24 Forfeiture Agreement. SPAC has delivered to the Company a true, correct and complete copy of the Forfeiture Agreement. No withdrawal, termination, amendment or modification of the Forfeiture Agreement is contemplated by SPAC and, to the knowledge of SPAC, the Forfeiture Agreement is in full force and effect and has not been withdrawn or terminated, or otherwise amended or modified, in any material respect. The Forfeiture Agreement is a legal, valid and binding obligation of SPAC and, to the knowledge of SPAC, the other parties thereto. To the knowledge of SPAC, neither the execution nor delivery by the other parties thereto of, nor the performance of any of the obligations of the parties thereto under, the Forfeiture Agreement violates any provision of, or results in the breach of or default under, or requires any filing, registration or qualification under, any applicable Law (other than as required under applicable securities laws and as otherwise contemplated herein or in the other Ancillary Documents). No event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of SPAC under any material term or condition of the Forfeiture Agreement.
Section 4.25 Investigation; No Other Representations.
(a) SPAC, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i) it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets, condition, operations and prospects, of the Group Companies and (ii) it has been furnished with or given access to such documents and information about the Group Companies and their respective businesses and operations as it and its Representatives have deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary Documents and the Transactions.
(b) In entering into this Agreement and the Ancillary Documents to which it is or will be a party, SPAC has relied solely on its own investigation and analysis and the representations and warranties expressly set forth in Article III and in the Ancillary Documents to which it is or will be a party and no other representations or warranties of the Company, any Company Non-Party Affiliate or any other Person, either express or implied, and SPAC, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article III and in the Ancillary Documents to which it is or will be a party, none of the Company, any Company Non-Party Affiliate or any other Person makes or has made any representation or warranty, either express or implied, in connection with or related to this Agreement, the Ancillary Documents or the Transactions.
Section 4.26 Residency. SPAC is a non-Israeli resident company that has no activities in Israel, and its activity is controlled and managed outside of Israel. Each of SPAC’s directors, officers, managers and general managers are non-Israeli residents and conduct SPAC’s activity outside of Israel.
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Section 4.27 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE COMPANY PARTIES OR ANY OF ITS OR THEIR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE IV AND THE ANCILLARY DOCUMENTS, NEITHER SPAC, NOR ANY SPAC NON-PARTY AFFILIATE OR ANY OTHER PERSON MAKES, AND SPAC EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING AS TO THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF SPAC THAT HAVE BEEN MADE AVAILABLE TO THE COMPANY PARTIES OR ANY OF ITS OR THEIR REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF SPAC BY OR ON BEHALF OF THE MANAGEMENT OF SPAC OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY THE COMPANY, MERGER SUB, OR ANY COMPANY NON-PARTY AFFILIATE IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV OR THE ANCILLARY DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION, ANY SPAC SEC REPORTS, OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING, BUT NOT LIMITED TO, ANY OFFERING MEMORANDUM OR SIMILAR MATERIALS MADE AVAILABLE BY OR ON BEHALF OF SPAC ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF SPAC, ANY SPAC NON-PARTY AFFILIATE OR ANY OTHER PERSON, AND ARE NOT AND SHALL NOT BE DEEMED TO BE RELIED UPON BY THE COMPANY OR ANY COMPANY NON-PARTY AFFILIATE IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Article
V.
COVENANTS
Section 5.1 Conduct of Business of the Company.
(a) From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law, as set forth on Section 5.1(a) of the Company Disclosure Schedules, or as consented to in writing by SPAC (it being agreed that any request for a consent shall not be unreasonably withheld, conditioned or delayed), use its commercially reasonable efforts to (i) conduct and operate the business of the Group Companies in the ordinary course of business and in compliance with all applicable Laws, (ii) maintain and preserve intact in all material respects the business organization, assets, properties and material business relations of the Group Companies, taken as a whole, (iii) keep available the services of the present officers and key employees of the Company and (iv) preserve existing relations and goodwill of the Group Companies with customers, suppliers, distributors and creditors of the Group Companies.
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(b) Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law (including COVID-19 Measures), as set forth on Section 5.1(b) of the Company Disclosure Schedules or as consented to in writing by SPAC (such consent, not to be unreasonably withheld, conditioned or delayed), not do any of the following:
(i) declare, set aside, make or pay a dividend on, or make any other distribution or payment (whether in cash, stock or property) in respect of, any Equity Securities of any Group Company or Merger Sub or repurchase, redeem or otherwise acquire, offer to repurchase, redeem or otherwise acquire, any outstanding Equity Securities of any Group Company or Merger Sub, other than dividends or distributions, declared, set aside or paid by any of the Company’s Subsidiaries to the Company or any Subsidiary that is, directly or indirectly, wholly owned by the Company, and other than any dividends or distributions required under the Governing Documents of any joint venture of any Subsidiaries of the Company;
(ii) (A) merge, consolidate, combine or amalgamate any Group Company or Merger Sub with any Person or (B) purchase or otherwise acquire (whether by merging or consolidating with, purchasing any Equity Security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or organization or division thereof, other than such acquisitions and purchases set forth in Section 5.1(b)(ii) of the Company Disclosure Schedules that would not require financial statements of the acquired business to be included in the Registration Statement / Proxy Statement pursuant to Rule 3-05 of Regulation S-X under the Securities Act;
(iii) adopt any amendments, supplements, restatements or modifications to any Group Company’s or Merger Sub’s Governing Documents;
(iv) form or establish any Subsidiary other than in the ordinary course of business;
(v) transfer, issue, sell, grant or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any Equity Securities of any Group Company or Merger Sub or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company or Merger Sub to issue, deliver or sell any Equity Securities of any Group Company, other than (X) the issuance of Company Equity Awards pursuant to a Company Equity Plan or the issuance of shares of capital stock of the Company upon the exercise, settlement or conversion of any Company Equity Awards outstanding on the date of this Agreement in accordance with the terms of the applicable Company Equity Plan and the underlying grant, award or similar agreement, (Y) the issuance of Company Preferred C-1 Shares pursuant to the Series C-1 Preferred Share Purchase Agreement, dated October 1, 2020, as the Company may amend solely to provide for the issuance of an additional $15 million aggregate value of Series C-1 Preferred Shares and to amend the purchase price for the Company Preferred C-1 Shares in accordance with the Equity Value, or (Z) the issuance of performance warrants, with the terms and amounts and to the Persons as set forth on Section 5.1(b)(v) of the Company Disclosure Schedule;
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(vi) incur, create or assume any Indebtedness in excess of $10,000,000, other than (x) ordinary course trade payables, (y) between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries or (z) in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities, notes and other existing Indebtedness and, in each case, any refinancings thereof;
(vii) make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any Person, other than (A) intercompany loans or capital contributions between the Company and any of its wholly owned Subsidiaries, (B) the reimbursement of expenses of employees in the ordinary course of business, (C) advances in the ordinary course of business to employees or officers of any Group Company not exceeding $500,000 in the aggregate, (D) prepayments and deposits paid to suppliers of any Group Company in the ordinary course of business, (E) trade credit extended to customers of the Group Companies in the ordinary course of business and (F) advances to wholly owned Subsidiaries of the Company;
(viii) except (x) as required under the terms of any Employee Benefit Plan of any Group Company that is set forth on the Section 3.11(a) of the Company Disclosure Schedules or any applicable Law, or (y) in the ordinary course of business (it being understood and agreed, for the avoidance of doubt, that in no event shall the exception in this clause (y) be deemed or construed as permitting any Group Company to take any action that is not permitted by any other provision of this Section 5.1(b)), (A) amend, modify, adopt, enter into or terminate any material Employee Benefit Plan of any Group Company or any material benefit or compensation plan, policy, program or Contract that would be an Employee Benefit Plan if in effect as of the date of this Agreement, (B) materially increase the compensation or benefits payable to, or pay any material special bonus or special remuneration to, any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (C) take any action to accelerate any payment, right to payment, or benefit, or the funding of any payment, right to payment or benefit, payable or to become payable to, or the vesting or period of exercisability of any Equity Award held by, or reprice any Equity Award held by, any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (D) waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (E) enter into any collective bargaining agreement or arrangement, (F) hire new executive officers, or (G) terminate the employment or engagement of any executive officer other than for cause;
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(ix) make, change or revoke any election concerning Taxes (including, for the avoidance of doubt, making any U.S. federal income Tax entity classification election pursuant to Treasury Regulations Section 301.7701-3(c) with respect to the Company or any Company Subsidiary not contemplated by this Agreement), enter into any Tax closing agreement, settle any Tax claim or assessment, change its jurisdiction of Tax residence, or consent to any extension or waiver of the limitation period applicable to or relating to any Tax claim or assessment, in each case, if such action would be reasonably expected to materially increase the present or future Tax liability of SPAC or any of the Group Companies;
(x) enter into any settlement, conciliation or similar Contract outside of the ordinary course of business the performance of which would involve the payment by the Group Companies in excess of $2,000,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on any Group Company (or SPAC or any of its Affiliates after the Closing);
(xi) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, reorganization or similar transaction involving any Group Company;
(xii) change any Group Company’s methods of accounting in any material respect, other than changes that are made in accordance with PCAOB standards;
(xiii) enter into any Contract with any broker, finder, investment banker or other Person under which such Person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement;
(xiv) except for entries, modifications, amendments, waivers, terminations or non-renewals in the ordinary course of business, enter into, materially modify, materially amend, waive any material right under, terminate (excluding any expiration in accordance with its terms) or fail to renew, any Contract required to be disclosed on Section 3.19 of the Company Disclosure Schedules (excluding, for the avoidance of doubt, any expiration or automatic extension or renewal of any such Material Contract pursuant to its terms);
(xv) abandon, dispose of, allow to lapse, transfer, sell, assign, or exclusively license any material Company Intellectual Property to any Person or otherwise extend, amend, or modify any material Company Intellectual Property (other than development in the ordinary course of business);
(xvi) sell, lease, license, encumber or otherwise dispose of any properties or assets except for the sale, lease, license, or disposition in the ordinary course of business;
(xvii) close any facility or discontinue any material line of business or material business operations; or
(xviii) enter into any Contract to take, or cause to be taken, any of the actions set forth in this Section 5.1.
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(c) Notwithstanding anything in this Section 5.1 or this Agreement to the contrary, nothing set forth in this Agreement shall give SPAC, directly or indirectly, the right to control or direct the operations of the Group Companies prior to the Closing.
(d) Notwithstanding anything in this Section 5.1 or this Agreement to the contrary, nothing set forth in this Agreement shall prohibit the Company from entering into additional subscription agreements for the sale and issuance of Company Ordinary Shares between the date of this Agreement and the Closing in connection with the PIPE Financing.
Section 5.2 Efforts to Consummate; Litigation.
(a) Subject to the terms and conditions herein provided, each of the Parties shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement (including (x) the satisfaction, but not waiver, of the closing conditions set forth in Article VI and, in the case of any Ancillary Document to which such Party will be a party after the date of this Agreement, to execute and delivery such Ancillary Document when required pursuant to this Agreement and (y) using commercially reasonable efforts to consummate the PIPE Financing simultaneously with the Closing on the terms and subject to the conditions set forth in the Subscription Agreements). Without limiting the generality of the foregoing, each of the Parties shall use commercially reasonable efforts to obtain, file with or deliver to, as applicable, any Consents of any Governmental Entities or other Persons necessary, proper or advisable to consummate the Transactions. The Company, on the one hand, and Perception and Antara, on the other hand, shall each pay fifty percent (50%) of any filing fees under the HSR Act and any other applicable competition, antitrust, merger control or foreign investment Laws; provided, however, that each Party shall bear its out-of-pocket costs and expenses in connection with the preparation of any such Consents. Each Party shall (i) make any appropriate filings pursuant to the HSR Act (and, where required, with any other Governmental Entity) with respect to the transactions contemplated by this Agreement promptly following the date of this Agreement and (ii) respond as promptly as reasonably practicable to any requests by any Governmental Entity for additional information and documentary material that may be requested pursuant to the HSR Act. SPAC shall promptly inform the Company of any communication between SPAC, on the one hand, and any Governmental Entity, on the other hand, and the Company shall promptly inform SPAC of any communication between any Company Party, on the one hand, and any Governmental Entity, on the other hand, in either case, regarding any of the Transactions. Without limiting the foregoing, (1) the Parties agree to request early termination of the applicable waiting period under the HSR Act, and (2) each Party and their respective Affiliates shall not extend any waiting period, review period or comparable period under the HSR Act or enter into any agreement with any Governmental Entity not to consummate the Transactions, except with the prior written consent of SPAC and the Company. Nothing in this Section 5.2 obligates any Party or any of its Affiliates to agree to (A) sell, license or otherwise dispose of, or hold separate and agree to sell, license or otherwise dispose of, any entities, assets or facilities of any Group Company or any entity, facility or asset of such Party or any of its Affiliates, (B) terminate, amend or assign existing relationships and contractual rights or obligations, (C) amend, assign or terminate existing licenses or other agreements, or (D) enter into new licenses or other agreements. No Party shall agree to any of the foregoing measures with respect to any other Party or any of its Affiliates, except with SPAC’s and the Company’s prior written consent.
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(b) From and after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms, SPAC, on the one hand, and the Company Parties, on the other hand, shall give counsel for the Company Parties (in the case of SPAC) or SPAC (in the case of any Company Party), a reasonable opportunity to review in advance, and consider in good faith the views of the other in connection with, any proposed written communication to any Governmental Entity relating to the Transactions. Each of the Parties agrees not to participate in any substantive meeting or discussion, either in person or by telephone with any Governmental Entity in connection with the transactions contemplated by this Agreement unless it consults with, in the case of any Company Party, SPAC, or, in the case of SPAC, any Company Party in advance and, to the extent not prohibited by such Governmental Entity, gives, in the case of any Company Party, SPAC, or, in the case of SPAC, the Company, the opportunity to attend and participate in such meeting or discussion.
(c) Notwithstanding anything to the contrary in the Agreement, in the event that this Section 5.2 conflicts with any other covenant or agreement in this Article V that is intended to specifically address any subject matter, then such other covenant or agreement shall govern and control solely to the extent of such conflict.
(d) From and after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms, SPAC, on the one hand, and the Company, on the other hand, shall each notify the other in writing promptly after learning of any shareholder demands or other shareholder Proceedings (including derivative claims) relating to this Agreement, any Ancillary Document or any matters relating thereto (collectively, the “Transaction Litigation”) commenced against, in the case of SPAC, SPAC or any of its Representatives (in their capacity as a Representative of SPAC) or, in the case of the Company and Merger Sub, any Group Company or Merger Sub or any of their respective Representatives (in their capacity as a Representative of any Group Company or Merger Sub). SPAC and the Company shall each (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith the other’s advice with respect to any such Transaction Litigation and (iv) reasonably cooperate with each other. Notwithstanding the foregoing, the Company shall, subject to and without limiting the covenants and agreements, and the rights of SPAC, set forth in the immediately preceding sentence, control the negotiation, defense and settlement of any such Transaction Litigation; provided, however, that in no event shall the Company, any other Group Company, Merger Sub or any of their respective Representatives settle or compromise any Transaction Litigation without the prior written consent of SPAC (not to be unreasonably withheld, conditioned or delayed, provided that it shall be deemed to be reasonable for SPAC to withhold, condition or delay its consent if any such settlement or compromise (A) does not provide for a legally binding, full, unconditional and irrevocable release of SPAC and its Representative(s) that are the subject of such Transaction Litigation, (B) provides for (x) the payment of cash any portion of which is payable by SPAC or its Representative(s) thereof or would otherwise constitute a SPAC Liability or (y) any non-monetary, injunctive, equitable or similar relief against SPAC or (C) contains an admission of wrongdoing or Liability by SPAC or any of its Representatives). Without limiting the generality of the foregoing, in no event shall SPAC or any of its Representatives settle or compromise any Transaction Litigation without the Company’s prior written consent.
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Section 5.3 Confidentiality and Access to Information.
(a) The Parties hereby acknowledge and agree that the information being provided in connection with this Agreement and the consummation of the transactions contemplated hereby is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference. Notwithstanding the foregoing or anything to the contrary in this Agreement, in the event that this Section 5.3(a) or the Confidentiality Agreement conflicts with any other covenant or agreement contained herein or any Ancillary Document that contemplates the disclosure, use or provision of information or otherwise, then such other covenant or agreement contained herein or therein shall govern and control to the extent of such conflict.
(b) From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, upon reasonable advance written notice, the Company shall provide, or cause to be provided, to SPAC and its Representatives during normal business hours reasonable access to the directors, officers, books and records of the Group Companies, including financial information used in the preparation of the Financial Statements (in a manner so as to not interfere with the normal business operations of the Group Companies). Notwithstanding the foregoing, none of the Group Companies shall be required to provide to SPAC or any of its Representatives any information (i) if and to the extent doing so would (A) violate any Law to which any Group Company is subject, including any privacy Law, (B) result in the disclosure of any trade secrets of third-parties in breach of any Contract with such third-party, (C) violate any legally binding obligation of any Group Company with respect to confidentiality, non-disclosure or privacy or (D) jeopardize protections afforded to any Group Company under the attorney-client privilege or the attorney work product doctrine (provided that, in case of each of clauses (A) through (D), the Company shall, and shall cause the other Group Companies to, use commercially reasonable efforts to (x) provide such access as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) without violating such privilege, doctrine, Contract, obligation or Law and (y) provide such information in a manner without violating such privilege, doctrine, Contract, obligation or Law), or (ii) if any Group Company or Merger Sub, on the one hand, and SPAC, any SPAC Non-Party Affiliate or any of their respective Representatives, on the other hand, are adverse parties in a litigation and such information is reasonably pertinent thereto; provided that the Company shall, in the case of clause (i) or (ii), provide prompt written notice of the withholding of access or information on any such basis.
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(c) From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, upon reasonable advance written notice, SPAC shall provide, or cause to be provided, to the Company and its Representatives during normal business hours reasonable access to the directors, officers, books and records of SPAC (in a manner so as to not interfere with the normal business operations of SPAC). Notwithstanding the foregoing, SPAC shall not be required to provide, or cause to be provided to, the Company or any of its Representatives any Evaluation Material or any other information (i) if and to the extent doing so would (A) violate any Law to which SPAC is subject, (B) result in the disclosure of any trade secrets of third-parties in breach of any Contract with such third-party, (C) violate any legally binding obligation of SPAC with respect to confidentiality, non-disclosure or privacy or (D) jeopardize protections afforded to SPAC under the attorney-client privilege or the attorney work product doctrine (provided that, in case of each of clauses (A) through (D), SPAC shall use commercially reasonable efforts to (x) provide such access as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) without violating such privilege, doctrine, Contract, obligation or Law and (y) provide such information in a manner without violating such privilege, doctrine, Contract, obligation or Law), or (ii) if SPAC, on the one hand, and any Group Company, any Company Non-Party Affiliate, Merger Sub or any of their respective Representatives, on the other hand, are adverse parties in a litigation and such information is reasonably pertinent thereto; provided that SPAC shall, in the case of clause (i) or (ii), provide prompt written notice of the withholding of access or information on any such basis.
Section 5.4 Public Announcements.
(a) Subject to Section 5.4(b), Section 5.7 and Section 5.8, none of the Parties or any of their respective Representatives shall issue any press releases or make any public announcements with respect to this Agreement or the transactions contemplated hereby without the prior written consent of, prior to the Closing, the Company and SPAC or, after the Closing, the Company; provided, however, that each Party may make any such announcement or other communication (i) if such announcement or other communication is required by applicable Law, in which case (A) prior to the Closing, the disclosing Party and its Representatives shall use commercially reasonable efforts to consult with the Company, if the disclosing party is SPAC, or SPAC, if the disclosing party is any Company Party, to review such announcement or communication and the opportunity to comment thereon and the disclosing Party shall consider such comments in good faith, or (B) after the Closing, the disclosing Party and its Representatives shall use commercially reasonable efforts to consult with the Company and the disclosing Party shall consider such comments in good faith, (ii) 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 5.4 and (iii) subject to the terms of Section 5.2, to Governmental Entities in connection with any Consents required to be made under this Agreement, the Ancillary Documents or in connection with the Transactions.
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(b) The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release in the form agreed by the Company and SPAC prior to the execution of this Agreement and such initial press release (the “Signing Press Release”) shall be released as promptly as reasonably practicable after the execution of this Agreement on the day thereof. Promptly after the execution of this Agreement, SPAC 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, and in compliance with, the Securities Laws, which the Company shall have the opportunity to review and comment upon prior to filing and SPAC shall consider such comments in good faith. The Company, on the one hand, and SPAC, on the other hand, shall mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed by either the Company or SPAC, as applicable) a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”) prior to the Closing, and, on the Closing Date, the Parties shall cause the Closing Press Release to be released. Promptly after the Closing (but in any event within four (4) Business Days after the Closing), the Company 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 Securities Laws. In connection with the preparation of each of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing, each Party shall, upon written request by any other Party, furnish such other Party with all information concerning itself, its directors, officers and equityholders, and such other matters as may be reasonably necessary for such press release or filing.
Section 5.5 Tax Matters.
(a) Notwithstanding anything to the contrary contained herein, Perception and Antara, on a joint and several basis, on the one hand, and the Company, on the other hand, shall each pay fifty percent (50%) of all transfer, documentary, sales, use, stamp, registration, value added or other similar Taxes (which, for the avoidance of doubt, shall not include any Taxes imposed on or determined with reference to income, profits, gross receipts, or direct or indirect capital gains) incurred in connection with the Merger and the other transactions contemplated hereby. The Company shall, at its own expense, file (or cause to be filed) all necessary Tax Returns with respect to all such Taxes and shall timely pay (or cause to be timely paid) to the applicable Governmental Authority such Taxes (subject to prompt reimbursement from Perception and/or Antara). The Parties agree to reasonably cooperate to (i) sign and deliver such resale and other certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce) any such Taxes and (ii) prepare and file (or cause to be prepared and filed) all Tax Returns in respect of any such Taxes.
(b) At or prior to the Closing, SPAC shall have delivered to the Company a certificate and notice pursuant to Treasury Regulation Sections 1.1445-2(c)(3) and 1.897-2(h)(2) certifying that the Company has not been a “United Stated real property holding corporation” within the meaning of Code Section 897(c)(2) during the five (5)-year period ending on the Closing Date and notifying the U.S. Internal Revenue Service of the same, in a form reasonably acceptable to the Company.
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Section 5.6 Exclusive Dealing.
(a) The Company shall immediately cease and cause to be terminated all existing discussions and negotiations with any parties with respect to any proposal that constitutes or may be reasonably expected to constitute or lead to a Company Acquisition Proposal. From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company Parties shall not, and shall cause the other Group Companies not to, and shall not authorize or permit their respective Representatives to, and shall use their reasonable best efforts to cause its and their respective Representatives not to, directly or indirectly: (i) solicit, initiate, knowingly encourage (including by means of furnishing or disclosing information), knowingly facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) that constitutes, or may reasonably be expected to lead to, a Company Acquisition Proposal; (ii) furnish or disclose any non-public information to any Person in connection with, or that could reasonably be expected to lead to, a Company Acquisition Proposal; (iii) enter into any Contract or other arrangement or understanding regarding a Company Acquisition Proposal; (iv) prepare or take any steps in connection with a public offering of any Equity Securities of any Group Company or Merger Sub (or any Affiliate or successor of any Group Company or Merger Sub); (v) waive or otherwise forbear in the enforcement of any rights or other benefits under confidential information agreements relating to a Company Acquisition Proposal, including without limitation any “standstill” or similar provisions thereunder, or (vi) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing. The Company agrees to (A) notify SPAC promptly upon receipt of any Company Acquisition Proposal by any Group Company or Merger Sub, and to describe the material terms and conditions of any such Company Acquisition Proposal in reasonable detail (including the identity of the Persons making such Company Acquisition Proposal) and (B) keep SPAC reasonably informed on a current basis of any modifications to such offer or information.
(b) Notwithstanding anything to the contrary in Section 5.6(a) or Section 5.13, this Agreement shall not prevent the Company or the Company Board from:
(i) making any legally required disclosure to shareholders with regard to the transactions contemplated by this Agreement or a Company Acquisition Proposal; provided, that this clause (i) shall not be deemed to permit the Company or the Company Board to effect a Company Change in Recommendation except in accordance with Section 5.6(c);
(ii) prior to obtaining the Company Preferred Shareholder Approval and the Company Shareholder Approval, making a Company Change in Recommendation (only to the extent permitted by Section 5.6(c)); or
(iii) resolving, authorizing, committing or agreeing to take any of the foregoing actions, only to the extent such actions would be permitted by the foregoing clauses (i) through (ii).
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(c) Notwithstanding anything in this Section 5.6 or Section 5.13 to the contrary, if, at any time prior to obtaining the Company Preferred Shareholder Approval and the Company Shareholder Approval, the Company Board determines in good faith, in response to an Intervening Event, after consultation with its outside legal counsel, that the failure to make a Company Change in Recommendation would be inconsistent with its fiduciary duties under applicable Law, the Company or the Company Board may, prior to obtaining the Company Preferred Shareholder Approval and the Company Shareholder Approval, make a Company Change in Recommendation; provided, that the Company will not be entitled to make, or agree or resolve to make, a Company Change in Recommendation unless (i) the Company delivers to SPAC a written notice (an “Intervening Event Notice”) advising SPAC that the Company Board proposes to take such action and containing the material facts underlying the Company Board’s determination that an Intervening Event has occurred, and (ii) at or after 5:00 p.m., New York City time, on the fifth (5th) Business Day immediately following the day on which the Company delivered the Intervening Event Notice (such period from the time the Intervening Event Notice is provided until 5:00 p.m. New York City time on the fifth (5th) Business Day immediately following the day on which the Company delivered the Intervening Event Notice (it being understood that any material development with respect to an Intervening Event shall require a new notice with an additional four (4) Business Day (instead of five (5) Business Day) period from the date of such notice), the “Intervening Event Notice Period”), the Company Board, after considering in good faith any proposed adjustments to the terms and conditions of this Agreement proposed by SPAC so as to obviate the need for a Company Change in Recommendation, reaffirms in good faith (after consultation with its outside legal counsel) that the failure to make a Company Change in Recommendation would be inconsistent with its fiduciary duties under applicable Law. During the Intervening Event Notice Period, (x) the Company shall not make a Company Change in Recommendation, and (y) the Company shall, and shall use its reasonable best efforts to cause its Representatives to, engage in good faith negotiations with SPAC and its Representatives to make such adjustments in the terms and conditions of this Agreement so as to obviate the need for a Company Change in Recommendation. For the avoidance of doubt, in no event shall the Company be permitted to accept a Company Acquisition Proposal, or take any action prohibited by Section 5.6(c) in connection therewith, or make a Company Change in Recommendation in connection with a Company Acquisition Proposal.
(d) If the Company makes a Company Change in Recommendation in accordance with Section 5.6(c), the Company shall terminate this Agreement in accordance with Article VII and concurrently therewith pay a termination fee to SPAC in an amount equal to $14.625 million (“Termination Fee”) in immediately available funds as liquidated damages and not as a penalty.
(e) From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, SPAC shall not, and shall cause its Representatives not to, directly or indirectly: (i) solicit, initiate, encourage (including by means of furnishing or disclosing information), facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to a SPAC Acquisition Proposal; (ii) furnish or disclose any non-public information to any Person in connection with, or that could reasonably be expected to lead to, a SPAC Acquisition Proposal; (iii) enter into any Contract or other arrangement or understanding regarding a SPAC Acquisition Proposal; (iv) prepare or take any steps in connection with an offering of any securities of SPAC (or any Affiliate or successor of SPAC, other than the PIPE Financing); or (v) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing. SPAC agrees to (A) notify the Company promptly upon receipt of any SPAC Acquisition Proposal by SPAC, and to describe the material terms and conditions of any such SPAC Acquisition Proposal in reasonable detail (including the identity of any Person making such SPAC Acquisition Proposal) and (B) keep the Company reasonably informed on a current basis of any modifications to such offer or information. The transfer of the SPAC Evaluation Material pursuant to Section 5.19 shall not violate the terms of this Section 5.6(e).
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Section 5.7 Preparation of Registration Statement / Proxy Statement.
(a) As promptly as reasonably practicable following the date of this Agreement, SPAC and the Company shall prepare and mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable): (i) a proxy statement (the “Proxy Statement”) to be filed with the SEC by SPAC relating to the Transaction Proposals to be submitted to the holders of SPAC Shares and Sponsor Shares at the SPAC Stockholders Meeting, all in accordance with and as, and if, required by SPAC’s Governing Documents, applicable Law, and any applicable rules and regulations of the SEC and Nasdaq and (ii) a registration statement on Form F-4 to be filed with the SEC by Company pursuant to which Company Ordinary Shares and Company Warrants issuable in the Merger will be registered with the SEC and that will include the Proxy Statement (such document, the “Registration Statement / Proxy Statement”), all in accordance with and as required by SPAC’s Governing Documents, applicable Law, and any applicable rules and regulations of the SEC and Nasdaq.
(b) Each of SPAC and the Company shall use its commercially reasonable efforts to (i) cause the Registration Statement / Proxy Statement to comply in all material respects with the applicable rules and regulations promulgated by the SEC (including, with respect to the Group Companies, the provision of financial statements of, and any other information with respect to, the Group Companies for all periods, and in the form, required to be included in the Registration Statement / Proxy Statement under Securities Laws (after giving effect to any waivers received) or in response to any comments from the SEC); (ii) promptly notify the others of, reasonably cooperate with each other with respect to and respond promptly to any comments of the SEC or its staff; (iii) have the Registration Statement / Proxy Statement declared effective under the Securities Act as promptly as reasonably practicable after it is filed with the SEC; and (iv) keep the Registration Statement / Proxy Statement effective through the Closing in order to permit the consummation of the transactions contemplated by this Agreement. SPAC, on the one hand, and the Company, on the other hand, shall promptly furnish, or cause to be furnished, to the other all information concerning such Party, its Non-Party Affiliates and their respective Representatives that may be required or reasonably requested in connection with any action contemplated by this Section 5.7 or for including in any other statement, filing, notice or application made by or on behalf of the Company or SPAC to the SEC or Nasdaq in connection with the Transactions.
(c) If any Party becomes aware of any information that should be disclosed in an amendment or supplement to the Registration Statement / Proxy Statement, then (i) such Party shall promptly inform, in the case of any Company Party, SPAC, or, in the case of SPAC, the Company, thereof; (ii) such Party shall prepare and mutually agree upon with, in the case of SPAC, the Company, or, in the case of the Company, SPAC (in either case, such agreement not to be unreasonably withheld, conditioned or delayed), an amendment or supplement to the Registration Statement / Proxy Statement; (iii) the Company shall file such mutually agreed upon amendment or supplement with the SEC; and (iv) the Parties shall reasonably cooperate, if appropriate, in mailing such amendment or supplement to the SPAC Stockholders and the Company Shareholders.
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(d) The Company shall as promptly as reasonably practicable advise SPAC of the time of effectiveness of the Registration Statement / Proxy Statement, the issuance of any stop order relating thereto or the suspension of the qualification of Company Ordinary Shares or Company Warrants for offering or sale in any jurisdiction, and the Company and SPAC shall each use its commercially reasonable efforts to have any such stop order or suspension lifted, reversed or otherwise terminated. Each of the Parties shall use commercially reasonable efforts to ensure that none of the information related to him, her or it or any of his, her or its Non-Party Affiliates or its or their respective Representatives, supplied by or on his, her or its behalf for inclusion or incorporation by reference in the Registration Statement / Proxy Statement will, at the time the Registration Statement / Proxy Statement is initially filed with the SEC, at each time at which it is amended, or at the time it becomes effective under the Securities Act contain any untrue statement of a material fact or omit 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 are made, not misleading.
(e) The Company and/or its designees shall pay all fees in connection with the registration of Company Securities and the filing of the Registration Statement / Proxy Statement.
Section 5.8 SPAC Stockholder Approval. SPAC shall use its commercially reasonable efforts to, as promptly as practicable, (i) establish the record date for, duly call, give notice of, convene and hold the SPAC Stockholders Meeting in accordance with the Governing Documents of SPAC and the DGCL, (ii) after the Registration Statement / Prospectus is declared effective under the Securities Act, cause the proxy statement contained therein to be disseminated to the SPAC Stockholders and (iii) after the Registration Statement / Proxy Statement is declared effective under the Securities Act, solicit proxies from the SPAC Stockholders to vote in accordance with the SPAC Board Recommendation, and, if applicable, any approvals related thereto, and providing the SPAC Stockholders with the Offer. SPAC shall, through unanimous approval of its board of directors, recommend to its shareholders (the “SPAC Board Recommendation”), (i) the adoption and approval of this Agreement and the transactions contemplated hereby (including the Merger and the issuance of the Per Share Consideration hereunder) (the “Business Combination Proposal”); (ii) the approval of the issuance of the Ordinary Shares issuable in the PIPE Financing, (iii) the election to the board of directors of the Company of the individuals identified on Schedule 5.15; (iv) certain material differences between SPAC’s Governing Documents and the Company A&R Articles of Association, (v) the adoption of an incentive equity plan of the Company; (vi) the adoption and approval of each other proposal that either the SEC or Nasdaq (or the respective staff members thereof) indicates is necessary in its comments to the Registration Statement / Proxy Statement or in correspondence related thereto; (vii) the adoption and approval of each other proposal reasonably agreed to by SPAC and the Company as necessary or appropriate in connection with the consummation of the Transactions; and (viii) the adoption and approval of a proposal for the adjournment of the SPAC Stockholders Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing (such proposals in (i) through (viii) together, the “Transaction Proposals”); provided, that SPAC may adjourn the SPAC Stockholders Meeting (A) to solicit additional proxies for the purpose of obtaining the SPAC Stockholder Approval, (B) for the absence of a quorum, (C) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosures that SPAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by the SPAC Stockholders prior to the SPAC Stockholders Meeting or (D) if the holders of SPAC Shares have elected to redeem a number of SPAC Shares as of such time that would reasonably be expected to result in the condition set forth in Section 6.3(c) not being satisfied; provided that, without the consent of the Company, in no event shall SPAC adjourn the SPAC Stockholders Meeting for more than fifteen (15) Business Days later than the most recently adjourned meeting or to a date that is beyond four (4) Business Days prior to the Termination Date. The SPAC Board Recommendation shall be included in the Registration Statement / Proxy Statement. Except as otherwise required by applicable Law, SPAC covenants that none of the SPAC Board or SPAC nor any committee of the SPAC Board shall change, withdraw, withhold or modify, or propose publicly or by formal action of the SPAC Board, any committee of the SPAC Board or SPAC to change, withdraw, withhold or modify the SPAC Board Recommendation or any other recommendation by the SPAC Board or SPAC of the proposals set forth in the Registration Statement / Proxy Statement (a “SPAC Change in Recommendation”).
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Section 5.9 Merger Sub Shareholder Approval. As promptly as reasonably practicable (and in any event within one (1) Business Day) following the date of this Agreement, the Company, as the sole shareholder of Merger Sub, will approve and adopt this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger).
Section 5.10 Conduct of Business of SPAC. From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, SPAC shall, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law, as set forth on Section 5.10 of the SPAC Disclosure Schedules, or as consented in writing by the Company (it being agreed that any request for a consent shall not be unreasonably withheld, conditioned, or delayed), use its commercially reasonable efforts to comply with and continue performing under SPAC’s Governing Documents, the Trust Agreement and all other agreements or Contracts to which SPAC may be a party. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, SPAC shall not, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law, as set forth on Section 5.10 of the SPAC Disclosure Schedules or as consented to in writing by the Company (such consent not to be unreasonably withheld, conditioned or delayed), do any of the following:
(a) adopt any amendments, supplements, restatements or modifications to the Trust Agreement, Warrant Agreement or the Governing Documents of SPAC;
(b) declare, set aside, make or pay a dividend on, or make any other distribution or payment (whether in cash, stock or property) in respect of, any Equity Securities of SPAC, or repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding Equity Securities of SPAC;
(c) (i) merge, consolidate, combine or amalgamate SPAC with any Person or (ii) purchase or otherwise acquire (whether by merging or consolidating with, purchasing any Equity Security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or organization or division thereof;
(d) split, combine or reclassify any of its capital stock or other Equity Securities or issue any other security in respect of, in lieu of or in substitution for shares of its capital stock;
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(e) incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently, or otherwise) any Indebtedness or other Liability, except for the Unpaid SPAC Expenses;
(f) make any loans or advances to, or capital contributions to, or guarantees for the benefit of, or any investment in, any other Person, other than to, of, or in, SPAC;
(g) issue any Equity Securities of SPAC or grant any additional options, warrants or stock appreciation rights with respect to Equity Securities of the foregoing of SPAC;
(h) enter into, renew, modify or revise any SPAC Related Party Transaction (or any Contract or agreement that if entered into prior to the execution and delivery of this Agreement would be a SPAC Related Party Transaction), other than with respect to Unpaid SPAC Expenses;
(i) engage in any activities or business, other than activities or business (i) in connection with or incident or related to SPAC’s incorporation or continuing corporate (or similar) existence, (ii) contemplated by, or incident or related to, this Agreement, any Ancillary Document, the performance of covenants or agreements hereunder or thereunder or the consummation of the Transactions or (iii) those that are administrative or ministerial, in each case, which are immaterial in nature;
(j) make, change or revoke any election concerning Taxes (including, for the avoidance of doubt, making any U.S. federal income Tax entity classification election pursuant to Treasury Regulations Section 301.7701-3(c) with respect to SPAC not contemplated by this Agreement), enter into any Tax closing agreement, settle any Tax claim or assessment, change its jurisdiction of Tax residence, or consent to any extension or waiver of the limitation period applicable to or relating to any Tax claim or assessment, in each case, if such action would reasonably be expected to materially increase the present or future Tax liability of SPAC or any of the Group Companies;
(k) enter into any settlement, conciliation or similar Contract that would require any payment from the Trust Account or that would impose any material non-monetary obligations on SPAC or any of its Affiliates (or the Company or any of its Subsidiaries after the Closing);
(l) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, reorganization or similar transaction involving SPAC;
(m) change SPAC’s methods of accounting in any material respect, other than changes that are made in accordance with PCAOB standards;
(n) enter into any Contract with any broker, finder, investment banker or other Person under which such Person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement;
(o) except for entries, modifications, amendments, waivers, terminations or non-renewals in the ordinary course of business, enter into, materially modify, materially amend, waive any material right under, terminate (excluding any expiration in accordance with its terms) or fail to renew, any Material Contract of the type described in Section 4.17 (excluding, for the avoidance of doubt, any expiration or automatic extension or renewal of any such Material Contract pursuant to its terms);
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(p) enter into or adopt any SPAC Benefit Plan or any benefit or compensation plan, policy, program or arrangement that would be a SPAC Benefit Plan if in effect as of the date of this Agreement; or
(q) enter into any Contract to take, or cause to be taken, any of the actions set forth in this Section 5.10.
Notwithstanding anything in this Section 5.10 or this Agreement to the contrary, (i) nothing set forth in this Agreement shall give the Company, directly or indirectly, the right to control or direct the operations of SPAC and (ii) nothing set forth in this Agreement shall prohibit, or otherwise restrict the ability of, SPAC from using the funds held by SPAC outside the Trust Account to pay any SPAC Expenses or SPAC Liabilities or from otherwise distributing or paying over any funds held by SPAC outside the Trust Account to Sponsor or any of its Affiliates, in each case, prior to the Closing.
Section 5.11 Nasdaq Listing. The Company shall use commercially reasonable efforts to cause: (a) the Company’s initial listing application with Nasdaq in connection with the transactions contemplated by this Agreement to have been approved: (b) the Company to satisfy all applicable initial listing requirements of Nasdaq; and (c) the Company Ordinary Shares and Company Warrants issuable in accordance with this Agreement, including the Merger, to be approved for listing on Nasdaq (and SPAC shall reasonably cooperate in connection therewith), subject to official notice of issuance, in each case, as promptly as reasonably practicable after the date of this Agreement, and in any event prior to the Effective Time. The Company shall pay all fees of Nasdaq in connection with the application to list and the listing of Company Securities on Nasdaq.
Section 5.12 Trust Account. Upon satisfaction or, to the extent permitted by applicable Law, waiver of the conditions set forth in Article VI and provision of notice thereof to the Trustee, (a) at the Closing, SPAC shall (i) cause the documents, certificates and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered, and (ii) make all appropriate arrangements to cause the Trustee to (A) pay as and when due all amounts, if any, payable to the Public Shareholders of SPAC pursuant to the SPAC Stockholder Redemption, (B) pay the amounts due to the underwriters of the IPO for their deferred underwriting commissions as set forth in the Trust Agreement, (C) pay the amounts due to the Sponsor, directors, officers, and other initial stockholders of SPAC as repayment of the Unpaid SPAC Liabilities, (D) pay the amounts due to third parties (e.g., professionals, printers, etc.) who have rendered services to SPAC in connection with its operations and efforts to effect the Transactions, and (E) immediately thereafter, pay all remaining amounts then available in the Trust Account to SPAC in accordance with the Trust Agreement, and (b) thereafter, the Trust Account shall terminate, except as otherwise provided therein.
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Section 5.13 Transaction Support Agreements; Company Preferred Approval and Company Shareholder Approval; Subscription Agreements.
(a) As promptly as reasonably practicable (and in any event within one (1) Business Day) following the date of this Agreement (the “Transaction Support Agreement Deadline”), the Company shall deliver, or cause to be delivered, to SPAC the Transaction Support Agreements duly executed by each Supporting Company Shareholder.
(b) As promptly as reasonably practicable (and in any event by the Transaction Support Agreement Deadline), SPAC shall deliver, or cause to be delivered, to the Company the Sponsor Letter Agreement duly executed by Sponsor.
(c) The Company shall use its commercially reasonable efforts to, as promptly as practicable, and in any event within 50 days of the date of this Agreement, establish the record date for, duly call and give notice of, a general meeting of the Company Shareholders (the “Company Shareholders Meeting”), and, as promptly as practicable thereafter, convene and hold the Company Shareholders Meeting, in each case in accordance with the Governing Documents of the Company and the laws of the state of Israel, at which the Company Preferred Shareholders shall vote on the Company Preferred Shareholder Proposals and the Company Shareholders shall vote on the Company Shareholder Proposals. Unless a Company Change of Recommendation as permitted by Section 5.6(c) has occurred, Company, through the Company Board, shall recommend to the holders of Company Shares the approval and adoption of this Agreement and the transactions contemplated by this Agreement (including the Merger) (such recommendation, the “Company Board Recommendation”). The Company may adjourn the Company Shareholders Meeting, if necessary, to permit further solicitation of approvals because there are not sufficient votes to approve and adopt the Company Preferred Shareholder Proposals or the Company Shareholder Proposals or because of the absence of a quorum.
(d) The Company may not modify or waive any provisions of a Subscription Agreement without the prior written consent of SPAC; provided that any modification or waiver that is solely ministerial in nature or otherwise immaterial and does not affect any economic or any other material term of a Subscription Agreement shall not require the prior written consent of SPAC.
(e) The Company may not amend, modify or waive any provisions of a Transaction Support Agreement without the prior written consent of SPAC, and SPAC may not amend, modify or waive any provisions of the Sponsor Letter Agreement without the prior written consent of the Company.
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Section 5.14 Indemnification; Directors’ and Officers’ Insurance.
(a) All rights to indemnification or exculpation now existing in favor of the directors and officers of SPAC, as provided in the SPAC Governing Documents or otherwise in effect as of immediately prior to the Effective Time, in either case, solely with respect to any matters occurring on or prior to the Effective Time shall survive the Transactions and shall continue in full force and effect from and after the Effective Time for a period of six (6) years and the Company will perform and discharge, or cause to be performed and discharged, all obligations to provide such indemnity and exculpation during such six (6)-year period. To the maximum extent permitted by applicable Law, during such six (6)-year period, the Company shall advance, or caused to be advanced, expenses in connection with such indemnification as provided in the SPAC Governing Documents or other applicable agreements as in effect immediately prior to the Effective Time. The indemnification and liability limitation or exculpation provisions of the SPAC Governing Documents shall not, during such six (6)-year period, be amended, repealed or otherwise modified after the Effective Time in any manner that would materially and adversely affect the rights thereunder of individuals who, as of immediately prior to the Effective Time, or at any time prior to such time, were directors or officers of SPAC (the “D&O Persons”) entitled to be so indemnified, their liability limited or be exculpated with respect to any matters occurring on or prior to the Effective Time and relating to the fact that such D&O Person was a director or officer of SPAC immediately prior to the Effective Time, unless such amendment, repeal or other modification is required by applicable Law.
(b) The Company shall not have any obligation under this Section 5.14 to any D&O Person when and if a court of competent jurisdiction shall ultimately determine (and such determination shall have become final and non-appealable) that the indemnification of such D&O Person in the manner contemplated hereby is prohibited by applicable Law.
(c) For a period of six (6) years after the Effective Time, the Surviving Company shall maintain, without any lapses in coverage, directors’ and officers’ liability insurance for the benefit of those Persons who are currently covered by any comparable insurance policies of SPAC as of the date of this Agreement with respect to matters occurring on or prior to the Effective Time (i.e., “tail coverage”). Such insurance policies shall provide coverage on terms (with respect to coverage and amount) that are substantially the same as (and no less favorable in the aggregate to the insured than) the coverage provided under SPAC’s directors’ and officers’ liability insurance policies as of the date of this Agreement and shall be obtained from an insurance carrier with the same or better credit rating as the current insurance carrier(s) of SPAC and the Company with respect to directors’ and officers’ liability insurance; provided that the Surviving Company shall not be obligated to pay annual premiums in excess of three hundred percent (300%) of the most recent annual premium paid by SPAC prior to the date of this Agreement and, in such event, the Surviving Company shall purchase the maximum coverage available for three hundred percent (300%) of the most recent annual premium paid by SPAC prior to the date of this Agreement.
(d) If the Surviving Company or any of its successors or assigns (i) shall merge or consolidate with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series of related transactions to any Person, then in each such case, proper provisions shall be made so that the successors or assigns of the Surviving Company shall assume all of the obligations set forth in this Section 5.14.
(e) The D&O Persons entitled to the indemnification, liability limitation, exculpation and insurance set forth in this Section 5.14 are intended to be third-party beneficiaries of this Section 5.14. This Section 5.14 shall survive the consummation of the transactions contemplated by this Agreement and shall be binding on all successors and assigns of the Surviving Company.
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Section 5.15 Post-Closing Officers. The officers of the Company immediately prior to the Effective Time shall be the officers of the Company immediately following the Effective Time.
Section 5.16 PCAOB Financials.
(a) As promptly as reasonably practicable, the Company shall deliver to SPAC (i) the audited consolidated balance sheets of the Group Companies as of December 31, 2018 and December 31, 2019 and the related audited statements of operations, changes in shareholders’ equity and cash flows of the Group Companies for each of the periods then ended, audited in accordance with the standards of the PCAOB and containing an unqualified report of the Company’s auditors (the “Closing Company Audited Financial Statements”) and (ii) the unaudited consolidated balance sheet and the related statements of operations, changes in shareholders’ equity and cash flows of the Group Companies as of and for a year-to-date period ended as of the end of a different fiscal quarter that is required to be included in the Registration Statement / Proxy Statement and any other filings to be made by the Company and/or SPAC with the SEC in connection with the Transactions. All such financial statements, together with any unaudited consolidated balance sheet and the related statements of operations, changes in shareholders’ equity and cash flows of the Group Companies as of and for a year-to-date period ended as of the end of a different fiscal quarter that is required to be included in the Registration Statement / Proxy Statement and any other filings to be made by the Company and/or SPAC with the SEC in connection with the Transactions, (A) will be prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), (B) will fairly present, in all material respects, the financial position, results of operations and cash flows of the Group Companies as of the date thereof and for the period indicated therein, except as otherwise specifically noted therein, and (C) will, in the case of the Closing Company Audited Financial Statements, have been audited in accordance with the standards of the PCAOB.
(b) The auditor engaged to audit the Closing Company Audited Financial Statements and to review the unaudited financial statements is an independent registered public accounting firm with respect to the Company within the meaning of the Exchange Act and the applicable rules and regulations thereunder adopted by the SEC and the Public Company Accounting Oversight Board.
Section 5.17 Certain Financial Information. The Company shall use commercially reasonable efforts (i) to assist, upon advance written notice, during normal business hours and in a manner such as to not unreasonably interfere with the normal operation of any member of such Group Company, SPAC in causing to be prepared in a timely manner any other financial information or statements (including customary pro forma financial statements) that are required to be included in the Registration Statement / Proxy Statement and any other filings to be made by the Company with the SEC in connection with the Transactions and (ii) to obtain the consents of its auditors with respect thereto as may be required by applicable Law or requested by the SEC.
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Section 5.18 Company Incentive Equity Plan. Prior to the effectiveness of the Registration Statement / Proxy Statement, the Company shall approve and adopt an equity incentive plan, the proposed form and terms of which shall be reasonably acceptable to SPAC (the “Company Incentive Equity Plan”), in the manner prescribed under applicable Laws, effective as of one (1) day prior to the Closing Date, reserving a number of Company Ordinary Shares for grant thereunder (exclusive of the number of Company Ordinary Shares subject to outstanding Company Equity Awards as of such date of approval) equal to 7% of the total number of Company Ordinary Shares that would be issued and outstanding on a fully diluted basis following the Effective Time. The Company shall file with the SEC a registration statement on Form S-8 (or any successor form or comparable form in another relevant jurisdiction) relating to Company Ordinary Shares issuable pursuant to the Company Incentive Equity Plan. Such registration statement shall be filed as soon as reasonably practicable after registration of shares on Form S-8 (or any successor form or comparable form in another relevant jurisdiction) first becomes available to the Company, and the Company shall use commercially reasonable efforts to maintain the effectiveness of such registration statement for so long as any awards issued under the Company Incentive Equity Plan remain outstanding.
Section 5.19 SPAC Transfer of Certain Intellectual Property.
(a) The Company Parties acknowledge that SPAC is in possession of certain confidential and proprietary information of third parties received in connection with the SPAC’s evaluation of alternative business combinations, including but not limited to, information concerning the business, financial condition, operations, assets and liabilities, trade secrets, know-how, technology, customers, business plans, intellectual property, promotional and marketing efforts, the existence and progress of financings, mergers, sales of assets, take-overs or tender offers of third parties, including SPAC’s and its Representatives’ internal notes and analysis concerning such information (collectively, “Evaluation Material”), and that the Evaluation Material is or may be subject to confidentiality or non-disclosure agreement. The Company Parties acknowledge they have no right or expectancy in or to the Evaluation Material. Immediately prior to the Closing, SPAC shall transfer all Evaluation Material to an entity of SPAC’s choosing for aggregate consideration of $1.00.
(b) The Company Parties shall have no right or expectancy in or to the name “Collective Growth Corporation” or any derivation thereof, the trading symbols “CGRO,” “CGROU,” or “CGROW,” SPAC’s internet domain name, or the Intellectual Property Rights therein (collectively, the “SPAC Identifiers”). Immediately prior to the Closing, SPAC shall transfer the SPAC Identifiers to an entity of SPAC’s choosing for aggregate consideration of $1.00.
Section 5.20 Company Warrant Agreement. Immediately prior to the Effective Time, (a) the Company, SPAC, and Continental shall enter into an assignment and assumption agreement pursuant to which SPAC will assign to the Company all of its rights, interests, and obligations in and under the Warrant Agreement and (b) the Company and Continental shall enter into the Company Warrant Agreement which, among other things, (i) reflects the changes to convert the SPAC Warrants into Company Warrants as set forth in Section 2.2(f) and (ii) provides that the Perception Company Warrants, Management Warrants, and Company Warrants issued upon exchange of the SPAC Warrants held by the Sponsor and certain other initial stockholders of SPAC are not redeemable and are exercisable for cash or on a cashless basis, at the holder’s option, so long as they are held by the initial holders or their permitted transferees.
Section 5.21 Termination of Company Investor Agreements.
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Prior to the Closing, the Company shall terminate each Company Investor Agreement (excluding the Transaction Support Agreements) without any liability being imposed on the part of SPAC, any Group Company, or Merger Sub.
Section 5.22 No SPAC Securities Transactions.
Without the prior written consent of SPAC, none of the individuals set forth on Section 5.23 of the Company Disclosure Schedules shall engage in any transactions involving the securities of SPAC prior to the time of the making of the Signing Press Release.
Section 5.23 Section 16 of the Exchange Act. Prior to the Effective Time, the Company Board or an appropriate committee thereof shall take all such steps as may be required to adopt a resolution consistent with the interpretive guidance of the SEC so that the acquisition of Company Ordinary Shares pursuant to this Agreement by any officer or director of SPAC or the Company who is expected to become a director or officer (as defined under Rule 16a-1(f) of the Exchange Act) of the Company for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder will be an exempt transaction under such rules and regulations.
Section 5.24 Consulting Agreement. At the Closing, the Company shall enter into a consulting agreement with Wilson Kello with respect to transition and public company consulting services to be provided to the Company by Mr. Kello during a six-month period following the Closing for an aggregate of $150,000.
Article
VI.
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
Section 6.1 Conditions to the Obligations of the Parties. The obligations of the Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver, if permitted by applicable Law, in writing by the Party for whose benefit such condition exists of the following conditions:
(a) the applicable waiting periods (and any extensions thereof) under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated;
(b) there shall not have been entered, enacted or promulgated any Law or Order enjoining or prohibiting the consummation of the transactions contemplated by this Agreement;
(c) the Registration Statement / Proxy Statement shall have become effective in accordance with the provisions of the Securities Act, no stop order suspending the effectiveness of the Registration Statement / Proxy Statement shall have been issued by the SEC and shall remain in effect with respect to the Registration Statement / Proxy Statement, and no Proceeding seeking such a stop order shall have been threatened or initiated by the SEC and remain pending;
(d) the Company Preferred Shareholder Approval and the Company Shareholder Approval shall have been obtained;
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(e) the SPAC Stockholder Approval shall have been obtained;
(f) after giving effect to the transactions contemplated hereby, SPAC shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Offer;
(g) no Proceeding shall be pending or threatened which is reasonably likely to (i) prevent consummation of any of the Transactions or (ii) cause any of the Transactions to be rescinded following consummation;
(h) the Company’s initial listing application with Nasdaq in connection with the transactions contemplated by this Agreement shall have been approved and the Company shall not have received any notice of non-compliance therewith that has not been cured or would not be cured at or immediately following the Effective Time, and the Company Shares (including, for the avoidance of doubt, the Company Ordinary Shares to be issued pursuant to the Merger) shall have been approved for listing on Nasdaq, subject only to official notice of issuance thereof and the requirement to have a sufficient number of round lot holders; and
(i) each Ancillary Document (other than the Subscription Agreements) shall have been executed and delivered by the parties thereto and shall be in full force and effect.
Section 6.2 Other Conditions to the Obligations of SPAC. The obligations of SPAC to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver, if permitted by applicable Law, in writing by SPAC of the following further conditions:
(a) (i) the Company Fundamental Representations (other than Section 3.2(a)) shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date), (ii) the representations and warranties set forth in Section 3.2(a) shall be true and correct in all respects (except for de minimis inaccuracies) as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects (except for de minimis inaccuracies) as of such earlier date), (iii) the representations and warranties of the Company Parties set forth in Article III (other than the Company Fundamental Representations) shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth herein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects as of such earlier date), except where the failure of such representations and warranties to be true and correct, taken as a whole, does not cause a Company Material Adverse Effect;
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(b) the Company shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by the Company under this Agreement at or prior to the Closing;
(c) since the date of this Agreement, no Company Material Adverse Effect has occurred that is continuing;
(d) at or prior to the Closing, the Company shall have delivered, or caused to be delivered, to SPAC a certificate duly executed by an authorized officer of the Company, dated as of the Closing Date, to the effect that the conditions specified in Section 6.2(a), Section 6.2(b) and Section 6.2(c) are satisfied, in a form and substance reasonably satisfactory to SPAC;
(e) SPAC shall have received a certificate of the secretary or equivalent officer of each of the Company Parties certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors or equivalent body of each of the Company Parties authorizing the execution, delivery, and performance of this Agreement and the Transactions, and that all such resolutions are in full force and effect and are all of the resolutions adopted in connection with the Transactions;
(f) the Company Board shall consist of the number of directors, and be comprised of the individuals, determined pursuant to Section 5.15; and
(g) the Company Investor Agreements shall have been terminated.
Section 6.3 Other Conditions to the Obligations of the Company Parties. The obligations of the Company Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver, if permitted by applicable Law, in writing by the Company (on behalf of itself and Merger Sub) of the following further conditions:
(a) (i) the SPAC Fundamental Representations (other than the representations and warranties set forth in Section 4.6(a)) shall be true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” or any similar limitation set forth therein) in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date), (ii) the representations and warranties set forth in Section 4.6(a) shall be true and correct in all respects (except for de minimis inaccuracies) as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects (except for de minimis inaccuracies) as of such earlier date), and (iii) the representations and warranties of SPAC set forth in Article IV (other than the SPAC Fundamental Representations) shall be true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” or any similar limitation set forth herein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects as of such earlier date), except where the failure of such representations and warranties to be true and correct, taken as a whole does not cause a material adverse effect;
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(b) SPAC shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by SPAC under this Agreement at or prior to the Closing;
(c) the Aggregate Transaction Proceeds shall be equal to or greater than $200,000,000;
(d) at or prior to the Closing, SPAC shall have delivered, or caused to be delivered, to the Company a certificate duly executed by an authorized officer of SPAC, dated as of the Closing Date, to the effect that the conditions specified in Section 6.3(a) and Section 6.3(b) are satisfied, in a form and substance reasonably satisfactory to the Company;
(e) the Company shall have received a certificate of the secretary or equivalent officer of SPAC certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of SPAC authorizing the execution, delivery, and performance of this Agreement and the Transactions, and that all such resolutions are in full force and effect and are all of the resolutions of the board of directors of SPAC adopted in connection with the Transactions;
(f) at or prior to the Closing, the directors and officers of SPAC shall have resigned or otherwise removed, effective as of or prior to the Closing;
(g) the Unpaid SPAC Liabilities and Unpaid SPAC Expenses shall collectively not exceed $9,700,000; and
(h) the Forfeiture shall have occurred and each of the other covenants of Sponsor required under the Forfeiture Agreement to be performed as of or prior to the Closing shall have been performed in all material respects.
Section 6.4 Frustration of Closing Conditions. The Company Parties may not rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was proximately caused by either of the Company Party’s failure to use commercially reasonable efforts to cause the Closing to occur, as required by Section 5.2. SPAC may not rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was proximately caused by SPAC’s failure to use commercially reasonable efforts to cause the Closing to occur, as required by Section 5.2.
Article
VII.
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at any time prior to the Closing:
(a) by mutual written consent of SPAC and the Company;
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(b) by SPAC, if any of the representations or warranties set forth in Article III shall not be true and correct or if either Company Party has failed to perform any covenant or agreement on the part of the Company set forth in this Agreement (including an obligation to consummate the Closing) such that the condition to Closing set forth in either Section 6.2(a) or Section 6.2(b) could not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured within the earlier of (i) thirty (30) days after written notice thereof is delivered to the Company by SPAC, and (ii) the Termination Date; provided, however, that SPAC is not then in breach of this Agreement so as to prevent the condition to Closing set forth in either Section 6.3(a) or Section 6.3(b) from being satisfied;
(c) by the Company, if any of the representations or warranties set forth in Article IV shall not be true and correct or if SPAC has failed to perform any covenant or agreement on the part of SPAC set forth in this Agreement (including an obligation to consummate the Closing) such that the condition to Closing set forth in either Section 6.3(a) or Section 6.3(b) could not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured within the earlier of (i) thirty (30) days after written notice thereof is delivered to SPAC by the Company and (ii) the Termination Date; provided, however, neither Company Party is then in breach of this Agreement so as to prevent the condition to Closing set forth in Section 6.2(a) or Section 6.2(b) from being satisfied;
(d) by either SPAC or the Company, if the transactions contemplated by this Agreement shall not have been consummated on or prior to May 30, 2021 (the “Termination Date”); provided, that (i) the right to terminate this Agreement pursuant to this Section 7.1(d) shall not be available to SPAC if SPAC’s breach of any of its covenants or obligations under this Agreement shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or before the Termination Date, and (ii) the right to terminate this Agreement pursuant to this Section 7.1(d) shall not be available to the Company if either Company Party’s breach of its covenants or obligations under this Agreement shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or before the Termination Date;
(e) by either SPAC or the Company, if any Governmental Entity shall have issued an Order, promulgated a Law or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such Order or other action shall have become final and nonappealable; provided, that (i) the right to terminate this Agreement under this Section 7.1(e) shall not be available to SPAC if (A) SPAC’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date or (B) SPAC is in material breach of its obligations under this Agreement on such date and (ii) the right to terminate this Agreement under this Section 7.1(e) shall not be available to the Company if (A) a Company Party’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on before such date or (B) the Company is in material breach of its obligations under this Agreement on such date;
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(f) by either SPAC or the Company if the SPAC Stockholders Meeting has been held (including any adjournment thereof), has concluded, SPAC Stockholders have duly voted and the SPAC Stockholder Approval was not obtained;
(g) by either SPAC or the Company if the Company Shareholder Meeting has been held (including any adjournment thereof), has concluded, Company Shareholders have duly voted and the Company Shareholder Approval or the Company Preferred Shareholder Approval was not obtained;
(h) by SPAC if, prior to obtaining the Company Preferred Shareholder Approval and the Company Shareholder Approval, the Company Board shall have made a Company Change in Recommendation in accordance with Section 5.6(c); or
(i) by the Company if, prior to obtaining the SPAC Stockholder Approval, the SPAC Board shall have made a SPAC Change in Recommendation or (ii) shall have failed to include the SPAC Board Recommendation in the Registration Statement / Proxy Statement distributed to SPAC Stockholders.
Section 7.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 7.1, this entire Agreement shall forthwith become void (and there shall be no Liability or obligation on the part of the Parties, Perception, Antara and their respective Non-Party Affiliates) with the exception of (a) the confidentiality obligation set forth in Section 5.3(a), payment of the Termination Fee as set forth in Section 5.6(d) if this Agreement is terminated following a Company Change in Recommendation, this Section 7.2, and Article I and Article VIII (to the extent related to the foregoing), each of which shall survive such termination and remain valid and binding obligations of the Parties and (b) the Confidentiality Agreement, which shall survive such termination and remain valid and binding obligations of the parties thereto in accordance with their respective terms. Notwithstanding the foregoing or anything to the contrary herein, the termination of this Agreement pursuant to Section 7.1 shall not affect (i) any Liability on the part of any Party for any Willful Breach of any covenant or agreement set forth in this Agreement prior to such termination or fraud or (ii) any Person’s Liability under any Subscription Agreement, the Confidentiality Agreement, any Transaction Support Agreement or the Sponsor Letter Agreement to which he, she or it is a party to the extent arising from a claim against such Person by another Person party to such agreement on the terms and subject to the conditions thereunder.
Article
VIII.
MISCELLANEOUS
Section 8.1 Non-Survival. Other than those representations, warranties and covenants set forth in Section 3.25, Section 3.26, Section 4.25 and Section 4.27, each of which shall survive following the Effective Time, or as otherwise provided in the last sentence of this Section 8.1, each of the representations and warranties, and each of the agreements and covenants (to the extent such agreement or covenant contemplates or requires performance at or prior to the Effective Time), of the Parties set forth in this Agreement, shall terminate at the Effective Time, such that no claim for breach of any such representation, warranty, agreement or covenant, detrimental reliance or other right or remedy (whether in contract, in tort, at law, in equity or otherwise) may be brought with respect thereto after the Effective Time against any Party, any Company Non-Party Affiliate or any SPAC Non-Party Affiliate. Each covenant and agreement contained herein that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms, and each covenant and agreement contained in any Ancillary Document that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms and any other provision in any Ancillary Document that expressly survives the Effective Time shall so survive the Effective Time in accordance with the terms of such Ancillary Document.
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Section 8.2 Entire Agreement; Assignment. This Agreement (together with the Ancillary Documents) and the Confidentiality Agreement, and any other documents, instruments and certificates explicitly referred to herein, constitute the entire agreement among the Parties, Perception and Antara with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties, Perception and Antara or any of their respective Subsidiaries with respect to the subject matter hereof. No representations, warranties, covenants, understandings, agreements, oral or otherwise, with respect to the subject matter contemplated by this Agreement exist between the Parties, Perception and Antara except as expressly set forth or referenced in this Agreement, the Subscription Agreement between Antara and the Company, and the Confidentiality Agreement. No Party, Perception or Antara shall assign, delegate, or otherwise transfer this Agreement or any part hereof without the prior written consent of the other Parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, Perception and Antara and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this Section 8.2 shall be null and void, ab initio.
Section 8.3 Amendment. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by each of the Parties in the same manner as this Agreement and which makes reference to this Agreement. The Perception Provisions may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by each of the Parties and Perception in the same manner as this Agreement and which makes reference to this Agreement. The Antara Provisions may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by each of the Parties and Antara in the same manner as this Agreement and which makes reference to this Agreement. This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any purported amendment by any Party or Parties, Perception or Antara, effected in a manner which does not comply with this Section 8.3 shall be null and void, ab initio.
Section 8.4 Notices. All notices, requests, claims, demands and other communications among the Parties, Perception and Antara shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
| (a) | If to SPAC, to: |
Collective Growth Corporation
1805 West Avenue
Austin, TX 78701
Attention: Bruce Linton, Chief Executive Officer
Email: [email protected]
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with copies (which shall not constitute notice) to:
Graubard Miller
405 Lexington Avenue, 11th Floor
New York, New York 10174
Attention: David Alan Miller; Jeffrey M. Gallant
E-mail: [email protected]; [email protected]
Cassels Brock & Blackwell LLP
40 King St W, Suite 2100
Toronto, ON M5H 3C2, Canada
Attention: Jonathan Sherman
E-mail: [email protected]
Goldfarb Seligman & Co.
Ampa Tower, 98 Yigal Alon Street
Tel Aviv 6789141, Israel
Attention: Adam M. Klein
E-mail: [email protected]
| (b) | If to the Company, to: |
Innoviz Technologies Ltd.
2 Amal St.
Rosh HaAin
4809202
Israel
Attention: Eldar Cegla, Chief Financial Officer
Email: [email protected]
with copies (which shall not constitute notice) to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Attention: Ryan Maierson
E-mail: [email protected]
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Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
United Kingdom
Attention: Joshua Kiernan
E-mail: [email protected]
| (c) | If to Perception, to: |
Perception Capital Partners LLC
c/o Northern Pacific Group
315 East Lake Street, Suite 301
Wayzata, MN 55391
Attention: Scott Honour
E-mail: [email protected]
with copies (which shall not constitute notice) to:
Faegre Drinker Biddle & Reath LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Attention: Steven C. Kennedy
Email: [email protected]
| (d) | If to Antara, to: |
Antara Capital LP
500 Fifth Avenue, Suite 2320
New York, NY 10110
Attention: Lance Kravitz
Email: [email protected]
or to such other address as the Party to whom notice is given or Perception or Antara, as applicable, may have previously furnished to the others in writing in the manner set forth above.
Section 8.5 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the Transactions, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
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Section 8.6 Fees and Expenses. Except as otherwise set forth in this Agreement, all fees and expenses incurred in connection with this Agreement, the Ancillary Documents and the Transactions, including the fees and disbursements of counsel, financial advisors and accountants, shall be paid by the Party incurring such fees or expenses; provided that, for the avoidance of doubt, (a) if this Agreement is terminated upon the Company Board’s making of a Company Change in Recommendation, the Company shall pay the Termination Fee, (b) if this Agreement is terminated in accordance with its terms, the Company shall pay, or cause to be paid, all Unpaid Company Expenses and SPAC shall pay, or cause to be paid, all Unpaid SPAC Expenses and (c) if the Closing occurs, then the Company shall pay, or cause to be paid, all Unpaid Company Expenses and all Unpaid SPAC Expenses.
Section 8.7 Construction; Interpretation. The term “this Agreement” means this Business Combination Agreement together with the Schedules and Exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. The headings set forth in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. No Party, Perception or Antara, nor their respective counsels, shall be deemed the drafter of this Agreement for purposes of construing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any Party, Perception or Antara. Unless otherwise indicated to the contrary herein by the context or use thereof: (a) the words, “herein,” “hereto,” “hereof” and words of similar import refer to this Agreement as a whole, including the Schedules and Exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause set forth in this Agreement; (b) masculine gender shall also include the feminine and neutral genders, and vice versa; (c) words importing the singular shall also include the plural, and vice versa; (d) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”; (e) references to “$” or “dollar” or “US$” shall be references to United States dollars; (f) the word “or” is disjunctive but not necessarily exclusive; (g) the words “writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (h) the word “day” means calendar day unless Business Day is expressly specified; (i) the word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (j) all references to Articles, Sections, Exhibits or Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement; (k) the words “provided” or “made available” or words of similar import (regardless of whether capitalized or not) shall mean, when used with reference to documents or other materials required to be provided or made available to SPAC, any documents or other materials posted to the electronic data room located www.intralinks.com under the project name “Innoviz Technologies” as of 5:00 p.m., Eastern Time, at least one (1) day prior to the date of this Agreement; (l) all references to any Law will be to such Law as amended, supplemented or otherwise modified or re-enacted from time to time; and (m) all references to any Contract are to that Contract as amended or modified from time to time in accordance with the terms thereof (subject to any restrictions on amendments or modifications set forth in this Agreement). If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.
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Section 8.8 Exhibits and Schedules. All Exhibits and Schedules, or documents expressly incorporated into this Agreement, are hereby incorporated into this Agreement and are hereby made a part hereof as if set out in full in this Agreement. The Schedules shall be arranged in sections and subsections corresponding to the numbered and lettered Sections and subsections set forth in this Agreement. Any item disclosed in the Company Disclosure Schedules or in the SPAC Disclosure Schedules corresponding to any Section or subsection of Article III (in the case of the Company Disclosure Schedules) or Article IV (in the case of the SPAC Disclosure Schedules) shall be deemed to have been disclosed with respect to every other section and subsection of Article III (in the case of the Company Disclosure Schedules) or Article IV (in the case of the SPAC Disclosure Schedules), as applicable, where the relevance of such disclosure to such other Section or subsection is reasonably apparent on the face of the disclosure. The information and disclosures set forth in the Schedules that correspond to the section or subsections of Article III or Article IV may not be limited to matters required to be disclosed in the Schedules, and any such additional information or disclosure is for informational purposes only and does not necessarily include other matters of a similar nature.
Section 8.9 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party, Perception and Antara and their respective successors and permitted assigns and, except as provided in Section 5.14 and the two subsequent sentences of this Section 8.9, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. Sponsor shall be an express third-party beneficiary of Section 8.2, Section 8.3, Section 8.14 and this Section 8.9 (to the extent related to the foregoing). Each of the Non-Party Affiliates shall be an express third-party beneficiary of Section 8.13 and this Section 8.9 (to the extent related to the foregoing).
Section 8.10 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable Law, all other provisions of this Agreement shall 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 materially adverse to any Party or Perception or Antara, as applicable. Upon such determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable Law, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 8.11 Counterparts; Electronic Signatures. This Agreement and each Ancillary Document (including any of the closing deliverables contemplated hereby) may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any Ancillary Document (including any of the closing deliverables contemplated hereby) by electronic means, including docusign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement or any such Ancillary Document.
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Section 8.12 Knowledge of Company; Knowledge of SPAC. For all purposes of this Agreement, the phrase “to the Company’s knowledge” and “known by the Company” and any derivations thereof shall mean as of the applicable date, the actual knowledge of the individuals set forth on Section 8.12(a) of the Company Disclosure Schedules, assuming reasonable due inquiry. For all purposes of this Agreement, the phrase “to SPAC’s knowledge” and “to the knowledge of SPAC” and any derivations thereof shall mean as of the applicable date, the actual knowledge of the individuals set forth on Section 8.12(b) of the SPAC Disclosure Schedules, assuming reasonable due inquiry. For the avoidance of doubt, none of the individuals set forth on Section 8.12(a) of the Company Disclosure Schedules or Section 8.12(b) of the SPAC Disclosure Schedules shall have any personal Liability or obligations regarding such knowledge.
Section 8.13 No Recourse. Except for claims pursuant to any Ancillary Document by any party(ies) thereto against any Company Non-Party Affiliate or any SPAC Non-Party Affiliate (each, a “Non-Party Affiliate”), and then solely with respect to claims against the Non-Party Affiliates that are party to the applicable Ancillary Document, each Party agrees on behalf of itself and on behalf of the Company Non-Party Affiliates, in the case of the Company, and the SPAC Non-Party Affiliates, in the case of SPAC, that (a) this Agreement may only be enforced against, and any action for breach of this Agreement may only be made against, the Parties, Perception and Antara and no claims of any nature whatsoever arising under or relating to this Agreement, the negotiation hereof or its subject matter, or the transactions contemplated hereby shall be asserted against any Non-Party Affiliate, and (b) none of the Non-Party Affiliates shall have any Liability arising out of or relating to this Agreement, the negotiation hereof or its subject matter, or the transactions contemplated hereby, including with respect to any claim (whether in tort, contract or otherwise) for breach of this Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Company, SPAC or any Non-Party Affiliate concerning any Group Company, SPAC, this Agreement or the transactions contemplated hereby.
Section 8.14 Extension; Waiver. The Company prior to the Closing and the Company and Sponsor after the Closing may (a) extend the time for the performance of any of the obligations or other acts of SPAC set forth herein, (b) waive any inaccuracies in the representations and warranties of SPAC set forth herein or (c) waive compliance by SPAC with any of the agreements or conditions set forth herein. SPAC may (i) extend the time for the performance of any of the obligations or other acts of the Company, set forth herein, (ii) waive any inaccuracies in the representations and warranties of the Company set forth herein or (iii) waive compliance by the Company with any of the agreements or conditions set forth herein. Any agreement on the part of any such Party, Perception or Antara to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such Party, Perception or Antara. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of such rights.
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Section 8.15 Waiver of Jury Trial. THE PARTIES, PERCEPTION AND ANTARA EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY DOCUMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES, PERCEPTION AND ANTARA IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES, PERCEPTION AND ANTARA EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES, PERCEPTION AND ANTARA MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY, PERCEPTION AND ANTARA CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.15.
Section 8.16 Submission to Jurisdiction. Each of the Parties, Perception and Antara irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction, any state or federal court sitting in the Borough of Manhattan, State of New York, New York County), for the purposes of any Proceeding, claim, demand, action or cause of action (a) arising under this Agreement or under any Ancillary Document or (b) in any way connected with or related or incidental to the dealings of the Parties, Perception and Antara in respect of this Agreement or any Ancillary Document or any of the Transactions, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each Party, Perception and Antara hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding claim, demand, action or cause of action against such Party (i) arising under this Agreement or under any Ancillary Document or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Document or any of the Transactions, (A) any claim that such Party is not personally subject to the jurisdiction of the courts as described in this Section 8.16 for any reason, (B) that such Party or such Party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such Party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such Party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such Party in or by such courts. Each Party, Perception and Antara agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 8.4 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
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Section 8.17 Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, Perception and Antara, and the exercise by a Party, Perception or Antara of any one remedy will not preclude the exercise of any other remedy. The Parties, Perception and Antara agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties, Perception or Antara do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The Parties, Perception and Antara acknowledge and agree that (i) the Parties, Perception and Antara shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof and thereof, without proof of damages and without posting a bond, prior to the valid termination of this Agreement in accordance with Section 7.1, this being in addition to any other remedy to which they are entitled under this Agreement, and (ii) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of the Parties would have entered into this Agreement. Each Party, Perception and Antara agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other Parties, Perception or Antara have an adequate remedy at law or that an award of specific performance is not an appropriate remedy for any reason at law or equity. The Parties, Perception and Antara acknowledge and agree that any Party, Perception or Antara seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 8.17 shall not be required to provide any bond or other security in connection with any such injunction.
Section 8.18 Trust Account Waiver. Reference is made to the final prospectus of SPAC, filed with the SEC (File No. 333-236798) on May 1, 2020 (the “SPAC Prospectus”). The Company acknowledges and agrees and understands that SPAC has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of SPAC’s public shareholders (including overallotment shares acquired by SPAC’s underwriters, the “Public Shareholders”), and SPAC may disburse monies from the Trust Account only in the express circumstances described in the SPAC Prospectus. For and in consideration of SPAC entering into this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company Parties each hereby agree on behalf of itself and its Representatives and controlled Affiliates that, notwithstanding the foregoing or anything to the contrary in this Agreement, none of the Company Parties nor any of its or their Representatives or controlled Affiliates does 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 SPAC or any of its Representatives, on the one hand, and, the Company Party or any of its Representatives or controlled Affiliates, 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 (any and all such claims are collectively referred to hereafter as the “Trust Account Released Claims”). Each Company Party, on its own behalf and on behalf of its Representatives and controlled Affiliates, hereby irrevocably waives any Trust Account Released Claims that it or any of its Representatives or controlled 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, or Contracts with SPAC 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 any agreement with SPAC or its Affiliates).
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Section 8.19 Conflicts; Privilege.
(a) The parties hereto acknowledge and agree, on their own behalf and on behalf of their respective directors, members, shareholders, stockholders, partners, officers, employees and Affiliates, as applicable, that:
(i) Graubard Miller, Cassels Brock & Blackwell LLP, and Goldfarb Seligman & Co. (the “Pre-Closing SPAC Law Firms”) have acted as counsel to SPAC and the holders of SPAC Common Stock (individually and collectively, the “SPAC Group”), in connection with the negotiation, preparation, execution and delivery of this Agreement and the applicable Ancillary Documents and the consummation of the transactions contemplated hereby and thereby. The Company Parties agree, and shall cause the Group Companies to agree, that, following consummation of the transactions contemplated hereby, such representation and any prior representation of SPAC by the Pre-Closing SPAC Law Firms, or any successors thereto, shall not preclude the Pre-Closing SPAC Law Firms from serving as counsel to the SPAC Group or any director, member, shareholder, stockholder, partner, officer or employee of the SPAC Group, in connection with any litigation, claim or obligation arising out of or relating to this Agreement or the transactions contemplated hereby. The Company Parties shall not, and each shall cause the Group Companies not to, seek to or have the Pre-Closing SPAC Law Firms disqualified from any such representation based upon the prior representation of SPAC by the Pre-Closing SPAC Law Firms. The parties hereto hereby consent thereto and waive any potential conflict of interest arising from such prior representation, and each of such parties shall cause any of their respective Affiliates to consent to waive any potential conflict of interest arising from such representation. Each of the parties acknowledges that such consent and waiver is voluntary, that it has been carefully considered, and that the parties have consulted with counsel or have been advised they should do so in connection herewith.
(ii) Latham & Watkins LLP and Meitar | Law Offices (“Pre-Closing Company Law Firms”) has acted as counsel to the Company Parties and the Group Companies (individually and collectively, the “Company Group”), in connection with the negotiation, preparation, execution and delivery of this Agreement and the applicable Ancillary Documents and the consummation of the transactions contemplated hereby and thereby. SPAC agrees that, following consummation of the transactions contemplated hereby, such representation and any prior representation of the Company Group by the Pre-Closing Company Law Firms shall not preclude the Pre-Closing Company Law Firms from serving as counsel to the Company Group or any director, member, shareholder, partner, officer or employee of the Company Group, in connection with any litigation, claim or obligation arising out of or relating to this Agreement or the transactions contemplated hereby. SPAC shall not seek or have the Pre-Closing Company Law Firms disqualified from any such representation based upon the prior representation of the Company Group by the Pre-Closing Company Law Firms. Each of the parties hereto hereby consents thereto and waives any potential conflict of interest arising from such prior representation, and each of such parties shall cause any of its Affiliates to consent to waive any potential conflict of interest arising from such representation. Each of the parties acknowledges that such consent and waiver is voluntary, that it has been carefully considered, and that the parties have consulted with counsel or have been advised they should do so in connection herewith.
(iii) The covenants, consents and waivers contained in this Section 8.19 shall not be deemed exclusive of any other rights to which the Pre-Closing SPAC Law Firms or the Pre-Closing Company Law Firms are entitled whether pursuant to law, contract or otherwise.
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(b) All communications between the SPAC Group, on the one hand, and Pre-Closing SPAC Law Firms, on the other hand, relating to the negotiation, preparation, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (the “SPAC Privileged Communications”) and all communications between the Company Group, on the one hand, and Pre-Closing Company Law Firms, on the other hand, relating to the negotiation, preparation, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (the “Company Privileged Communications”) shall be deemed to be attorney-client privileged and the expectation of client confidence relating thereto shall belong solely to the SPAC Group and the Company Group, as applicable, and shall not pass to or be claimed by Company, Merger Sub, or any Group Company (in the case of SPAC Privilege Communication) or the SPAC (in the case of Company Privileged Communication). Accordingly, Company, Merger Sub, and the Group Companies shall not have access to any SPAC Privileged Communications or to the files of the Pre-Closing SPAC Law Firms and SPAC shall not have access to the Company Privileged Communications or to the files of the Pre-Closing Company Law Firms relating to the engagement of the Pre-Closing SPAC Law Firms by the SPAC Group and the Pre-Closing Company Law Firms by the Company Group, as applicable, from and after Closing.
(c) Without limiting the generality of the foregoing, from and after the Closing, (i) (A) the SPAC Group (and not the Company, Merger Sub, or any Group Company) shall be the sole holders of the attorney-client privilege with respect to the engagement of the Pre-Closing SPAC Law Firms, and none of Company, Merger Sub, or any Group Company shall be a holder thereof and (B) the Company Group (and not SPAC) shall be the sole holders of the attorney-client privilege with respect to the engagement of the Pre-Closing Company Law Firms, and SPAC shall not be a holder thereof, (ii) (A) to the extent that files of the Pre-Closing SPAC Law Firms in respect of their engagement by the SPAC Group constitute property of the client, only the SPAC Group (and not the Company, Merger Sub, nor any Group Company) shall hold such property rights and (B) to the extent that files of Pre-Closing Company Law Firms in respect of its engagement by the Company Group constitute property of the client, only the Company Group (and not SPAC) shall hold such property rights and (iii) (A) the Pre-Closing SPAC Law Firms shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to the Company, Merger Sub, or any Group Company by reason of any attorney-client relationship between the Pre-Closing SPAC Law Firms and SPAC or otherwise and (B) the Pre-Closing Company Law Firms shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to SPAC by reason of any attorney-client relationship between the Pre-Closing Company Law Firms and the Group Companies or otherwise.
(d) Notwithstanding the foregoing, in the event that a dispute arises between SPAC or its Affiliates, on the one hand, and a third party other than any of the Company Group, on the other hand, SPAC and its Affiliates may assert the attorney-client privilege to prevent disclosure of confidential communications to such third party; provided, however, that neither SPAC nor any of its Affiliates may waive such privilege without the prior written consent of Company, which consent shall not be unreasonably withheld, conditioned or delayed. In the event that SPAC or any of its Affiliates is legally required by order of a Governmental Entity or otherwise legally required to access or obtain a copy of all or a portion of the Company Privileged Communications, to the extent (x) permitted by applicable Law, and (y) advisable in the opinion of SPAC’s counsel, then SPAC shall immediately (and, in any event, within five (5) Business Days) notify the Company in writing so that the Company can seek a protective order.
(e) This Section 8.19 is intended for the benefit of, and shall be enforceable by, the SPAC Group and the Company Group. This Section 8.19 shall be irrevocable, and no term of this Section 8.19 may be amended, waived or modified, without the prior written consent of the Pre-Closing SPAC Law Firms or Pre-Closing Company Law Firms, as applicable.
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IN WITNESS WHEREOF, each of the Parties, Perception and Antara has caused this Business Combination Agreement to be duly executed on its behalf as of the day and year first above written.
| COLLECTIVE GROWTH CORPORATION | ||
| By: | /s/ Bruce Linton | |
| Name: | Bruce Linton | |
| Title: | Chief Executive Officer | |
| HATZATA MERGER SUB, INC. | ||
| By: | /s/ Omer Keilaf | |
| Name: | Omer Keilaf | |
| Title: | President | |
| INNOVIZ TECHNOLOGIES LTD. | ||
| By: | /s/ Eldar Cegla | |
| Name: | Eldar Cegla | |
| Title: | Chief Financial Officer | |
| PERCEPTION CAPITAL PARTNERS LLC | ||
| By: | /s/ James J. Sheridan III | |
| Name: | James J. Sheridan III | |
| Title: | CEO | |
| ANTARA CAPITAL LP | ||
| By: | /s/ Himanshu Gulafi | |
| Name: | Himanshu Gulafi | |
| Title: | Managing Partner | |
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Exhibit 10.1
Execution Version
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this 10th day of December, 2020, by and among Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Issuer”), and the undersigned (“Subscriber” or “you”). Defined terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Business Combination Agreement (as defined below).
WHEREAS, the Issuer, Hatzata Merger Sub, Inc., a wholly owned subsidiary of the Issuer (the “Merger Sub”) and Collective Growth Corporation, a Delaware corporation (the “Company”), will, immediately following the execution of this Subscription Agreement, enter into that certain Business Combination Agreement, dated as of December 10, 2020 (as amended, modified, supplemented or waived from time to time in accordance with its terms, the “Business Combination Agreement”), pursuant to which, inter alia, the Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of the Issuer (the “Business Combination”), on the terms and subject to the conditions set forth therein (the Business Combination, together with the other transactions contemplated by the Business Combination Agreement, the “Transactions”); and
WHEREAS, in connection with the Transactions, Subscriber desires to subscribe for and purchase from the Issuer that number of Issuer’s ordinary shares of no par value (the “Ordinary Shares”) set forth on the signature page hereto (the “Shares”) for a purchase price of $10.00 per share, for the aggregate purchase price set forth on Subscriber’s signature page hereto, which purchase price assumes that the Issuer has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00 (the “Purchase Price”), and the Issuer desires to issue and sell to Subscriber the Shares in consideration of the payment of the Purchase Price therefor by or on behalf of Subscriber to the Issuer, all on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, at the Closing, Subscriber hereby agrees to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Shares (such subscription and issuance, the “Subscription”).
2. Representations, Warranties and Agreements.
2.1 Subscriber’s Representations, Warranties and Agreements. To induce the Issuer to issue the Shares to Subscriber, Subscriber hereby represents and warrants to the Issuer and acknowledges and agrees with the Issuer as follows:
2.1.1 If Subscriber is not an individual, Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement. If Subscriber is an individual, Subscriber has the authority to enter into, deliver and perform its obligations under this Subscription Agreement.
2.1.2 If Subscriber is not an individual, this Subscription Agreement has been duly authorized, validly executed and delivered by Subscriber. If Subscriber is an individual, the signature on this Subscription Agreement is genuine, and Subscriber has legal competence and capacity to execute the same. This Subscription Agreement is enforceable against Subscriber 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.
2.1.3 The execution, delivery and performance by Subscriber of this Subscription Agreement and the consummation of the transactions contemplated herein do not and 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 Subscriber or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber or any of its subsidiaries is a party or by which Subscriber or any of its subsidiaries is bound or to which any of the property or assets of Subscriber or any of its subsidiaries is subject, which would reasonably be expected to prevent or delay Subscriber’s timely performance of its obligations under this Subscription Agreement (a “Subscriber Material Adverse Effect”), (ii) if Subscriber is not an individual, result in any violation of the provisions of the organizational documents of Subscriber or any of its subsidiaries or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its subsidiaries or any of their respective properties that would reasonably be expected to have a Subscriber Material Adverse Effect.
2.1.4 Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933 (as amended, the “Securities Act”)) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule I, (ii) is acquiring the Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is an accredited investor and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, warranties and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Shares 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 on Schedule I following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Shares.
2.1.5 Subscriber understands that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act. Subscriber understands that the Shares may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book entries representing the Shares shall contain a legend to such effect. Subscriber acknowledges that the Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. Subscriber understands and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.
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2.1.6 Subscriber understands and agrees that Subscriber is purchasing the Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants or agreements made to Subscriber by the Issuer, the Company or any of their respective affiliates, officers or directors, expressly or by implication, other than those representations, warranties, covenants and agreements expressly set forth in this Subscription Agreement, and Subscriber is not relying on any representations, warranties or covenants other than those expressly set forth in this Subscription Agreement.
2.1.7 Subscriber represents and warrants that its acquisition and holding of the Shares 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 (“ERISA”), Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
2.1.8 In making its decision to purchase the Shares, Subscriber represents that it has relied solely upon independent investigation made by Subscriber. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by anyone other than the Issuer concerning the Issuer or the Shares or the offer and sale of the Shares. Subscriber acknowledges and agrees that Subscriber has received and has had an adequate opportunity to review, such financial and other information as Subscriber deems necessary in order to make an investment decision with respect to the Shares, including with respect to the Issuer, the Company and the Transactions and made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant to the Subscriber’s investment in the Shares. Subscriber acknowledges that it has reviewed the documents made available to the Subscriber by the Company. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. Subscriber acknowledges that Goldman Sachs & Co. LLC (the “Placement Agent”) and its respective directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, the Company or the Shares or the accuracy, completeness or adequacy of any information supplied to the Subscriber by the Issuer or the Company. Subscriber acknowledges that (i) it has not relied on any statements or other information provided by the Placement Agent or any of the Placement Agent’s affiliates with respect to its decision to invest in the Shares, including information related to the Issuer, the Company, the Shares and the offer and sale of the Shares, and (ii) neither the Placement Agent nor any of its affiliates have prepared any disclosure or offering document in connection with the offer and sale of the Shares. Subscriber further acknowledges that the information provided to Subscriber is preliminary and subject to change, and 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 Subscriber’s obligation to purchase the Shares hereunder.
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2.1.9 Subscriber became aware of this offering of the Shares solely by means of direct contact from either the Placement Agent or the Issuer as a result of a pre-existing substantive relationship (as interpreted in guidance from the Securities and Exchange Commission (the “Commission”) under the Securities Act) with the Issuer or its representatives, and the Shares were offered to Subscriber solely by direct contact between Subscriber and the Placement Agent or the Issuer. Subscriber did not become aware of this offering of the Shares, nor were the Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Placement Agent has not acted as its financial advisor or fiduciary. Subscriber acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising, including methods described in section 502(c) of Regulation D under the Securities Act 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.
2.1.10 Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares. Subscriber 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 Shares, and Subscriber has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber understands and acknowledges that the purchase and sale of the Shares hereunder meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
2.1.11 Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.
2.1.12 Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of an investment in the Shares.
2.1.13 Subscriber represents and warrants that Subscriber 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) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it 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”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Shares were legally derived.
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2.1.14 If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or 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 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”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that neither Issuer, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares.
2.1.15 Subscriber 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of equity securities of the Issuer (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
2.1.16 No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Issuer as a result of the purchase and sale of Shares hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Issuer from and after the Closing as a result of the purchase and sale of Shares hereunder.
2.1.17 Subscriber has, and on each date the Purchase Price would be required to be funded to the Issuer pursuant to Section 3.1 will have, sufficient immediately available funds to pay the Purchase Price pursuant to Section 3.1.
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2.1.18 Subscriber represents that no disqualifying event described in Rule 506(d)(1)(i)-(viii) under the Securities Act (a “Disqualification Event”) is applicable to Subscriber or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Subscriber hereby agrees that it shall notify the Company promptly in writing in the event a Disqualification Event becomes applicable to Subscriber or any of its Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. For purposes of this Section 2.1.18, “Rule 506(d) Related Party” shall mean a person or entity that is a beneficial owner of Subscriber’s securities for purposes of Rule 506(d) under the Securities Act.
2.1.19 Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Company, any of its affiliates or any of its or their respective control persons, officers, directors or employees), other than the representations and warranties of the Issuer expressly set forth in this Subscription Agreement, in making its investment or decision to invest in the Issuer. Subscriber agrees that neither (i) any other Subscriber pursuant to this Subscription Agreement or any other agreement related to the private placement of shares of the Issuer’s share capital (including the controlling persons, officers, directors, partners, agents or employees of any such Subscriber) nor (ii) the Company, its affiliates or any of their or their respective affiliates’ control persons, officers, directors, partners, agents or employees, shall be liable to any other Subscriber pursuant to this Subscription Agreement or any other agreement related to the private placement of shares of the Issuer’s share capital for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares hereunder.
2.2 Issuer’s Representations, Warranties and Agreements. To induce Subscriber to purchase the Shares, the Issuer hereby represents and warrants to Subscriber and agrees with Subscriber as follows:
2.2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Israel, with 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.
2.2.2 The Shares have been duly authorized and, when issued and delivered to Subscriber against full payment for the Shares in accordance with the terms of this Subscription Agreement and registered with the Issuer’s transfer agent, the 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 amended and restated articles of association or under the Laws of the State of Israel.
2.2.3 This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity.
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2.2.4 The execution, delivery and performance of this Subscription Agreement (including compliance by the Issuer with all of the provisions hereof), issuance and sale of the Shares 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 reasonably be expected to have a material adverse effect on the legal authority of the Issuer to enter into and perform its obligations under this Subscription Agreement (a “Issuer Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.
2.2.5 As of the date of this Subscription Agreement, the authorized capital shares of the Issuer consists of (i) 204,870,390 ordinary shares of no par value (“Existing Ordinary Shares”) and (iii) 95,129,610 preferred shares of no par value (“Preferred Shares”). As of the date hereof: (i) 19,280,691 Existing Ordinary Shares are issued and outstanding and (ii) 80,038,346 Preferred Shares are issued and outstanding (consisting of (a) 23,255,810 series A convertible preferred shares of the Issuer, no par value, (b) 18,116,580 series B convertible preferred shares of the Issuer, no par value, (c) 3,454,440 series B-1 convertible preferred shares of the Issuer, no par value, (d) 32,137,295 series C convertible preferred shares of the Issuer, no par value and (e) 3,074,221 series C-1 convertible preferred shares of the Issuer, no par value).
2.2.6 Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 2.1 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Issuer to Subscriber.
2.2.7 The Issuer has provided Subscriber an opportunity to ask questions regarding the Issuer and made available to Subscriber all the information reasonably available to the Issuer that Subscriber has reasonably requested to make an investment decision with respect to the Shares.
2.2.8 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 of the Shares under the Securities Act.
2.2.9 No Disqualification Event is applicable to the Issuer or, to the Issuer's knowledge, any Issuer Covered Person (as defined below), except for a Disqualification Event as to which Rule 506(d)(2)(ii)-(iv) or (d)(3) under the Securities Act is applicable. The Issuer has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Issuer Covered Person” means, with respect to the Issuer as an “issuer” for purposes of Rule 506 under the Securities Act, any person listed in the first paragraph of Rule 506(d)(1) under the Securities Act.
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3. Settlement Date and Delivery.
3.1 Closing. The closing of the Subscription contemplated hereby (the “Closing”) shall occur on the date of (the “Closing Date”), and immediately following, the consummation of the Transactions. Upon written notice from (or on behalf of) the Issuer to Subscriber (the “Closing Notice”) at least five (5) Business Days prior to the date that the Issuer reasonably expects all conditions to the closing of the Transactions to be satisfied, Subscriber shall deliver to the Issuer within two (2) Business Days after receiving the Closing Notice, the Purchase Price for the Shares, by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice, such funds to be held by the Issuer in escrow until the Closing. Unless otherwise agreed by the Company in writing, the Issuer shall deliver the Closing Notice at least four (4) Business Days prior to the date of the Special Meeting. At the Closing, upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 3, the Issuer shall deliver to Subscriber the Shares in book entry form, in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable.
3.2 Conditions to Closing of the Issuer. The Issuer’s obligations to sell and issue the Shares at the Closing are subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:
3.2.1 Representations and Warranties Correct. The representations and warranties made by Subscriber in Section 2.1 hereof shall be true and correct in all material respects when made (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true and correct in all respects) and shall be true and correct in all material respects on and as of the Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true and correct in all respects), with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Transactions.
3.2.2 Closing of the Transactions. The Transactions set forth in the Business Combination Agreement shall have been or will be consummated substantially concurrently with the Closing.
3.2.3 Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, statute, rule or regulation enjoining or prohibiting the consummation of the Subscription.
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3.3 Conditions to Closing of Subscriber. Subscriber’s obligation to purchase the Shares at the Closing is subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:
3.3.1 Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 2.2 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, which representations and warranties shall be true and correct in all respects) on and as of the Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Transactions; provided, that in the event this condition would otherwise fail to be satisfied as a result of a breach of one or more of the representations and warranties of the Issuer contained in this Subscription Agreement and the facts underlying such breach would also cause a condition to the Issuer’s obligations under the Business Combination Agreement to fail to be satisfied, this condition shall nevertheless be deemed satisfied in the event the Company waives such condition with respect to such breach under the Business Combination Agreement.
3.3.2 Closing of the Transactions. The Transactions set forth in the Business Combination Agreement shall have been or will be consummated substantially concurrently with the Closing.
3.3.3 Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, statute, rule or regulation enjoining or prohibiting the consummation of the Subscription.
4. Registration Statement.
4.1 The Issuer agrees that, within forty-five (45) calendar days after the consummation of the Transactions (the “Filing Date”), the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and 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) the 90th calendar day (or 135th calendar day if the Commission notifies the Issuer that it will “review” the Registration Statement) following the Closing and (ii) the 10th Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, however, that the Issuer’s obligations to include the Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Shares as shall be reasonably requested by the Issuer to effect the registration of the Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. For purposes of clarification, any failure by the Issuer to file the Registration Statement by the Filing Date 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 as set forth above in this Section 4.
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4.2 In the case of the registration effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration. At its expense the Issuer shall:
4.2.1 except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Subscriber, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (i) Subscriber ceases to hold any Shares, (ii) the date all Shares held by Subscriber may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), and (iii) two years from the Effectiveness Date of the Registration Statement;
4.2.2 advise Subscriber within five (5) Business Days:
(a) when a Registration Statement or any post-effective amendment thereto has become effective;
(b) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;
(c) of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(d) 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 are not misleading 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.
Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising Subscriber of such events, provide Subscriber with any material, nonpublic information regarding the Issuer other than to the extent that providing notice to Subscriber of the occurrence of the events listed in (a) through (d) above constitutes material, nonpublic information regarding the Issuer;
4.2.3 use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;
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4.2.4 upon the occurrence of any event contemplated in Section 4.2.2(d), except for such times as the Issuer is permitted hereunder 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 therein, 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;
4.2.5 use its commercially reasonable efforts to cause all Shares to be listed on each securities exchange or market, if any, on which the Issuer’s Ordinary Shares are then listed; and
4.3 Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Subscriber not to sell under the Registration Statement or to suspend the effectiveness thereof, if the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event the Issuer’s board of directors reasonably believes, upon the advice of in-house legal counsel, would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors, upon the advice of in-house legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”); provided, however, that the Issuer may not delay or suspend the Registration Statement on more than three occasions or for more than sixty (60) consecutive calendar days, or more than one hundred and twenty (120) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Issuer of the happening of any 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, Subscriber agrees that (i) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law or subpoena. If so directed by the Issuer, Subscriber will deliver to the Issuer or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Shares shall not apply (i) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.
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5. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (i) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms and (ii) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement; provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer shall promptly notify Subscriber of the termination of the Business Combination Agreement promptly after the termination of such agreement.
6. Miscellaneous.
6.1 Further Assurances. At the Closing, the parties hereto shall execute and deliver 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.
6.1.1 Subscriber acknowledges that the Issuer, the Company, the Placement Agent and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Issuer and the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate in all material respects. Subscriber further acknowledges and agrees that the Placement Agent is a third-party beneficiary of the representations and warranties of the Subscriber contained in Section 2.1.8 and Section 2.1.9 of this Subscription Agreement to the extent such representations and warranties relate to the Placement Agent.
6.1.2 Each of the Issuer, Subscriber and the Company is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
6.1.3 The Issuer may request from Subscriber such additional information as the Issuer may deem necessary to evaluate the eligibility of Subscriber to acquire the Shares, and Subscriber shall provide such information as may be reasonably requested.
6.1.4 Subscriber shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
6.1.5 Each of Subscriber and the Issuer shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Subscription Agreement on the terms and conditions described therein no later than immediately following the consummation of the Transactions.
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6.2 Notices. Any notice or communication required or permitted hereunder 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, and 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 (3) Business Days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:
(i) if to Subscriber, to such address or addresses set forth on the signature page hereto;
(ii) if to the Issuer, to:
| Innoviz Technologies Ltd. | ||
| 2 Amal Street | ||
| Afek Industrial Park | ||
| Rosh Ha’Ayin, Israel | ||
| Attention: | Eldar Cegla | |
| Dana Nutkevich | ||
| Email: | [email protected] | |
| [email protected] | ||
| with a copy (which shall not constitute notice) to: | ||
| Latham & Watkins LLP | ||
| 99 Bishopsgate | ||
| London EC2M 3XF | ||
| United Kingdom | ||
| Attention: | Joshua Kiernan | |
| Ryan Maierson | ||
| E-mail: | [email protected] | |
| [email protected] | ||
| (iii) if to the Company, to: | ||
| Innoviz Technologies Ltd. | ||
| 2 Amal St. | ||
| Rosh HaAin | ||
| 4809202 | ||
| ISRAEL | ||
| Attention: | Eldar Cegla, Chief Financial Officer | |
| Email: | [email protected] | |
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| with copies to (which shall not constitute notice) to: | ||
| Graubard Miller | ||
| 405 Lexington Avenue, 11th Floor | ||
| New York, New York 10174 | ||
| Attention: | Jeffrey M. Gallant | |
| E-mail: | [email protected] | |
| Cassels Brock & Blackwell LLP | ||
| 40 King St W, Suite 2100 | ||
| Toronto, ON M5H 3C2, Canada | ||
| Attention: | Jonathan Sherman | |
| E-mail: | [email protected] | |
6.3 Entire Agreement. This Subscription Agreement 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 hereof, including any commitment letter entered into relating to the subject matter hereof.
6.4 Modifications and Amendments. This Subscription Agreement may not be amended, modified, supplemented or waived (i) except by an instrument in writing, signed by the party against whom enforcement of such amendment, modification, supplement or waiver is sought and (ii) without the prior written consent of the Issuer and the Company.
6.5 Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the parties hereunder (including Subscriber’s rights to purchase the Shares) may be transferred or assigned without the prior written consent of each of the other parties hereto (other than the Shares acquired hereunder, if any, and then only in accordance with this Subscription Agreement).
6.6 Benefit.
6.6.1 Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns. This Subscription Agreement shall not confer rights or remedies upon any person other than the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, the Company is an express third-party beneficiary of Section 6.4.
6.6.2 Each of the Issuer and Subscriber acknowledges and agrees that (a) this Subscription Agreement is being entered into in order to induce the Company to execute and deliver the Business Combination Agreement and without the representations, warranties, covenants and agreements of the Issuer and Subscriber hereunder, the Company would not enter into the Business Combination Agreement, (b) each representation, warranty, covenant and agreement of the Issuer and Subscriber hereunder is being made also for the benefit of the Company, and (c) the Company may directly enforce (including by an action for specific performance, injunctive relief or other equitable relief, including to cause the Purchase Price to be paid and the Closing to occur) each of the covenants and agreements of each of the Issuer and Subscriber under this Subscription Agreement.
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6.7 Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.
6.8 Consent to Jurisdiction; Waiver of Jury Trial. Each of the parties irrevocably consents to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware, provided, that if subject matter jurisdiction over the matter that is the subject of the legal proceeding is vested exclusively in the U.S. federal courts, such legal proceeding shall be heard in the U.S. District Court for the District of Delaware (together with the Court of Chancery of the State of Delaware “Chosen Courts”), in connection with any matter based upon or arising out of this Subscription Agreement. Each party hereby waives, and shall not assert as a defense in any legal dispute, that (i) such person is not personally subject to the jurisdiction of the Chosen Courts for any reason, (ii) such legal proceeding may not be brought or is not maintainable in the Chosen Courts, (iii) such person’s property is exempt or immune from execution, (iv) such legal proceeding is brought in an inconvenient forum or (v) the venue of such legal proceeding is improper. Each Party hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, further consents to service of process by nationally recognized overnight courier service guaranteeing overnight delivery, or by registered or certified mail, return receipt requested, at its address specified pursuant to Section 6.2 and waives and covenants not to assert or plead any objection which they might otherwise have to such manner of service of process. Notwithstanding the foregoing in this Section 6.8, a party may commence any action, claim, cause of action or suit in a court other than the Chosen Courts solely for the purpose of enforcing an order or judgment issued by the Chosen Courts. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT WHETHER NOW EXISTING OR HEREAFTER ARISING. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT. FURTHERMORE, NO PARTY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED.
6.9 Severability. If any provision of this Subscription Agreement shall 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 thereby and shall continue in full force and effect.
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6.10 No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Subscription Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or remedy under this Subscription Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Subscription Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
6.11 Remedies.
6.11.1 The parties agree that the Issuer and the Company would suffer irreparable damage if this Subscription Agreement was not performed or the Closing is not consummated in accordance with its specific terms or was otherwise breached and that money damages or other legal remedies would not be an adequate remedy for any such damage. It is accordingly agreed that the Issuer and the Company shall be entitled to equitable relief, including in the form of an injunction or injunctions, to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement in an appropriate court of competent jurisdiction as set forth in Section 6.8, this being in addition to any other remedy to which any party is entitled at law or in equity, including money damages. The right to specific enforcement shall include the right of the Issuer or the Company to cause Subscriber and the right of the Company to cause the Issuer to cause the transactions contemplated hereby to be consummated on the terms and subject to the conditions and limitations set forth in this Subscription Agreement. The parties hereto further agree (i) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, (ii) not to assert that a remedy of specific enforcement pursuant to this Section 6.11 is unenforceable, invalid, contrary to applicable law or inequitable for any reason and (iii) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate. In connection with any Action for which the Company is being granted an award of money damages, each of the Issuer and Subscriber agrees that such damages, to the extent payable by such party, shall include, without limitation, damages related to the consideration that is or was to be paid to the Company or its equityholders under the Business Combination Agreement and/or Subscription Agreement and such damages are not limited to an award of out-of-pocket fees and expenses related to the Business Combination Agreement and Subscription Agreement.
6.11.2 The parties acknowledge and agree that this Section 6.11 is an integral part of the transactions contemplated hereby and without that right, the parties hereto would not have entered into this Subscription Agreement.
6.11.3 In any dispute arising out of or related to this Subscription Agreement, or any other agreement, document, instrument or certificate contemplated hereby, or any transactions contemplated hereby or thereby, the applicable adjudicating body shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the dispute and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby and, if the adjudicating body determines a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the adjudicating body may award the prevailing party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the adjudication and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby or thereby.
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6.12 Survival of Representations and Warranties. All representations and warranties made by the Subscriber shall survive the Closing. For the avoidance of doubt, if for any reason the Closing does not occur immediately following the consummation of the Transactions, all representations, warranties, covenants and agreements of the parties hereunder shall survive the consummation of the Transactions and remain in full force and effect.
6.13 No Broker or Finder. Other than the Placement Agent (which has been engaged by the Issuer in connection with this Subscription), each of the Issuer and Subscriber each represents and warrants to the other parties hereto that no broker, finder or other financial consultant has acted on its behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on any other party hereto. Each of the Issuer and Subscriber agrees to indemnify and save the other parties hereto harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.
6.14 Headings and Captions. The headings and captions of the various subdivisions of this Subscription Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.15 Counterparts. This Subscription Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
6.16 Construction. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Subscription Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Subscription Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant. All references in this Subscription Agreement to numbers of shares, per share amounts and purchase prices shall be appropriately adjusted to reflect any stock split, stock dividend, stock combination, recapitalization or the like occurring after the date hereof.
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6.17 Mutual Drafting. This Subscription Agreement is the joint product of the parties hereto and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and shall not be construed for or against any party hereto.
7. Consent to Disclosure. Subscriber hereby consents to the publication and disclosure in any press release issued by the Issuer or the Company or Form 8-K filed by the Issuer or the Company with the SEC in connection with the execution and delivery of the Business Combination Agreement and the Proxy Statement (and, as and to the extent otherwise required by the federal securities laws or the SEC or any other securities authorities, any other documents or communications provided by the Issuer or the Company to any Governmental Authority or to securityholders of the Issuer or the Company) of Subscriber’s identity and beneficial ownership of Covered Shares and the nature of Subscriber’s commitments, arrangements and understandings under and relating to this Subscription Agreement and, if deemed appropriate by the Issuer or the Company, a copy of this Subscription Agreement. Subscriber will promptly provide any information reasonably requested by the Issuer or the Company for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the SEC).
8. Trust Account Waiver. Notwithstanding anything to the contrary set forth herein, Subscriber acknowledges that it has read the Investment Management Trust Agreement, dated as of April 30, 2020, by and between the Company and Continental Stock Transfer & Trust Company, a New York corporation, and understands that the Company has established the trust account described therein (the “Trust Account”) for the benefit of the Company’s public stockholders and that disbursements from the Trust Account are available only in the limited circumstances set forth therein. Subscriber further acknowledges and agrees that the Company’s sole assets consist of the cash proceeds of the Company’s initial public offering and private placements of its securities, and that substantially all of these proceeds have been deposited in the Trust Account for the benefit of its public stockholders. Accordingly, Subscriber (on behalf of itself and its affiliates) hereby waives any past, present or future claim of any kind against, and any right to access, the Trust Account, any trustee of the Trust Account and the Company to collect from the Trust Account any monies that may be owed to them by the Company or any of its affiliates for any reason whatsoever, and will not seek recourse against the Trust Account at any time for any reason whatsoever, including, without limitation, for any knowing and intentional material breach by any of the parties to this Subscription Agreement of any of its representations or warranties as set forth in this Subscription Agreement, or such party’s material breach of any of its covenants or other agreements set forth in this Subscription Agreement, which material breach constitutes, or is a consequence of, a purposeful act or failure to act by such party with the knowledge that the taking of such act or failure to take such act would cause a material breach of this Subscription Agreement. This Section 8 shall survive the termination of this Subscription Agreement for any reason.
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9. [Waiver of Sovereign Immunity. With respect to the liability of Subscriber to perform its obligations under this Subscription Agreement, with respect to itself or its property, Subscriber:
9.1 agrees that, for purposes of the doctrine of sovereign immunity, the execution, delivery and performance by it of this Subscription Agreement constitutes private and commercial acts done for private and commercial purposes;
9.2 agrees that, should any proceedings be brought against it or its assets in any jurisdiction in relation to this Subscription Agreement or any transaction contemplated by this Subscription Agreement in accordance with the terms hereof, Subscriber is not entitled to any immunity on the basis of sovereignty in respect of its obligations under this Subscription Agreement, and no immunity from such proceedings (including, without limitation, immunity from service of process from suit, from the jurisdiction of any court, from an order or injunction of such court or the enforcement of same against its assets) shall be claimed by or on behalf of such party or with respect to its assets;
9.3 waives, in any such proceedings, to the fullest extent permitted by law, any right of immunity which it or any of its assets now has or may acquire in the future in any jurisdiction;
9.4 subject to the terms and conditions hereof, consents generally in respect of the enforcement of any judgment or award against it in any such proceedings to the giving of any relief or the issue of any process in any jurisdiction in connection with such proceedings (including, without limitation, pre-judgment attachment, post judgment attachment, the making, enforcement or execution against or in respect of any assets whatsoever irrespective of their use or intended use of any order or judgment that may be made or given in connection therewith); and
9.5 specifies that, for the purposes of this provision, “assets” shall be taken as excluding “premises of the mission” as defined in the Vienna Convention on Diplomatic Relations signed at Vienna, April 18, 1961, “consular premises” as defined in the Vienna Convention on Consular Relations signed in 1963, and military property or military assets or property of the Investor.]1
[Signature Page Follows]
| 1 | Note to Draft: To be included for all sovereign wealth or similar investors. |
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IN WITNESS WHEREOF, each of the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| ISSUER: | ||
| innoviz Technologies ltd. | ||
| By: | ||
| Name: | ||
| Title: | ||
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| Accepted and agreed this day of December, 2020. | ||||
| SUBSCRIBER: | ||||
| Signature of Subscriber: | Signature of Joint Subscriber, if applicable: | |||
| By: | By: | |||
| Name: | Name: | |||
| Title: | Title: | |||
| Date: December , 2020 | ||||
| Name of Subscriber: | Name of Joint Subscriber, if applicable: | |||
| (Please print. Please indicate name and capacity of person signing above) | (Please Print. Please indicate name and capacity of person signing above) | |||
| Name in which securities are to be registered (if different from the name of Subscriber listed directly above): __________________ | ||||
| Email Address: _______________________ | ||||
| If there are joint investors, please check one: | ||||
| ☐ Joint Tenants with Rights of Survivorship | ||||
| ☐ Tenants-in-Common | ||||
| ☐ Community Property | ||||
| Subscriber’s EIN: __________________________ | Joint Subscriber’s EIN: ________________ | |||
| Business Address-Street: | Mailing Address-Street (if different): | |||
| City, State, Zip: | City, State, Zip: | |||
| Attn: | Attn: | |||
| Telephone No.: | Telephone No.: | |||
| Facsimile No.: | Facsimile No.: | |||
| Aggregate Number of Shares subscribed for: | ||||
| __________________________ | ||||
Aggregate Purchase Price: $______________
You must pay the Purchase Price by wire transfer of U.S. dollars in immediately available funds, to be held in escrow until the Closing, to the account specified by the Issuer in the Closing Notice. The aggregate Purchase Price assumes that the Issuer has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00.
SCHEDULE I
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the applicable subparagraphs): |
| 1. | ☐ | We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB. |
| 2. | ☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
*** OR ***
| B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs): |
| 1. | ☐ | We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.” |
| 2. | ☐ | We are not a natural person. |
*** AND ***
| C. | AFFILIATE STATUS (Please check the applicable box) SUBSCRIBER: |
| ☐ | is: |
| ☐ | is not: |
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This page should be completed by Subscriber
and constitutes a part of the Subscription Agreement.
The Subscriber is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to the Subscriber (Please check the applicable subparagraphs):
☐ The Subscriber is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and:
☐ is an insurance company as defined in section 2(a)(13) of the Securities Act;
☐ is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;
☐ is a Small Business Investment Company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);
☐ is a 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;
☐ is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);
☐ is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans 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, of (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;
☐ is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);
☐ is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act, or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust; or
☐ is an investment adviser registered under the Investment Advisers Act;
☐ The Subscriber is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the Subscriber;
☐ The Subscriber is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;
☐ The Subscriber is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies2 which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Subscriber or are part of such family of investment companies;
☐ The Subscriber is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or
☐ The Subscriber is a as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a US bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.
2 “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided that, (a) each series of a series company (as defined in Rule 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor)
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. Subscriber has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ☐ | Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; |
| ☐ | Any broker or dealer registered pursuant to section 15 of the Exchange Act; |
| ☐ | Any insurance company as defined in section 2(a)(13) of the Securities Act; |
| ☐ | Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a)(48) of the Investment Company Act; |
| ☐ | Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act; |
| ☐ | 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 $5,000,000; |
| ☐ | Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”; |
| ☐ | Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act; |
| ☐ | Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000; |
| ☐ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
| ☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; |
| ☐ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; |
| ☐ | Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D under the Securities Act; or |
| ☐ | Any entity in which all of the equity owners are “accredited investors.” |
Exhibit 10.2
CONFIDENTIALITY AND LOCKUP AGREEMENT
This Confidentiality and Lockup Agreement is dated as of December 10, 2020 and is between Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company”), and each of the shareholder parties identified on Exhibit A hereto and the other persons who enter into a joinder to this Agreement substantially in the form of Exhibit B hereto with the Company in order to become a “Shareholder Party” for purposes of this Agreement (collectively, the “Shareholder Parties”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Business Combination Agreement (as defined below).
BACKGROUND:
WHEREAS, the Shareholder Parties own or will own equity interests in Collective Growth Corporation, a Delaware corporation (“SPAC”), and/or the Company;
WHEREAS, pursuant to that certain Business Combination Agreement, dated as of December 10, 2020 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, SPAC and Hatzata Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger”); and
WHEREAS, in connection with the Merger and effective upon the consummation thereof, the parties hereto wish to set forth herein certain understandings between such parties with respect to confidentiality and restrictions on transfer of equity interests in the Company.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
INTRODUCTORY MATTERS
1.1 Defined Terms. In addition to the terms defined elsewhere herein, the following terms have the following meanings when used herein with initial capital letters:
“Agreement” means this Confidentiality and Lockup Agreement, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof.
“Antara” means Antara Capital LP, a Delaware limited partnership.
“Company” has the meaning set forth in the Preamble.
“Company Ordinary Shares” means ordinary shares of no par value of the Company.
“Confidential Information” means any information concerning the Company or its Subsidiaries that is furnished after the date of this Agreement by or on behalf of the Company or its designated representatives to a Shareholder Party or its designated representatives, together with any notes, analyses, reports, models, compilations, studies, documents, records or extracts thereof containing, based upon or derived from such information, in whole or in part; provided, however, that Confidential Information does not include information:
(i) that is generally known to the public at the time of disclosure or becomes generally known without violation of this Agreement by the receiving Shareholder Party or its designated representatives;
(ii) that is in the Shareholder Party’s possession or the possession of the Shareholder Party’s representatives at the time of disclosure otherwise than as a result of Shareholder Party’s or its designated representatives’ breach of any legal or fiduciary obligation of confidentiality owed to the Company or its affiliates;
(iii) that becomes known to the receiving Shareholder Party or its designated representatives through disclosure by sources, other than the Company, provided that such sources are not known by the receiving Shareholder Party to be bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to, the Company or its affiliates with respect to such information;
(iv) that is independently developed by the receiving Shareholder Party or its designated representatives without use of or reference to the Confidential Information, as is clearly provable by competent evidence in their possession; or
(v) that the receiving Shareholder Party or its designated representatives is required, in the good faith determination of such receiving Shareholder Party or designated representative, to disclose by applicable Law, regulation or legal process, provided that such receiving Shareholder Party or designated representative takes reasonable steps to minimize the extent of any such required disclosure, discloses only that portion of the Confidential Information that such Shareholder Party’s legal counsel advises is legally required to be disclosed, and, if permissible, provides the Company with the opportunity to seek a protective order or other appropriate remedy to prevent such disclosure, provided further that no such steps to minimize disclosure shall be required where disclosure is made in connection with a routine audit or examination by a bank examiner or auditor and such audit or examination does not specifically reference the Company or this Agreement.
“covered shares” has the meaning set forth in Section 3.1.
“designated representatives” means, with respect to a Shareholder Party, (a) its and its Affiliates’ directors, managers, officers, attorneys, accountants, consultants, insurers, financing sources and other advisors in connection with such Shareholder Party’s investment in the Company and (b) any of such Shareholder Party’s or their respective Affiliates’ partners, members, shareholders, directors, managers, officers, other fiduciaries, employees or agents in the ordinary course of business, so long as such Person has agreed to maintain the confidentiality of the information relating to the Company provided to it.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.
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“immediate family” has the meaning set forth in Section 3.1(b).
“Lock-Up Period” has the meaning set forth in Section 3.1(a).
“Magna” means Magna International Inc.
“Non-Recourse Party” means any past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any named party to this Agreement and any past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any of the foregoing.
“Perception” means Perception Capital Corp., a Delaware corporation.
“Permitted Transferees” means with respect to a Shareholder Party, a transferee of shares that agrees to become party to, and to be bound to the same extent as its Transferor by the terms of, this Agreement.
“Put Option Agreement” means that certain Put Option Agreement, dated as of December 10, 2020. between the Company and Antara.
“shares” means Company Ordinary Shares received by the Sponsors, Perception, Antara, and members of management of the Company pursuant to the Business Combination Agreement and the Company Ordinary Shares held by the other Shareholder Parties immediately following the Merger.
“Sponsors” means Shipwright SPAC I, LLC, a Delaware limited liability company, The Linton Family Trust, GWW LLC, a Delaware imited liability company, Tim Saunders, Jonathan Sherman, 2702933 Ontario Inc., an Ontario corporation, 2702932 Ontario Inc., an Ontario corporation, and Wilson Kello.
“Shareholder Parties” has the meaning set forth in the Preamble.
1.2 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Unless the context otherwise requires: (a) ”or” is disjunctive but not exclusive, (b) words in the singular include the plural, and in the plural include the singular, and (c) the words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to sections of this Agreement unless otherwise specified.
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ARTICLE II
CONFIDENTIALITY
2.1 Confidentiality. Each Shareholder Party agrees that it will, and will direct its designated representatives to, keep confidential and not disclose any Confidential Information; provided, however, that the Sponsors may disclose Confidential Information (a) to their respective designated representatives and (b) as the Company may otherwise consent in writing; provided, further, however, that each Shareholder Party agrees to be responsible for any breaches of this Article II by such Shareholder Party’s designated representatives and agrees, at its sole expense, to take commercially reasonable measures (including, but not limited to, court proceedings) to restrain its designated representatives from prohibited or unauthorized disclosure of the Confidential Information.
ARTICLE III
LOCKUP
3.1 Lockup. (a) During the period beginning on the effective time of the Merger and continuing to and including the date that is 180 days after the Closing (in each case, the “Lock-Up Period”), each Shareholder Party agrees not to, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares, or any options or warrants to purchase any shares, or any securities convertible into, exchangeable for or that represent the right to receive shares, or any interest in any of the foregoing, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the U.S. Securities and Exchange Commission (collectively, the “covered shares”). The foregoing restriction is expressly agreed to preclude such Shareholder Parties from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the covered shares even if such covered shares would be disposed of by someone other than such Shareholder Parties. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the covered shares or with respect to any security that includes, relates to, or derives any significant part of its value from such covered shares.
(b) Notwithstanding the foregoing, a Shareholder Party may transfer or dispose of its shares following the Closing (i) by will or intestacy, (ii) as a bona fide gift or gifts, including to charitable organizations, (iii) to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Section 3.1, “immediate family” shall mean any relationship by blood, current or former marriage or adoption, not more remote than first cousin), (iv) to any immediate family member or other dependent, (v) as a distribution to limited partners, members or shareholders of such Shareholder Party, (vi) to its Affiliated investment fund. other Affiliated entity controlled by, any account managed by, or designee of, such Shareholder Party or its or their Affiliates, (vii) to a nominee or custodian of a Person to whom a disposition or transfer would be permissible under clauses (i) through (vi) above, (viii) pursuant to an order or decree of a Governmental Entity, (ix) to the Company or its Subsidiary or parent entities upon death, disability or termination of employment, in each case, of such holder, (x) pursuant to a bona fide tender offer, merger, consolidation or other similar transaction in each case made to all holders of the shares involving a Change of Control (as defined below) (including negotiating and entering into an agreement providing for any such transaction), provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, such Shareholder Party’s shares shall remain subject to the provisions of this Section 3.1, (xi) to the Company (1) pursuant to the exercise, in each case on a “cashless” or “net exercise” basis, of any option to purchase shares granted by the Company pursuant to any employee benefit plans or arrangements which are set to expire during the Lock-Up Period, where any shares received by the undersigned upon any such exercise will be subject to the terms of this Section 3.1, or (2) for the purpose of satisfying any withholding taxes (including estimated taxes) due as a result of the exercise of any option to purchase shares or the vesting of any restricted stock awards granted by the Company pursuant to employee benefit plans or arrangements which are set to expire or automatically vest during the Lock-Up Period, in each case on a “cashless” or “net exercise” basis, where any shares received by such Shareholder Party upon any such exercise or vesting will be subject to the terms of this Section 3.1, or (xii) in any transaction relating to Ordinary Shares acquired by the undersigned in open market transactions; or (xiii) with the prior written consent of the Company; provided that:
(1) in the case of each transfer or distribution pursuant to clauses (ii) through (vii) above, (a) each donee, trustee, distributee or transferee, as the case may be, agrees to be bound in writing by the restrictions set forth in this Section 3.1; and (b) any such transfer or distribution shall not involve a disposition for value, other than with respect to any such transfer or distribution for which the transferor or distributor receives (x) equity interests of such transferee or (y) such transferee’s interests in the transferor;
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(2) in the case of each transfer or distribution pursuant to clauses (ii) through (vii) above, if any public reports or filings (including filings under Section 16(a) of the Exchange Act) reporting a reduction in beneficial ownership of shares shall be required or shall be voluntarily made during the Lock-Up Period (x) such Shareholder Party shall provide the Company prior written notice informing them of such report or filing and (y) such report or filing shall disclose that such donee, trustee, distributee or transferee, as the case may be, agrees to be bound in writing by the restrictions set forth herein; and
(3) for purposes of clause (x) above, “Change of Control” shall mean the transfer to or acquisition by (whether by tender offer, merger, consolidation, division or other similar transaction), in one transaction or a series of related transactions, a Person or group of Affiliated Persons (other than an underwriter pursuant to an offering), of the Company’s voting securities if, after such transfer or acquisition, such Person or group of Affiliated Persons would Beneficially Own more than 50% of the outstanding voting securities of the Company (or the surviving entity).
(c) Each Shareholder Party shall be permitted to enter into a trading plan established in accordance with Rule 10b5-1 under the Exchange Act during the applicable Lock-Up Period so long as no transfers or other dispositions of such Shareholder Party’s shares in contravention of Section 3.1 are effected prior to the expiration of the applicable Lock-Up Period.
(d) Each Shareholder Party also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the covered shares except in compliance with the foregoing restrictions and to the addition of a legend to such Shareholder Party’s shares describing the foregoing restrictions.
(e) (x) Any Ordinary Shares acquired by the undersigned pursuant to any subscription agreement executed in connection with the PIPE Financing, (y) in the case of Magna, any Ordinary Shares acquired by Magna pursuant to a warrant of the Company, and (z) in the case of Antara, any Ordinary Shares acquired by Antara pursuant to Section 2 of the Put Option Agreement, shall not be subject to the lockup provisions of this Section 3; provided that, for the avoidance of doubt, the Antara Ordinary Shares and the Antara Warrants as defined in and issuable pursuant to Section 3 of the Put Option Agreement shall be subject to the provisions of this Agreement.
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ARTICLE IV
GENERAL PROVISIONS
4.1 Termination. Subject to Section 4.13 or the early termination of any provision as a result of an amendment to this Agreement agreed to by the Company Board and the Shareholder Parties, as provided under Section 4.3, this Agreement shall not terminate with respect to a Shareholder Party or its Permitted Transferees until the expiration of the Lock-Up Period.
4.2 Notices. All notices, requests, claims, demands and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
If to the Company, to:
Innoviz Technologies Ltd.
2 Amal St.
Rosh HaAin
4809202, Israel
| Attention: | Eldar Cegla, Chief Financial Officer |
| Email: | [email protected] |
with copies (which shall not constitute notice) to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
| Attention: | Ryan Maierson |
| E-mail: | [email protected] |
Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
United Kingdom
| Attention: | Joshua Kiernan |
| E-mail: | [email protected] |
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If to any Shareholder Party, to such address indicated on the Company’s records with respect to such Shareholder Party or to such other address or addresses as such Shareholder Party may from time to time designate in writing.
4.3 Amendment; Waiver. (a) The terms and provisions of this Agreement may be amended or modified in whole or in part only by a duly authorized agreement in writing executed by the Company and Shareholder Parties holding a majority of the shares then held by the Shareholder Parties in the aggregate as to which this Agreement has not been terminated pursuant to Section 4.1. Prior to the consummation of the Merger, this Agreement may not be amended without the prior written consent of the Company.
(b) Except as expressly set forth in this Agreement, neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
(c) No party shall be deemed to have waived any claim arising out of this Agreement, or any right, remedy, power or privilege under this Agreement, unless the waiver of such claim, right, remedy, power or privilege is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
(d) Any party hereto may unilaterally waive any of its rights hereunder in a signed writing delivered to the Company.
4.4 Further Assurances. The parties hereto will sign such further documents, cause such meetings to be held, resolutions passed, exercise their votes and do and perform and cause to be done such further acts and things necessary, proper or advisable in order to give full effect to this Agreement and every provision hereof. To the fullest extent permitted by Law, the Company shall not directly or indirectly take any action that is intended to, or would reasonably be expected to result in, the Shareholder Parties being deprived of the rights contemplated by this Agreement.
4.5 Assignment. No party shall assign, delegate, or otherwise transfer this Agreement or any part hereof without the prior written consent of the other parties hereto. 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. Any attempted assignment in violation of the terms of this Section 4.5 shall be null and void, ab initio.
4.6 Third Parties. Except as provided for in Article II, Article III and Article IV with respect to any Non-Recourse Party, nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the parties hereto, any right or remedies under or by reason of this Agreement.
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4.7 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
4.8 Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction, any state or federal court sitting in the Borough of Manhattan, State of New York, New York County), for the purposes of any Proceeding (as defined in the Business Combination Agreement), claim, demand, action or cause of action (a) arising under this Agreement or (b) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding, claim, demand, action or cause of action against such Party (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement, (A) any claim that such party is not personally subject to the jurisdiction of the courts as described in this Section 4.8 for any reason, (B) that such party or such party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such party in or by such courts. Each party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 4.8 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
(b) THE PARTIES HERETO EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY DOCUMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.8.
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4.9 Specific Performance. The parties hereto each agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (a) the parties shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, without proof of damages, prior to the valid termination of this Agreement, and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of the parties would have entered into this Agreement. Each party agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other parties have an adequate remedy at law or that an award of specific performance is not an appropriate remedy for any reason at law or equity. The parties hereto each acknowledge and agree that any party seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 4.9 shall not be required to provide any bond or other security in connection with any such injunction.
4.10 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable Law, all other provisions of this Agreement shall 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 materially adverse to any party. Upon such determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable Law, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
4.11 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. No representations, warranties, covenants, understandings, agreements, oral or otherwise, with respect to the subject matter contemplated by this Agreement exist between the parties hereto except as expressly set forth or referenced in this Agreement.
4.12 Captions; Counterparts. The headings, subheadings and captions contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement and any amendment hereto may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any amendment hereto by electronic means, including docusign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement or any amendment hereto.
4.13 Effectiveness; Termination if Business Combination Agreement is Terminated. This Agreement shall be valid and enforceable as of the date of this Agreement and may not be revoked by any party hereto; provided that the provisions herein (other than this Article IV) shall not be effective until the consummation of the Merger. In the event the Business Combination Agreement is terminated in accordance with its terms, this Agreement shall automatically terminate and be of no further force or effect.
4.14 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 hereto, and then only with respect to the specific obligations set forth herein with respect to such party. Except to the extent a named party to this Agreement (and then only to the extent of the specific obligations undertaken by such named party in this Agreement), no Non-Recourse Party 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 the parties to this Agreement or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Confidentiality and Lockup Agreement on the day and year first above written.
| Innoviz Technologies Ltd. | |||
| By: | /s/ Eldar Cegla | ||
| Name: | Eldar Cegla | ||
| Title: | Chief Financial Officer | ||
| Perception Capital Corp. | |||
| By: | /s/ James J. Sheridan III | ||
| Name: | James J. Sheridan III | ||
| Title: | CEO | ||
| Antara Capital LP | |||
| By: | /s/ Himanshu Gulati | ||
| Name: | Himanshu Gulati | ||
| Title: | Managing Partner | ||
| Shipwright SPAC I, LLC | |||
| By: | /s/ Andrew Townsend | ||
| Name: | Andrew Townsend | ||
| Title: | Managing Member | ||
| THE LINTON FAMILY TRUST (2040) | |||
| By: | /s/ Bruce Linton | ||
| Name: | Bruce Linton | ||
| Title: | Trustee | ||
| GWW LLC | |||
| By: | /s/ Geoffrey W. Whaling | ||
| Name: | Geoffrey W. Whaling | ||
| Title: | Member | ||
[Signature Page to Confidentiality and Lockup Agreement]
| /s/ Tim Saunders | |||
| Tim Saunders | |||
| /s/ Jonathan Sherman | |||
| Jonathan Sherman | |||
| /s/ Wilson Kello | |||
| Wilson Kello | |||
| 2702933 ontario inc. | |||
| By: | /s/ Jonathan Sherman | ||
| Name: | Jonathan Sherman | ||
| Title: | Director | ||
| 2702932 ontario inc. | |||
| By: | /s/ Jamie Litchen | ||
| Name: | Jamie Litchen | ||
| Title: | Director | ||
| /s/ Omer Keilaf | |||
| Omer Keilaf | |||
| /s/ Oren Rosenzweig | |||
| Oren Rosenzweig | |||
| /s/ Oren Buskila | |||
| Oren Buskila | |||
| /s/ Zohar Zisapel | |||
| Zohar Zisapel | |||
[Signature Page to Confidentiality and Lockup Agreement]
| MICHAEL AND KILL HOLDINGS (93) LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| LOMSHA LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| MAGMA VENTURE CAPITAL IV L.P. | |||
| By: | /s/ Yahal Zilka | ||
| Name: | Yahal Zilka | ||
| Title: | |||
| MAGMA VENTURE CAPITAL IV CEO FUND LP | |||
| By: | /s/ Yahal Zilka | ||
| Name: | Yahal Zilka | ||
| Title: | |||
| VERTEX IV (C.I.) FUND, L.P. | |||
| By: | /s/ Yoram Oron | ||
| Name: | Yoram Oron | ||
| Title: | General Partner | ||
| By: | /s/ Ran Gartenberg | ||
| Name: | Ran Gartenberg | ||
| Title: | CFO & General Partner | ||
[Signature Page to Confidentiality and Lockup Agreement]
| AMITI FUND II, L.P. | |||
| By: | /s/ Ben Rabinowitz | ||
| Name: | Ben Rabinowitz | ||
| Title: | |||
| AMITI INNOVIZ, L.P. | |||
| By: | /s/ Ben Rabinowitz | ||
| Name: | Ben Rabinowitz | ||
| Title: | |||
| DELEK MOTORS LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| MAGNA US INVESTMENTS, INC. | |||
| By: | /s/ Seetarama Swamy Kotagiri | ||
| Name: | Seetarama Swamy Kotagiri | ||
| Title: | |||
| By: | /s/ Bruce Cluney | ||
| Name: | Bruce Cluney | ||
| Title: | Executive Vice-President | ||
| INTEGRATED DYNAMIC ENTERPRISES LIMITED | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
[Signature Page to Confidentiality and Lockup Agreement]
| INTEGRATED DYNAMIC ENTERPRISES A LIMITED | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| ALLIED HOLDINGS LTD. | |||
| By: | /s/ Raanan Weissel | ||
| Name: | Raanan Weissel | ||
| Title: | Chief Financial Officer | ||
| By: | /s/ Yigal Schreiber | ||
| Name: | Yigal Schreiber | ||
| Title: | Chief Executive Officer | ||
| SB GLOBAL CHAMP FUND | |||
| By: | /s/ Benjamin Eli Weiss | ||
| Name: | Benjamin Eli Weiss | ||
| Title: | Venture Partner | ||
| SB NEXT MEDIA INNOVATION FUND | |||
| By: | /s/ Benjamin Eli Weiss | ||
| Name: | Benjamin Eli Weiss | ||
| Title: | Venture Partner | ||
| GLORY VENTURES INVESTMENTS FUND II L.P. | |||
| By: | /s/ Yang Craig | ||
| Name: | Yang Craig | ||
| Title: | |||
[Signature Page to Confidentiality and Lockup Agreement]
| ROBOLUTION CAPITAL I | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| SINO-BLR INDUSTRIAL INVESTMENT FUND, L.P. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PENSION | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| TZAVA HAKEVA SAVING FUND – PROVIDENT FUNDS MANAGEMENT COMPANY LTD. SOLELY ON BEHALF OF TZVA HAKEVA SAVINGS FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Confidentiality and Lockup Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL INSURANCE COMPANY LTD. (PARTICIPATING FUNDS) | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| LEATID PENSION FUNDS MANAGEMENT COMPANY LTD. SOLELY ON BEHALF OF ATIDIT PENSION FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Confidentiality and Lockup Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL GENERAL PLAN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL STUDY FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Confidentiality and Lockup Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT FOR CHILDREN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT FOR CHILDREN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL INSURANCE COMPANY LTD. (NOSTRO) | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Confidentiality and Lockup Agreement]
| THE PHOENIX INSURANCE COMPANY LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| THE PHOENIX INSURANCE COMPANY LTD. (NOSTRO) | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| THE PHOENIX EXCELLENCE PENSION & PROVIDENT FUND LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| ALLIANCE ONE INVESTMENT SINGAPORE PTE LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| GLORY VENTURES INVESTMENT L.P. | |||
| By: | /s/ Yang Greg | ||
| Name: | Yang Greg | ||
| Title: | |||
[Signature Page to Confidentiality and Lockup Agreement]
| CHAMPEL INNOVIZ LIMITED | |||
| By: | /s/ Amir Weitmann | ||
| Name: | Amir Weitmann | ||
| Title: | Director | ||
| SHEFA CAPITAL – INNOVIZ OPPORTUNITY FUND, L.P. | |||
| By Shefa Capital General Partner, L.P., Its General Partner | |||
| By Shefa Capital General Partner, Ltd., Its General Partner | |||
| By: | /s/ Ranan Gkobman | ||
| Name: | Ranan Gkobman | ||
| Title: | Managing Partner | ||
[Signature Page to Confidentiality and Lockup Agreement]
Exhibit A
Perception Capital Corp.
Antara Capital LP
Shipwright SPAC I, LLC
The Linton Family Trust
GWW LLC
Tim Saunders
Jonathan Sherman
2702933 Ontario Inc.
2802932 Ontario Inc.
Wilson Kello
Omer Keilaf
Oren Rosenzweig
Oren Buskila
Zohar Zisapel
Champel Innoviz Limited
Shefa Capital – Innoviz Opportunity Fund, L.P.
Magma Venture Capital IV LP
Magma Venture Capital IV CEO Fund LP
Vertex IV (C.I.) Fund, L.P.
Amiti Fund II, L.P.
Amiti Innoviz, L.P.
Delek Motors Ltd.
Michael and Klil Holdings (93) Ltd.
Lomsha Ltd.
Magna US Investments, Inc.
Allied Holdings Ltd.
Integrated Dynamic Enterprises Limited
Integrated Dynamic Enterprises A Limited
Robolution Capital 1
SB Global Champ Fund
SB Next Media Innovation Fund
SINO-BLR Industrial Investment Fund, L.P.
Harel Pension and Provident Ltd. solely on behalf of Harel Pension
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Fund
LeAtid Pension Funds Management Company Ltd. solely on behalf of Atidit Pension Fund
Harel Pension and Provident Ltd. solely on behalf of Harel Study Fund
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Investment For Children
Tzava Hakeva Saving Fund - Provident Funds Management Company Ltd. solely on behalf of Tzva Hakeva Savings Fund
Harel Insurance Company Ltd. (Participating Funds)
Harel Pension and Provident Ltd. solely on behalf of Harel General Plan
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Investment
Harel Insurance Company Ltd. (Nostro)
The Phoenix Insurance Company Ltd.
The Phoenix Excellence Pension & Provident Fund Ltd.
The Phoenix Insurance Company Ltd. (Nostro)
Alliance One Investment Singapore PTE Ltd.
Glory Ventures Investments L.P.
Glory Ventures Investment Fund II L.P.
Exhibit B
FORM OF JOINDER TO CONFIDENTIALITY AND LOCKUP AGREEMENT
[______], 20__
Reference is made to the Confidentiality and Lockup Agreement, dated as of [ ● ], by and among Innoviz Technologies Ltd. (the “Company”) and the other Shareholder Parties (as defined therein) from time to time party thereto (as amended from time to time, the “Confidentiality and Lockup Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Confidentiality and Lockup Agreement.
Each of the Company and each undersigned holder of ordinary shares of the Company (each, a “New Shareholder Party”) agrees that this Joinder to the Confidentiality and Lockup Agreement (this “Joinder”) is being executed and delivered for good and valuable consideration.
Each undersigned New Shareholder Party hereby agrees to and does become party to the Confidentiality and Lockup Agreement as a Shareholder Party. This Joinder shall serve as a counterpart signature page to the Confidentiality and Lockup Agreement and by executing below each undersigned New Shareholder Party is deemed to have executed the Confidentiality and Lockup Agreement with the same force and effect as if originally named a party thereto.
This Joinder may be executed in multiple counterparts, including by means of facsimile or electronic signature, each of which shall be deemed an original, but all of which together shall constitute the same instrument.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the undersigned have duly executed this Joinder as of the date first set forth above.
| [NEW SHAREHOLDER PARTY] | |||
| By: | |||
| Name: | |||
| Title | |||
| Innoviz Technologies Ltd. | |||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of December 10, 2020, is made and entered into by and among:
(i) Innoviz Technologies Ltd., a company organized under the laws of Israel (the “Company”);
(ii) the investors designated on Schedule A hereto as Other Equityholders that will receive Ordinary Shares (as defined below) pursuant to the transactions contemplated by the Business Combination Agreement (as defined below) (the “Other Equityholders”);
(iii) the equityholders of Collective Growth Corporation, a Delaware corporation (the “SPAC”), and designated on Schedule B as SPAC Holders that will receive Ordinary Shares (as defined below) pursuant to the transactions contemplated by the Business Combination Agreement (as defined below) (the “SPAC Holders”); and
(iv) the equityholders of Innoviz designated on Schedule C hereto as Innoviz Equityholders (collectively, the “Innoviz Equityholders” and, together with the SPAC Holders and Other Equityholders and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Holder” and collectively the “Holders”).
RECITALS
WHEREAS, pursuant to that certain Business Combination Agreement, dated as of December 10, 2020 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, SPAC and Hatzata Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger”); and
WHEREAS, in connection with the consummation of the transactions described above (the “Transactions”), the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to the Registrable Securities (as defined below) on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Article
I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer of the Company or the Board, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
“Action” means any claim, action, suit, audit, examination, assessment, arbitration, mediation or inquiry, or any proceeding or investigation, by or before any Governmental Authority.
“Agreement” shall have the meaning given in the Preamble hereto.
“Board” means the board of directors of the Company.
“Block Trade” shall have the meaning given in Section 2.4.1.
“Business Combination Agreement” shall have the meaning given in the Recitals hereto.
“Closing” shall have the meaning given in the Business Combination Agreement.
“Closing Date” shall have the meaning given in the Business Combination Agreement.
“Commission” shall mean the Securities and Exchange Commission.
“Company” shall have the meaning given in the Recitals hereto and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.
“Demanding Holder” shall have the meaning given in Section 2.1.4.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“FINRA” shall mean the Financial Industry Regulatory Authority Inc.
“Form F-1 Shelf” shall have the meaning given in Section 2.1.1.
“Form F-3 Shelf” shall have the meaning given in Section 2.1.1.
“Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency (which for the purposes of this Agreement shall include FINRA and the Commission), governmental commission, department, board, bureau, agency or instrumentality, court or tribunal.
“Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority.
“Holder Information” shall have the meaning given in Section 4.1.2.
“Holders” shall have the meaning given in the Preamble hereto, for so long as such person or entity holds any Registrable Securities.
“Innoviz Equityholders” shall have the meaning given in the Preamble hereto.
“Law” means any statute, law, ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
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“Lockup Agreement” shall mean the Confidentiality and Lockup Agreement, dated as of December 10, 2020, by and among the Company and the other parties thereto, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Lock-Up Period” shall have the meaning given in the Lockup Agreement.
“Maximum Number of Securities” shall have the meaning given in Section 2.1.5.
“Merger” shall have the meaning given in the Recitals hereto.
“Minimum Takedown Threshold” shall have the meaning given in Section 2.1.4.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus, (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.
“Ordinary Shares” shall mean the ordinary shares of the Company, no par value.
“Permitted Transferees” shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the Lockup Period pursuant to the Lockup Agreement.
“Piggyback Registration” shall have the meaning given in Section 2.2.1.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” shall mean (a) any outstanding Ordinary Shares held by a Holder immediately following the Closing (including Ordinary Shares distributable pursuant to the Business Combination Agreement), (b) any Ordinary Shares that may be acquired by Holders upon the exercise of a warrant or other right to acquire Ordinary Shares held by a Holder immediately following the Closing, (c) any Ordinary Shares or warrants to purchase Ordinary Shares (including any Ordinary Shares issued or issuable upon the exercise of any such warrant) of the Company otherwise acquired or owned by a Holder following the date hereof to the extent that such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of the Company and for so long as the Holder may be deemed to be an Underwriter pursuant to Rule 145(c), and (d) any other equity security of the Company or any of its subsidiaries issued or issuable with respect to any securities referenced in clause (a), (b) or (c) above by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable Holder; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act (but with no volume or other restrictions or limitations including as to manner or timing of sale); and (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
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“Registration” shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean the expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and fees of any national securities exchange on which the Ordinary Shares are then listed;
(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of outside counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses of one legal counsel selected by the majority-in-interest of the Demanding Holders in an Underwritten Offering (not to exceed $35,000 without the consent of the Company).
“Registration Statement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holders” shall have the meaning given in Section 2.1.5.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf” shall mean the Form F-1 Shelf, the Form F-3 Shelf or any Subsequent Shelf Registration, as the case may be.
“Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.
“SPAC Holders” shall have the meaning given in the Preamble.
“Subsequent Shelf Registration” shall have the meaning given in Section 2.1.2.
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“Transactions” shall have the meaning given in the Recitals hereto.
“Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer’s market-making activities.
“Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten Shelf Takedown” shall have the meaning given in Section 2.1.4.
“Withdrawal Notice” shall have the meaning given in Section 2.1.6.
Article
II
REGISTRATIONS AND OFFERINGS
2.1 Shelf Registration.
2.1.1 Filing. The Company shall file within sixty (60) days after the Closing Date, and use commercially reasonable efforts to cause to be declared effective as soon as practicable thereafter, a Registration Statement for a Shelf Registration on Form F-1 (the “Form F-1 Shelf”) or, if the Company is eligible to use a Registration Statement on Form F-3, a Shelf Registration on Form F-3 (the “Form F-3 Shelf”), in each case, covering the resale of all the Registrable Securities (determined as of two business days prior to such filing) on a delayed or continuous basis. Such Shelf 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 a Shelf 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 continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Form F-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form F-1 Shelf (and any Subsequent Shelf Registration) to a Form F-3 Shelf as soon as practicable after the Company is eligible to use Form F-3.
2.1.2 Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration”) registering the resale of all Registrable Securities (determined as of two business days prior to such filing), and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form F-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form.
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2.1.3 Additional Registerable Securities. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon request of a Innoviz Equityholder, a SPAC Holder or an Other Equityholder that holds at least five (5.0%) percent of the Registrable Securities, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, the Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for the Innoviz Equityholders, the SPAC Holders, and the Other Equityholders, respectively.
2.1.4 Requests for Underwritten Shelf Takedowns. At any time and from time to time when an effective Shelf is on file with the Commission, any Innoviz Equityholder, SPAC Holder, or Other Equityholder (any of the Innoviz Equityholders, the SPAC Holders, or the Other Equityholders being, in such case, a “Demanding Holder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering or other coordinated offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder with a total offering price reasonably expected to exceed, in the aggregate, $75 million (the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. Subject to Section 2.4.4, the Company shall have the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the initial Demanding Holder’s prior approval (which shall not be unreasonably withheld, conditioned or delayed). The Innoviz Equityholders, the SPAC Holders, and the Other Equityholders may each demand not more than two (2) Underwritten Shelf Takedowns pursuant to this Section 2.1.4 in any 12-month period. Notwithstanding anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then effective Registration Statement, including a Form F-3, that is then available for such offering.
2.1.5 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding Holders and the Holders requesting piggy back rights pursuant to this Agreement with respect to such Underwritten Shelf Takedown (the “Requesting Holders”) (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Ordinary Shares or other equity securities that the Company desires to sell and all Ordinary Shares or other equity securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other shareholders, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, before including any Ordinary Shares or other equity securities proposed to be sold by Company or by other holders of Ordinary Shares or other equity securities, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Shelf Takedown) that can be sold without exceeding the Maximum Number of Securities. To facilitate the allocation of Registrable Securities in accordance with the above provisions, the Company or the Underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. The Company shall not be required to include any Registrable Securities in such Underwritten Shelf Takedown unless the Holders accept the terms of the underwriting as agreed upon between the Company and its Underwriters.
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2.1.6 Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown, a majority-in-interest of the Demanding Holders initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Shelf Takedown; provided that any Innoviz Equityholder, SPAC Holder, or Other Equityholder may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by the Innoviz Equityholders, the SPAC Holders, or the Other Equityholders or any of their respective Permitted Transferees, as applicable. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown for purposes of Section 2.1.4, unless either (i) the Demanding Holder has not previously withdrawn any Underwritten Shelf Takedown or (ii) the Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown; provided that, if a Innoviz Equityholder, a SPAC Holder, or an Other Equityholder elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence, such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by the Innoviz Equityholders, the SPAC Holders, or the Other Equityholders, as applicable, for purposes of Section 2.1.4. Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this Section 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence of this Section 2.1.6.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. Subject to Section 2.4.3, if the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file a Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders of the Company (or by the Company and by the shareholders of the Company including, without limitation, an Underwritten Shelf Takedown pursuant to Section 2.1 hereof), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a Registration Statement on Form F-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iii) for an offering of debt that is convertible into equity securities of the Company or, (iv) for a dividend reinvestment plan or (v) for a rights offering, then the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder’s agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering.
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of Ordinary Shares or other equity securities that the Company desires to sell, taken together with (i) the Ordinary Shares or other equity securities, if any, as to which Registration or a registered offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the Ordinary Shares or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Securities, then:
(a) If the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration or registered offering (A) first, the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to written contractual piggy-back registration rights of other shareholders of the Company, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration or registered offering is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration or registered offering (A) first, the Ordinary Shares or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities; and
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(c) If the Registration or registered offering is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1 hereof, then the Company shall include in any such Registration or registered offering securities pursuant to Section 2.1.5.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdrawal from an Underwritten Shelf Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include the Shelf) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement (other than Section 2.1.6), the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant to Section 2.2 hereof shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4 hereof.
2.3 Market Stand-off. In connection with any Underwritten Offering of equity securities of the Company (other than a Block Trade), each Holder given an opportunity to participate in the Underwritten Offering pursuant to the terms of this Agreement agrees that it shall not Transfer any Ordinary Shares or other equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company, during the 90-day period beginning on the date of pricing of such offering or such shorter period during which the Company agrees not to conduct an underwritten primary offering of Ordinary Shares or other equity securities, except in the event the Underwriters managing the offering otherwise agree by written consent. Each Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders).
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2.4 Block Trades.
2.4.1 Notwithstanding the foregoing, at any time and from time to time when an effective Shelf is on file with the Commission and effective, if a Demanding Holder wishes to engage in an underwritten or other coordinated registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”), with a total offering price reasonably expected to exceed, in the aggregate, either (x) $100 million or (y) all remaining Registrable Securities held by the Demanding Holder, then notwithstanding the time periods provided for in Section 2.1.4, such Demanding Holder need only to notify the Company of the Block Trade at least five (5) business days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade shall use commercially reasonable efforts to work with the Company and any Underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade.
2.4.2 Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade, a majority-in-interest of the Demanding Holders initiating such Block Trade shall have the right to submit a Withdrawal Notice to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Block Trade. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a block trade prior to its withdrawal under this Section 2.4.2.
2.4.3 Notwithstanding anything to the contrary in this Agreement, Section 2.2 hereof shall not apply to a Block Trade initiated by a Demanding Holder pursuant to this Agreement.
2.4.4 The Demanding Holder in a Block Trade shall have the right to select the Underwriters for such Block Trade (which shall consist of one or more reputable nationally recognized investment banks).
Article
III
COMPANY PROCEDURES
3.1 General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities have ceased to be Registrable Securities;
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by any Holder that holds at least five (5.0%) percent of the Registrable Securities registered on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
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3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable Securities (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each national securities exchange on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (or such shorter period of time as may be necessary in order to comply with the Securities Act, the Exchange Act, and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable), furnish a copy thereof to each seller of such Registrable Securities or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
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3.1.10 permit a representative of any Holder, the Underwriters, if any, and any attorney or accountant retained by such Holder(s) or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters agree to confidentiality arrangements reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 obtain a “comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering or other coordinated offering that is registered pursuant to a Registration Statement, in customary form and covering such matters of the type customarily covered by “comfort” letters as the managing Underwriter or other similar type of sales agent or placement agent may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.12 on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.13 in the event of any Underwritten Offering or other coordinated offering that is registered pursuant to a Registration Statement, enter into and perform its obligations under an underwriting agreement, sales agreement or placement agreement, in usual and customary form, with the managing Underwriter, sales agent or placement agent of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule then in effect);
3.1.15 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50 million with respect to an Underwritten Offering pursuant to Section 2.1.4, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or other sales agent or placement agent if such Underwriter or other sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering or other coordinated offering that is registered pursuant to a Registration Statement.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ or agents’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
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3.3 Requirements for Participation in Registration Statement Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No person may participate in any Underwritten Offering or other coordinated offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting or other agreements and other customary documents as may be reasonably required under the terms of such arrangements. The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.
3.4 Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed.
3.4.2 If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board such Registration, cause serious and irreparable harm to the Company and the majority of the Board concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under this Section 3.4.2, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.
3.4.3 (a) During the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company-initiated Registration and provided that the Company continues to actively employ, in good faith, all reasonable efforts to maintain the effectiveness of the applicable Shelf Registration Statement, or (b) if, pursuant to Section 2.1.4, Holders have requested an Underwritten Shelf Takedown and the Company and such Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering, the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to Section 2.1.4 or 2.4.
3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to the Electronic Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished or delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall 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 held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule then in effect). Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
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Article
IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify and hold harmless, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors and agents and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including without limitation reasonable outside attorneys’ fees) arising out of or resulting from any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction of the Company in connection therewith.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits with respect to such Holder as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify and hold harmless the Company, its directors, officers and agents and each person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including without limitation reasonable outside attorneys’ fees) arising out of or resulting from any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue or alleged untrue statement or omission or alleged omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) 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). 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. No indemnifying party shall, without the consent of the indemnified party, 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 does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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4.1.4 The indemnification provided for under this 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 of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, 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, claims, damages, liabilities and out-of-pocket expenses 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. 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 relates to information supplied by, 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; provided, however, that the liability of any Holder under this Section 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5. 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 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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Article
V
MISCELLANEOUS
5.1 Notices. All notices, requests, claims, demands and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
| If to the Company, to: | ||
| Innoviz Technologies Ltd. | ||
| 2 Amal St. | ||
| Rosh HaAin | ||
| 4809202, Israel | ||
| Attention: | Eldar Cegla, Chief Financial Officer | |
| Email: | [email protected] | |
| with copies (which shall not constitute notice) to: | ||
| Latham & Watkins LLP | ||
| 811 Main Street, Suite 3700 | ||
| Houston, Texas 77002 | ||
| Attention: | Ryan Maierson | |
| E-mail: | [email protected] | |
| Latham & Watkins LLP | ||
| 99 Bishopsgate | ||
| London EC2M 3XF | ||
| United Kingdom | ||
| Attention: | Joshua Kiernan | |
| E-mail: | [email protected] | |
If to any Holder, to such address indicated on the Company’s records with respect to such Shareholder Party or to such other address or addresses as such Shareholder Party may from time to time designate in writing.
5.2 Assignment; No Third Party Beneficiaries
5.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
5.2.2 A Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, to any person to whom it transfers Registrable Securities; provided that such Registrable Securities remain Registrable Securities following such transfer and such person agrees to become bound by the terms and provisions of this Agreement.
5.2.3 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement).
5.2.4 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. Any attempted assignment in violation of the terms of this Section 5.2 shall be null and void, ab initio.
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5.2.5 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 hereof.
5.3 Captions; Counterparts. The headings, subheadings and captions contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement and any amendment hereto may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any amendment hereto by electronic means, including docusign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement or any amendment hereto.
5.4 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
5.5 Jurisdiction; Waiver of Jury Trial.
5.5.1 Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction, any state or federal court sitting in the Borough of Manhattan, State of New York, New York County), for the purposes of any Proceeding (as defined in the Business Combination Agreement), claim, demand, action or cause of action (a) arising under this Agreement or (b) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding, claim, demand, action or cause of action against such Party (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement, (A) any claim that such party is not personally subject to the jurisdiction of the courts as described in this Section 5.5 for any reason, (B) that such party or such party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such party in or by such courts. Each party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 5.5 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
17
5.5.2 THE PARTIES HERETO EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY DOCUMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.5.
5.6 Amendments and Modifications. Upon the written consent of (a) the Company and (b) the Holders of a majority of the total Registrable Securities, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that in the event any such waiver, amendment or modification would be adverse in any material respect to the material rights or obligations hereunder of a Holder of at least five (5.0%) percent of the Registrable Securities, the written consent of such Holder will also be required; provided further that in the event any such waiver, amendment or modification would be disproportionate and adverse in any material respect to the material rights or obligations hereunder of a Holder, the written consent of such Holder will also be required. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.7 Termination of Existing Registration Rights. The registration rights granted under this Agreement shall supersede any registration, qualification or similar rights of the Holders with respect to any shares or securities of Collective Growth or the Company granted under any other agreement, including, but not limited to, that certain Registration Rights Agreement dated as of May 5, 2020, among Collective Growth and the investors party thereto, and that certain Amended and Restated Investors’ Rights Agreement, dated as of October 1, 2020, among the Company, the Founders defined therein and the Investors defined therein, and any of such preexisting registration, qualification or similar rights and such agreements shall be terminated and of no further force and effect.
5.8 Term. This Agreement shall terminate with respect to any Holder on the date that such Holder no longer holds any Registrable Securities. The provisions of Sections 3.5, 5.1, 5.4, and 5.5, and Article IV shall survive any termination.
5.9 Termination if Business Combination Agreement is Terminated. In the event the Business Combination Agreement is terminated in accordance with its terms, this Agreement shall automatically terminate and be of no further force and effect, except for Article IV and Sections 5.1, 5.4, and 5.5, which shall survive such termination.
5.10 Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make determinations hereunder.
[SIGNATURE PAGES FOLLOW]
18
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| Innoviz Technologies Ltd. | |||
| By: | /s/ Eldar Cegla | ||
| Name: | Eldar Cegla | ||
| Title: | Chief Financial Officer | ||
| Perception Capital Corp. | |||
| By: | /s/ James J. Sheridan III | ||
| Name: | James J. Sheridan III | ||
| Title: | CEO | ||
| Antara Capital LP | |||
| By: | /s/ Himanshu Gulati | ||
| Name: | Himanshu Gulati | ||
| Title: | Managing Partner | ||
| Shipwright SPAC I, LLC | |||
| By: | /s/ Andrew Townsend | ||
| Name: | Andrew Townsend | ||
| Title: | Managing Member | ||
| THE LINTON FAMILY TRUST (2040) | |||
| By: | /s/ Bruce Linton | ||
| Name: | Bruce Linton | ||
| Title: | Trustee | ||
| GWW LLC | |||
| By: | /s/ Geoffrey W. Whaling | ||
| Name: | Geoffrey W. Whaling | ||
| Title: | Member | ||
[Signature Page to Registration Rights Agreement]
| /s/ Tim Saunders | |||
| Tim Saunders | |||
| /s/ Jonathan Sherman | |||
| Jonathan Sherman | |||
| /s/ Wilson Kello | |||
| Wilson Kello | |||
| 2702933 ontario inc. | |||
| By: | /s/ Jonathan Sherman | ||
| Name: | Jonathan Sherman | ||
| Title: | Director | ||
| 2702932 ontario inc. | |||
| By: | /s/ Jamie Litchen | ||
| Name: | Jamie Litchen | ||
| Title: | Director | ||
| /s/ Omer Keilaf | |||
| Omer Keilaf | |||
| /s/ Oren Rosenzweig | |||
| Oren Rosenzweig | |||
| /s/ Oren Buskila | |||
| Oren Buskila | |||
| /s/ Zohar Zisapel | |||
| Zohar Zisapel | |||
[Signature Page to Registration Rights Agreement]
| MICHAEL AND KILL HOLDINGS (93) LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| LOMSHA LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| MAGMA VENTURE CAPITAL IV L.P. | |||
| By: | /s/ Yahal Zilka | ||
| Name: | Yahal Zilka | ||
| Title: | |||
| MAGMA VENTURE CAPITAL IV CEO FUND LP | |||
| By: | /s/ Yahal Zilka | ||
| Name: | Yahal Zilka | ||
| Title: | |||
| VERTEX IV (C.I.) FUND, L.P. | |||
| By: | /s/ Yoram Oron | ||
| Name: | Yoram Oron | ||
| Title: | General Partner | ||
| By: | /s/ Ran Gartenberg | ||
| Name: | Ran Gartenberg | ||
| Title: | CFO & General Partner | ||
[Signature Page to Registration Rights Agreement]
| AMITI FUND II, L.P. | |||
| By: | /s/ Ben Rabinowitz | ||
| Name: | Ben Rabinowitz | ||
| Title: | |||
| AMITI INNOVIZ, L.P. | |||
| By: | /s/ Ben Rabinowitz | ||
| Name: | Ben Rabinowitz | ||
| Title: | |||
| DELEK MOTORS LTD. | |||
| By: | /s/ Mosho Levi | ||
| Name: | Mosho Levi | ||
| Title: | Vice President of Investor Relations | ||
| MAGNA US INVESTMENTS, INC. | |||
| By: | /s/ Seetarama Swamy Kotagiri | ||
| Name: | Seetarama Swamy Kotagiri | ||
| Title: | |||
| By: | /s/ Bruce Cluney | ||
| Name: | Bruce Cluney | ||
| Title: | Executive Vice-President | ||
| MAGNA INTERNATIONAL INC. | |||
| By: | /s/ Seetarama Swamy Kotagiri | ||
| Name: | Seetarama Swamy Kotagiri | ||
| Title: | |||
| By: | /s/ Bruce Cluney | ||
| Name: | Bruce Cluney | ||
| Title: | Executive Vice-President | ||
[Signature Page to Registration Rights Agreement]
| INTEGRATED DYNAMIC ENTERPRISES LIMITED | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| INTEGRATED DYNAMIC ENTERPRISES A LIMITED | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| ALLIED HOLDINGS LTD. | |||
| By: | /s/ Raanan Weissel | ||
| Name: | Raanan Weissel | ||
| Title: | Chief Financial Officer | ||
| By: | /s/ Yigal Schreiber | ||
| Name: | Yigal Schreiber | ||
| Title: | Chief Executive Officer | ||
| SB GLOBAL CHAMP FUND | |||
| By: | /s/ Benjamin Eli Weiss | ||
| Name: | Benjamin Eli Weiss | ||
| Title: | Venture Partner | ||
| SB NEXT MEDIA INNOVATION FUND | |||
| By: | /s/ Benjamin Eli Weiss | ||
| Name: | Benjamin Eli Weiss | ||
| Title: | Venture Partner | ||
[Signature Page to Registration Rights Agreement]
| GLORY VENTURES INVESTMENTS FUND II L.P. | |||
| By: | /s/ Yang Craig | ||
| Name: | Yang Craig | ||
| Title: | |||
| ROBOLUTION CAPITAL I | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PENSION | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| TZAVA HAKEVA SAVING FUND – PROVIDENT FUNDS MANAGEMENT COMPANY LTD. SOLELY ON BEHALF OF TZVA HAKEVA SAVINGS FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Registration Rights Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL INSURANCE COMPANY LTD. (PARTICIPATING FUNDS) | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| LEATID PENSION FUNDS MANAGEMENT COMPANY LTD. SOLELY ON BEHALF OF ATIDIT PENSION FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Registration Rights Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL GENERAL PLAN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL STUDY FUND | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Registration Rights Agreement]
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT FOR CHILDREN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL PENSION AND PROVIDENT LTD. SOLELY ON BEHALF OF HAREL PROVIDENT INVESTMENT FOR CHILDREN | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
| HAREL INSURANCE COMPANY LTD. (NOSTRO) | |||
| By: | /s/ Shmuel Babecov | ||
| Name: | Shmuel Babecov | ||
| Title: | Chief Investment Officer | ||
| By: | /s/ Koby Kehaty | ||
| Name: | Koby Kehaty | ||
| Title: | Equity Investments | ||
[Signature Page to Registration Rights Agreement]
| THE PHOENIX INSURANCE COMPANY LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| THE PHOENIX INSURANCE COMPANY LTD. (NOSTRO) | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| THE PHOENIX EXCELLENCE PENSION & PROVIDENT FUND LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| ALLIANCE ONE INVESTMENT SINGAPORE PTE LTD. | |||
| By: | /s/ | ||
| Name: | |||
| Title: | |||
| GLORY VENTURES INVESTMENT L.P. | |||
| By: | /s/ Yang Greg | ||
| Name: | Yang Greg | ||
| Title: | |||
[Signature Page to Registration Rights Agreement]
| CHAMPEL INNOVIZ LIMITED | |||
| By: | /s/ Amir Weitmann | ||
| Name: | Amir Weitmann | ||
| Title: | Director | ||
| SHEFA CAPITAL – INNOVIZ OPPORTUNITY FUND, L.P. | |||
| By Shefa Capital General Partner, L.P., Its General Partner | |||
| By Shefa Capital General Partner, Ltd., Its General Partner | |||
| By: | /s/ Ranan Gkobman | ||
| Name: | Ranan Gkobman | ||
| Title: | Managing Partner | ||
| SAMSUNG OAK HOLDINGS, INC. | |||
| By: | /s/ Young K. Sohn | ||
| Name: | Young K. Sohn | ||
| Title: | President | ||
[Signature Page to Registration Rights Agreement]
Schedule A
Other Equityholders
Perception Capital Partners LLC
Antara Capital LP
Schedule B
SPAC Holders
Shipwright SPAC I, LLC
The Linton Family Trust
GWW LLC
Tim Saunders
Jonathan Sherman
2702933 Ontario Inc.
2802932 Ontario Inc.
Wilson Kello
Cantor Fitzgerald & Co.
Schedule C
Innoviz Equityholders
Omer Keilaf
Oren Buskila
Oren Rosenzweig
Zohar Zisapel
Champel Innoviz Limited
Shefa Capital – Innoviz Opportunity Fund, L.P.
Magma Venture Capital IV LP
Magma Venture Capital IV CEO Fund LP
Vertex IV (C.I.) Fund, L.P.
Amiti Fund II, L.P.
Amiti Innoviz, L.P.
Delek Motors Ltd.
Michael and Klil Holdings (93) Ltd.
Lomsha Ltd.
Magna US Investments, Inc.
Magna International Inc.
Allied Holdings Ltd.
Integrated Dynamic Enterprises Limited
Integrated Dynamic Enterprises A Limited
Robolution Capital 1
SB Global Champ Fund
SB Next Media Innovation Fund
Harel Pension and Provident Ltd. solely on behalf of Harel Pension
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Fund
LeAtid Pension Funds Management Company Ltd. solely on behalf of Atidit Pension Fund
Harel Pension and Provident Ltd. solely on behalf of Harel Study Fund
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Investment For Children
Tzava Hakeva Saving Fund - Provident Funds Management Company Ltd. solely on behalf of Tzva Hakeva Savings Fund
Harel Insurance Company Ltd. (Participating Funds)
Harel Pension and Provident Ltd. solely on behalf of Harel General Plan
Harel Pension and Provident Ltd. solely on behalf of Harel Provident Investment
Harel Insurance Company Ltd. (Nostro)
The Phoenix Insurance Company Ltd.
The Phoenix Excellence Pension & Provident Fund Ltd.
The Phoenix Insurance Company Ltd. (Nostro)
Alliance One Investment Singapore PTE Ltd.
Glory Ventures Investments L.P.
Glory Ventures Investment Fund II L.P.
Exhibit 10.4
Collective Growth Corporation
1805 West Avenue
Austin, TX 78701
December 10, 2020
Shipwright SPAC I, LLC
The Linton Family Trust
GWW LLC
2702932 Ontario Inc.
2702933 Ontario Inc.
Mr. Jonathan Sherman
Mr. Timothy Saunders
Mr. Wilson Kello
Re: Sponsor Forfeiture
Ladies and Gentlemen:
The undersigned individuals and entities (“Sponsors”), who are directors, officers, and shareholders of Collective Growth Corporation (“SPAC”), purchased shares of Class B common stock of SPAC, $0.0001 par value per share (“Sponsor Shares”), and/or warrants exercisable for shares of Class A common stock of SPAC at an initial exercise price of $11.50 per share (“SPAC Warrants”).
In connection with the consummation (“Closing”) of the transactions contemplated under that certain Business Combination Agreement, dated on or about the date hereof, by and among SPAC, Innoviz Technologies Ltd., a company organized under the laws of the State of Israel, and Hatzata Merger Sub, Inc., a Delaware corporation, the Sponsors hereby agree to forfeit and transfer to the Company for cancellation in exchange for no consideration, and agree that SPAC shall immediately terminate and cancel immediately prior to the Closing, an aggregate of 1,875,000 Sponsor Shares and 187,500 SPAC Warrants, as allocated among the Sponsors on Exhibit A hereto (collectively, the “Founder Forfeited Securities”). The Sponsors and the SPAC each shall take such actions as are necessary to cause the Founder Forfeited Securities to be terminated and cancelled, including by directing SPAC’s transfer agent (or such other intermediaries as appropriate) to take any and all such actions incident thereto, after which the Founder Forfeited Securities shall no longer be issued or outstanding. Please indicate your agreement to the foregoing by signing in the space provided below.
[signature page follows]
| Very truly yours, | ||
| COLLECTIVE GROWTH CORPORATION | ||
| By: | /s/ Bruce Linton | |
| Name: | Bruce Linton | |
| Title: | Chief Executive Officer | |
| ACCEPTED AND AGREED TO: | ||
| SHIPWRIGHT SPAC I, LLC | ||
| By: | /s/ Andrew Townsend | |
| Name: Andrew Townsend | ||
| Title: Managing Member | ||
| THE LINTON FAMILY TRUST | ||
| By: | /s/ Bruce Linton | |
| Name: Bruce Linton | ||
| Title: Trustee | ||
| GWW LLC | ||
| By: | /s/ Geoffrey W. Whaling | |
| Name: Geoffrey W. Whaling | ||
| Title: Member | ||
| 2702932 ONTARIO INC. | ||
| By: | /s/ Jamie Litchen | |
| Name: Jamie Litchen | ||
| Title: Director | ||
| 2702933 ONTARIO INC. | ||
| By: | /s/ Jonathan Sherman | |
| Name: Jonathan Sherman | ||
| Title: Director | ||
| /s/ Tim Saunders | |
| Tim Saunders | |
| /s/ Jonathan Sherman | |
| Jonathan Sherman | |
| /s/ Wilson Kello | |
| Wilson Kello |
[Signature Page to Sponsor Forfeiture Agreement]
Exhibit A
| Sponsor Name | Sponsor Shares Forfeited | SPAC Warrants Forfeited | ||||||
| Shipwright SPAC I, LLC | 1,031,250 | 150,000 | ||||||
| The Linton Family Trust | 324,375 | 15,000 | ||||||
| GWW LLC | 217,813 | 12,500 | ||||||
| Jonathan Sherman | 16,406 | 0 | ||||||
| 2702923 Ontario Inc. | 88,125 | 5,000 | ||||||
| 2702933 Ontario Inc. | 88,125 | 5,000 | ||||||
| Timothy Saunders | 25,406 | 0 | ||||||
| Wilson Kello | 83,500 | 0 | ||||||
| TOTAL | 1,875,000 | 187,500 | ||||||
Exhibit 10.5
December 10, 2020
Innoviz Technologies Ltd.
2 Amal Street
Afek Industrial Park
Rosh Ha’Avin, Israel
Collective Growth Corporation
1805 West Avenue
Austin, TX 78701
Re: Sponsor Letter Agreement
Ladies and Gentlemen:
This letter agreement (“Sponsor Letter Agreement”) is being delivered to you in accordance with that certain Business Combination Agreement (“Business Combination Agreement”), dated on or about the date hereof, by and among Collective Growth Corporation, a Delaware corporation (“SPAC”), Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company”), and Hatzata Merger Sub, Inc., a Delaware corporation (“Merger Sub”), pursuant to which Merger Sub will merge with and into SPAC (“Merger”), with SPAC surviving the Merger as a wholly owned subsidiary of the Company. In order to induce the Company and SPAC to enter into the Business Combination Agreement and proceed with the Merger, and in recognition of the benefit that the Merger will confer on the undersigned, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees with the Company and SPAC as follows:
1. The undersigned will (i) vote all shares of Class B common stock of SPAC, par value $0.0001 per share (“Sponsor Shares”), and all shares of Class A common stock of SPAC, par value $0.0001 per share (“SPAC Shares”) (including all SPAC Shares issuable upon the conversion of Sponsor Shares and all SPAC Shares underlying units of SPAC) beneficially owned by it in favor of the Merger and each other proposal related to the Merger included on the agenda for the special meeting of stockholders relating to the Merger, (ii) when such meeting of stockholders is held, appear at such meeting or otherwise cause the Sponsor Shares and SPAC Shares beneficially owned by it to be counted as present thereat for the purpose of establishing a quorum and (iii) vote all Sponsor Shares and SPAC Shares beneficially owned by it against any action that would reasonably be expected to materially impede, interfere with, delay, postpone or adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement or result in a breach of any covenant, representation or warranty or other obligation or agreement of SPAC under the Business Combination Agreement or result in a breach of any covenant or other obligation or agreement of the undersigned contained in this Sponsor Letter Agreement. The obligations of the undersigned specified in this paragraph 1 shall apply whether or not the Merger or any action described above is recommended by the SPAC Board (as defined in the Business Combination Agreement) or the SPAC Board has effected a SPAC Change in Recommendation (as defined in the Business Combination Agreement).
2. The undersigned agrees that the Sponsor Shares and SPAC Shares beneficially owned by it may not be transferred, assigned or sold (except to certain permitted transferees as described in the SPAC’s registration statement on Form S-1 (SEC File No. 333-236798) filed with the Securities and Exchange Commission Statement) prior to the date of the closing of the transactions contemplated by the Business Combination Agreement.
3. The undersigned acknowledges that the undersigned is a party to a letter agreement with SPAC and Cantor Fitzgerald & Co. dated on or about April 30, 2020 (“Existing Letter Agreement”), which includes, among other things, an agreement to vote the undersigned’s Sponsor Shares and SPAC Shares in favor of a business combination (as defined therein), transfer restrictions with respect to the Sponsor Shares and SPAC Shares, and a waiver of any and all right, title, interest or claim of any kind in or to any distribution of the trust account into which a portion of the net proceeds of SPAC’s initial public offering were deposited. The undersigned acknowledges and agrees that this Sponsor Letter Agreement is made in addition to, and does not amend, modify, terminate, or replace, the Existing Letter Agreement, and the Existing Letter Agreement remains in full force and effect.
4. This Sponsor Letter Agreement shall be governed by and construed and enforced in accordance with 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 undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this Sponsor Letter Agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service of process in any Proceeding. If for any reason such agent is unable to act as such, the undersigned will promptly notify the Company and SPAC and appoint a substitute agent acceptable to each of the Company and SPAC within 30 days and nothing in this letter will affect the right of either party to serve process in any other manner permitted by law.
5. This Sponsor Letter Agreement and the Existing Letter Agreement constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. In the event of any inconsistency, conflict or ambiguity as to the rights and obligations of the parties hereto under this Sponsor Letter Agreement and the Existing Letter Agreement, the terms of this Sponsor Letter Agreement shall control and supersede any such inconsistency, conflict or ambiguity. This Sponsor Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.
6. The undersigned hereby agrees and acknowledges that: (i) SPAC and the Company would be irreparably injured in the event of a breach of the undersigned’s obligations of this Sponsor Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) SPAC and the Company shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.
7. This Sponsor Letter Agreement shall be binding on the undersigned and its successors and assigns. This Sponsor Letter Agreement shall terminate on the earlier of (i) the closing of the transactions contemplated by the Business Combination Agreement and (ii) the termination of the Business Combination Agreement in accordance with its terms; provided, that such termination shall not relieve the undersigned from liability for any breach of this Sponsor Letter Agreement prior to its termination. Prior to any valid termination of the Business Combination Agreement, the undersigned shall take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary under applicable Laws to consummate the Merger and the other transactions contemplated by the Business Combination Agreement on the terms and subject to the conditions set forth therein.
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8. This Sponsor Letter Agreement and any amendment hereto may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Sponsor Letter Agreement or any amendment hereto by electronic means, including docusign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Sponsor Letter Agreement or any amendment hereto.
9. Whenever possible, each provision of this Sponsor Letter Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any term or other provision of this Sponsor Letter Agreement is held to be invalid, illegal or unenforceable under applicable Law, all other provisions of this Sponsor Letter Agreement shall remain in full force and effect so long as the substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision of this Sponsor Letter Agreement is invalid, illegal or unenforceable under applicable Law, the parties hereto shall negotiate in good faith to modify this Sponsor Letter Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
[Signature Page Follows]
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| Very truly yours, | ||
| [___________________________] | ||
| By: | ||
| Name: | ||
| Title: | ||
| ACKNOWLEDGED AND AGREED: | ||
| INNOVIZ TECHNOLOGIES LTD. | ||
| By: | ||
| Name: | ||
| Title: | ||
| COLLECTIVE GROWTH CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
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Exhibit 10.6
SUPPORT AGREEMENT
This Support Agreement (this “Agreement”), dated as of December 10, 2020, 2020, is entered into by and among Collective Growth Corporation, a Delaware corporation (“SPAC”), Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company”), and [ ● ] (the “Shareholder”).
RECITALS
WHEREAS, concurrently herewith, SPAC, Hatzata Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and the Company are entering into a Business Combination Agreement (as amended, supplemented, restated or otherwise modified from time to time, the “Business Combination Agreement”; capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Business Combination Agreement), pursuant to which (and subject to the terms and conditions set forth therein) Merger Sub will merge with and into SPAC, with SPAC surviving the merger (the “Merger”);
WHEREAS, as of the date hereof, the Shareholder is the record and “beneficial owner” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”)) of and is entitled to dispose of and vote [[ ● ] Company Ordinary Shares][,] [[ ● ] Company Preferred A Shares][,] [[ ● ] Company Preferred B Shares][ ,] [[ ● ] Company Preferred B-1 Shares][,] [[ ● ] Company Preferred C Shares] [and] [[ ● ] Company Preferred C-1 Shares] (collectively, the “Owned Shares”; the Owned Shares and any additional Company Shares (or any securities convertible into or exercisable or exchangeable for Company Shares) in which the Shareholder acquires record and beneficial ownership after the date hereof, including by purchase, as a result of a share dividend, share split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities, the “Covered Shares”);
WHEREAS, as a condition and inducement to the willingness of SPAC to enter into the Business Combination Agreement, SPAC, the Company and the Shareholder are entering into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, SPAC, the Company and the Shareholder hereby agree as follows:
1. Agreement to Vote. Subject to the earlier termination of this Agreement in accordance with Section 3, the Shareholder, in its capacity as a shareholder of the Company, irrevocably and unconditionally agrees that it shall, and shall cause any other holder of record of any of the Shareholder’s Covered Shares to, validly execute and deliver to the Company, on (or effective as of) the fifth (5th) day following the date that the notice of the Company Shareholder Meeting (the “Company Shareholder Meeting Notice”) is delivered by the Company, the voting proxy in substantially the form attached hereto as Exhibit A in respect of all of the Shareholder’s Covered Shares. In addition, prior to the Termination Date (as defined herein), the Shareholder, in its capacity as a shareholder of the Company, irrevocably and unconditionally agrees that, at any other meeting of the shareholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting, however called and including any adjournment or postponement thereof) and in connection with any written consent of shareholders of the Company, the Shareholder shall, and shall cause any other holder of record of any of the Shareholder’s Covered Shares to:
(a) if and when such meeting is held, appear at such meeting or otherwise cause the Shareholder’s Covered Shares to be counted as present thereat for the purpose of establishing a quorum;
(b) execute and return an action by written consent (or vote, in person or by proxy), or validly execute and return and cause such consent to be granted with respect to (or cause to be voted at such meeting), all of the Shareholder’s Covered Shares owned as of the date that any written consent is executed by the Shareholder (or the record date for such meeting) in favor of (i) the Merger and the adoption of the Business Combination Agreement, (ii) the Company Shareholder Proposals, (iii) the Company Preferred Shareholder Proposals, if applicable, and (iv) any other matters necessary or reasonably requested by the Company for consummation of the Merger and the other transactions contemplated by the Business Combination Agreement; and
(c) execute and return an action by written consent (or vote, in person or by proxy), or validly execute and return and cause such consent to be granted with respect to (or cause to be voted at such meeting), all of the Shareholder’s Covered Shares against any Company Acquisition Proposal and any other action that would reasonably be expected to materially impede, interfere with, delay, postpone or adversely affect the Merger or any of the other transactions contemplated by the Business Combination Agreement or result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company under the Business Combination Agreement that would result in the failure of any condition set forth in Section 6.1, Section 6.2 or Section 6.3 of the Business Combination Agreement to be satisfied or result in a breach of any covenant, representation or warranty or other obligation or agreement of the Shareholder contained in this Agreement.
(d) The obligations of the Shareholder specified in this Section 1 shall apply whether or not the Merger or any action described above is recommended by the Company Board or the Company Board has effected a Company Change in Recommendation.
(e) The Shareholder hereby irrevocably, to the fullest extent permitted by law, appoints the Company, or any designee of the Company, for so long as the provisions of this Section 1 remain in effect, as the Shareholder’s attorney-in-fact and proxy with full power of substitution, to vote and otherwise act (by written consent or otherwise) with respect to the Owned Shares, solely on the matters and in the manner specified in this Section 1. This proxy shall be valid for the duration of this Agreement.
(f) THE PROXIES AND POWERS OF ATTORNEY GRANTED PURSUANT TO SECTION 1(e) ARE IRREVOCABLE AND COUPLED WITH AN INTEREST. The proxies and powers of attorney shall not be terminated by any act of the Shareholder or by operation of law, by lack of appropriate power or authority, or by the occurrence of any other event or events and shall be binding upon all successors, assigns, heirs, beneficiaries and legal representatives of the Shareholder. The Shareholder hereby revokes all other proxies and powers of attorney on the matters specified in this Section 1 with respect to the Owned Shares that the Shareholder may have previously appointed or granted, and no subsequent proxy or power of attorney shall be given or written consent executed (and if given or executed, shall not be effective) by the Shareholder with respect thereto. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the Shareholder and any obligation of the Shareholder under this Agreement shall be binding upon the heirs, personal representatives, and successors of the Shareholder.
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2. No Inconsistent Agreements. The Shareholder hereby covenants and agrees that the Shareholder shall not, at any time prior to the Termination Date, (i) enter into any voting agreement or voting trust with respect to any of the Shareholder’s Covered Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement, (ii) grant a proxy or power of attorney with respect to any of the Shareholder’s Covered Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement, or (iii) enter into any agreement or undertaking that is otherwise inconsistent with, or would interfere with, or prohibit or prevent it from satisfying, its obligations pursuant to this Agreement.
3. Termination. This Agreement shall terminate, and no party shall have any further obligations or liabilities under this Agreement, upon the earliest of (i) the Effective Time, (ii) the termination or expiration of the Business Combination Agreement in accordance with its terms, (iii) the time this Agreement is terminated upon the mutual written agreement of SPAC, the Company and the Shareholder, or (iv) the election of the Shareholder in its sole discretion to terminate this Agreement following any modification or amendment to, or the waiver of any provision of, the Business Combination Agreement, as in effect on the date hereof, that reduces the amount or changes the form of consideration payable to the Shareholder in a manner disproportionate to the Company Shareholders as a whole (the earliest such date under clause (i), (ii), (iii) and (iv) being referred to herein as the “Termination Date”); provided, that the provisions set forth in Sections 10 to 22 below shall survive the termination of this Agreement; provided further, that termination of this Agreement shall not relieve any party hereto from any liability for any Willful Breach of, or actual fraud in connection with, this Agreement prior to such termination.
4. Representations and Warranties of the Shareholder. The Shareholder hereby represents and warrants to SPAC as to itself as follows:
(a) The Shareholder is the only record and beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of, and has good, valid and marketable title to, the Covered Shares, free and clear of Liens other than as created by this Agreement and Permitted Liens. As of the date hereof, other than the Owned Shares, the Shareholder does not own beneficially or of record any share capital of the Company (or any securities convertible into share capital of the Company).
(b) The Shareholder (i) except as provided in this Agreement, has full voting power, full power of disposition and full power to issue instructions with respect to the matters set forth herein, in each case, with respect to the Shareholder’s Covered Shares, (ii) has not entered into any voting agreement or voting trust with respect to any of the Shareholder’s Covered Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement, (iii) has not granted a proxy or power of attorney with respect to any of the Shareholder’s Covered Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement and (iv) has not entered into any agreement or undertaking that is otherwise inconsistent with, or would interfere with, or prohibit or prevent it from satisfying, its obligations pursuant to this Agreement.
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(c) [The Shareholder (i) is a legal entity duly organized, validly existing and, to the extent such concept is applicable, in good standing under the Laws of the jurisdiction of its organization, and (ii) has all requisite corporate or other power and authority and has taken all corporate or other action necessary in order to, execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.1] This Agreement has been duly executed and delivered by the Shareholder and constitutes a valid and binding agreement of the Shareholder enforceable against the Shareholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity.
(d) Other than the filings, notices and reports pursuant to, in compliance with or required to be made under the Exchange Act, if any, no filings, notices, reports, consents, registrations, approvals, permits, waivers, expirations of waiting periods or authorizations are required to be obtained by the Shareholder from, or to be given by the Shareholder to, or be made by the Shareholder with, any Governmental Entity in connection with the execution, delivery and performance by the Shareholder of this Agreement, the consummation of the transactions contemplated hereby or the Merger and the other transactions contemplated by the Business Combination Agreement.
(e) The execution, delivery and performance of this Agreement by the Shareholder do not, and the consummation of the transactions contemplated hereby or the Merger and the other transactions contemplated by the Business Combination Agreement will not, constitute or result in [(i) a breach or violation of, or a default under, the limited liability company agreement or similar governing documents of the Shareholder,2] (ii) with or without notice, lapse of time or both, a breach or violation of, a termination (or right of termination) of or a default under, the loss of any benefit under, the creation, modification or acceleration of any obligations under or the creation of a Lien on any of the properties, rights or assets of the Shareholder pursuant to any Contract binding upon the Shareholder or, assuming (solely with respect to performance of this Agreement and the transactions contemplated hereby), compliance with the matters referred to in Section 4(d), under any applicable Law to which the Shareholder is subject or (iii) any change in the rights or obligations of any party under any Contract legally binding upon the Shareholder, except, in the case of clause (ii) or (iii) directly above, for any such breach, violation, termination, default, creation, acceleration or change that would not, individually or in the aggregate, reasonably be expected to prevent or materially delay or impair the Shareholder’s ability to perform its obligations hereunder or to consummate the transactions contemplated hereby, the consummation of the Merger or the other transactions contemplated by the Business Combination Agreement.
(f) As of the date of this Agreement, there is no action, proceeding or investigation pending against the Shareholder or, to the knowledge of the Shareholder, threatened against the Shareholder that questions the beneficial or record ownership of the Shareholder’s Owned Shares, the validity of this Agreement or the performance by the Shareholder of its obligations under this Agreement.
1 NTD: To be included if the Shareholder is an entity.
2 NTD: To be included if the Shareholder is an entity.
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(g) The Shareholder understands and acknowledges that SPAC is entering into the Business Combination Agreement in reliance upon the Shareholder’s execution and delivery of this Agreement and the representations, warranties, covenants and other agreements of the Shareholder contained herein.
(h) No investment banker, broker, finder or other intermediary is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission for which SPAC or the Company is or will be liable in connection with the transactions contemplated hereby based upon arrangements made by or, to the knowledge of the Shareholder, on behalf of the Shareholder.
5. Certain Covenants of the Shareholder. Except in accordance with the terms of this Agreement, the Shareholder hereby covenants and agrees as follows:
(a) No Solicitation. Subject to Section 6 hereof, prior to the Termination Date, the Shareholder shall not, and shall cause its Affiliates and Subsidiaries not to, shall not authorize its Representatives to, and shall use its reasonable best efforts to cause its and their respective Representatives not to, directly or indirectly, (i) solicit, initiate, knowingly encourage (including by means of furnishing or disclosing information), knowingly facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) that constitutes, or may reasonably be expected to lead to, a Company Acquisition Proposal; (ii) furnish or disclose any non-public information about the Company to any Person in connection with, or that could reasonably be expected to lead to, a Company Acquisition Proposal (except that the Shareholder shall be permitted to disclose non-public information about the Company to its limited partners, members, or shareholders for the limited purpose of securing the corporate or other power and authority to execute and perform this Agreement, provided the Shareholder takes reasonable efforts to cause such Persons to comply with this Section 5(a)); (iii) enter into any Contract or other arrangement or understanding regarding a Company Acquisition Proposal; or (iv) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing. The Shareholder shall (A) notify SPAC promptly upon receipt of any Company Acquisition Proposal by the Shareholder, and describe the material terms and conditions of any such Company Acquisition Proposal in reasonable detail (including the identity of the Persons making such Company Acquisition Proposal) and (B) keep SPAC reasonably informed on a current basis of any modifications to such offer or information.
Notwithstanding anything in this Agreement to the contrary, (i) the Shareholder shall not be responsible for the actions of the Company or the Company Board (or any committee thereof), any Subsidiary of the Company, or any officers, directors (in their capacity as such), employees and professional advisors of any of the foregoing (the “Company Related Parties”), including with respect to any of the matters contemplated by this Section 5(a), (ii) the Shareholder makes no representations or warranties with respect to the actions of any of the Company Related Parties and (iii) any breach by the Company of its obligations under Section 5.6(a) of the Business Combination Agreement shall not be considered a breach of this Section 5(a) (it being understood for the avoidance of doubt that the Shareholder shall remain responsible for any breach by it or its Representatives (other than any such Representative that is a Company Related Party) of this Section 5(a)).
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(b) The Shareholder hereby agrees not to, directly or indirectly, prior to the Termination Date, except in connection with the consummation of the Merger, (i) sell, transfer, pledge, encumber, assign, hedge, swap, convert or otherwise dispose of (including by merger (including by conversion into securities or other consideration), by tendering into any tender or exchange offer, by testamentary disposition, by operation of Law or otherwise), either voluntarily or involuntarily (collectively, “Transfer”), or enter into any Contract or option with respect to the Transfer of any of the Shareholder’s Covered Shares, or (ii) take any action that would make any representation or warranty of the Shareholder contained herein untrue or incorrect or have the effect of preventing or disabling the Shareholder from performing its obligations under this Agreement; provided, however, that nothing herein shall prohibit a Transfer to an Affiliate of the Shareholder (a “Permitted Transfer”); provided, further, that any Permitted Transfer shall be permitted only if, as a precondition to such Transfer, the transferee agrees in a writing, reasonably satisfactory in form and substance to SPAC, to assume all of the obligations of the Shareholder under, and be bound by all of the terms of, this Agreement; provided, further, that any Transfer permitted under this Section 5(b) shall not relieve the Shareholder of its obligations under this Agreement. Any Transfer in violation of this Section 5(b) with respect to the Shareholder’s Covered Shares shall be null and void. Nothing in this Agreement shall prohibit direct or indirect transfers of equity or other interests in a Shareholder.
(c) The Shareholder hereby authorizes the Company to maintain a copy of this Agreement at either the executive office or the registered office of the Company.
6. Further Assurances. From time to time, at SPAC’s request and without further consideration, the Shareholder shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to effect the actions and consummate the transactions contemplated by this Agreement. The Shareholder further agrees not to commence or participate in, and to take all actions necessary to opt out of any class action with respect to, any action or claim, derivative or otherwise, against SPAC, SPAC’s Affiliates, the Sponsors, the Company or any of their respective successors and assigns relating to the negotiation, execution or delivery of this Agreement, the Business Combination Agreement (including the Per Share Consideration and conversion of Company Preferred Shares) or the consummation of the transactions contemplated hereby and thereby.
7. Disclosure. The Shareholder hereby authorizes the Company and SPAC to publish and disclose in any announcement or disclosure required by the SEC, or include in any document or information required to be filed with or furnished to the SEC or Nasdaq, the Shareholder’s identity and ownership of the Covered Shares and the nature of the Shareholder’s obligations under this Agreement; provided, that prior to any such publication or disclosure, the Company and SPAC have provided the Shareholder with an opportunity to review and comment upon such announcement or disclosure, which comments the Company and SPAC will consider in good faith.
8. Changes in Share Capital. In the event of a share split, share dividend or distribution, or any change in the Company’s share capital by reason of any split-up, reverse share split, recapitalization, combination, reclassification, exchange of shares or the like, the terms “Owned Shares” and “Covered Shares” shall be deemed to refer to and include such shares as well as all such share dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.
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9. Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing signed by SPAC, the Company and the Shareholder.
10. Waiver. Any party to this Agreement may, at any time prior to the Termination Date, waive any of the terms or conditions of this Agreement, or agree to an amendment or modification to this Agreement in the manner contemplated by Section 9 and by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement.
11. Notices. All notices, requests, claims, demands and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
If
to SPAC, to:
Collective
Growth Corporation
1805 West Avenue
Austin, TX 78701
Attention: Bruce Linton, Chief Executive Officer
E-mail: [email protected]
with copies (which shall not constitute notice) to:
Graubard
Miller
405 Lexington Avenue, 11th Floor
New
York, New York 10174
Attention: David Alan Miller; Jeffrey M. Gallant
E-mail: [email protected]; [email protected]
Cassels
Brock & Blackwell LLP
40 King St W, Suite 2100
Toronto,
ON M5H 3C2, Canada
Attention: Jonathan Sherman
E-mail: [email protected]
Goldfarb
Seligman & Co.
Ampa Tower, 98 Yigal Alon Street
Tel Aviv 6789141, Israel
Attention: Adam M. Klein
E-mail: [email protected]
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If
to the Company, to:
Innoviz
Technologies Ltd.
2 Amal St.
Rosh HaAin
4809202 Israel
Attention: Eldar Cegla, Chief Financial Officer
Email: [email protected]
with copies (which shall not constitute notice) to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Attention: Ryan Maierson
E-mail: [email protected]
Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
United Kingdom
Attention: Joshua Kiernan
E-mail: [email protected]
If to the Shareholder, to such address indicated on the Company’s records with respect to the Shareholder or to such other address or addresses as the Shareholder may from time to time designate in writing.
12. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in SPAC any direct or indirect ownership or incidence of ownership of or with respect to the Covered Shares of the Shareholder. All rights, ownership and economic benefits of and relating to the Covered Shares of the Shareholder shall remain vested in and belong to the Shareholder, and SPAC shall have no authority to manage, direct, restrict, regulate, govern or administer any of the policies or operations of Company or exercise any power or authority to direct the Shareholder in the voting or disposition of any of the Shareholder’s Covered Shares, except as otherwise provided herein.
13. Entire Agreement. This Agreement and the Business Combination Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. No representations, warranties, covenants, understandings, agreements, oral or otherwise, with respect to the subject matter contemplated by this Agreement exist between the parties hereto except as expressly set forth or referenced in this Agreement and the Business Combination Agreement. In the event of any inconsistency, conflict, or ambiguity as to the rights and obligations of the parties hereto under this Agreement and the Business Combination Agreement, the terms of this Agreement shall control and supersede any such inconsistency, conflict or ambiguity.
14. No Third-Party Beneficiaries. The Shareholder hereby agrees that its representations, warranties and covenants set forth herein are solely for the benefit of SPAC in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein, and the parties hereto hereby further agree that this Agreement may only be enforced against, and any Proceeding that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against, the Persons expressly named as parties hereto; provided, that the Company shall be an express third party beneficiary with respect to Section 4, Section 5(b) and Section 7 hereof.
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15. Governing Law and Venue; Service of Process; Waiver of Jury Trial.
(a) This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware.
(b) Each of the parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction, any state or federal court sitting in the Borough of Manhattan, State of New York, New York County), for the purposes of any Proceeding, claim, demand, action or cause of action (a) arising under this Agreement or (b) in any way connected with or related or incidental to the dealings of the parties in respect of this Agreement or any of the transactions contemplated hereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding claim, demand, action or cause of action against such party (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the parties in respect of this Agreement or any of the transactions contemplated hereby, (A) any claim that such party is not personally subject to the jurisdiction of the courts as described in this Section 15 for any reason, (B) that such party or such party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such party in or by such courts. Each party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 11 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
16. Assignment; Successors. No party hereto shall assign this Agreement or any part hereof without the prior written consent of the other parties. 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. Any attempted assignment in violation of the terms of this Section 16 shall be null and void, ab initio.
17. 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 hereto, and then only with respect to the specific obligations set forth herein with respect to such party. Except to the extent a named party to this Agreement (and then only to the extent of the specific obligations undertaken by such named party in this Agreement), (a) no past, present or future director, officer, employee, incorporator, member, partner, shareholder, affiliate, agent, attorney, advisor or representative or affiliate of any named party to this Agreement and (b) no past, present or future director, officer, employee, incorporator, member, partner, shareholder, affiliate, agent, attorney, advisor or representative or affiliate 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 SPAC, the Company or the Shareholder under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
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18. Enforcement. The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (a) the parties shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, including the Shareholder’s obligations to vote its Covered Shares as provided in this Agreement, without proof of damages, prior to the valid termination of this Agreement, this being in addition to any other remedy to which they are entitled under this Agreement, and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of the parties would have entered into this Agreement. Each party agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other parties have an adequate remedy at Law or that an award of specific performance is not an appropriate remedy for any reason at Law or equity. The parties acknowledge and agree that any party seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 18 shall not be required to provide any bond or other security in connection with any such injunction.
19. Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable Law, all other provisions of this Agreement shall 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 materially adverse to any party. Upon such determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable Law, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
20. Counterparts. This Agreement and any amendment hereto may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any amendment hereto by electronic means, including docusign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement or any amendment hereto.
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21. Interpretation and Construction. The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. References to Sections are to Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. The definitions contained in this Agreement are applicable to the masculine as well as to the feminine and neuter genders of such term. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute and to any rules or regulations promulgated thereunder. References to any person include the successors and permitted assigns of that person. References from or through any date mean, unless otherwise specified, from and including such date or through and including such date, respectively. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
22. Capacity as a Shareholder. Notwithstanding anything herein to the contrary, the Shareholder signs this Agreement solely in the Shareholder’s capacity as a shareholder of the Company, and not in any other capacity and this Agreement shall not limit or otherwise affect the actions of any affiliate, employee or designee of the Shareholder or any of its affiliates in his or her capacity, if applicable, as an officer or director of the Company or any other Person.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed (where applicable, by their respective officers or other authorized Persons thereunto duly authorized) as of the date first written above.
| Collective Growth Corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
| Innoviz Technologies Ltd. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Support Agreement]
| [ ● ] | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Support Agreement]
Exhibit A
Innoviz Technologies Ltd.
(the “Company”)
Proxy
For an Extraordinary General Meeting of the Shareholders of the Company
Capitalized terms used and not otherwise defined herein, shall have the respective meanings ascribed to them under the Notice of an Extraordinary General Meeting dated December __, 2020, to which this Proxy was attached or under the Business Combination Agreement dated December [ ● ], 2020 by and between the Company, Collective Growth Corporation, a Delaware corporation, and Hatzata Merger Sub, Inc., a Delaware corporation (as amended, supplemented, restated or otherwise modified from time to time, the “Business Combination Agreement”.
The Company Shares represented by this proxy, when properly executed, will be voted or withheld from voting on any ballot that may be called for, in the manner directed herein by the undersigned shareholder. If a choice is specified with respect to any matter to be acted upon, the Company Shares shall be voted or withheld from voting accordingly. Where no instruction is given in respect to any matter to be acted upon, the Company Shares represented hereby shall, on any ballot that may be called for, be voted FOR the adoption of all such matters.
This proxy confers upon the Proxy Holder (as defined below) discretionary authority with respect to such other business as may properly come before the Meeting or postponements of adjournments thereof.
The undersigned (the “Shareholder”), being the holder of [ ● ] ordinary shares of no par value (“Company Ordinary Shares”) of Innoviz Technologies Ltd. (the “Company”)[,] [ ● ] series A convertible preferred shares of the Company, no par value (“Company Preferred A Shares”)[,] [ ● ] series B convertible preferred shares of the Company, no par value (“Company Preferred B Shares”)[,] [ ● ] series B-1 convertible preferred shares of the Company, no par value (“Company Preferred B-1 Shares”)[,] [ ● ] series C convertible preferred shares of the Company, no par value (“Company Preferred C Shares”) [and] [ ● ] series C-1 convertible preferred shares of the Company, no par value (“Company Preferred C-1 Shares” and, together with the Company Preferred A Shares, the Company Preferred B Shares, the Company Preferred B-1 Shares and the Company Preferred C Shares, the “Company Preferred Shares”)), acting pursuant to [ ● ] of the Companies Law, 5759-1999, does hereby irrevocably authorize Mr. __________ (the “Proxy Holder”) to represent the Shareholder and vote all of the [Company Ordinary Shares] [and] [Company Preferred Shares] held by the Shareholder, on behalf and in the name of the Shareholder, at the Meeting, and at any postponements or adjournments thereof, in favor of the following resolutions:
Business Combination AGREEMENT
WHEREAS, the Company has entered into a Business Combination Agreement, dated as of December [ ● ], 2020 (the “Business Combination Agreement”), by and among the Company, Collective Growth Corporation, a Delaware corporation (“SPAC”) and Hatzata Merger Sub, Inc., a Delaware corporation (“Merger Sub”), a copy of which has been provided to the undersigned Shareholder (capitalized terms used herein without definition shall have the respective meaning ascribed to them in the Business Combination Agreement);
WHEREAS, pursuant to the Business Combination Agreement, Merger Sub will be merged with and into SPAC (the “Merger”), with SPAC continuing as the surviving corporation of the Merger, upon the terms and subject to the conditions set forth in the Business Combination Agreement;
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WHEREAS, the Company Board has (a) approved the Business Combination Agreement, the Ancillary Documents to which the Company is or will be a party and the transactions contemplated thereby (including the Merger) and (b) recommended, among other things, the approval of the Company Preferred Shareholder Proposals and the Company Shareholder Proposals, in each case by written consent; and
WHEREAS, (a) the affirmative vote of the holders of at least sixty percent (60%) of the issued and outstanding Company Preferred Shares, voting together as a single class on an as converted to Company Ordinary Shares basis, including the written consents of the holders of Company Preferred C Shares and Company Preferred C-1 Shares holding, together, more than fifty percent (50%) of the then issued and outstanding Company Preferred C Shares and Company Preferred C-1 Shares, on an as-converted basis, in favor of (i) the adoption and approval of the proposal to convert the Company Preferred Shares into Company Ordinary Shares, (ii) the proposal to increase the size of the Company Board, (iii) the adoption and approval of a proposal to terminate each Company Investor Agreement requiring consent of the Company Preferred Shareholders, (iv) the adoption of the Company A&R Articles of Association, (v) the waiver of preemptive rights set forth in the Company Charter Documents, and (vi) the adoption and approval of each other proposal reasonably agreed to by the Company and SPAC as necessary and appropriate in connection with the consummation of the Transactions that would require the approval of all or certain holders of Company Preferred Shares (collectively, the “Company Preferred Shareholder Proposals”), is required pursuant to the Amended and Restated Articles of Association of the Company, dated as of October 1, 2020 (the “Company Articles”) and the applicable Company Investor Agreement, upon the terms and subject to the conditions set forth in the Business Combination Agreement, and (b) the affirmative vote of the holders of Company Shares holding more than fifty percent (50%) of the then issued and outstanding Company Shares, on an as-converted basis, in favor of (i) the proposal to increase the size of the Company Board (ii) the adoption and approval of a proposal to terminate each Company Investor Agreement requiring consent of the Company Shareholders, (iii) the adoption of the Company A&R Articles of Association, and (iv) the adoption and approval of each other proposal reasonably agreed to by the Company and SPAC as necessary and appropriate in connection with the consummation of the Transactions that would require the approval of all or certain holders of Company Shares (collectively, the “Company Shareholder Proposals”), is required pursuant to the Company Articles, upon the terms and subject to the conditions set forth in the Business Combination Agreement; now, therefore, be it
RESOLVED, that the undersigned Shareholder hereby votes [all of the Company Ordinary Shares] [and] [all of the Company Preferred Shares] held by the Shareholder in favor of the [Company Preferred Shareholder Proposals [and the] [Company Shareholder Proposals]; and
FURTHER RESOLVED, that the undersigned Shareholder hereby waives any and all irregularities of notice, with respect to the time and place of meeting, and consents to the transaction of all business represented by this written consent.
| SHAREHOLDER*
(please PRINT name) |
SIGNATURE | NAME
& TITLE (for corporate entities) |
DATE |
* If this proxy represents shares held by more than one person/entity, please list all such entities or provide separate proxies.
You are kindly requested to complete, date and sign the enclosed proxy and deliver it to the Company at your earliest convenience, but in any event prior to the time appointed for the Meeting, by email to [______].
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Exhibit 10.7
PUT OPTION AGREEMENT
This Put Option Agreement (this “Agreement”) is made and entered as of December 10, 2020 by and between Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company”) and Antara Capital LP, a Delaware limited partnership, on behalf of the funds it manages and/or its designees (“Antara” and, together with the Company, the “Parties”).
W I T N E S S E T H:
WHEREAS, the Parties have entered into that certain letter agreement (the “Innoviz Agreement”), dated as of October 7, 2020, by and among the Company, Perception Capital Corp., a Delaware corporation, Antara and Collective Growth Corporation, a Delaware corporation, as amended and supplemented by that certain letter agreement among such parties dated as of November 22, 2020 (the “Letter Agreement”);
WHEREAS, in order to enable the transactions contemplated by the BCA (as defined below) and to induce investors other than Antara to participate in the PIPE Financing, the Parties have agreed as of November 27, 2020 (the “Effective Date”) to implement the backstop commitment contemplated in Section 2 of the Letter Agreement pursuant to a put option arrangement which would provide, among other things, that, notwithstanding the Letter Agreement, Antara’s total investment in the Company in connection with the exercise of such put option, excluding, for the avoidance of doubt, the aggregate equity value ascribed to the Antara Ordinary Shares (defined below) and the Antara Warrants (defined below), shall be no greater than $150 million and no less than $70 million (the “Investment Parameters”); and
WHEREAS, the Parties wish to enter into this Agreement to memorialize such put option arrangement agreed in principle in the initial stages of negotiation of the transactions contemplated by the BCA and to set forth certain of their respective rights and obligations in furtherance thereof.
NOW, THEREFORE, for and in consideration of the premises, agreements and covenants hereinafter set forth and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as set forth below.
1. Business Combination Agreement. A copy of the Business Combination Agreement, dated as of December 10, 2020, by and among Collective Growth Corporation, a Delaware corporation, Hatzata Merger Sub, Inc., a Delaware corporation, and the Company (the “BCA”), is attached hereto as Exhibit A. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the BCA.
2. Grant of Put Option.
(a) Right to Sell. Subject to the terms and conditions of this Agreement, at any one time from and after the Effective Date and up to and until the Closing Press Release is released pursuant to the BCA (the “Put Exercise Period”), the Company shall purchase a put option right (the “Option” or “Asset”), according to which the Company will have the right but not the obligation, to cause Antara to purchase a number of newly-issued Company Ordinary Shares at the Put Shares Purchase Price (defined below); provided, however, that the aggregate equity value ascribed to such Company Ordinary Shares purchased by Antara shall be within the Investment Parameters. For the avoidance of doubt, the Company shall have the right to exercise the Option only one time; in the event the Company exercises the Option to cause Antara to purchase Company Ordinary Shares, the aggregate equity value ascribed to which is less than $150 million, it will be deemed to have waived its right with respect to any unutilized amount within the Investment Parameters and shall not have the right to subsequently exercise the Option to cause Antara to purchase any additional Company Ordinary Shares.
(b) Procedures.
(i) If the Company desires to exercise the Option and sell Company Ordinary Shares at the Put Shares Purchase Price to Antara pursuant to Section 2(a) above, the Company shall deliver to Antara within the Put Exercise Period a written, unconditional and irrevocable notice in the form attached hereto at Exhibit B (the “Put Exercise Notice”) exercising the Option and specifying the number of Company Ordinary Shares to be sold at the Put Shares Purchase Price (the “Put Option Shares”), the Put Shares Purchase Price and the aggregate equity value ascribed to such Company Ordinary Shares, together with the Put Shares Subscription Agreement (defined below).
(ii) By delivering the Put Exercise Notice, the Company represents and warrants to Antara that: (A) the Company has the requisite power and authority and has taken all necessary action to issue and sell the Put Option Shares as contemplated by this Section 2; (B) each of the Company Fundamental Representations and the representations and warranties set forth in Section 3.23 of the BCA is true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth therein) in all material respects (or, solely in the case of the representations and warranties set forth in Section 3.2(a) of the BCA, true and correct in all respects except for de minimis inaccuracies) as of the date on which the Company exercises the Option and Antara executes and delivers the Put Shares Subscription Agreement (defined below), as though made on and as of such date (except to the extent that any such representation and warranty is made in the BCA as of an earlier date (other than the Closing Date), in which case such representation and warranty shall be true and correct in all material respects as of such earlier date or, solely in the case of the representations and warranties set forth in Section 3.2(a) of the BCA, true and correct in all respects except for de minimis inaccuracies as of such earlier date); and (C) each of the Put Option Shares will be upon issuance and delivery to Antara free and clear of any and all Liens other than transfer restrictions under applicable securities Laws.
(c) Consummation of Issuance and Sale.
(i) The closing of the issuance and sale of Put Option Shares pursuant to the Option shall take place on such date and at such time (the “Exercise Closing Date”) and in such manner, including with respect to the payment of the Put Shares Purchase Price, as is set forth in one or more definitive, binding and enforceable Subscription Agreements, substantially in the form of Subscription Agreement attached hereto as Exhibit C (collectively, the “Put Shares Subscription Agreement”), to be executed and delivered by the Parties.
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(ii) Antara’s obligation to close the purchase of the Put Option Shares pursuant to the Option shall be subject Antara’s satisfaction, in Antara’s reasonable determination, that the transactions contemplated by the BCA have been consummated or will be consummated substantially concurrently with the Closing; and
(iii) Without limiting the generality of Section 2(c)(i) above, (A) Antara shall pay the Company the aggregate purchase price for the Put Option Shares set forth in the Put Shares Subscription Agreement, which shall be calculated on a $10.00 per Put Share basis (which assumes that the Company has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00) unless otherwise agreed by Antara (the “Put Shares Purchase Price”), at such time and in such manner as provided in Section 3 of the Put Shares Subscription Agreement, and (B) the Company shall deliver to Antara newly-issued certificates representing the Put Option Shares, which such shares will bear restrictive legends and stop transfer instructions as set forth in the Put Shares Subscription Agreement, free and clear of any and all Liens other than transfer restrictions under applicable securities Laws.
(d) No Other Representations and Warranties. Other than as provided for in Section 2(b)(ii) above and Section 4 below, the Company does not make any representation or warranty hereunder, express or implied, with respect to the Put Option Shares or the transactions contemplated hereby.
(e) Commercially Reasonable Efforts; Transaction Documents. Each of the Parties shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or advisable to consummate and make effective as promptly as practicable the transactions contemplated hereby, including, without limitation, the satisfaction, but not waiver, of the conditions set forth in Section 2(c)(ii) above, and to execute and/or deliver this Agreement, the Put Exercise Notice, the Put Share Subscription Agreement, the Put Option Shares, the Antara Ordinary Shares and the Antara Warrants (collectively, the “Transaction Documents”), including, without limitation, by delivering all notices, making all filings and seeking and using reasonable best efforts to obtain all consents and approvals reasonably required in connection therewith, if any. Each of the Transaction Documents shall be in form and substance reasonably satisfactory to Antara.
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3. Consideration for Purchased Asset. In consideration for the Option, as agreed between the parties at fair market value, the Company shall issue and deliver to Antara Capital Master Fund LP, a fund managed by Antara Capital LP, free and clear of any and all Liens other than transfer restrictions under applicable securities Laws and without reduction, deduction, set-off, claim or withholding:
(a) Upon the consummation of the PIPE Financing, such number of Company Ordinary Shares equal to (i) 3,559,294 Company Ordinary Shares if the Initial Transaction Proceeds are equal to or greater than $150,000,000, or (ii) a number of Company Ordinary Shares equal to the difference of (A) 3,559,294 and (B) the product of (x) 0.5556 and (y) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000, as applicable.
(b) Concurrently with the issuance of the Perception Earnout Shares, if any, pursuant to Section 2.3(a) of the BCA, such number of Company Ordinary Shares equal to (i) 370,167 Company Ordinary Shares if the Initial Transaction Proceeds are equal to or greater than $150,000,000, or (ii) a number of Company Ordinary Shares equal to the difference of (A) 370,167 and (B) the product of (x) 0.577 and (y) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000, as applicable (such Company Ordinary Shares, if any, together with the Company Ordinary Shares issuable to Antara pursuant to clause (a) above, the “Antara Ordinary Shares”).
(c) Upon the consummation of the PIPE Financing, 4,310,736 Company Warrants (the “Antara Warrants”). The Company acknowledges that the terms of the Antara Warrants will include (among others) that such Company Warrants may be exercised for cash or on a cashless basis at the holder’s option, in either case as long as they are held by the initial purchasers or their permitted transferees (as prescribed in Section 5.6 of that certain Warrant Agreement, dated as of April 30, 2020, and filed with the United States Securities and Exchange Commission on May 5, 2020, as amended by that certain Amendment to the Company Warrant Agreement, substantially in the form set forth on Exhibit G to the BCA, to entered into at the Closing and to be effective upon the Closing).
(d) The Company acknowledges that the Equity Securities of the Company issued or issuable to Antara Capital Master Fund LP pursuant to this Section 3 are subject to registration rights pursuant to the Registration Rights Agreement.
(e) Antara acknowledges that the Equity Securities of the Company issued or issuable to Antara Capital Master Fund LP pursuant to this Section 3 (and not, for the avoidance of doubt, the Equity Securities of the Company issued or issuable to Antara pursuant to Section 2 above) are subject to confidentiality and lockup restrictions pursuant to the Lockup Agreement.
(f) Antara Capital Master Fund LP is a Cayman Islands exempted limited partnership. Its EIN is 98-1426769 and its business and mailing address is 500 Fifth Avenue, Suite 2320, New York, NY 10110, Attn: Lance Kravitz, Telephone No.: +1 (646) 762-8591.
(g) The number of Antara Ordinary Shares and Antara Warrants that may be issued to Antara pursuant to this Section 3 and other dependent items shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, including a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00, stock dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of Company Ordinary Shares or Company Preferred Shares outstanding after the date hereof and prior to the Effective Time, so as to provide Antara with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the number of Antara Ordinary Shares and Antara Warrants that may be issued to Antara pursuant to this Section 3; provided, that the Parties agree that the conversion of each Company Preferred Share into one Company Ordinary Share pursuant to Section 2.1(g) of the BCA shall not require, or result in, any adjustments pursuant to this Section 3(g).
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4. Representations and Warranties. Each Party represents and warrants to the other Party as follows:
(a) Such Party has the power, authority and legal right to carry on the business now being conducted by it and to enter into this Agreement and to perform its obligations hereunder.
(b) This Agreement has been duly and validly authorized, executed and delivered by such Party and is a valid and binding agreement of such Party (assuming that this Agreement has been duly and validly authorized, executed and delivered by the other Party) enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity.
(c) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite company action.
(d) Neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby will violate or contravene any Law to which such Party is subject, except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole.
(e) Neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby will conflict with, result in any breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify or cancel, or require any notice under, any of the Company Party’s or Group Company’s Governing Documents or any Contract to which any Group Company or Merger Sub is a party or any of their respective properties or assets are bound, except as would not, individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole.
5. Withholding. The Company will indemnify Antara for any tax claim by the Israeli tax authorities with respect to any Equity Securities of the Company issued or issuable to Antara pursuant to this Agreement. Antara shall cooperate with the Company in good faith and provide reasonable assistance with respect to meeting any necessary tax reporting or other tax compliance requirements in connection with this Agreement, including any reasonable and necessary actions to reduce, mitigate or eliminate any deduction or withholding of any taxes if applicable to any consideration, whether in cash or otherwise, provided to Antara under this Agreement in consideration for the Option.
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6. Notices. All notices, requests, claims, demands and other communications between the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (c) when delivered by FedEx or other nationally recognized overnight delivery service or (d) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
If to the Company, to:
Innoviz
Technologies Ltd.
2 Amal St.
Rosh HaAin
4809202
Israel
| Attention: | Eldar Cegla, Chief Financial Officer |
| Email: | [email protected] |
with copies (which shall not constitute notice) to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
| Attention: | Ryan Maierson |
| E-mail: | [email protected] |
Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
United Kingdom
| Attention: | Joshua Kiernan |
| E-mail: | [email protected] |
If to Antara, to:
Antara Capital LP
500 Fifth Avenue, Suite 2320
New York, NY 10110
| Attention: | Lance Kravitz |
| Email: | [email protected] |
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7. Entire Agreement. This Agreement, together with the other Transaction Documents, constitute the sole and entire agreement of the Parties with respect to the backstop commitment contemplated in Section 2 of the Letter Agreement and the other subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such backstop commitment and subject matter. For the avoidance of doubt and notwithstanding anything to the contrary herein, in the event that any term, condition, covenant, agreement or provision in this Agreement conflicts with any term, condition, covenant, agreement or provision in the Innoviz Agreement and/or the Letter Agreement that is intended to specifically address any of the subject matter herein, then the term, condition, covenant, agreement or provision of this Agreement shall govern and control solely to the extent of such conflict.
8. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign or transfer any of its rights or obligations hereunder to any other Person, without the prior written consent of the other Party. Any attempted transfer or assignment in violation of this Section 8 shall be void ab initio.
9. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
10. Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
11. Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
12. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
13. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Agreement (including any of the closing deliverables contemplated hereby) by electronic means, including DocuSign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement.
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14. 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 ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
15. Venue. Each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction, any state or federal court sitting in the Borough of Manhattan, State of New York, New York County), for the purposes of any Proceeding, claim, demand, action or cause of action (a) arising under this Agreement or (b) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any of the Transactions, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding claim, demand, action or cause of action against such Party (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement, (A) any claim that such Party is not personally subject to the jurisdiction of the courts as described in this Section 15 for any reason, (B) that such Party or such Party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such Party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such Party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such Party in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 15 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
16. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE 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 16.
17. No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.
[signature pageS follow]
8
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.
| INNOVIZ TECHNOLOGIES LTD. | |||
| By: | /s/ Eldar Cegla | ||
| Name: | Eldar Cegla | ||
| Title: | Chief Financial Officer | ||
[Signature Page to Put Option Agreement]
| ANTARA CAPITAL LP | |||
| By: | /s/ Himanshu Gulati | ||
| Name: | Himanshu Gulati | ||
| Title: | Managing Partner | ||
[Signature Page to Put Option Agreement]
Exhibit A
Business Combination Agreement
(see attached)
Exhibit B
Form of Put Exercise Notice
(see attached)
INNOVIZ TECHNOLOGIES LTD.
OPTION EXERCISE NOTICE
To: Antara Capital LP
Date: ___________, 2020
RE: Exercise of Option
Reference is made to that certain Put Option Agreement (the “Put Option Agreement”), dated as of December 10, 2020, by and between Innoviz Technologies Ltd. (the “Company”) and Antara Capital LP, on behalf of the funds it manages and/or its designees (“Antara”). Capitalized terms used herein, but not otherwise defined, shall have the meanings set forth in the Put Option Agreement.
The Company hereby exercises, unconditionally and irrevocably, its Option under Section 2 of the Put Option Agreement, for ___________ Company Ordinary Shares at the Put Shares Purchase Price of $___________.1 The aggregate equity value ascribed to such Company Ordinary Shares is $____________________.2
This Put Exercise Notice is being delivered together with the Put Share Subscription Agreement(s). The closing of the issuance and sale of Put Option Shares pursuant to the Option shall take place on the Exercise Closing Date in such manner, including with respect to the payment of the Put Shares Purchase Price, as is set forth in the Put Share Subscription Agreement delivered together with this Put Exercise Notice.
Please complete, execute and deliver the Put Share Subscription Agreement as promptly as practicable.
| INNOVIZ TECHNOLOGIES LTD. | |||
| By: | |||
| Name: | Eldar Cegla | ||
| Title: | Chief Financial Officer | ||
| 1 | To be calculated on a $10.00 per Put Share basis (which assumes that the Company has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00) pursuant to Section 2(c) of the Put Option Agreement. |
| 2 | Aggregate equity value ascribed to such Company Ordinary Shares to be no less than $70 million and no more than $150 million pursuant to Section 2(a) of the Put Option Agreement. |
Exhibit C
Form of Put Share Subscription Agreement
(see attached)
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this 10th day of December, 2020, by and among Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Issuer”), and the undersigned (“Subscriber” or “you”). Defined terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Business Combination Agreement (as defined below).
WHEREAS, the Issuer, Hatzata Merger Sub, Inc., a wholly owned subsidiary of the Issuer (the “Merger Sub”) and Collective Growth Corporation, a Delaware corporation (the “Company”), will, immediately following the execution of this Subscription Agreement, enter into that certain Business Combination Agreement, dated as of December 10, 2020 (as amended, modified, supplemented or waived from time to time in accordance with its terms, the “Business Combination Agreement”), pursuant to which, inter alia, the Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of the Issuer (the “Business Combination”), on the terms and subject to the conditions set forth therein (the Business Combination, together with the other transactions contemplated by the Business Combination Agreement, the “Transactions”); and
WHEREAS, in connection with the Transactions, Subscriber desires to subscribe for and purchase from the Issuer that number of Issuer’s ordinary shares of no par value (the “Ordinary Shares”) set forth on the signature page hereto (the “Shares”) for a purchase price of $10.00 per share, for the aggregate purchase price set forth on Subscriber’s signature page hereto, which purchase price assumes that the Issuer has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00 (the “Purchase Price”), and the Issuer desires to issue and sell to Subscriber the Shares in consideration of the payment of the Purchase Price therefor by or on behalf of Subscriber to the Issuer, all on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, at the Closing, Subscriber hereby agrees to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Shares (such subscription and issuance, the “Subscription”).
2. Representations, Warranties and Agreements.
2.1 Subscriber’s Representations, Warranties and Agreements. To induce the Issuer to issue the Shares to Subscriber, Subscriber hereby represents and warrants to the Issuer and acknowledges and agrees with the Issuer as follows:
2.1.1 If Subscriber is not an individual, Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement. If Subscriber is an individual, Subscriber has the authority to enter into, deliver and perform its obligations under this Subscription Agreement.
2.1.2 If Subscriber is not an individual, this Subscription Agreement has been duly authorized, validly executed and delivered by Subscriber. If Subscriber is an individual, the signature on this Subscription Agreement is genuine, and Subscriber has legal competence and capacity to execute the same. This Subscription Agreement is enforceable against Subscriber 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.
2.1.3 The execution, delivery and performance by Subscriber of this Subscription Agreement and the consummation of the transactions contemplated herein do not and 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 Subscriber or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber or any of its subsidiaries is a party or by which Subscriber or any of its subsidiaries is bound or to which any of the property or assets of Subscriber or any of its subsidiaries is subject, which would reasonably be expected to prevent or delay Subscriber’s timely performance of its obligations under this Subscription Agreement (a “Subscriber Material Adverse Effect”), (ii) if Subscriber is not an individual, result in any violation of the provisions of the organizational documents of Subscriber or any of its subsidiaries or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its subsidiaries or any of their respective properties that would reasonably be expected to have a Subscriber Material Adverse Effect.
2.1.4 Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933 (as amended, the “Securities Act”)) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule I, (ii) is acquiring the Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is an accredited investor and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, warranties and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Shares 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 on Schedule I following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Shares.
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2.1.5 Subscriber understands that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act. Subscriber understands that the Shares may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book entries representing the Shares shall contain a legend to such effect. Subscriber acknowledges that the Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. Subscriber understands and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.
2.1.6 Subscriber understands and agrees that Subscriber is purchasing the Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants or agreements made to Subscriber by the Issuer, the Company or any of their respective affiliates, officers or directors, expressly or by implication, other than those representations, warranties, covenants and agreements expressly set forth in this Subscription Agreement, and Subscriber is not relying on any representations, warranties or covenants other than those expressly set forth in this Subscription Agreement.
2.1.7 Subscriber represents and warrants that its acquisition and holding of the Shares 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 (“ERISA”), Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
2.1.8 In making its decision to purchase the Shares, Subscriber represents that it has relied solely upon independent investigation made by Subscriber. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by anyone other than the Issuer concerning the Issuer or the Shares or the offer and sale of the Shares. Subscriber acknowledges and agrees that Subscriber has received and has had an adequate opportunity to review, such financial and other information as Subscriber deems necessary in order to make an investment decision with respect to the Shares, including with respect to the Issuer, the Company and the Transactions and made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant to the Subscriber’s investment in the Shares. Subscriber acknowledges that it has reviewed the documents made available to the Subscriber by the Company. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. Subscriber acknowledges that Goldman Sachs & Co. LLC (the “Placement Agent”) and its respective directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, the Company or the Shares or the accuracy, completeness or adequacy of any information supplied to the Subscriber by the Issuer or the Company. Subscriber acknowledges that (i) it has not relied on any statements or other information provided by the Placement Agent or any of the Placement Agent’s affiliates with respect to its decision to invest in the Shares, including information related to the Issuer, the Company, the Shares and the offer and sale of the Shares, and (ii) neither the Placement Agent nor any of its affiliates have prepared any disclosure or offering document in connection with the offer and sale of the Shares. Subscriber further acknowledges that the information provided to Subscriber is preliminary and subject to change, and 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 Subscriber’s obligation to purchase the Shares hereunder.
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2.1.9 Subscriber became aware of this offering of the Shares solely by means of direct contact from either the Placement Agent or the Issuer as a result of a pre-existing substantive relationship (as interpreted in guidance from the Securities and Exchange Commission (the “Commission”) under the Securities Act) with the Issuer or its representatives, and the Shares were offered to Subscriber solely by direct contact between Subscriber and the Placement Agent or the Issuer. Subscriber did not become aware of this offering of the Shares, nor were the Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Placement Agent has not acted as its financial advisor or fiduciary. Subscriber acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising, including methods described in section 502(c) of Regulation D under the Securities Act 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.
2.1.10 Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares. Subscriber 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 Shares, and Subscriber has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber understands and acknowledges that the purchase and sale of the Shares hereunder meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
2.1.11 Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.
2.1.12 Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of an investment in the Shares.
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2.1.13 Subscriber represents and warrants that Subscriber 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) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it 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”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Shares were legally derived.
2.1.14 If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or 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 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”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that neither Issuer, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares.
2.1.15 Subscriber 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of equity securities of the Issuer (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
2.1.16 No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Issuer as a result of the purchase and sale of Shares hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Issuer from and after the Closing as a result of the purchase and sale of Shares hereunder.
2.1.17 Subscriber has, and on each date the Purchase Price would be required to be funded to the Issuer pursuant to Section 3.1 will have, sufficient immediately available funds to pay the Purchase Price pursuant to Section 3.1.
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2.1.18 Subscriber represents that no disqualifying event described in Rule 506(d)(1)(i)-(viii) under the Securities Act (a “Disqualification Event”) is applicable to Subscriber or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Subscriber hereby agrees that it shall notify the Company promptly in writing in the event a Disqualification Event becomes applicable to Subscriber or any of its Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. For purposes of this Section 2.1.18, “Rule 506(d) Related Party” shall mean a person or entity that is a beneficial owner of Subscriber’s securities for purposes of Rule 506(d) under the Securities Act.
2.1.19 Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Company, any of its affiliates or any of its or their respective control persons, officers, directors or employees), other than the representations and warranties of the Issuer expressly set forth in this Subscription Agreement, in making its investment or decision to invest in the Issuer. Subscriber agrees that neither (i) any other Subscriber pursuant to this Subscription Agreement or any other agreement related to the private placement of shares of the Issuer’s share capital (including the controlling persons, officers, directors, partners, agents or employees of any such Subscriber) nor (ii) the Company, its affiliates or any of their or their respective affiliates’ control persons, officers, directors, partners, agents or employees, shall be liable to any other Subscriber pursuant to this Subscription Agreement or any other agreement related to the private placement of shares of the Issuer’s share capital for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares hereunder.
2.2 Issuer’s Representations, Warranties and Agreements. To induce Subscriber to purchase the Shares, the Issuer hereby represents and warrants to Subscriber and agrees with Subscriber as follows:
2.2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Israel, with 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.
2.2.2 The Shares have been duly authorized and, when issued and delivered to Subscriber against full payment for the Shares in accordance with the terms of this Subscription Agreement and registered with the Issuer’s transfer agent, the 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 amended and restated articles of association or under the Laws of the State of Israel.
2.2.3 This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity.
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2.2.4 The execution, delivery and performance of this Subscription Agreement (including compliance by the Issuer with all of the provisions hereof), issuance and sale of the Shares 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 reasonably be expected to have a material adverse effect on the legal authority of the Issuer to enter into and perform its obligations under this Subscription Agreement (a “Issuer Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.
2.2.5 As of the date of this Subscription Agreement, the authorized capital shares of the Issuer consists of (i) 204,870,390 ordinary shares of no par value (“Existing Ordinary Shares”) and (iii) 95,129,610 preferred shares of no par value (“Preferred Shares”). As of the date hereof: (i) 19,280,691 Existing Ordinary Shares are issued and outstanding and (ii) 80,038,346 Preferred Shares are issued and outstanding (consisting of (a) 23,255,810 series A convertible preferred shares of the Issuer, no par value, (b) 18,116,580 series B convertible preferred shares of the Issuer, no par value, (c) 3,454,440 series B-1 convertible preferred shares of the Issuer, no par value, (d) 32,137,295 series C convertible preferred shares of the Issuer, no par value and (e) 3,074,221 series C-1 convertible preferred shares of the Issuer, no par value).
2.2.6 Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 2.1 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Issuer to Subscriber.
2.2.7 The Issuer has provided Subscriber an opportunity to ask questions regarding the Issuer and made available to Subscriber all the information reasonably available to the Issuer that Subscriber has reasonably requested to make an investment decision with respect to the Shares.
2.2.8 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 of the Shares under the Securities Act.
2.2.9 No Disqualification Event is applicable to the Issuer or, to the Issuer’s knowledge, any Issuer Covered Person (as defined below), except for a Disqualification Event as to which Rule 506(d)(2)(ii)-(iv) or (d)(3) under the Securities Act is applicable. The Issuer has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Issuer Covered Person” means, with respect to the Issuer as an “issuer” for purposes of Rule 506 under the Securities Act, any person listed in the first paragraph of Rule 506(d)(1) under the Securities Act.
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3. Settlement Date and Delivery.
3.1 Closing. The closing of the Subscription contemplated hereby (the “Closing”) shall occur on the date of (the “Closing Date”), and immediately following, the consummation of the Transactions. Upon written notice from (or on behalf of) the Issuer to Subscriber (the “Closing Notice”) at least five (5) Business Days prior to the date that the Issuer reasonably expects all conditions to the closing of the Transactions to be satisfied, Subscriber shall deliver to the Issuer within two (2) Business Days after receiving the Closing Notice, the Purchase Price for the Shares, by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice, such funds to be held by the Issuer in escrow until the Closing. Unless otherwise agreed by the Company in writing, the Issuer shall deliver the Closing Notice at least four (4) Business Days prior to the date of the Special Meeting. At the Closing, upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 3, the Issuer shall deliver to Subscriber the Shares in book entry form, in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable.
3.2 Conditions to Closing of the Issuer. The Issuer’s obligations to sell and issue the Shares at the Closing are subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:
3.2.1 Representations and Warranties Correct. The representations and warranties made by Subscriber in Section 2.1 hereof shall be true and correct in all material respects when made (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true and correct in all respects) and shall be true and correct in all material respects on and as of the Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true and correct in all respects), with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Transactions.
3.2.2 Closing of the Transactions. The Transactions set forth in the Business Combination Agreement shall have been or will be consummated substantially concurrently with the Closing.
3.2.3 Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, statute, rule or regulation enjoining or prohibiting the consummation of the Subscription.
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3.3 Conditions to Closing of Subscriber. Subscriber’s obligation to purchase the Shares at the Closing is subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:
3.3.1 Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 2.2 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, which representations and warranties shall be true and correct in all respects) on and as of the Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Transactions; provided, that in the event this condition would otherwise fail to be satisfied as a result of a breach of one or more of the representations and warranties of the Issuer contained in this Subscription Agreement and the facts underlying such breach would also cause a condition to the Issuer’s obligations under the Business Combination Agreement to fail to be satisfied, this condition shall nevertheless be deemed satisfied in the event the Company waives such condition with respect to such breach under the Business Combination Agreement.
3.3.2 Closing of the Transactions. The Transactions set forth in the Business Combination Agreement shall have been or will be consummated substantially concurrently with the Closing.
3.3.3 Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, statute, rule or regulation enjoining or prohibiting the consummation of the Subscription.
4. Registration Statement.
4.1 The Issuer agrees that, within sixty (60) calendar days after the consummation of the Transactions (the “Filing Date”), the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and 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) the 120th calendar day (or 180th calendar day if the Commission notifies the Issuer that it will “review” the Registration Statement) following the Closing and (ii) the 10th Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, however, that the Issuer’s obligations to include the Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Shares as shall be reasonably requested by the Issuer to effect the registration of the Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. For purposes of clarification, any failure by the Issuer to file the Registration Statement by the Filing Date 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 as set forth above in this Section 4.
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4.2 In the case of the registration effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration. At its expense the Issuer shall:
4.2.1 except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Subscriber, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (i) Subscriber ceases to hold any Shares, (ii) the date all Shares held by Subscriber may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), and (iii) two years from the Effectiveness Date of the Registration Statement;
4.2.2 advise Subscriber within five (5) Business Days:
(a) when a Registration Statement or any post-effective amendment thereto has become effective;
(b) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;
(c) of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(d) 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 are not misleading 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.
Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising Subscriber of such events, provide Subscriber with any material, nonpublic information regarding the Issuer other than to the extent that providing notice to Subscriber of the occurrence of the events listed in (a) through (d) above constitutes material, nonpublic information regarding the Issuer;
4.2.3 use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;
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4.2.4 upon the occurrence of any event contemplated in Section 4.2.2(d), except for such times as the Issuer is permitted hereunder 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 therein, 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;
4.2.5 use its commercially reasonable efforts to cause all Shares to be listed on each securities exchange or market, if any, on which the Issuer’s Ordinary Shares are then listed; and
4.3 Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Subscriber not to sell under the Registration Statement or to suspend the effectiveness thereof, if the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event the Issuer’s board of directors reasonably believes, upon the advice of in-house legal counsel, would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors, upon the advice of in-house legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”); provided, however, that the Issuer may not delay or suspend the Registration Statement on more than three occasions or for more than sixty (60) consecutive calendar days, or more than one hundred and twenty (120) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Issuer of the happening of any 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, Subscriber agrees that (i) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law or subpoena. If so directed by the Issuer, Subscriber will deliver to the Issuer or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Shares shall not apply (i) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.
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5. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (i) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms and (ii) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement; provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer shall promptly notify Subscriber of the termination of the Business Combination Agreement promptly after the termination of such agreement.
6. Miscellaneous.
6.1 Further Assurances. At the Closing, the parties hereto shall execute and deliver 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.
6.1.1 Subscriber acknowledges that the Issuer, the Company, the Placement Agent and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Issuer and the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate in all material respects. Subscriber further acknowledges and agrees that the Placement Agent is a third-party beneficiary of the representations and warranties of the Subscriber contained in Section 2.1.8 and Section 2.1.9 of this Subscription Agreement to the extent such representations and warranties relate to the Placement Agent.
6.1.2 Each of the Issuer, Subscriber and the Company is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
6.1.3 The Issuer may request from Subscriber such additional information as the Issuer may deem necessary to evaluate the eligibility of Subscriber to acquire the Shares, and Subscriber shall provide such information as may be reasonably requested.
6.1.4 Subscriber shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
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6.1.5 Each of Subscriber and the Issuer shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Subscription Agreement on the terms and conditions described therein no later than immediately following the consummation of the Transactions.
6.2 Notices. Any notice or communication required or permitted hereunder 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, and 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 (3) Business Days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:
(i) if to Subscriber, to such address or addresses set forth on the signature page hereto;
(ii) if to the Issuer, to:
Innoviz
Technologies Ltd.
2 Amal Street
Afek Industrial Park
Rosh Ha’Ayin, Israel
| Attention: | Eldar
Cegla Dana Nutkevich |
| Email: | [email protected] [email protected] |
with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
United Kingdom
| Attention: | Joshua Kiernan |
Ryan Maierson
| E-mail: | [email protected] |
(iii) if to the Company, to:
Innoviz
Technologies Ltd.
2 Amal St.
Rosh HaAin
4809202
ISRAEL
| Attention: | Eldar Cegla, Chief Financial Officer |
| Email: | [email protected] |
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with copies to (which shall not constitute notice) to:
Graubard
Miller
405 Lexington Avenue, 11th Floor
| New | York,
New York 10174 Attention: Jeffrey M. Gallant |
| E-mail: | [email protected] |
Cassels
Brock & Blackwell LLP
40 King St W, Suite 2100
Toronto, ON M5H 3C2, Canada
| Attention: | Jonathan Sherman |
| E-mail: | [email protected] |
6.3 Entire Agreement. This Subscription Agreement 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 hereof, including any commitment letter entered into relating to the subject matter hereof.
6.4 Modifications and Amendments. This Subscription Agreement may not be amended, modified, supplemented or waived (i) except by an instrument in writing, signed by the party against whom enforcement of such amendment, modification, supplement or waiver is sought and (ii) without the prior written consent of the Issuer and the Company.
6.5 Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the parties hereunder (including Subscriber’s rights to purchase the Shares) may be transferred or assigned without the prior written consent of each of the other parties hereto (other than the Shares acquired hereunder, if any, and then only in accordance with this Subscription Agreement).
6.6 Benefit.
6.6.1 Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns. This Subscription Agreement shall not confer rights or remedies upon any person other than the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, the Company is an express third-party beneficiary of Section 6.4.
6.6.2 Each of the Issuer and Subscriber acknowledges and agrees that (a) this Subscription Agreement is being entered into in order to induce the Company to execute and deliver the Business Combination Agreement and without the representations, warranties, covenants and agreements of the Issuer and Subscriber hereunder, the Company would not enter into the Business Combination Agreement, (b) each representation, warranty, covenant and agreement of the Issuer and Subscriber hereunder is being made also for the benefit of the Company, and (c) the Company may directly enforce (including by an action for specific performance, injunctive relief or other equitable relief, including to cause the Purchase Price to be paid and the Closing to occur) each of the covenants and agreements of each of the Issuer and Subscriber under this Subscription Agreement.
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6.7 Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.
6.8 Consent to Jurisdiction; Waiver of Jury Trial. Each of the parties irrevocably consents to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware, provided, that if subject matter jurisdiction over the matter that is the subject of the legal proceeding is vested exclusively in the U.S. federal courts, such legal proceeding shall be heard in the U.S. District Court for the District of Delaware (together with the Court of Chancery of the State of Delaware “Chosen Courts”), in connection with any matter based upon or arising out of this Subscription Agreement. Each party hereby waives, and shall not assert as a defense in any legal dispute, that (i) such person is not personally subject to the jurisdiction of the Chosen Courts for any reason, (ii) such legal proceeding may not be brought or is not maintainable in the Chosen Courts, (iii) such person’s property is exempt or immune from execution, (iv) such legal proceeding is brought in an inconvenient forum or (v) the venue of such legal proceeding is improper. Each Party hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, further consents to service of process by nationally recognized overnight courier service guaranteeing overnight delivery, or by registered or certified mail, return receipt requested, at its address specified pursuant to Section 6.2 and waives and covenants not to assert or plead any objection which they might otherwise have to such manner of service of process. Notwithstanding the foregoing in this Section 6.8, a party may commence any action, claim, cause of action or suit in a court other than the Chosen Courts solely for the purpose of enforcing an order or judgment issued by the Chosen Courts. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT WHETHER NOW EXISTING OR HEREAFTER ARISING. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT. FURTHERMORE, NO PARTY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED.
6.9 Severability. If any provision of this Subscription Agreement shall 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 thereby and shall continue in full force and effect.
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6.10 No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Subscription Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or remedy under this Subscription Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Subscription Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
6.11 Remedies.
6.11.1 The parties agree that the Issuer and the Company would suffer irreparable damage if this Subscription Agreement was not performed or the Closing is not consummated in accordance with its specific terms or was otherwise breached and that money damages or other legal remedies would not be an adequate remedy for any such damage. It is accordingly agreed that the Issuer and the Company shall be entitled to equitable relief, including in the form of an injunction or injunctions, to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement in an appropriate court of competent jurisdiction as set forth in Section 6.8, this being in addition to any other remedy to which any party is entitled at law or in equity, including money damages. The right to specific enforcement shall include the right of the Issuer or the Company to cause Subscriber and the right of the Company to cause the Issuer to cause the transactions contemplated hereby to be consummated on the terms and subject to the conditions and limitations set forth in this Subscription Agreement. The parties hereto further agree (i) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, (ii) not to assert that a remedy of specific enforcement pursuant to this Section 6.11 is unenforceable, invalid, contrary to applicable law or inequitable for any reason and (iii) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate. In connection with any Action for which the Company is being granted an award of money damages, each of the Issuer and Subscriber agrees that such damages, to the extent payable by such party, shall include, without limitation, damages related to the consideration that is or was to be paid to the Company or its equityholders under the Business Combination Agreement and/or Subscription Agreement and such damages are not limited to an award of out-of-pocket fees and expenses related to the Business Combination Agreement and Subscription Agreement.
6.11.2 The parties acknowledge and agree that this Section 6.11 is an integral part of the transactions contemplated hereby and without that right, the parties hereto would not have entered into this Subscription Agreement.
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6.11.3 In any dispute arising out of or related to this Subscription Agreement, or any other agreement, document, instrument or certificate contemplated hereby, or any transactions contemplated hereby or thereby, the applicable adjudicating body shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the dispute and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby and, if the adjudicating body determines a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the adjudicating body may award the prevailing party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the adjudication and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby or thereby.
6.12 Survival of Representations and Warranties. All representations and warranties made by the Subscriber shall survive the Closing. For the avoidance of doubt, if for any reason the Closing does not occur immediately following the consummation of the Transactions, all representations, warranties, covenants and agreements of the parties hereunder shall survive the consummation of the Transactions and remain in full force and effect.
6.13 No Broker or Finder. Other than the Placement Agent (which has been engaged by the Issuer in connection with this Subscription), each of the Issuer and Subscriber each represents and warrants to the other parties hereto that no broker, finder or other financial consultant has acted on its behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on any other party hereto. Each of the Issuer and Subscriber agrees to indemnify and save the other parties hereto harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.
6.14 Headings and Captions. The headings and captions of the various subdivisions of this Subscription Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.15 Counterparts. This Subscription Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
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6.16 Construction. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Subscription Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Subscription Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant. All references in this Subscription Agreement to numbers of shares, per share amounts and purchase prices shall be appropriately adjusted to reflect any stock split, stock dividend, stock combination, recapitalization or the like occurring after the date hereof.
6.17 Mutual Drafting. This Subscription Agreement is the joint product of the parties hereto and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and shall not be construed for or against any party hereto.
7. Consent to Disclosure. Subscriber hereby consents to the publication and disclosure in any press release issued by the Issuer or the Company or Form 8-K filed by the Issuer or the Company with the SEC in connection with the execution and delivery of the Business Combination Agreement and the Proxy Statement (and, as and to the extent otherwise required by the federal securities laws or the SEC or any other securities authorities, any other documents or communications provided by the Issuer or the Company to any Governmental Authority or to securityholders of the Issuer or the Company) of Subscriber’s identity and beneficial ownership of Covered Shares and the nature of Subscriber’s commitments, arrangements and understandings under and relating to this Subscription Agreement and, if deemed appropriate by the Issuer or the Company, a copy of this Subscription Agreement. Subscriber will promptly provide any information reasonably requested by the Issuer or the Company for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the SEC).
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8. Trust Account Waiver. Notwithstanding anything to the contrary set forth herein, Subscriber acknowledges that it has read the Investment Management Trust Agreement, dated as of April 30, 2020, by and between the Company and Continental Stock Transfer & Trust Company, a New York corporation, and understands that the Company has established the trust account described therein (the “Trust Account”) for the benefit of the Company’s public stockholders and that disbursements from the Trust Account are available only in the limited circumstances set forth therein. Subscriber further acknowledges and agrees that the Company’s sole assets consist of the cash proceeds of the Company’s initial public offering and private placements of its securities, and that substantially all of these proceeds have been deposited in the Trust Account for the benefit of its public stockholders. Accordingly, Subscriber (on behalf of itself and its affiliates) hereby waives any past, present or future claim of any kind against, and any right to access, the Trust Account, any trustee of the Trust Account and the Company to collect from the Trust Account any monies that may be owed to them by the Company or any of its affiliates for any reason whatsoever, and will not seek recourse against the Trust Account at any time for any reason whatsoever, including, without limitation, for any knowing and intentional material breach by any of the parties to this Subscription Agreement of any of its representations or warranties as set forth in this Subscription Agreement, or such party’s material breach of any of its covenants or other agreements set forth in this Subscription Agreement, which material breach constitutes, or is a consequence of, a purposeful act or failure to act by such party with the knowledge that the taking of such act or failure to take such act would cause a material breach of this Subscription Agreement. This Section 8 shall survive the termination of this Subscription Agreement for any reason.
9. [Waiver of Sovereign Immunity. With respect to the liability of Subscriber to perform its obligations under this Subscription Agreement, with respect to itself or its property, Subscriber:
9.1 agrees that, for purposes of the doctrine of sovereign immunity, the execution, delivery and performance by it of this Subscription Agreement constitutes private and commercial acts done for private and commercial purposes;
9.2 agrees that, should any proceedings be brought against it or its assets in any jurisdiction in relation to this Subscription Agreement or any transaction contemplated by this Subscription Agreement in accordance with the terms hereof, Subscriber is not entitled to any immunity on the basis of sovereignty in respect of its obligations under this Subscription Agreement, and no immunity from such proceedings (including, without limitation, immunity from service of process from suit, from the jurisdiction of any court, from an order or injunction of such court or the enforcement of same against its assets) shall be claimed by or on behalf of such party or with respect to its assets;
9.3 waives, in any such proceedings, to the fullest extent permitted by law, any right of immunity which it or any of its assets now has or may acquire in the future in any jurisdiction;
9.4 subject to the terms and conditions hereof, consents generally in respect of the enforcement of any judgment or award against it in any such proceedings to the giving of any relief or the issue of any process in any jurisdiction in connection with such proceedings (including, without limitation, pre-judgment attachment, post judgment attachment, the making, enforcement or execution against or in respect of any assets whatsoever irrespective of their use or intended use of any order or judgment that may be made or given in connection therewith); and
9.5 specifies that, for the purposes of this provision, “assets” shall be taken as excluding “premises of the mission” as defined in the Vienna Convention on Diplomatic Relations signed at Vienna, April 18, 1961, “consular premises” as defined in the Vienna Convention on Consular Relations signed in 1963, and military property or military assets or property of the Investor.]1
| 1 | Note to Draft: To be included for all sovereign wealth or similar investors. |
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| ISSUER: | |||
| innoviz Technologies ltd. | |||
| By: | |||
| Name: | |||
| Title: | |||
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| Accepted and agreed this day of December, 2020. | ||
| SUBSCRIBER: | ||
| Signature of Subscriber: | Signature of Joint Subscriber, if applicable: | |
| By: __________________________________________ | By: __________________________________________ | |
| Name: ________________________________________ | Name: ________________________________________ | |
| Title: _________________________________________ | Title: _________________________________________ | |
| Date: December , 2020 | ||
| Name of Subscriber: | Name of Joint Subscriber, if applicable: | |
| ______________________________________________ | ______________________________________________ | |
| (Please print. Please indicate name and capacity of person signing above) | (Please Print. Please indicate name and capacity of person signing above) | |
| ______________________________________________ | ______________________________________________ | |
| Name
in which securities are to be registered (if different from the name of Subscriber listed directly above): _______________________________________ |
||
| Email Address: _________________________________ | ||
| If there are joint investors, please check one: | ||
| ☐ Joint Tenants with Rights of Survivorship | ||
| ☐ Tenants-in-Common | ||
| ☐ Community Property | ||
| Subscriber’s EIN: _______________________________ | Joint Subscriber’s EIN: ____________________________ | |
| Business Address-Street: | Mailing Address-Street (if different): | |
| ______________________________________________ | ______________________________________________ | |
| ______________________________________________ | ______________________________________________ | |
| City, State, Zip: _________________________________ | City, State, Zip: _________________________________ | |
| Attn: _________________________________________ | Attn: _________________________________________ | |
| Telephone No.: _________________________________ | Telephone No.: _________________________________ | |
| Facsimile No.: ___________________________________ | Facsimile No.: ___________________________________ | |
| Aggregate Number of Shares subscribed for: | ||
| ______________________________________________ | ||
| Aggregate Purchase Price: $______________ | ||
You must pay the Purchase Price by wire transfer of U.S. dollars in immediately available funds, to be held in escrow until the Closing, to the account specified by the Issuer in the Closing Notice. The aggregate Purchase Price assumes that the Issuer has effected a reverse stock split prior to the Effective Time in order to cause the Company Share Value to equal $10.00.
SCHEDULE
I
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
| A. | QUALIFIED
INSTITUTIONAL BUYER STATUS (Please check the applicable subparagraphs): |
| 1. | ☐ | We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB. |
| 2. | ☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
*** OR ***
| B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs): |
| 1. | ☐ | We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.” |
| 2. | ☐ | We are not a natural person. |
*** AND ***
C. AFFILIATE STATUS (Please check the applicable box)
SUBSCRIBER:
| ☐ | is: |
| ☐ | is not: |
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This
page should be completed by Subscriber
and constitutes a part of the Subscription Agreement.
The Subscriber is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to the Subscriber (Please check the applicable subparagraphs):
| ☐ | The Subscriber is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and: |
| ☐ | is an insurance company as defined in section 2(a)(13) of the Securities Act; |
| ☐ | is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act; |
| ☐ | is a Small Business Investment Company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”); |
| ☐ | is a 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; |
| ☐ | is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); |
| ☐ | is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans 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, of (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans; |
| ☐ | is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”); |
| ☐ | is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act, or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust; or |
| ☐ | is an investment adviser registered under the Investment Advisers Act; |
| ☐ | The Subscriber is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the Subscriber; |
| ☐ | The Subscriber is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer; |
| ☐ | The Subscriber is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies3 which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Subscriber or are part of such family of investment companies; |
| ☐ | The Subscriber is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or |
| ☐ | The Subscriber is a as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a US bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution. |
| 3 | “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided that, (a) each series of a series company (as defined in Rule 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor) |
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. Subscriber has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ☐ | Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; |
| ☐ | Any broker or dealer registered pursuant to section 15 of the Exchange Act; |
| ☐ | Any insurance company as defined in section 2(a)(13) of the Securities Act; |
| ☐ | Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a)(48) of the Investment Company Act; |
| ☐ | Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act; |
| ☐ | 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 $5,000,000; |
| ☐ | Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”; |
| ☐ | Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act; |
| ☐ | Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000; |
| ☐ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
| ☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; |
| ☐ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; |
| ☐ | Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D under the Securities Act; or |
| ☐ | Any entity in which all of the equity owners are “accredited investors.” |
Exhibit 99.1
Innoviz Technologies, a Global Leader in LiDAR Sensors and Perception Software for Autonomous Driving, to be Listed on Nasdaq Through Business Combination with Collective Growth Corporation
| ● | Innoviz Technologies Ltd. (“Innoviz”) to become publicly listed through business combination with Collective Growth Corporation (NASDAQ: CGRO) (“Collective Growth”) in a transaction sponsored by Antara Capital LP and Perception Capital Partners LLC |
| ● | Transaction is expected to provide up to $350 million in gross proceeds comprised of Collective Growth’s $150 million of cash held in trust, assuming no redemptions by public stockholders, and a $200 million fully committed ordinary share PIPE at $10.00 per share, led by Antara Capital and includes strategic investments from Magna International, Innoviz’s Tier-1 partner, Phoenix Insurance and other institutional investors |
| ● | Following the expected closing of the transaction in the first quarter of 2021, the combined Company is expected to have an estimated equity value of approximately $1.4 billion and to be listed on NASDAQ under the ticker symbol “INVZ” |
| ● | Founded in 2016 by a group of Israeli Intelligence Corps veterans from Unit 81, the most prestigious technological unit in the Israeli Defence Forces, Innoviz is a global developer of high-performance, solid-state LiDAR sensors and perception software for autonomous vehicles |
| ● | BMW chose Innoviz’s solid-state LiDAR sensor, InnovizOne, sourced and manufactured by Magna International, to develop its LiDAR for series production |
| ● | Furthering its commitment to bring automation to the entire mobility market, Innoviz recently announced InnovizTwo, a lower price point and technologically advanced product that will enable OEM customers to deliver enhanced safety and functionality at a mass-market price point |
| ● | Innoviz current partners and investors include Magna International, Samsung-Harman, Aptiv, Magma Venture Partners, Vertex Ventures, SoftBank Ventures Asia, Phoenix Insurance, China Merchants Capital, Shenzhen Capital Group, Harel Insurance Investments and Financial Services and others |
| ● | All Innoviz shareholders will retain 100% of their equity holdings in the public company |
| ● | Transaction positions Innoviz to capitalize on significant growth opportunities, expand its product roadmap and offers investors a unique opportunity to invest in the future of autonomous driving |
TEL AVIV, Israel, and AUSTIN, Texas Dec 11, 2020 – Innoviz Technologies, a technology leader of high-performance, solid-state LiDAR sensors and perception software, today announced it has entered into a definitive agreement to merge with Collective Growth Corporation (NASDAQ: CGRO) in a transaction sponsored by Antara Capital LP and Perception Capital Partners LLC. The transaction is supported by a $200 million fully committed common stock PIPE led by Antara Capital and includes strategic investments from Magna International, Innoviz’s Tier-1 partner. Upon completion of the transaction, the combined Company will retain the Innoviz Technologies, Ltd. name and is expected to be listed on NASDAQ under the ticker symbol “INVZ”.
Founded in 2016, Innoviz, alongside its mobility tech partner Magna International, was the first to bring a high-end solid-state LiDAR to market and meet the stringent requirements of automotive OEMs, robotaxi companies and Tier 1 suppliers for sensor safety, reliability, durability, low-power consumption, range, resolution, cost and size. The Company has continued to break new ground and enable consumer autonomous vehicle adoption by delivering LiDAR with unparalleled performance at a price point that allows for adoption and mass production. The Company was one of the first to innovate up the AV stack and develop perception software to accompany its LiDAR products, and many other industry participants followed Innoviz’s approach. Innoviz’s leading solid-state LiDAR sensors and perception software are built and priced for mass produced consumer autonomous vehicles, a market that accounts for approximately two thirds of the total addressable market for LiDAR in the near term.
In addition to Magna International, Innoviz has established several partnerships with other world leading Tier 1 automotive suppliers, such as HARMAN, Aptiv and HiRain, which is active in China. These partners are some of the most influential companies in the automotive industry and have extensive experience with driver assistance and autonomous driving systems.
Innoviz’s Co-founder and CEO Omer Keilaf has spent over 21 years driving cutting edge technologies from inception to commercialization, and under his leadership the Company has grown rapidly, raising $251 million to date and expanding to over 280 employees globally. He also served in leadership roles in the Israeli Army’s elite unit 81 division, tasked with developing innovations and technology to great success.
Since its inception, Innoviz has launched several LiDAR products and its advanced perception software. Its solid-state LiDAR sensor is specifically designed for automakers requiring an automotive-grade, mass-producible solution. Its perception software is designed to be the ideal complement to the Company’s hardware offerings with advanced AI and machine learning-based classification, detection and tracking features. Innoviz has been named a World Economic Forum Technology Pioneer, Automobility LA Top Three Startup, two-time CES Innovation Award winner, The Atlas Award for Best Israeli LiDAR, Most Innovative Startup in Israel, and more. Innoviz is headquartered in Tel Aviv, Israel, a region globally recognized for its engineering talent and record-breaking startup investments in the mobility and semiconductor sectors.
Innoviz has focused on the Consumer Vehicle market because it is the largest and most demanding market for LiDAR, accounting for 2/3 of the LiDAR TAM in the near term. Innoviz’s win for the production of an L3 platform, mature and proven technology and deep partnerships with four of the largest Tier I auto suppliers positions Innoviz to be a winner in the Consumer Vehicle market. Winning in the Consumer Vehicle market is expected to give Innoviz an advantaged platform that is already being used to expand into broader LiDAR applications such as Robotaxis/Delivery Vehicles, Drones, Security/Surveillance and the Internet of Things.
Innoviz’s latest product, InnovizTwo, offers a significant cost reduction and performance improvement compared to InnovizOne. InnovizTwo aims to meet automakers’ desired price target for LiDAR and allow car manufacturers to offer safe L2+ vehicles while paving the path to full L3 automation through roadway data collection and software updates. The transition from L2+ to L3 poses additional challenges to automakers with hands-free driving on highways occurring at higher speeds. Innoviz is accelerating the path to widespread adoption of L2/L2+ and thereby giving automakers the confidence to pursue full autonomy.
Omer Keilaf, Innoviz CEO said: “Innoviz continues to push the boundaries of LiDAR performance and price. Our engineers, along with our partner Magna International, have been working tirelessly to bring a solution that automakers can adopt at scale and trust to perform safely and reliably for the entire lifecycle of their vehicles. This milestone is pivotal for our continued growth and the advancement of the autonomous vehicle industry as a whole. It requires significant investment of time and resources and we’ve made great strides due to the support of our investors and partners. The public listing is a major step on our path to becoming one of the dominant players in the global autonomous driving industry.”
Nicolai Martin, Senior VP Automated Driving and Driver Assistance at BMW says: “Our goal is to offer safe driver assistance functions for our customers by using state-of-the-art sensors and creating a robust modular system. We are focusing on developing automated driving technology by using LiDAR sensors. Innoviz is one of our strongest partners that is enabling us to develop the future of automated driving.”
"Working with companies like Innoviz to transform innovative technologies into game-changing automotive-grade products is a win for our customers and the industry as we tackle challenges that come with autonomous vehicle development," said Swamy Kotagiri, Magna International President and incoming Chief Executive Officer. "Innoviz LiDAR technology, along with Magna's ADAS expertise, software integration and manufacturing excellence is meeting the need by bringing a high-performance, first-to-market solution.”
Bruce Linton, Chairman and CEO of Collective Growth, said, “Collective Growth sought to advance industrial practices and drive the evolution of the auto sector, a mission well served by this merger. We are extremely excited today to announce the merger with Innoviz and Collective Growth. Innoviz brings a winning combination of high-performance LIDAR technology, commercial partnerships with leading OEMs and Tier 1 suppliers, and a dynamic management team.”
Jim Sheridan, CEO of Perception Capital Partners, who is expected to join the Board of Directors of the Company upon closing of the transaction, said, “I look forward to joining the Innoviz Board. Innoviz is perfectly positioned to extend its leading position in the large and rapidly growing ADAS and autonomous market.”
Transaction Overview
The Transaction is expected to provide up to $350 million in gross proceeds comprised of Collective Growth’s $150 million of cash held in trust, assuming no redemptions by public stockholders, and $200 million from a fully committed ordinary share PIPE at $10.00 per share, including strategic investments from Magna International, Innoviz’s Tier-1 partner, Antara Capital, co-sponsor and the largest investor in the PIPE, Phoenix Insurance and other institutional investors.
The combined Company is expected to have an estimated equity value of approximately $1.4 billion and is expected to be listed on NASDAQ under the ticker symbol “INVZ”. All current Innoviz stockholders will retain the entirety of their existing equity holdings in the combined Company.
The transaction, which has been unanimously approved by the boards of directors of both Innoviz and Collective Growth, is targeted to close in the first quarter of 2021, subject to regulatory and stockholder approvals and other customary closing conditions. Following completion of the transaction, Innoviz will retain its experienced management team. Founder Omer Keilaf will continue to serve as CEO.
Additional information about the proposed business combination, including a copy of the definitive agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Collective Growth with the Securities and Exchange Commission and available at www.sec.gov.
Advisors
Goldman Sachs & Co. LLC is serving as exclusive Financial advisor and Placement Agent to Innoviz in connection with the
merger. Latham & Watkins LLP and Meitar | Law Offices are serving as Legal Advisor to Innoviz. Akin Gump Strauss Hauer &
Field LLP and Faegre Drinker Biddle & Reath LP are serving as Legal Advisors to sponsors Antara Capital and Perception Capital,
respectively, and Nechama Brin and Michael Yifrah are serving as Financial Advisors to Perception Capital. Graubard Miller and
Goldfarb Seligman & Co. are serving as Legal Advisor to Collective Growth, and Cantor Fitzgerald is serving as Financial and
Capital Markets Advisor to Collective Growth.
Investor Conference Call Information
A recording of an investor conference call between Innoviz and Collective Growth discussing the business and the proposed transaction
will be available on Innoviz’s Investors page through December 23, 2020.
About Innoviz Technologies
Innoviz is a leading manufacturer of
high-performance, solid-state LiDAR sensors and perception software that enable the mass production of autonomous vehicles. Innoviz’s
offerings include InnovizOne, an automotive-grade, mass-producible LiDAR sensor, InnovizTwo, next generation high-performance automotive-grade
LiDAR sensor, and Innoviz’s perception software, designed to complement its hardware offerings with advanced AI and machine
learning-based classification, detection and tracking features. Innoviz is backed by top-tier strategic partners and investors,
including SoftBank Ventures Asia, Samsung, Magna International, Aptiv, Magma Venture Partners, Vertex Ventures, 360 Capital Partners,
Harel Insurance Investments and Financial Services, Phoenix Insurance Company and others. For more information, visit www.innoviz.tech.
About Collective Growth Corporation
Collective Growth Corporation is a blank check company led by Bruce Linton and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities, which Collective Growth refers to as its initial business combination. For more information, visit www.collectivegrowthcorp.com.
About Perception Capital
Perception Capital is a Partnership between Northern Pacific Group and operating executives Jim Sheridan and Patrick Williams focused on combining with a rapidly growing global technology company. Perception Capital is led by CEO Jim Sheridan who held senior procurement positions at Ford Motor Company and led multiple purchasing transformations while at McKinsey & Company.
About Antara
Antara Capital LP is an event driven credit and special situations hedge fund manager, investing globally over $1 billion of capital on behalf of institutions and high net worth individuals. Antara takes a partnership approach with management teams to create shareholder value, and has provided creative financing solutions to a number of advanced stage technology companies.
Forward Looking Statements
This document contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction between Innoviz Technologies Ltd. (“Innoviz”) and Collective Growth Corporation (“Collective Growth”), including statements regarding the benefits of the transaction, the anticipated timing of the transaction, the services offered by Innoviz and the markets in which it operates, and Innoviz’s projected future results. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of Collective Growth’s securities, (ii) the risk that the transaction may not be completed by Collective Growth’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by Collective Growth, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the business combination agreement by the shareholders of Collective Growth and Innoviz, the satisfaction of the minimum trust account amount following redemptions by Collective Growth’s public shareholders and the receipt of certain governmental and regulatory approvals, (iv) the lack of a third party valuation in determining whether or not to pursue the proposed transaction, (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement, (vi) the effect of the announcement or pendency of the transaction on Innoviz’s business relationships, performance, and business generally, (vii) risks that the proposed transaction disrupts current plans of Innoviz and potential difficulties in Innoviz employee retention as a result of the proposed transaction, (viii) the outcome of any legal proceedings that may be instituted against Innoviz or against Collective Growth related to the business combination agreement or the proposed transaction, (ix) the ability of Innoviz to list its ordinary shares on the Nasdaq, (x) the price of Innoviz’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which Innoviz plans to operate, variations in performance across competitors, changes in laws and regulations affecting Innoviz’s business and changes in the combined capital structure, and (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Collective Growth’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other documents filed by Collective Growth from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and the registration statement on Form F-4 and proxy statement/prospectus discussed below. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Innoviz and Collective Growth assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither Innoviz nor Collective Growth gives any assurance that either Innoviz or Collective Growth will achieve its expectations.
Any financial information or projections in this communication are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond Innoviz’s and Collective Growth’s control. While such information and projections are necessarily speculative, Innoviz and Collective Growth believe that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection extends from the date of preparation. The assumptions and estimates underlying the projected results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. The inclusion of financial information or projections in this communication should not be regarded as an indication that Innoviz or Collective Growth, or their respective representatives and advisors, considered or consider the information or projections to be a reliable prediction of future events.
This communication is not intended to be all-inclusive or to contain all the information that a person may desire in considering in an investment in Innoviz or Collective Growth and is not intended to form the basis of an investment decision in either company. All subsequent written and oral forward-looking statements concerning Innoviz and Collective Growth, the proposed transactions or other matters and attributable to Innoviz and Collective Growth or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.
Additional Information and Where to Find It
This document relates to a proposed transaction between Innoviz and Collective Growth. This document does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Innoviz intends to file a registration statement on Form F-4 that will include a proxy statement of Collective Growth and a prospectus of Innoviz. The proxy statement/prospectus will be sent to all Collective Growth stockholders. Collective Growth and Innoviz also will file other documents regarding the proposed transaction with the SEC. Before making any voting decision, investors and security holders of Collective Growth are urged to read the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as they become available because they will contain important information about the proposed transaction.
Investors and security holders will be able to obtain free copies of the registration statement, proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by Collective Growth or Innoviz through the website maintained by the SEC at www.sec.gov. In addition, the documents filed by Collective Growth may be obtained free of charge from Collective Growth’s website at www.collectivegrowthcorp.com or by written request to Collective Growth at Collective Growth Corporation, 1805 West Avenue, Austin, TX 78701 and the documents filed by Innoviz may be obtained free of charge from Innoviz’s website at www.innoviz.tech or by written request to Innoviz at Innoviz Technologies Ltd., 2 Amal Street, Rosh HaAin, 4809202, Israel.
Participants in Solicitation
Collective Growth and Innoviz and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Collective Growth’s stockholders in connection with the proposed transaction. Information about Collective Growth’s directors and executive officers and their ownership of Collective Growth’s securities is set forth in Collective Growth’s filings with the SEC, including Collective Growth’s final prospectus filed with the SEC on May 1, 2020. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the proxy statement/prospectus regarding the proposed transaction. You may obtain a free copy of these documents as described in the preceding paragraph.
Contact Information
Innoviz
Collective Growth Corporation
Wilson Kello
Exhibit 99.2
1 1 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Enabling the Autonomous Vehicle Revolution Investor Presentation December 2020
2 2 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Disclaimer This presentation (this “Presentation”) is provided for informational purposes only and has been prepared to assist intereste d p arties in making their own evaluation with respect to a potential business combination between Innoviz Technologies Ltd. (“th e “ Company” or “Innoviz”) and Collective Growth Corporation (“Collective Growth”) and related transactions (the “Proposed Business Combinati on” ) and for no other purpose. No representations or warranties, express or implied are given in, or respect of, this Presentation. To the fullest extent pe rmi tted by law, in no circumstances will Innoviz, Collective Growth, Antara Capital LP or any of their respective subsidiaries, stockholders, affiliates, representatives, partners, directors, officers, employees, advisers or agents be responsible or liable for any direct, indire ct or consequential loss or loss of profit arising from use of this Presentation, its contents, its omissions, reliance on the i nfo rmation contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. This Presentation does not pur port to be all - inclusive or to contain all of the information that may be required to make a full analysis of Innoviz or the Pro posed Business Combination. Viewers of this Presentation should each make their own evaluation of Innoviz and of the relevance and adequacy of the information and should make such other investigations as they deem necessary. Forward - Looking Statements This Presentation contains certain forward - looking statements within the meaning of the federal securities laws with respect to the proposed transaction between Innoviz and Collective Growth, including statements regarding the benefits of the transactio n, the anticipated timing of the transaction, the services offered by Innoviz and the markets in which it operates, and Innoviz’s projected future results. These forward - looking statements generally are identified by the words “believe,” “project,” “expect, ” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continu e,” “will likely result,” and similar expressions. Forward - looking statements are predictions, projections and other statements abo ut future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors co uld cause actual future events to differ materially from the forward - looking statements in this Presentation, including but not limited to: ( i ) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of Collecti ve Growth’s securities, (ii) the risk that the transaction may not be completed by Collective Growth’s business combination dead lin e and the potential failure to obtain an extension of the business combination deadline if sought by Collective Growth, (iii) the failu re to satisfy the conditions to the consummation of the transaction, including the adoption of the business combination agreemen t b y the shareholders of Collective Growth and Innoviz, the satisfaction of the minimum trust account amount following redemptions by Col lective Growth’s public shareholders and the receipt of certain governmental and regulatory approvals, (iv) the lack of a thi rd party valuation in determining whether or not to pursue the proposed transaction, (v) the occurrence of any event, change or other cir cumstance that could give rise to the termination of the business combination agreement, (vi) the effect of the announcement or pendency of the transaction on Innoviz’s business relationships, performance, and business generally, (vii) risks that the proposed transaction disrupts current plans o f Innoviz and potential difficulties in Innoviz employee retention as a result of the proposed transaction, (viii) the outcome of any legal proceedings that may be instituted against Innoviz or against Collective Growth related to the business com bination agreement or the proposed transaction, (ix) the ability of Innoviz to list its ordinary shares on the Nasdaq, (x) th e p rice of Innoviz’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which Innoviz plans to operate, variations in performance across competitors, changes in laws and regulations affecting Innoviz’s business and changes in the combined capital structure, and (xi) the ability to implement business plans, forecasts, and other expectation s a fter the completion of the proposed transaction, and identify and realize additional opportunities. The foregoing list of fac tor s is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” sec tio n of Collective Growth’s Annual Reports on Form 10 - K, Quarterly Reports on Form 10 - Q, and other documents filed by Collective Gr owth from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and the registration statement on Form F - 4 and proxy s tatement/prospectus discussed below. These filings identify and address other important risks and uncertainties that could ca use actual events and results to differ materially from those contained in the forward - looking statements. Forward - looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward - looking statements, and Innoviz a nd Collective Growth assume no obligation and do not intend to update or revise these forward - looking statements, whether as a resu lt of new information, future events, or otherwise. Neither Innoviz nor Collective Growth gives any assurance that either Inn ovi z or Collective Growth will achieve its expectations. Additional Information and Where to Find It This Presentation relates to a proposed transaction between Innoviz and Collective Growth. This Presentation does not constit ute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale o f securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securit ies laws of any such jurisdiction. Innoviz intends to file a registration statement on Form F - 4 that will include a proxy statement of Collective Growth and a prospectus of Innoviz. The proxy statement/prospectus will be sent to all Collective Growth stockholders. Collective Gr owt h and Innoviz also will file other documents regarding the proposed transaction with the SEC. Before making any voting decisi on, investors and security holders of Collective Growth are urged to read the registration statement, the proxy statement/prospectus and all ot her relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as they become availa bl e because they will contain important information about the proposed transaction. Investors and security holders will be able to obtain free copies of the registration statement, proxy statement/prospectus a nd all other relevant documents filed or that will be filed with the SEC by Collective Growth or Innoviz through the website mai nta ined by the SEC at www.sec.gov. In addition, the documents filed by Collective Growth may be obtained free of charge from Collective Growth’s we bsite at www.collectivegrowthcorp.com or by written request to Collective Growth at Collective Growth Corporation, 1805 West Ave nue, Austin, TX 78701 and the documents filed by Innoviz may be obtained free of charge from Innoviz’s website at www.innoviz.tech or by written request to Innoviz at Innoviz Technologies Ltd., 2 Amal Street, Rosh HaAin , 4809202, Israel.
3 3 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Disclaimer Participants in Solicitation Collective Growth and Innoviz and their respective directors and executive officers may be deemed to be participants in the s oli citation of proxies from Collective Growth’s stockholders in connection with the proposed transaction. Information about Coll ect ive Growth’s directors and executive officers and their ownership of Collective Growth’s securities is set forth in Collective Growth’s fi lin gs with the SEC, including Collective Growth’s final prospectus filed with the SEC on May 1, 2020. Additional information reg ard ing the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the pro xy statement/prospectus regarding the proposed transaction. You may obtain a free copy of these documents as described in the pr ece ding paragraph. Industry and Market Data This presentation has been prepared by Innoviz and Collective Growth and includes market data and other statistical informati on from sources believed by Innoviz and Collective to be reliable, including independent industry publications, governmental pub lic ations or other published independent sources. Some data is also based on the good faith estimates of Innoviz or Collective Growth, whi ch in each case are derived from its review of internal sources as well as the independent sources described above. Although Inn ovi z and Collective Growth believe these sources are reliable, Innoviz and Collective Growth have not independently verified the infor mat ion and cannot guarantee its accuracy and completeness . Antara Capital LP has not made any verification of the market data and other statistical information included in this presentation. Financial Information; Non - GAAP Financial Measures The financial information and data contained in this Presentation is unaudited and does not conform to Regulation S - X. According ly, such information and data may not be included in, may be adjusted in or may be presented differently in the registration sta tement to be filed by Innoviz with the SEC and the proxy statement/prospectus contained therein. Some of the financial information and dat a c ontained in this Presentation, such as EBITDA and free cash flow, has not been prepared in accordance with United States gene ral ly accepted accounting principles (“GAAP”). Innoviz and Collective Growth believe these non - GAAP measures of financial results provide usefu l information to management and investors regarding certain financial and business trends relating to Innoviz’s financial condition and results of operations. Innoviz’s management uses these non - GAAP measure for trend analyses and for budgeting and planning purposes. Innoviz and Collective Growth believe that the use of these non - GAAP financial measures provides an additional tool for investor s to use in comparing Innoviz’s financial condition and results of operations with other similar companies, many of which present similar non - GAAP financial measures to investors. Management does not consider these non - GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non - GAAP financial measures is that the y exclude significant expenses and income that are required by GAAP to be recorded in Innoviz’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by mana ge ment about which expenses and income are excluded and included in determining these non - GAAP financial measures. In order to compensate for these limitations, management presents non - GAAP financial measures in connection with GAAP results. You should review Innoviz’s audited financial statements, which will be included in the registration statement. No Offer or Solicitation This Presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall ther e b e any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registratio n o r qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the re quirements of the U.S. Securities Act of 1933, as amended. Use of Projections Any financial information or projections in this Presentation are forward - looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond Innoviz’s and Collective Growth’s control. While such information and projections are necessarily speculative, Innoviz and Collective Growth believe that the preparatio n o f prospective financial information involves increasingly higher levels of uncertainty the further out the projection extends fr om the date of preparation. The assumptions and estimates underlying the projected results are inherently uncertain and are subject to a wid e v ariety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ ma ter ially from those contained in the projections. The inclusion of financial information or projections in this Presentation should not be regard ed as an indication that Innoviz or Collective Growth, or their respective representatives and advisors, considered or consider the information or projections to be a reliable prediction of future events. This Presentation is not intended to be all - inclusive or to contain all the information that a person may desire in considering in an investment in Innoviz or Collective Growth and is not intended to form the basis of an investment decision in either co mpa ny. All subsequent written and oral forward - looking statements concerning Innoviz and Collective Growth, the proposed transactions or other matters and attributable to Innoviz and Collective Growth or any person acting on their behalf are expressly qualified in their entir et y by the cautionary statements above . Trademarks This Presentation contains trademarks, service marks, trade names and copyrights of Innoviz, Collective Growth and other comp ani es, which are the property of their respective owners.
4 4 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Omer Keilaf Co - founder & Chief Executive Officer › 20+ years of experience in developing complex technologies › Previously held senior management roles in start - ups, and led complex R&D projects › Former senior officer in the Elite Technological Unit of the Intelligence Corps (“Unit 81”) › BSc and MSc in Electrical Engineering and MBA from Tel Aviv University Oren Rosenzweig Co - founder & Chief Business Officer › 20+ years at the intersection of Advanced Technologies, Products and Business › Previously served as a consultant with the Boston Consulting Group advising leading technology companies › Former senior officer in the Elite Technological Unit of the Intelligence Corps (“Unit 81”) › BSc in Electrical Engineering from the Technion and MBA from the University of Chicago Eldar Cegla Chief Financial Officer › 20+ years of senior management roles in various high tech companies › Extensive experience in equity - and debt - financing and managing Finance & Operations departments in technology companies › BSc in Chemistry (Cum Laude) from Tel Aviv University The Innoviz Team Making the Impossible Possible › Previously held senior management roles in start - ups › Former senior officer in the Elite Technological Unit of the Intelligence Corps (“Unit 81”) › BSc in Physics, BSc in Electrical Engineering, MSc in Electro - optical Engineering and MBA from Tel Aviv University Oren Buskila Co - founder & Chief R&D Officer
5 5 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Scott Honour Chairman › 30 years of experience in investing in technology companies › Managing Partner of Northern Pacific Group. Former Senior Managing Director at The Gores Group and investment banker at UBS Warburg and Donaldson, Lufkin & Jenrette › BS/BA in Business Administration/Economics from Pepperdine University and MBA from The Wharton School of the University of Pennsylvania James Sheridan Chief Executive Officer › 25 years of operating experience with automotive industry focus › Held senior procurement positions at Ford Motor Company and led multiple purchasing transformations while at McKinsey › BA in Economics from the College of the Holy Cross and MBA from Carnegie Mellon University Bruce Linton Chief Executive Officer › Founder and former Chairman of Canopy Growth Corporation, where he led over 31 acquisitions and $6 bn of capital raises › Former CEO and current Co - Chairman of the Board of communications company Martello Technologies Corporation › Holds a Bachelor’s Degree from Carleton University Antara Capital, Perception Capital Partners and Collective Growth Corp . Perception Capital Partners Collective Growth Corp. Himanshu Gulati Founder and Chief Investment Officer › Founder and CIO, Antara Capital LP, an event driven credit and special situations hedge fund, with over $1 billion of AUM › Antara takes a partnership approach with management teams to create shareholder value, and has provided creative financing solutions to a number of advanced stage technology companies › Mr . Gulati has over 18 years of experience as an investment professional specializing in underappreciated assets and complex capital structures in public markets › BA in Management with a concentration in Finance from Binghamton University Antara Capital
6 6 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Transaction Overview Transaction Structure › Innoviz to become publicly listed through business combination with Collective Growth Corporation (NASDAQ: CGRO) in a transaction sponsored by Antara Capital LP and Perception Capital Partners LLC › CGRO is a publicly listed special purpose acquisition company with over $150m cash held in trust › Following the targeted closing of the transaction in the first quarter of 2021, the combined company is expected to be listed on NASDAQ under the ticker symbol “INVZ” › Innoviz existing shareholders would retain 100% of their equity › Innoviz existing shareholders and management would own c.71% of the combined entity post - closing Valuation & Financing › Pro forma enterprise value of ~$1.0 billion, implying a 1.8x EV / 2025E revenue multiple, an attractive valuation versus peer av erages › Transaction is expected to provide up to $350 million in gross proceeds comprised of: › CGRO’s $150m of cash held in trust, assuming no redemption by public shareholders › $ 200 million fully committed ordinary share PIPE at $10.00 per share, led by Antara Capital and includes strategic investments fr om Magna International, Innoviz’s Tier - 1 partner, Phoenix Insurance and other institutional investors › Pro forma for the transaction, Innoviz is expected to have c.$ 370m cash on balance sheet › No additional capital is expected to be required between now and achieving positive cash flow
Company Overview
8 8 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz at a Glance Global Presence c. 280 Employees Unique Offering InnovizOne Perception Partnerships with Tier 1 Companies and OEM Partners $251 Million Capital Raised 2016 2018 2017 2019 2020 Series A $9 Million Founded InnovizOne Announced Tier 1 Partnership Series B $73 Million Tier 1 Partnership Selection by BMW for Series Production Series C $169 Million Tier 1 Partnership C Samples Production Tier 1 Partnership InnovizTwo Announced
9 9 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz Was Built Around the Values of “Unit 81” Unparalleled Concentration of Unit 81 Talent › Unit 81 is Israel’s most elite technology unit in the Israeli Defense Forces › Complex technology across multi - disciplinary fields › Uncompromising level of reliability › Unit 81 values of excellence, quality and speed are core to Innoviz › “Making the Impossible Possible” Oren Buskila Co - founder, Chief R&D Officer Oren Rosenzweig Co - founder, Chief Business Officer Omer Keilaf Co - founder, Chief Executive Officer David Elooz Chief Photonics Officer 25% of Innoviz’s R&D Force are alumni of Unit 81 Dozens of companies started by alumni of Unit 81 R&D S&M G&A Operations R&D 72 % c.280 Employees
10 10 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz Was First To Win An OEM Production Contract For L3 LiDAR › Multi - year development › Hundreds of millions of dollars spent › Hundreds of top engineers › Tens of millions of kilometers driven for validation › Only selected OEMs are able to go through such a long and rigorous process Awarded BMW Series Production Program for multiple vehicle lines
11 11 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. 1 1 3 6 9 12 15 17 19 22 26 1 2 3 4 4 4 3 3 1 1 2 3 6 9 12 16 1 1 4 7 12 17 21 27 32 38 44 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E However, Level 2+ is the Largest Opportunity in the Next 10 Years 12 million L2 and 3 million L3 vehicles by 2025 Vehicles (in millions) ¹ HANDS TEMP. OFF EYES TEMP. OFF PARTLY AUTOMATED HANDS OFF, EYES OFF HIGHLY AUTOMATED HANDS OFF, MIND OFF FULLY AUTOMATED PASSENGER AUTONOMOUS Level2 Level3 Level4 ¹ Source: Company analysis; IHS Markit ; Frost & Sullivan: LiDAR for Automotive and Industrial Applications report; Yole Développement , 2020 Note: Level 2+ (“L2+”), Level 3 (“L3”). Level5
12 12 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. But L2+ is Still Not Safe… 1 Illustrative LiDAR image recreation of the incident's camera image. Truck not detected due to saturated camera 1 Driver trying to warn oncoming cars A LiDAR would have prevented this accident 1 Direct sun Rain Dark Will not scale without solving serious safety issues first
13 13 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No Part of this Document May be Reproduced or Disclosed in Any Manner. Innoviz’s L3 Technology is Also Affordable for L2+ InnovizOne InnovizTwo › 0.1 Σ x0.1 Σ (256 Lines) › 115 Σ x25 Σ › Price & Price fit for Level 3 - 5 Current Next Generation 70% Cost Reduction › 0.1x0.1 Σ (256 Lines) › 100x25 Σ › Longer Range and Smaller Size › Price & Price fit for Level 2 - 5
14 14 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. L2+ Transforms Into L3 Through Software Updates Major cost reduction in Innoviz’s high - end LiDAR to put market on track towards autonomous driving Safe & Affordable L2+ Collect Data & Validate Software Upgrade to L3
15 15 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz Uniquely Meets All Automotive OEM Requirements Real Automotive - Grade Certified by BMW and Tier 1 Partners Superior Performance Most Advanced Automotive - Grade Perception Multiple Tier 1 Partners Enabling Market Penetration Affordable Pricing
16 16 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. MEMS DETECTOR Innovation Comes From Those Who Dare › Proprietary MEMS › High Field - Of - View Scanning › Solid - State › Small form - factor › Low cost › Superior performance / 256 lines @10Hz Proprietary and Efficient Design to Unlock the Mass Market › High Resolution › High Sensitivity › Long Range › Proprietary Signal Processing › Immunity to Crosstalk and Ambient Light Signal Processing ASIC High Performance Proprietary Architecture › Object Detection and Classification (Cars, Trucks, Pedestrians, Motorcycles, unknown moving objects) › Shape, Orientation and Occlusion status › Absolute and Relative Velocity & Acceleration Industry - Leading LiDAR Perception Ground - up approach solving the performance - cost challenge
17 17 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Industry - Leading LiDAR - Based Perception Software Innoviz’s Perception Software › Most Mature LiDAR - based perception software – with over 4 years of development › Automotive - Grade – automotive spice implementation › Millions of object data are collected › Ability To Leverage Existing Partners – automotive Tier 1s and OEMs › Lean Algorithms – optimized to run on lean low - cost automotive - grade chip › Enables L3 Driving – best - in - class accuracy Built on Proprietary Building Blocks *Offered at market price as benchmarked by the camera sector (~$50)
18 18 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Layered Patent Structure Protects Innoviz Unique IP From Chip Level to System System Architecture LiDAR Algo Perception Algo MEMS Optics Lasers Detector ASIC 66 17 5 In Process Granted/ Allowed Areas of Jurisdiction (US/EU/China/Japan/Korea) Proprietary design of Innoviz unique silicon components with sole ownership and access, patent protected
19 19 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner.
20 20 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. • BMW certification process is one of the most rigorous in the industry • Continuous and extensive auditing by BMW and Magna over the past 3 years • Millions of kilometers required to successfully complete validation “Automotive Grade” – More Than Just a Buzzword Automotive SPICE Q2’21 IATF 16949:2016 By Q4’20 ISO 9001:2015 Quality Management in the Automotive Industry Process Audit 6 Verband der Automobilindustria Vibration Thermal Shock Mechanical Shock Salt Spray Water Seal Wind EMC Water Pressure Window Resilience ISO 26262 Automotive Functional Safety – Q4’20 The only certified automotive - grade high - performance LiDAR on the market in the near future
21 21 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. The Only LiDAR Company That Meets Both Performance AND Cost Requirements Level 2+ Price Barrier of $500 InnovizTwo Competitor A (Tier 1) Competitor B (Tier 1) Performance 250m 150m 40m Number of lines @10Hz 256 16 32 Ability to detect small objects Yes No Limited resolution No Limited range and resolution Size (cm ) Volume (liters) 10x5x5 (0.25L) 12x10x8 (0.96L) 10x12x6.5 (0.78L) Technology Solid state – MEMS 905nm Mechanical – 905nm Flash – 1064nm T1 Partners And Other s Tier1 Tier 1 Level 3 - 4 Price Barrier of $1,000 InnovizTwo InnovizSLR Competitor C (Tier 2) Performance 250m 250m 250m Number of lines @10Hz 256 400 64 Ability to detect small objects Yes Yes No Limited resolution Size (cm ) Volume (litres) 10x5x5 (0.25L) 10x10x5 (0. 50L) 30x18x8 (4.32L) Technology Solid state – MEMS 905nm Mechanical 1550nm, high cost challenges T1 Partners – LiDAR and SW automotive validation and integration And Others NA Competitor C offers the Perception Software for an additional >$400; too expensive for L2+ Can’t support path to L3 Source: Company data and competitors’ website, analysis of core technology’s physics
22 © Innoviz Technologies Ltd. 2019 All Rights Reserved – Proprietary & Confidential. No Part of this Document May be Reproduced or Disclosed in Any Manner. Efficient combination of contract manufacturing and Tier 1s coupled with global supply base for the different components Global Manufacturing Capabilities and Supply Chain Already in Place
23 23 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz Product Portfolio Spans All Key LIDAR Markets Heavy Machinery Industrial Drones Logistics & Sidewalk Delivery Notes: Logos are for illustrative purpose and represent target eco - system Consumer Vehicles Trucking SLR InnovizOne InnovizTwo Robotaxis & Shuttles SLR InnovizOne InnovizTwo SLR InnovizOne InnovizTwo InnovizOne InnovizTwo InnovizOne InnovizTwo SLR InnovizOne InnovizTwo
24 24 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. 2025E LiDARs Sold by Stage (revenues) 8% 26% 19% 13% 34% Awarded RFQ RFI Evaluation Engaged Robust Sales Funnel Covers Entire Addressable Market Source: Company estimates. › Funnel towards multi - year series production contracts › All projected revenues of Innoviz are from parties in the sales funnel › In multiple cases, RFQs are defined based on price performance balance that only Innoviz can provide Tangible Opportunities 2025E LiDARs Sold by Vertical (revenues) Multi - Year Contracts Funnel 39% 28% 14% 4% 8% 7% L2+ L3 Robotaxi/Shuttle Trucking Others Software $581m Total 36 Evaluation 13 RFI 12 RFQ $581m Total
Financial Overview
26 26 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Summary P&L and Cash Flow Note: Preliminary management projections In $M, Non - GAAP FYE December 2020E 2021E 2022E 2023E 2024E 2025E Hardware Income 5 9 23 75 220 539 Software Income - - - 4 17 43 Total Revenue 5 9 23 79 237 581 Growth (%) 90% 161% 238% 199% 146% COGS 5 8 17 44 118 281 Gross Profit 0 1 6 35 118 300 Gross Profit Margin (%) 4% 10% 26% 45% 50% 52% OPEX R&D 53 71 73 75 80 87 S&M 6 9 11 14 19 28 G&A 9 11 11 14 15 16 Total OPEX 68 90 95 103 114 131 Total OPEX as % of Revenues 1,445% 1,005% 407% 130% 48% 23% EBIT (68) (89) (89) (67) 4 169 EBIT Margin (%) (1,440)% (995)% (380)% (85)% 2% 29% Depreciation & Amortization 3 3 4 6 8 10 EBITDA (65) (87) (85) (62) 12 179 EBITDA Margin (%) (1,384)% (964)% (363)% (78)% 5% 31% Free Cash Flow Net Operating Cash Flow (65) (84) (85) (69) (19) 104 Total Capital Expenditure (4) (6) (8) (14) (19) (29) Free Cash Flow (69) (90) (93) (82) (38) 75 v1v2 v3 v4v5v6
27 27 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Gross Profit and EBITDA Note: Preliminary management projections In $M, Non - GAAP Gross Profit EBITDA Gross Margin EBITDA Margin 0 1 6 35 118 300 4% 10% 26% 45% 50% 52% 2020 2021 2022 2023 2024 2025 (65) (87) (89) (63) 12 179 (363)% (78)% 5% 31% 2020 2021 2022 2023 2024 2025 r124
Transaction Overview
29 29 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Transaction Overview ¹ Assumes no redemptions from SPAC’s existing public shareholders; 2 Expected cash on Innoviz balance sheet as of the end of 2020; 3 Assumes new shares issued at $10.00 per share following expected reverse stock split prior to the effective time of the merge r; 4 Illustrative pro forma ownership reflects ownership before taking into account a post - closing management incentive equity plan and assumes no red emptions from SPAC’s existing public shareholders. Innoviz existing shareholders include 2.5m shares issued to management as part of this transaction. Sponsor Shares includes shares owned both by Antara Capital , Perception Capital and Collective Growth Corp. sponsors. Note: all share counts and ownership data do not take into account 20.9m warrants with $11.50 exercise price held by SPAC pub lic shareholders, the co - sponsors and Innoviz shareholders and management Pro Forma Equity Ownership Share Price $10.00 x Pro Forma Shares Outstanding (M) 140.3 Mark et Cap ($M) $1,403 Less: Net Cash ($M) $( 370) Enterprise Value ($M) $ 1,033 Equity of Existing Innoviz Shareholders $975 SPAC Cash in Trust 1 $150 Total PIPE Proceeds $200 Existing Innoviz Cash 2 $50 Total Sources $1,375 Equity of Existing Innoviz Shareholders $975 Cash to Balance Sheet $ 370 Estimated Fees and Expenses $30 Total Sources $1,375 Sources ($m) Uses ($m) Pro Forma Valuation 3 Commentary 71% 11% 14% 4% Innoviz Existing Shareholders Public SPAC Shareholders PIPE Investors Sponsor Shares Pro Forma Ownership 4 › All Innoviz existing shareholders retain stake in the company › Transaction proceeds will be used for development of Innoviz next generation products and continued commercialization efforts › The transaction, which has been unanimously approved by the boards of directors of both Innoviz and Collective Growth, is targeted to close in the first quarter of 2021 › Additional shares to be granted pursuant to an earn - out to certain members of Innoviz management (1.25m) 3 , Antara Capital (325k) 3 and Perception Capital ( 2.125m) 3 , if the stock trades at or above 125% of the implied Innoviz share value for 10 out of 20 trading days at any time before 4 years following completion of the business combination
30 30 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Operational Benchmarking 2020E - 2022E Revenue Growth Source: Latest publicly available financial statements. Market data as of 09 - Dec - 2020 . Note: Equity Market Cap based on diluted shares outstanding. Projections for the High - Growth Semis and Disruptive AutoTech pee rs are based on IBES median estimates and/or other Wall Street research. Projections for the LiDAR peers are based on publicly available investor presentations. All research estimat es have been calendarized to December. Negative margins are presented as “NM”. 2021E Gross Profit Margin 2021E EBITDA Margin LiDAR High-Growth Semis Disruptive AutoTech 171.0% 242.5% 159.8% 66.0% 17.5% 17.2% 8.9% 115.2% 82.4% 72.3% 34.5% 6.0% Innoviz 2023E-2025E AEVA 2023E-2025E Luminar 2023E-2025E Velodyne 2023E-2024E Ambarella NVIDIA Xilinx Xpeng NIO Li Auto Tesla Cree Median: 17.2% Median: 159.8% Median: 72.3% 51.6% 63.4% 62.7% 57.8% 69.2% 66.0% 60.4% 37.5% 21.8% 17.5% 16.5% 12.9% Innoviz 2025E Luminar 2025E AEVA 2025E Velodyne 2024E Xilinx NVIDIA Ambarella Cree Tesla NIO Li Auto Xpeng Median: 66.0% Median: 62.7% Median: 17.5% 30.8% 43.6% 39.4% 21.8% 47.2% 31.8% 11.9% 19.0% 9.0% NM NM NM Innoviz 2025E Luminar 2025E AEVA 2025E Velodyne 2024E NVIDIA Xilinx Ambarella Tesla Cree Li Auto NIO Xpeng Median: 31.8% Median: 39.4% Median: 14.0%
31 31 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Valuation Benchmarking EV / 2021E Revenues Source: Latest publicly available financial statements. Market data as of 09 - Dec - 2020 . Note: Equity Market Cap based on diluted shares outstanding. Projections for the High - Growth Semis and Disruptive AutoTech pee rs are based on IBES median estimates and/or other Wall Street research. Projections for the LiDAR peers are based on publicly available investor presentations. All research estimat es have been calendarized to December. Negative multiples, or multiples greater than 50 are presented as “NM”. 1 Xilinx undisrupted share price as of 08 - Oct - 2020, before it was reported that Advanced Micro Devices is interested in acquiring the company. EV / 2021E Revenue Growth Adjusted EV / 2021E EBITDA LiDAR High-Growth Semis Disruptive AutoTech 1.8 x 14.5 x 5.2 x 3.2 x 20.3 x 13.2 x 8.3 x 36.1 x 26.2 x 21.4 x 20.8 x 14.0 x Innoviz 2025E Luminar 2025E Velodyne 2024E AEVA 2025E NVIDIA Ambarella Xilinx¹ Xpeng NIO Tesla Li Auto Cree Median: 13.2x Median: 5.2x Median: 21.4x 0.01 x 0.09 x 0.08 x 0.01 x 1.18 x 0.93 x 0.76 x 2.33 x 0.62 x 0.32 x 0.31 x 0.29 x Innoviz 2025E Velodyne 2024E Luminar 2025E AEVA 2025E NVIDIA Xilinx¹ Ambarella Cree Tesla NIO Xpeng Li Auto Median: 0.93x Median: 0.08x Median: 0.32x 5.8 x 33.4 x 23.8 x 8.0 x 43.4 x 27.1 x NM NM NM NM NM NM Innoviz 2025E Velodyne 2024E Luminar 2025E AEVA 2025E NVIDIA Xilinx¹ Ambarella Tesla Cree Li Auto NIO Xpeng Median: 35.2x Median: 23.8x
32 32 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Innoviz Intrinsic Value Potential Well Above Transaction Value Note: Figures in bar charts represent current enterprise value 1 Includes Luminar, Velodyne and Aeva . 2 Includes NVIDIA, Ambarella , Xilinx, Xpeng , Li Auto, NIO, Tesla and CREE. Transaction Value Comparable Valuation Sensitivity Analysis $3.0bn Midpoint EV Broader Peer Group 2 Future Enterprise Value discounted back 4 years at 20% Discount Rate LiDAR Peers 1 Current Enterprise Value based on LiDAR peers’ ’24E / ’25E EV / Revenue multiple 1.8x 2025E Revenue $2.3bn $2.5bn $1.0bn $3.5bn $3.6bn Post-Money Enterprise Value 5.0x +/- 20% 2025E Revenue 9.0x - 13.0x 2025E Revenue
Appendix
34 34 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Revenues Breakdown Note: Preliminary management projections In $M, Non - GAAP 1 5 27 90 226 4 3 8 25 70 165 1 5 11 23 59 148 4 17 43 5 9 23 79 237 581 2020 2021 2022 2023 2024 2025 Level 2+ OEM Level 3 OEM Level 4 Robo Vehicles & Others Total Software Income 0.5 4 21 117 446 1,175 Number of LiDARs in '000 r123
35 35 © Innoviz Technologies Ltd. 2020 All Rights Reserved – Proprietary & Confidential. No part of this document may be reproduced or disclosed in any manner. Projected Opex and Capex In $M, Non - GAAP Select Cash Flow Items Capex (4) (6) (8) (14) (19) (29) NRE 1 1 3 4 7 8 9 Note: Preliminary management projections. 1 NRE cash inflows are recognized as deferred revenues over the lifetime of the different programs. 53 71 73 75 80 87 6 9 11 14 19 28 9 11 11 14 15 16 68 90 95 103 114 131 2020 2021 2022 2023 2024 2025 R&D S&M G&A NM 264 % of Total Revenues Average # of FTEs NM 357 406.8% 420 129.8% 477 48.1% 535 22.6% 595 r125
Exhibit 99.3
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Date: December 11th, 2020
INVESTOR PRESENTATION TRANSCRIPT
| Jim Sheridan: |
Hi, I’m Jim Sheridan, the CEO of Perception Capital Partners
and I’m honored to be here today. We at Perception first met the Innoviz team six months ago and were immediately impressed with
their product and technology, but were even more impressed with the acumen, integrity, and focus of the management team.
Now, in terms of the valuation of the company, the pro-forma enterprise value of a billion dollars along with the market cap of 1.4 billion dollars, represents a very attractive valuation relative to that of our most direct peers. The reason that we did that was to attract the right group of shareholders - smart, long-term investors, because we believe the company has a promising path towards market leadership and our valuation will grow as we achieve that leadership.
With that, I’ll turn it over to Omer. |
| 2 Amal St.| Afek Industrial Park | Rosh HaAyin, Israel | +972-74-700-3692 | www.innoviz.tech | [email protected] |
| Omer Keilaf: |
Thank you Jim, hi everyone! I am Omer Keilaf, Co-founder
and CEO of Innoviz, and I am very excited about this milestone. Let me tell you about the short history of Innoviz. We started
in 2016 to develop our Solid-state LiDAR, InnovizOne. As you can see here, it is a very nice-looking device. During 2016, we partnered,
already in our first year, with Magna International, our first Tier 1 partner in the industry. We are working with Magna in order
to win business in the market, and we also partnered with Aptiv, which with Magna, led our second financing round. During 2017,
we worked with Magna on a very long due diligence conducted by BMW as part of their RFQ process to select the LiDAR for their
series production vehicle for L3. We were nominated in December 2017 by BMW to be their LiDAR for their series production of L3.
Later, we partnered with HiRain, which is a Chinese Tier 1. We worked with them to win business in China. We also partnered with
Samsung Harman. |
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We won the BMW program with Innovizone,
our solid-state LiDAR, which is a very high-end LiDAR and cost effective. We froze that design 3.5 years ago. Since then, we made
a lot of progress in our technology, to bring now, InnovizTwo, which provides a 70% cost reduction. This enables adopting a LiDAR,
a high end LiDAR, also in L2+ platforms. L2+ price point is much lower than L3, and in order to be able to absorb such a technology,
it needs to be very cost effective. Now, with InnovizTwo, we believe that we will be able to penetrate the L2+ and allow carmakers
to launch earlier with a much more simple platform, which allows the car to drive itself, yet the driver holds the wheel and pays
attention. That allows the car maker to collect data and validate through crowdsourcing – testing their software in real
time, in real life conditions in different countries. That not only saves the cost of the LiDAR for the platform, but also the
cost of validation, which is very high. We see ourselves penetrating through that into the market. Being an incumbent in the L2+,
when L3 occurs in several years, we will already be part of many programs. |
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You can see here a video taken from a LiDAR that was mounted
in the grille of the car. It looks as if it comes from a drone, but that’s only because the data is 3D. It allows us to change
the pointing view of the sensor, but the sensor is just mounted on the grille. You can see how easy it is to see the different
objects, seeing the different people, pedestrians, and people on bicycles or motorcycles. This is the most advanced LiDAR today
available and it’s going to be in mass market next year.
We are very honored to work with BMW and Magna that are helping us get there. Not only that the technology needs to be automotive grade, but also the company. We have been working the last three years to bring up all of the qualification that we need to meet – all of the certification, such as VDA, which goes to the way that we manage suppliers, Automotive SPICE, which goes to how we write the code.
This slide talks about the way we split the market. We’ve split it between L2 and L3, and the reason is price. The pricing barrier for L2 is to have a LiDAR which is below $500. in this space, our competition is very low-end LiDARS with very low resolution. InnovizTwo, which is targeting a very low-cost, provides a path not only to allow very good and safe L2+ platforms, but also a path for the carmaker to develop on top of it, the software that eventually reaches L3. Our competition in the L3 and L4 are products that are far from being mature, don’t meet the resolution, very big, and really most of our competition are start-ups that don’t have Tier 1 relationships, which allows them to compete on business.
On the manufacturing front, we have different partners and different business models. We work with Jabil today. We have a line in Germany that produces these LiDARs, which we provide to different partners.
Within the automotive space, our partnership with the Tier 1 works in the fact that we provide a business model based on components. We sell our unique components, which are the MEMS, the detector, and the ASIC, and the Tier 1 is responsible for the high-volume manufacturing. We are now ramping up a high-volume manufacturing with our partner to serve BMW and others.
Let me hand over to Oren to present our product portfolio. Thank you. |
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| Oren Rosenzweig: |
Thank you, Omer. Hi, I’m Oren Rosenzweig, Chief Business Officer and Co-Founder at Innoviz.
As you understood from Omer’s presentation, we’ve been very focused on the passenger car market since we started the company in 2016 and this is how we managed to strike four Tier 1 partnerships and this is how we won the first and largest L3 series production award for a LiDAR in passenger cars, and it’s really through the work of our global sales teams that are working very, very closely on a daily basis with the passenger car OEMs on their RFIs and RFQs, and the work of our product team which is getting guidance on LiDAR specifications to enable L2+ and L3 passenger cars from our Tier 1 partners, and of course from our lead customer, BMW. But it’s really not just about the product performance, it’s also about cost, especially in the passenger car market and this is true for our current product, InnovizOne, and also for the next generation products, InnovizTwo, and Innoviz SLR.
Besides the passenger car market, where we’ve got a leading position in, we also have very strong business traction in other industries. So, you can find InnovizOne on the shuttles and robotaxis of the leading companies that develop their L4 fleets. We have partnered with Shaanxi trucks, one of the leading truck companies in China, earlier this year, and we’re also working with other leaders of the trucking space, and our LiDARs are also used by many of the companies developing delivery robots and autonomous drones. We’re also working with a variety of heavy machinery companies for mining applications, construction, and agriculture.
The way we approached modeling revenue is a completely bottom-up approach. We look at a funnel of about 200 companies across all these industries that our team works with today, especially over 20 passenger car OEMs across U.S., Europe, China, and Japan. We’re in daily, close discussions about the LiDAR that they’d like to put in the cars that they’re developing. About 25 of the 200 accounts are in late stages of awarding series production contracts and the win rate that we model will depend on the stage of those accounts. We want to be able to beat our projections, so we took a very conservative approach to modeling volumes as well, so we use take rates of about 3% maximum. Therefore, what we see here is a very big upside, so for example, an award such as BMW at a standard 15% take rate at the peak year of the program, would represent more than $700M in booking and $220M in revenue in 2025, which would be about 38% of 2025 projections.
Another big upside we see here is around the software, so in our model we only included the one-time sale of perception software that we sell together with the LiDAR, but from more recent discussions with OEMs, they would also like to get updates to the software to support corner cases that they encounter after they roll out their vehicles, or when they want to support additional locations. This will be offered as a subscription model that, as I said, we have not included in our model yet.
I will hand it over to Eldar Cegla, CFO, to go through the financials. |
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| Eldar Cegla |
Thank you, Oren. My name is Eldar Cegla and I am the CFO of Innoviz. So the projections shown reflect the company’s strategy with a focus on L2+ and L3 for OEM car manufacturer’s business. In addition to the business we already won, we plan on additional design wins in the next year which will yield significant revenues once these programs mature and hit the market. This is reflected in the significant revenues ramp up, as of 2023 and the continuous growth in 2024 and 2025 when we reach over half a billion dollars of revenues. It is a predictable business and once a program is won, the revenues it generates will provide visibility for 6 to 8 years over the lifetime of the program. We offer a computer vision perception software at $50 per license, which adds to our revenues and has a positive contribution to our gross margins.
In terms of gross margins, we applied a few business models that support our performance. When working with OEMS, we are actually selling our strategic chipsets to the T1s, which in turn manufacturer the LiDAR system based on our design. This enables higher gross margins in the levels of around 50% in high-volume sales. We turn EBITDA positive on 2024, and we show higher values as revenues picks up. Our cash position at the end of 2020 will be around 50 million dollars. The merger transaction will provide us with sufficient cash to support the company up to cash flow positive, which happens in 2025. It is important to note that a strong and viable balance sheet is supporting our ability to win programs. We are audited by the OEMs both on the technology side, as well as on our financial stability and ability to support this industry cycle time, I am certain that by consummating the merger transaction Innoviz will be able to extract its full potential. Thank you, and I will turn it back to Jim. Thank you very much.
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| Jim Sheridan: | Thank you Omer, Oren, and Eldar, and thank you to our current and prospective shareholders. We look forward to the merger, and to helping Innoviz become the leader in the LiDAR space. |
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